Souterhead Industrial Estate in Aberdeen, Scotland, is one of Stenprop’s properites. Picture: SUPPLIED
Souterhead Industrial Estate in Aberdeen, Scotland, is one of Stenprop’s properites. Picture: SUPPLIED

Landlord Stenprop, which is selling off assets in mainland Europe as it fully commits to UK multi-let industrial (MLI) estates, says this strategy has paid off amid Covid-19, with rent from these assets rising almost a fifth in its half year to end-September.

MLI assets refer to estates with multiple tenants, with Stenprop betting on these even as the UK property market experiences severe pressure from Brexit uncertainty, and now the Covid-19 pandemic.

The group, however, collected 90% of its rent in the six months to end-September, while it saw a 2.2 percentage point increase in its MLI occupancy rate to 93.3%. The pandemic boosted e-commerce and demand for regional distribution, Stenprop said, maintaining that this is ideally suited to MLI estates.

Stenprop kept its interim dividend per share unchanged at 3.375p — a £10m (R204m) payment — flagging the same amount per share for a final dividend, as it expressed confidence its cash position as it continues with asset disposals.

This resulted in the group being confident enough to give forward guidance on a final dividend for the first time, CEO Paul Arenson said in a statement, with the ability of Stenprop to advertise through its web-based portals and enter leases online being key factors in its first-half performance.

Net rental income from the MLI portfolio rose 17.1% to £9.6m to end-September, almost two thirds of the group’s revenue, while also adding to an increase in the underlying value of its portfolio.

Net rental income fell to £15.0m, from £15.8m previously.

The group had a £574.1m portfolio at the end of September, a 4.4% increase in its like-for-like value, while it completed £40m worth of acquisitions during its half year.

Up to the end of September 2020, MLI represented 62.8% of the property portfolio, an increase from 52% a year earlier. The group wants a 100% MLI portfolio by March 2022.

“The MLI sector has displayed its strength over the past six months and we have seen a material increase in demand from a new and ever diversifying occupier base,” the group said.

In afternoon trade on Friday, Stenprop’s share was unchanged at R27.30, having risen 12.35% so far in 2020, giving it a market capitalisation of R7.7bn.

Over the same period, the JSE’s property index has fallen more than 43%.

Update: December 4 2020
This article has been updated with additional information.

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