Urban Logistics Reit PLC (LON:SHED) is the topic of conversation when Mike Foster, Analyst at Hardman & Co joins DirectorsTalk. Mike explains what the company does, why rents are low, supply and demand, risks involved, if this is a realistic growth stock, key valuation metrics and stock rating.
Urban Logistics REIT focus on a specialist sub-sector of the UK real estate market, investing in industrial and logistics properties that enable businesses to operate essential modern distribution networks capable of responding to the challenges created by e-commerce and evolving infrastructure demands.
The supply of urban logistics assets in the UK is constrained by a variety of factors which, taken together with the shift towards online commerce and the need for faster supply chains, creates heightened demand for well-located smaller-sized warehouses.
We are building a portfolio of high quality assets with strong income generating and capital growth capabilities through a diverse base of tenants operating in a variety of sectors. Acquisitions are added to the portfolio through a mix of equity and conservative levels of debt, targeting Net Initial Yields of 6.0% to 7.5% with affordable underlying rents in the region of £4.50 to £5.50 per sq.ft.. We actively manage our acquired assets, enabling us to deliver attractive returns to shareholders.
