Tritax Big Box REIT sees Brexit silver lining

Tritax Big Box REIT sees Brexit silver lining – Tritax Big Box REIT has released its results for 2017. Highlights are:

  • Dividends declared in relation to 2017 totalled 6.40 pence per share, in line with targets. Progressive dividend target of 6.70 pence per share announced for 2018.
  • EPRA net asset value per share increased by 10.3% to 142.24 pence at 31 December 2017 (31 December 2016: 129.00 pence).
  • Total return (being the increase in EPRA NAV plus dividends paid) for the year was 15.2%, compared to their target of in excess of 9% per annum over the medium term.
  • Adjusted earnings per share totalled 6.37 pence per share.
  • Portfolio independently valued at GBP2.61 billion as at 31 December 2017.
  • The portfolio’s contracted annual rent roll has increased to GBP125.95 million (31 December 2016: GBP99.66 million), which includes all forward funded commitments.
  • Further diversified sources of borrowing, with their first issue of unsecured loan notes totalling GBP500 million.
  • Weighted average unexpired debt term extended to 8.9 yrs (2016: 4.8 yrs). The Loan to Value (LTV) as at 31 December 2017 was 26.8%.
  • A reducing EPRA cost ratio of 13.1% (2016: 15.8%), reflecting the benefits of increased scale.
  • Raised GBP350 million of equity during 2017, through a substantially oversubscribed share issue.

Operational highlights:

  • Acquired 11 Big Boxes during the year with an aggregate purchase price of GBP434.99 million, further diversifying the portfolio by geography and tenant.
  • As at the year-end they held 46 assets, covering more than 22.7 million sq ft of logistics space.
  • 114 acres of strategic land acquired at Littlebrook, Dartford for GBP62.5 million.
  • A further three Big Box assets acquired post year end totalling GBP139.81 million and one pre-let forward funded asset conditionally exchanged totalling GBP81.8 million.
  • Average net initial yield of the portfolio at acquisition is 5.7%(1) , against year-end valuation of 4.6%.
  • Portfolio was fully let, or pre-let and income producing during the year.
  • At the year end, the weighted average unexpired lease term (“WAULT”) was 13.9 years, against their target of at least 12 years.

Richard Jewson, Chairman of Tritax Big Box REIT plc, commented: “We have a sector-leading portfolio of UK Big Box assets that are benefiting from structural change driven by increasing e-commerce penetration, and the operational and financial benefits which they can provide to our Customers. The fundamentals of our market remain positive and are largely unaffected by current geopolitical and economic uncertainties. Despite the uncertainties it brings, Brexit may provide a silver lining, since with increased border controls our Customers will require more warehousing domestically, further supporting our business case. 

Through the Manager’s excellent relationships, we see opportunities to acquire high-quality assets and forward-funded developments to further diversify our portfolio. The continued imbalance between occupational supply and demand means that we expect rental growth and values to remain robust in 2018. The assets we acquired towards the end of 2017 will add to our rental income in 2018. Coupled with our largely fixed cost base, this will contribute to earnings growth and support our progressive dividend target of 6.70 pence for 2018.”

BBOX : Tritax Big Box REIT sees Brexit silver lining

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