Industrials REIT (MLI) 176p

Loss to date: 7.9%

Original entry point: By at 191p, 3 February 2022

Multi-let industrial property company Industrials REIT (MLI) posted a record total accounting return of 25% for the year to March.

The uplift was due to a 20.8% jump in the like-for-like valuation of the portfolio topped off by 4.4% like-for-like rental growth.

Occupier demand remains strong due to land scarcity in urban areas, the high cost of building new units, the surge in e-commerce and the need for customers to onshore supply chains and manufacturing.

Occupancy was steady at 93.6% while rent collection was close to pre-Covid levels at 93% of invoices billed last year paid.

While underlying rental growth was in line with the five-year average, on new lettings it was 26% thanks to competition for space.

Manager Paul Arenson believes the business can generate a total return of over 10% per year while continuing to grow. He plans to double the size of the portfolio by 2026. This should reduce the firm’s cost ratio and potentially lead to a re-rating of the business in line with sectors like student accommodation and self-storage that trade on big premiums to net asset value.

SHARES SAYS: This is a great long-term business, keep buying. 

Disclaimer: The author owns shares in Industrial REIT

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