Brexit, despite its uncertainties, “may provide a silver lining” for Tritax Big Box REIT, according to its chairman, Richard Jewson.
In the logistics investor’s full-year results, in which it announced a 10.3% increase in net asset value to 142.24p a share, Jewson said that the increased border controls mean its “customers will require more warehousing domestically, further supporting our business case”.
Its portfolio was independently valued at £2.61bn as at 31 December 2017, across 46 assets plus 114 acres of strategic land, covering 22.7m sq ft of logistics space. It also reported a market capitalisation of £2bn as at 31 December 2017.
The portfolio’s contracted annual rent roll has increased to £125.9m, up from £99.6m as at 31 December 2016. These totals include all forward-funded commitments.
Diversified borrowing sources
The company said that it further diversified its sources of borrowing, with its debut unsecured loan notes totalling £500m. Weighted average unexpired debt term extended to 8.9 years. The loan-to-value as at 31 December 2017 was 26.8%.
It also raised £350m of equity during 2017 through a substantially oversubscribed share issue.
On the operational side, the company acquired 11 Big Boxes during the year with an aggregate purchase price of £435m, further diversifying the portfolio by geography and tenant.
Notable acquisitions included 114 acres of strategic land acquired at Littlebrook, Dartford for £62.5m.
The average net initial yield of the portfolio at acquisition is 5.7%, against a year-end valuation of 4.6%.
The portfolio was fully let or prelet and income producing during the year. At the year end, the weighted average unexpired lease term was 13.9 years, against a target of at least 12 years.
Structural change
Richard Jewson, chairman of Tritax Big Box REIT, said: “We have a portfolio of UK Big Box assets that are benefiting from structural change driven by increasing e-commerce penetration.
“The fundamentals of our market remain positive and are largely unaffected by current geopolitical and economic uncertainties.
“We see opportunities to acquire high-quality assets and forward-funded developments. The 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 dividend target of 6.7 pence for 2018.”
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