Hansteen Holdings plc Portfolio Update (8846Q)
December 05 2016 - 2:46AM
UK Regulatory
TIDMHSTN
RNS Number : 8846Q
Hansteen Holdings plc
05 December 2016
5 December 2016
Hansteen Holdings PLC
("Hansteen" or the "Company", the "Group")
Portfolio Update
Hansteen Holdings (LSE: HSTN), the UK and Continental European
property investment company, announces a portfolio update for the
period 1 July to 30 November 2016.
Highlights
-- 836 lettings and lease renewals for more than 4.3 million sq
ft (400,000 sq m), securing annualised income of GBP16.6 million;
further deals in pipeline
-- Vacancy reduced to 4.2 million sq ft (390,000 sq m) or 10.2%
(30 June 2016: 5.3 million sq ft or 12.9%)
-- Rental growth emerging in UK and Germany
-- Increased investor appetite for multi-let light industrial
property across the European markets from both national and
international investors
For further information:
Ian Watson/Morgan Jones Jeremy Carey/Kirsty Allan
Hansteen Holdings PLC Tavistock
Tel: 0207 408 7000 Tel: 0207 920 3150
Email: jeremy.carey@tavistock.co.uk
Overview
We have completed 836 new leases or lease renewals for more than
4.3 million sq ft (400,000 sq m) of space from 1 July to 30
November 2016, securing annualised income of GBP16.6 million. The
vacancy rate reported in the interim accounts at 30 June 2016 of
5.3 million sq ft (496,000 sq m), or 12.9% of the portfolio, had
been reduced to 4.2 million sq ft (390,000 sq m), or 10.2% of the
portfolio, at the end of November 2016. Further deals are in the
pipeline, which should reduce the vacancy rate further by the year
end.
UK portfolio
In the UK, the vacancy at 30 June 2016 was 1.7 million sq ft
(157,000 sq m), or 10.5%, and today stands at 1.4 million sq ft
(134,000 sq m), or 9.0% showing the strength of the UK occupational
market post the Brexit vote on 23 June.
Our seven UK regional offices have all enjoyed growth in
enquiries and demand. The Yorkshire and Wales regions have
performed well, improving their vacancy rates from 12.6% and 14.0%
respectively at 30 June 2016 to 9.7% and 9.8% today. Scotland has
also performed well, and the 600,000 sq ft (56,000 sq m), 155-unit
portfolio in East Kilbride, a former Scottish new town, became
fully let at the end of October for the first time since being sold
by the Scottish New Towns Development Corporations in the early
1990s.
In addition to a reduction in voids all regions are experiencing
pockets of rental growth and shorter incentives being offered to
tenants as demand intensifies, particularly at estates where voids
are zero or close to zero. We have a relatively short weighted
average unexpired lease term (WAULT) which allows this rental
growth to be achieved relatively quickly. We believe this trend
will continue as demand remains high and no competing supply is
coming through.
European portfolio
The picture across our Continental European markets is similar
to that in the UK. Both the German and Benelux regions have
performed well occupationally since the half year with a combined
900,000 sq ft (84,000 sq m) reduction in the vacancy rate to 10.9%
at the end of November. Current forecasts suggest that this year
will see record low vacancy levels across Europe with occupational
demand outstripping supply in most sub markets.
In Germany, there is evidence that rental growth is starting to
emerge. Tenant letting and renewal incentives have been reducing
for some time on assets that are well located to service urban
conurbations and, where there is a lack of available supply, rental
levels are moving forward. An example of this is at our Motzener
Strasse asset, which was purchased in February 2013 with a passing
rent of EUR3.52/sq m. The main tenant vacated the warehouse later
in 2013 and the space has recently been part relet to Rewe Digital
for its online food retailing service and to Deutsche Bahn for
document storage at rents of EUR4.50/sq m and EUR4.19/sq m
respectively.
Although the Dutch market is further behind in terms of rental
growth, the occupier markets continue to gather momentum and there
is expectation that supply will reduce in 2017.
Investment market
Following the summer hiatus and the Brexit vote on 23 June, the
capital markets have come back strongly with material capital
looking for asset-backed income. There has been a marked increase
in investor appetite for our types of multi-let, light industrial
assets from both overseas and national investors.
Morgan Jones and Ian Watson, joint Chief Executives, commented:
"The light industrial sector is benefiting from the shift towards
online retailing, by providing flexible, low cost space that is
well placed to service urban areas, and investors are looking to
access this markets. As the demand from occupiers and investors
grows in our European markets, our platform is well placed to
capitalise through letting, selling and recycling capital. Our
fully-internalised management team allows us to convert new
occupiers quickly as rents move forward, and to identify, purchase
and deliver new value-add opportunities".
This information is provided by RNS
The company news service from the London Stock Exchange
END
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