abrdn Property Income Trust Limited
(an
authorised closed-ended investment company incorporated in Guernsey
with registration number 41352)
LEI
Number: 549300HHFBWZRKC7RW84
(The
"Company" or "API")
5 DECEMBER 2023
PORTFOLIO
REVERSION
As at
30 September 2023 the API portfolio
had a very attractive reversionary potential of c£7.6m, reflecting
29% of the portfolio income.
This
potential will be realised at lease expiries, rent reviews or when
vacant space is let, and is a clear indicator of future
performance.
We are
pleased to provide an update on recent asset management where some
of this reversion has been captured.
Rent
Reviews
Three rent
reviews have been agreed within the last two months across the
industrial portfolio, with significant increases in
rent.
In
Bristol, a rent review at Kings Business Park was agreed at £96,350
p.a. reflecting a 38.6% uplift to the previously passing
rent.
This was
in line with the September 2023
valuation, but 28% ahead of the June valuation which more
accurately reflects the pre-agreement level.
At Opus 9
in Warrington, a rent review has been settled at £245,000 p.a.
which is 57.6% above the previous passing level and 16.4% ahead of
the September valuation.
Lastly, we
have just agreed the rent review on Elliot
Way in Birmingham at £428,000 p.a. which is 8.3% ahead of
the September valuation and 52.4% above the previous
rent.
All three
of these deals demonstrate a strong trajectory of income growth,
particularly with the portfolio's very favourable structure with
56% invested in the industrial sector.
These
settlements also reflect a pattern of exceeding the portfolio
valuation assumptions.
Lettings
Building
on the rent review settlements, API is delighted to announce that a
new 15-year lease to a leading parcel delivery company at Rainhill
Road in Washington has
completed.
The
c150,000 sq.ft industrial building has undergone a comprehensive
refurbishment, which has repositioned the property to serve the
parcel distribution market and includes a number of ESG
initiatives.
These
include an extensive roof-mounted solar panel installation and
approximately 1.2 acres of landscaping that will be seeded with
wild flowers next spring to increase
biodiversity.
This has
also resulted in an improvement to the Energy Performance
Certificate with an A rating having been achieved.
As the
letting terms were agreed in mid-2022, the rent of £591,500 p.a. is
already estimated to be approximately 10% below the prevailing
market level, providing the potential for future rental
growth.
Net
Zero Carbon Pathway
API's
stated aim is to de-carbonise the portfolio by 2050, and we have
received updated analysis from our consultants that indicates this
is on track.
The
portfolio not only met its 2022 targets, but its absolute emissions
have also fallen below the calculated Net Zero trajectory by
c16%.
Additionally,
API has reduced its "whole building" carbon intensity by c33% which
puts it in line to meet the CRREM targets for circa 2024 to
2025.
Mark Blyth, Deputy Fund Manager of API commented: "Our
continued focus on ESG, and in particular the environmental
performance of the portfolio, can now be evidenced by the recent
carbon emission results.
These
reflect that our strategy to take advantage of suitable
opportunities to improve API's assets is on track to meet our Net
Zero commitments.
We believe
that these actions are not only moral obligations, but are also
likely to protect future asset value.
The
excellent outcomes on the letting and rent review deals are
indicative of the quality of the API portfolio, and also the
underlying income growth that can be unlocked through good asset
management.
The high
sector weighting to industrial, allied to the ability to
out-perform the valuation assumptions, should be a very positive
driver of performance for API going forward."
All
Enquiries:
Jason Baggaley - Real Estate Fund Manager, abrdn
Tel:
07801039463 or
jason.baggaley@abrdn.com
Mark Blyth - Real Estate Deputy Fund Manager,
abrdn
Tel:
07703695490 or
mark.blyth@abrdn.com
END