Our objectives and strategy

We aim to create value through a top‑down approach to investment, followed by hands-on asset management with best‑in-class processes.

Our objectives

We aim to provide shareholders with an attractive level of income, together with the potential for income and capital growth.

Dividends: a total dividend of at least 6.0 pence per share.
Total accounting return: at least 10% per annum, through a combination of dividends and growth in NAV.

Our strategy

To achieve our objectives, we follow the strategy set out below:

Investment strategy

Stock selection is key to outperformance. Our investment strategy includes:

1. Location 

We look for attractive sites, close to major transport links and large conurbations, with a high level of occupier demand and suitable local workforce.

2. Buildings 

We look through the lens of the occupier, to ensure the buildings match their current and future requirements. We predominantly buy multi-let warehouse estates, which spread risk compared with single-let assets and offer more asset management opportunities. Rental increases can also be reflected across the remainder of the estate.

Most buildings we buy are less than 100,000 sq ft, with a typical unit size of 5,000 to 25,000 sq ft, but we will consider larger units that meet our criteria.

3. Optionality 

We look for buildings with a range of different uses which offer long-term flexibility, such as the ability to sub-divide larger units, and which have the potential to change permitted use. 

Asset management strategy

We budget to spend 0.75% of our gross asset value (“GAV”) on capital expenditure each year, with a target return of at least 10%. We also target a vacancy level of 5-7%, since vacant properties allow us to carry out asset management activities. Outsourcing day-to-day property management to Savills and Aston Rose allows Tilstone’s asset management team to focus on strategic conversations with tenants and to drive lease renewals and new lettings, which contribute to rental and NAV growth.

Financial strategy

We fund the business through shareholders’ equity and bank debt. We look to raise equity at times when we can make investments that are accretive to shareholders. Our strategy for debt financing is to maintain a prudent level of debt, with a target LTV of 30-40% in the longer term. We look to hedge the interest on a proportion of our debt, to provide certainty over our financing costs.