Industrials Reit Reports Higher Passing Rent Despite Economic Downturn

Despite having a decreased occupancy percentage, UK-based Industrials Reit, which owns multilet industrial (MLI) buildings offering workspace for small- and medium-sized firms, recorded significant rent growth.

In its final quarterly trading update for its 2023 year to end-March, the company, valued at R11.3 billion on the JSE, reported that strong tenant demand helped to deliver 4.8% like-for-like growth over 12 months in passing rent, or rental income from current leases, while the occupancy rate fell 1.5 percentage points year over year to 92.3%.

This was less passing rent than the prior quarter’s 5% passing rent.

The business is in a solid position to “weather the storm with a low level of debt and a highly diversified customer base and portfolio,” according to CEO Paul Arenson, who acknowledged that Industrials Reit is not immune from the current global economic crisis, which is characterized by rising inflation and interest rate hikes.

Industrials Reit was founded in 2012 and has its main listing on the London Stock Exchange as well as a subsidiary listing on the Johannesburg Stock Exchange. Currently, Industrials Reit owns and manages purpose-built MLI assets totaling more than 7 million square feet that are dispersed throughout towns and cities in England, Scotland, and Wales.

Earlier this month, the company accepted the conditions of an acquisition offer from the private equity group Blackstone valued at over £700 million (around R16.1 billion). The sale will be proposed at the business’s next general meeting by directors and others who hold a combined 6.3% of the company.

Listed on the New York Stock Exchange With over $975 billion in assets under management, Blackstone is the largest alternative investment manager in the world. Leader in real estate investing, with a $577 billion global portfolio and $326 billion in assets under management.

Additionally, it recently completed the transition to becoming a fully MLI business after selling its final non-MLI asset five years ago.