Rental income at Tritax EuroBox dipped by 2.6% in the six months ended 31 March to €74.3m (£63.7m), as a result of the group’s disposals programme.
The industrial investor has sold more than €170m of assets and said it was on track to complete its disposals programme, launched 18 months ago, by the end of 2024.
Despite the decline in income, the group said it continued to collect 100% of rents and had reduced its vacancy rate from 5.4% to 3.9%.
The value of its portfolio fell marginally over the period from €1.6bn at the end of 2023 to €1.5bn at the 2024 half-year point, led largely by disposals and a continued sector-wide outward yield shift.
Chair Robert Orr said: “Despite the challenging macro-economic backdrop, our portfolio remains well-positioned. The high-quality assets and strong income characteristics are demonstrated by our 100% rent collection, high occupancy, roster of strong customers on long leases and annual rental increases through indexation.
“However, the continuation of restrictive monetary conditions has caused investment markets to remain subdued and valuation yields to drift higher across European logistics markets. Reflecting these market conditions, during the period we experienced a small reduction in the valuation of our portfolio. In spite of this, we are encouraged to see macro-economic expectations improving and investor sentiment turning more positive.”
Orr said the group remained confident in the ability of its portfolio to deliver strong returns but was “acutely aware” of the significant discount to NAV it was currently trading at and was in “regular dialogue” over how to address the issue.
The group’s 12-month average discount to NAV is around 37%.
He said there was increasing confidence that the cycle of interest rate increases across Europe had now passed and that occupational markets remained “broadly healthy”. However, he did warn that a more challenging economic outlook across Continental Europe was leading to increasing caution from some occupiers, with decision-making taking longer and expansion plans being reviewed.
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