Industrials REIT Ltd said on Friday demand for multi-let industrial space continued to outstrip supply in the first quarter, notwithstanding headwinds such as rising inflation.

For the first quarter to June 30, the London-based real estate investment trust said the average passing rent increased by 27% on the aggregate of all new lettings and lease renewals, the highest growth rate achieved to date.

This is the seventh successive quarter of over 20% average uplifts.

Industrials REIT said 89 letting transactions were completed during the quarter across £2.1 million of leases, compared to 86 lettings and £2.9 million in the previous quarter.

Estimated rental value growth was also strong, with like-for-like growth of 6.4% for the period from 1.2% previously.

Occupancy across the company’s portfolio remained stable at 93.7% from 93.8%.

The group expects rent collections for the financial year ending March 31 to be at normalised pre-Covid levels of around 98%.

The group said 87% of rents due in the first quarter had been collected by July 26 and 95% of rents due for the financial year ended March 31 had been collected by July 26.

‘Since the start of the first quarter in April, the MLI market has continued to be driven by the same high level of occupier demand as last year,’ Industrials REIT Chief Executive Paul Arenson said.

‘Given the backdrop of negative headlines around inflation, rising interest rates and the threat of recession, the fact that our MLI space remains highly affordable to our customers and that demand for space continues to outstrip supply across the UK, provides us with a great deal of comfort and confidence,’ Arenson said.

In London, shares in Industrials REIT rose by 1.1% to 166.50 pence on Friday. They were up by 0.6% at R 33.50 in Johannesburg.

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