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By Malcolm Stacey | Wednesday 7 November 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello, Share Provers. You may have noticed that I favour the warehouse game. It seems to me that online shopping is the in-thing and the stuff has to be stored somewhere. However, Warehouse REIT (WHR) provides a wider warehouse function. It also serves the old-fashioned retail world.
I hate the company name though but any road up, the company snaps up warehouses close to population centres. This helps larger companies to send goods directly to customers’ homes. Companies which are not so big also use the warehouses to keep their stuff before sale. Having warehouses so near to city centres helps the online sellers to get their goods to us as quickly and efficiently as possible, something everyone seems to demand these days.
You may have heard me say that companies which have clients who are household names are often a better investment than those which don’t. Well, Amazon, Argos, Halfords (HFD) DFS (DFS), Asda and Boots are all on Warehouse REIT’s books.
The company’s aim is to accrue £500 million of assets by 2023. As of now, the warehouses are valued at £290 million. So it’s not really a giant. But it does have a huge and growing market to have a go at. If traditional high street stores really don't have a future, this firm’s second string of serving online sellers should make up for it.
The outfit is managed by another company called Tilstone Partners. It’s invested £17 million in the venture. How’s that for a token of confidence? Warehouse REIT has only relatively recently registered on AIM. But its core team has a total of 100 years experience of property development. There’s an enviable occupancy rate of 93% across 4.4 million square feet. That’s a lot of football pitches.
And now let’s house ourselves in the Punter’s Return.
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