Paul Leaf-Wright. Picture: FINANCIAL MAIL
Paul Leaf-Wright. Picture: FINANCIAL MAIL

Atlantic Leaf Properties, a UK-based real-estate investment trust (Reit) has acquired an industrial property for £9m in Denby, a small village in Derbyshire, UK.

The deal is Atlantic Leaf’s fifth acquisition of industrial property in the past three months as it shifts its focus from retail assets to industrial warehouses.

“In our view, the industrial and distribution warehouse sector in the UK remains attractive and continues to benefit from the growth being experienced in underlying rentals and general demand driven by increasing volumes in e-commerce and logistics,” said CEO Paul Leaf-Wright.

He said Atlantic Leaf had successfully exited retail assets so it could focus on owning managing industrial warehouses. Leaf-Wright said Atlantic Leaf's industrial exposure had increased in value to 79%, up from 70% at the end of February 2019.

“We now have a portfolio which is worth about £385m or R7.2bn and I believe we are an attractive investment for South Africans who want offshore exposure for their investments and to hedge against a volatile rand,” said Leaf-Wright.

“In our view, the industrial and distribution warehouse sector in the UK remains attractive and continues to benefit from the growth being experienced in underlying rentals and general demand driven by increasing volumes in e-commerce and logistics,” said Leaf-Wright.

He said that since the end of March, Atlantic Leaf Properties had managed to secure investment of £40m in a mix of five individual new and existing industrial properties at “a blended net initial yield of 6.7%, all of which we think will positively contribute to our earnings over time”.

Atlantic Leaf has secured a new three-year credit facility from Lloyds Bank and has fixed 100% of the debt at a rate of 2.5%. 

“We are very pleased to have introduced Lloyds Bank as a new funding relationship and the terms of the facility provides for Atlantic Leaf to grow this new relationship with Lloyds,” Atlantic Leaf's financial director, Mark Pryce, said.

“The accommodative swap rates in the market have allowed us to fix the cost of the new debt at rates lower than the weighted cost of our existing debt. The loan to value on the new debt is lower than the existing loan to value of the group and will assist in the objective of reducing the overall loan to value of the group over the medium-term,” Pryce said.

The company's debt would only mature in three to four years, which would help it in an uncertain economic and political environment, Leaf-Wright said.

“We believe that the combination of these should see us through the period of uncertainty currently being created by Brexit,” he said.

andersona@businesslive.co.za