Warehouse Reit (WHR ) has put interest rate hedges on its debt after a report from Numis Securities highlighted the logistics investor was the most exposed to rising interest rates in its sector.

The £605m real estate investment trust (Reit) came under scrutiny this month after analysts at Numis singled out the portfolio of last-mile warehouses as being most exposed from rapidly rising interest rates as most of the fund’s debt was floating rate.

While Warehouse Reit has not made reference to the report, it has made moves to reassure investors, by reworking the terms of its debt.

The Reit announced that it plans to fund its acquisition of Bradwell Abbey industrial estate in Milton Keynes by drawing down £63m from its revolving debt facility and that it was also using the opportunity to change the terms of its debt facilities.

Previously the debt was paid at an interest rate of Sonia – the inter-bank lending rate that replaced Libor last year – plus a lending margin. Now, the trust has taken out two additional interest rate caps of £100m each for three and five years that will cap the Sonia rate in the debt at 1.5%.

In an announcement to the stock market, the trust said: ‘These are in addition to the two existing £30m interest rate caps the company has in place, which expire in November 2022 and 2023 and have caps at Sonia rates of 1.5% and 1.75%, respectively.’

The trust has total debt facilities of £345m with a loan-to-value ratio of 30.1% at 31 March valuations, and since the amendments 75% of the debt is hedged against interest rate volatility.

In the report, Numis’ Sam Murphy said companies that have a high level of floating-rate debt ‘may have to deal with an unforeseen rise in finance costs, while near-term debt maturities also pose a risk if lending conditions become unfavourable’.

Warehouse Reit has been a winner over the Covid-19 pandemic, with a 61.6% total shareholder return over three years. The fund broke through the £1bn market value earlier this year but its shares have de-rated in the past three months, losing 14% as the red-hot logistics sector has cooled after a warning of potential excess capacity by Amazon, to stand on an 18% discount.