Tritax Big Box has sold three warehouses for £125m to an unnamed global real estate investor.
The warehouse REIT today published its results for 2022, showing a 157% drop in earnings per share and a -15.9% accounting return, driven by “significant outward yield shift” across the logistics real estate sector. A -13.1% portfolio capital value deficit was partly offset by development gains and rental growth.
Excluding additional DMA income, adjusted earnings increased by 8.3% to £140.3m.
Today’s confirmation of the sale of the three assets, which total 1.4m sq ft with a combined WAULT of 9.2 years, reflects a blended net initial yield of 4.6%.
The deal includes a 470,000 sq ft unit in Skelmersdale, let to DHL for an unexpired term of 1.5 years; a 578,000 sq ft warehouse in Knowsley, let to Matalan for a further 13.6 years; and a 330,000 sq ft building in Worksop, let to Cerealto for a further 12.5 years.
Tritax said all three assets are non-core to its investment strategy and have delivered an attractive blended IRR of 12.8% per annum over the combined hold period. So far this year, Tritax has sold £150m of assets.
Chief executive Colin Godfrey said: “We constantly seek ways to optimise our portfolio to crystalise value and redeploy capital into higher-returning opportunities. The disposal of three assets for £125m, in line with their book value, demonstrates the ongoing effective implementation of our strategy and the attractiveness of our assets. The sale to a leading global investor in real estate provides further evidence of the growing stabilisation within the UK investment market. With the UK’s largest logistics focused land portfolio, we have a significant pipeline of higher returning development opportunities we are able to recycle capital into.”
Tritax signed 38m sq ft of lettings in 2022, down from 2021’s 42m sq ft but still near record levels.
Chair Aubrey Adams said: “Despite this positive operational performance we have not been immune from the rapid fall in property valuations in the second half of the year. However, we entered this period with a strong balance sheet and high-quality assets, providing us with the headroom to weather these changes as we continued to implement our strategy. Encouragingly, the strength of the occupational market continues to support attractive rental growth and we are seeing early signs of the investment market stabilising as investor confidence begins to return.”
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