First World Hybrid Real Estate Plc (“FWHRE” or the “Company” or “the Fund”)
The Board of First World Hybrid Real Estate Plc is pleased to announce that on 20 December 2024 the lease with Eviosys Packaging UK at the Fund’s Leicester distribution warehouse property was extended by a further 10 years. This lease now expires in September 2037. A 12-month rent-free incentive was granted to secure the extension. The next rent review is in September 2027, and it has been agreed that the rent will be reviewed to headline rental at the time, with no provision for incentives to be deducted. Accordingly, a meaningful uplift in rental is expected in due course.
This is a significant leasing event in that the Leicester property is the 2nd largest in the portfolio by value. It increases the certainty of income for the Fund and enhances the portfolio WAULT, from 8.2 to 9.2 years. It is also likely to positively impact on the valuation of the property.
The Fund continues to see good evidence of valuations yields being stable and indeed some evidence of yields firming. Furthermore, evidence of increasing market rental levels and the consequent positive impact on valuations continues.
A good example of this is the recent valuation of the Runcorn distribution warehouse property, occupied by Matthew Clark Bibendum. The most recent independent valuation, dated 21 December 2024, saw a £725k (13%) uplift in market value to £6.275m, driven by both a 25bps firming in yield and an increased view on market rental levels.
During Q4 2024, 10 properties (comprising 45% of portfolio value) were routinely revalued by the independent valuers. Six were retained at previous levels while four saw upward adjustments. The net increase was £1.19m, a 1.5% increase on those properties revalued.
There are several other leasing and asset management activities that are nearing conclusion. These include rent reviews, removal of tenant breaks and other value add initiatives. They will be reported once concluded.
This announcement was made on behalf of the Company by FIM Capital Limited.