RNS Number : 9473T
Stenprop Limited
24 July 2020


(Registered in Guernsey)

(Registration number 64865)

LSE share code: STP    JSE share code: STP


("Stenprop" or the "Company")




24 July 2020


Stenprop, the UK multi-let industrial property company, today publishes a trading update on its UK multi-let industrial (MLI) portfolio for the period from 1 April 2020 to 30 June 2020 and up-to-date information on transactions and rent collections across the Company's whole portfolio.


Strong leasing momentum driving rental growth

·    Further improvement in occupancy across the MLI portfolio to 92% as at 30 June 2020, up from 91.1% as at year end. 

·    £0.79 million per annum of new rental income1 contracted through 25 new lettings (previous quarter: 28) and 17 lease renewals (previous quarter: 25), totalling 123,946 sq ft.

·    22% average uplift on the previous passing rent on new lettings (previous quarter: 34%) and 20% on lease renewals (previous quarter: 20%).

·    Average rental incentives on all new lettings and renewals remained broadly unchanged at 3.1 months on an average lease term of 4.2 years (3.4 years to earliest break).

·    23 of the 42 leases completed in the quarter closed in June, accounting for 58% of the total sq ft transacted and 57% of the contractual rental income, illustrating the renewed high levels of leasing activity and demand for space in the Company's MLI assets as we emerge from lock down.

·    Average passing rent grew by 0.4% over the quarter to £5.29/sq ft (previous quarter: £5.27/sq ft) as the Company continued to capture rental reversion. The estimated rental value for the portfolio remains unchanged at £5.80 psf, reflecting a 8.9% premium to the average passing rent at quarter end.

·    The most significant transactions completed were a letting of 11,500 sq ft at Eurolink 31, in Normanton, on a ten-year term with a break in year five and a five-month rent free incentive, and a letting of 7,300 sq ft at Rawdon Network Centre, in Swadlincote, for a six-year term with a break in year three and a four-month rent free incentive. 


Industrials.co.uk direct leasing platform continues to underpin leasing activity

·    36% increase in direct leasing calls via the Industrials platform versus the previous quarter, and up 117% versus the average weekly calls received throughout 2019. 

·    Users numbers up 17% versus the previous quarter, with the number of pages viewed up 78%, indicating that users were shopping with greater intent. 

Strong leasing momentum continues into second quarter

·    Following a substantial uptick in leasing activity during June, 44 deals were under offer at the end of the quarter over a total of 131,000 sq ft of space.

·    A further 11 deals had exchanged and were awaiting completion on a total of 48,000 sq ft.

E-commerce remains a key driver of leasing activity

·    During the period over half of the leasing transactions (whether completed or under offer) are to businesses seeking to meet requirements (at least in part) for growing e-commerce operations. 

Continued progress in building MLI portfolio and non-core asset sales


Since 31 March 2020 we have completed or agreed £23.4 million of acquisitions and £25 million of disposals across the following transactions:


Acquisition of Stretton Business Park in Burton-upon-Trent - on 24 June 2020 we completed on the purchase of this asset for £3,750,000, reflecting a net initial yield of 6.9% and a capital value of £86 psf.  The fully occupied terrace comprises four units across 43,500 sq ft. The estate provides an additional £278,000 of rental income per annum (£6.43 psf).

For further information: https://stenprop.com/investors/regulatory-news-service/rns-announcements/3789997.


Acquisition of Bowthorpe Park Industrial Estate in Norwich - on 21 July 2020 we completed on the purchase of this asset for £19,600,000, reflecting a net initial yield of 6.35% and a capital value of £80 psf. The 245,730 sq ft estate is 94% let to a wide range of tenants, with a low average rent of £5.40 psf.

For further information: https://stenprop.com/investors/regulatory-news-service/rns-announcements/3795007.


Disposal of Neucölln Carrée Retail Park, Berlin - On 15 July we exchanged contracts on the sale of the long leasehold in this asset for €27.0 million to Hamburg based real estate investment manager, Union Investment. The disposal price reflects a 15% (€3.6 million) premium to the 31 March 2020 book value.  Completion of the disposal is expected to occur at satisfaction of the last conditions precedent and by no later than 15 January 2021.

