Home » News » FTSE 250 » Tritax Big Box REIT plc Market have remained robust despite Brexit and the uncertainty for the UK economy
Tritax Big Box REIT

Tritax Big Box REIT plc Market have remained robust despite Brexit and the uncertainty for the UK economy

Tritax Big Box REIT plc (LON: BBOX), the only real estate investment trust giving pure exposure to Big Box logistics assets in the UK, is today reporting its full year results for the Group for the period from 1 January 2018 to 31 December 2018.

Financial highlights

31 December 2018

31 December 2017

Increase / Decrease

Dividend per share

6.70p

6.40p

+4.7%

Adjusted earnings per share

6.88p

6.37p

+8.0%

EPRA NAV

152.83p

142.24p

+7.4%

Total Return

12.1%

15.2%

(20.3%)

Portfolio value

£3.42bn

£2.61bn

+31.1%

Contracted annual rent roll

£161.12m

£125.95m

+27.9%

Operating profit

£113.76m

£93.78m

+21.3%

Weighted average unexpired lease term

14.4yrs

13.9yrs

+0.5yrs

· Dividends declared in relation to 2018 totalled 6.70 pence per share, in line with our target.

· Adjusted earnings per share increased by 8.0% to 6.88 pence per share for 2018 (2017: 6.37 pence per share).

· EPRA net asset value (“NAV”) per share increased by 7.4% to 152.83 pence at 31 December 2018 (31 December 2017: 142.24 pence).

· Total return (being the increase in EPRA NAV plus dividends paid) for the year was 12.1%, compared to our target of in excess of 9% per annum over the medium term.

· Portfolio independently valued at £3.42 billion as at 31 December 2018, across 54 assets plus 114 acres of strategic land (including forward funded development commitments).

· The portfolio’s contracted annual rent roll has increased to £161.12 million (31 December 2017: £125.95 million).

· Further diversified our sources of borrowing, with our debut unsecured loan notes totalling £400 million. Weighted average unexpired debt term maintained at 8.7 years (2017: 8.9 years). The Loan to Value (“LTV”) as at 31 December 2018 was 27.3%.

· Low EPRA cost ratio of 13.7% (2017: 13.1%), reflecting the benefits of increased scale.

· Raised £156 million of equity during 2018, through an oversubscribed share issue.

Operational highlights

· Acquired 8 Big Boxes during the year with an aggregate purchase price of £641.45 million, further diversifying the portfolio by geography and tenant.

· Completion of a 10 year lease extension with Kellogg’s at the Company’s distribution centre at Trafford Park, Manchester, reflecting an increase in annual rent of 20.0% from the previous passing level.

· Completion of a new 15 year lease at the Company’s distribution centre at Barlborough Links, Chesterfield, following the successful negotiation of a lease surrender with the previous tenant, reflecting an increase in annual rent of 25.4% from the previous passing level.

· As at the year-end our portfolio comprised 54 assets, covering more than 29.8 million sq ft of logistics space.

· At the year end, the weighted average unexpired lease term (“WAULT”) was 14.4 years1, against our target of at least 12 years.

· Detailed planning consent achieved for 450,000 sq ft on Phase 1 of our 114 acre strategic land site at Littlebrook, Dartford.

· Average net initial yield of the portfolio at acquisition is 5.5%1, against our year-end valuation of 4.4%.

· Our portfolio was fully let, or pre-let and income producing during the year.1

Post Balance Sheet Highlights

· Progressive dividend target of 6.85 pence per share announced for 2019.

· £250 million of equity raised to fund the acquisition of db symmetry.

· An 87% economic interest was acquired in db symmetry, one of the UK’s largest strategic land portfolios for logistics property, with the potential to deliver 38.2 million sq ft of logistics assets.2

1 Includes all 54 assets held at 31 December 2018; excludes Littlebrook, Dartford.

2 Including DMA, overage and profit share.

Sir Richard Jewson KCVO, JP, Chairman of Tritax Big Box REIT plc, commented:

“The quality of the Group’s portfolio and Customer base mean that we are confident of continuing to deliver secure dividends to Shareholders, resulting in attractive returns in a low interest rate environment. While the continued delays and lack of clarity over Brexit presents a substantial uncertainty for the UK economy, our market has remained robust. Since the referendum in June 2016, occupiers have continued to search for space, rents have risen and yields have hardened. Brexit is also encouraging manufacturers and retailers to hold additional stock domestically, increasing occupational requirements for UK warehouse space while supply constraints continue. This reinforces the favourable dynamics for landlords. Nonetheless, Brexit does present significant risk for the UK economy which could impinge upon the current positive attributes of our market.

We see good opportunities to continue to add assets to the portfolio at prices that create value at the point of purchase. Following the db symmetry acquisition, we now have the ability to bring through our own developments which are expected to contribute materially to earnings growth and our progressive dividend policy over the medium term.”