tenprop makes inroads in UK multilet sector

Property group Stenprop has become a first mover within the UK’s popular multilet industrial sector and wants to develop into a specialist in that area within five years.

In the past few months, the company has invested aggressively in multilet industrial estates, which now make up 16% of its total assets, results for the six months to September showed on Thursday.

Stenprop has spent the past few years focused on creating a coherent investment strategy that would be supported by a wider group of shareholders.

“We want to become 100% invested in the multilet industrial space. These are granular 300m² to 500m² properties housed within industrial estates. We want to be 50% invested in this space in the next two to three years and then 100% in five years,” said CEO Paul Arenson. Stenprop was also seeking to list on the London Stock Exchange in May and become a real estate investment trust.

Stenprop has declared an interim dividend of 4p per share, a 2.6% increase over the prior year and one in line with the company’s full-year guidance of 8p per share.

Arenson said he had been advised there were investors who wanted to buy into a specialised fund in this sector.

“Pre the 2008 credit crisis, there were four or five listed specialists in this field, but they became overleveraged and hit problems. Now there are only really private companies that deal with multilet industrial estates,” he said.

“So we can be an early entrant and serve shareholders who are hungry for this type of company that provides very secure income.”

Stenprop would only make acquisitions in the multilet industrial sector.

“We had been looking for a sector that had real potential to deliver sustainable growth in earnings for some time, as we didn’t see value in the sectors where we had historically invested,” said Arenson.

“The multilet industrial sector met all our criteria.”

Stenprop acquired an industrials.co.uk portfolio for £130m as well as the C2 Capital management team in June.

Keillen Ndlovu, Stanlib’s head of listed property, said that UK property stocks could offer good value at current levels. Recent good performers had been industrial and logistic stocks.