For further information: https://stenprop.com/investors/regulatory-news-service/rns-announcements/3793161.


As at 22 July 2020, Stenprop's portfolio comprised 60% of MLI assets. The percentage of MLI assets within Stenprop's portfolio is expected to rise to 62% once the sale of Neucölln Carrée Retail Park, Berlin, completes later in the year2


 Rent collection update


As at close of business on 22 July 2020, Stenprop can report the following rent collection statistics:


Monthly Rents (2020)

Quarterly Rents (2020)







July - Sept










UK Urban Logistics








Guernsey Office

































Stenprop has collected 93% of its April-June quarterly rents and agreed to defer payment of a further 2% until later this year. 


Significant cash balances and low LTV


As at close of business on 22 July 2020, Stenprop's loan-to-value ratio (LTV) was 39.1%, falling to approximately 32%3 when available cash of c. £40 million is added to this measure.


Paul Arenson, CEO, commented:

"The high number of leasing enquiries we have experienced on the UK MLI portfolio over the last 4 months underpins our conviction as to the resilience of this asset class and the quality of the portfolio we have assembled.  Whilst we have had a small number of units back as a result of tenant insolvencies due to COVID-19, at present the overall demand continues to outstrip supply, helping us to reduce our overall vacancy rate by 0.9% during the quarter, whilst continuing to achieve further growth in headline rents.  The strong pipeline of lettings which we hope to capture throughout the second quarter gives us further confidence.

"We have also made good progress on acquisitions and disposals since issuing our annual results in June, as we continue to work towards our ambition to become a pure UK MLI REIT within the next two years. The 15% premium to valuation achieved on our German retail disposal is indicative of the quality of our assets and the strength of the German market and gives us confidence that we can continue to execute the remainder of our sales programme, providing further funds that can be recycled into our UK MLI portfolio. In addition, the completion of over £23 million of selective MLI acquisitions moves us a good step closer to our stated goal of acquiring a further £90 million of MLI assets this financial year. 

"While we expect rent collections to remain abnormal for the time being, we are encouraged that rent receipts are now flowing in faster this quarter and on a monthly basis than they were earlier in the pandemic.  This is largely as a result of the fact that most of our tenants are now open and trading. We have also made good progress in collecting historic arrears from April and May and remain optimistic that in time we will collect the vast majority of all rent due."


The financial information on which this trading update is based has not been reviewed or reported on by the Company's external auditors.

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1.        Contractual Rental Income represents the annual income secured from a lease contract ignoring any incentives and break options in the lease.

2.        These figures are based on our 31 March 2020 valuations adjusted for subsequent acquisitions and disposals and changes in foreign exchange rates.

3.        Calculated as gross borrowing less unrestricted cash, divided by gross asset value based on our 31 March 2020 valuations adjusted for subsequent acquisitions and disposals and changes in foreign exchange rates.



For further information:


Stenprop Limited                                                                                          44(0)20 3918 6600

Paul Arenson (paul.arenson@stenprop.com)

Julian Carey (julian.carey@stenprop.com)

James Beaumont (james.beaumont@stenprop.com)


Numis Securities Limited (Financial Adviser)                                          44(0)20 7260 1000

Hugh Jonathan

Vicki Paine   


FTI Consulting (PR Adviser)                                                                        44(0)20 3727 1000

Dido Laurimore

Richard Sunderland

Richard Gotla

Neel Bose




Java Capital                                                                                                     27 (0)11 722 3050

(JSE sponsor)



About Stenprop:

Stenprop is a UK REIT listed on the LSE and the JSE. The objective of the Company is to deliver sustainable growing income to its investors. Stenprop's investment policy is to invest in a diversified portfolio of UK multi-let industrial (MLI) properties with the strategic goal of becoming the leading MLI business in the UK. For further information, go to www.stenprop.com.



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