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 provide an update on recent leasing, property valuations and debt refinancing activities.
On 27 February 2025 the Fund announced that rent review negotiations with the tenant at the Fund’s Runcorn distribution warehouse property had been concluded with a substantial 42% increase on the previous passing rent, effective December 2024. It was also noted that the previous £6.275m valuation of this property in Dec 2024 had been based off a slightly lower ERV and the higher rental that had been agreed was expected to impact positively when the property was next revalued. This property has now been revalued at £6.795m, a meaningful £520k or 8% increase in value.
The Fund has received unsolicited purchaser interest in its warehouse property in Leicester at levels which warranted the Board’s consideration. The property is well located, the lease has 12 years remaining, with good reversionary rental growth prospects, and the tenant now forms part of the NYSE Sonoco group, a global leader in packaging. It was decided to retain the property as a strategic long-term hold. However, it was also agreed that given the level of the offer and that this property is the second largest by value in the portfolio, and further that as time passes the incentives granted for the 10-year lease extension are likely to be impacting positively on the valuation, that an updated independent valuation should be obtained. To this end, we are pleased to advise that the updated valuation reflects a meaningful 6% increase in value of £1.275m, from £21.1m to £22.375m.
These valuation increases are reflected in the pricing of the Fund at 30 June 2025.
Planning approval has now been received for the development of the Burger King drive thru at Marina Quay, Rhyl. A 25-year lease has been agreed with Burger King UK, with a circa 8% investment return expected from the £1.4m capital commitment.
An Agreement for lease has also been concluded with Iduna EVCI Asset Co 1 Limited (Be.EV) for six EV charging bays at North Durham Retail Park. The lease term is for 25 years and will add £21k pa, circa 3%, to the property’s rental income once the planning approval is received and the lease commences.
There are several other leasing and asset management activities that are being pursued. These include rent reviews, removal of tenant breaks and other value add initiatives. They will be reported once concluded.
The debt arrangements with both Barclays and HSBC have been refinanced for 3-year terms with two additional 1-year extensions. In both cases the banking margin has been reduced to 175 bps. A £9m Revolving Credit facility has been added to the HSBC facility. Following the maturity of a £15m swap in April, the Fund entered three short-dated swaps (1 and 2 years) totalling £24.5m. As a result, 70% of the term debt is hedged through a spread of 5 swaps for a weighted average remaining term of 3.9 years. The property portfolio loan to value is 46% and the average cost of debt (including RCF reserving) is circa 4.8%, meaningfully below the property yield.
This announcement was made on behalf of the Company by FIM Capital Limited.