Tritax Big Box REIT has announced record development lettings for 2022, despite the “challenging” economy.
In a trading update ahead of its full-year results, due on 2 March, the big-shed specialist said 3.1m sq ft of development lettings during the year had added £23.3m of annual rent, equating to a 6-8% yield on cost.
Tritax let 38m sq ft in the UK over the year, a fall from 2021’s 42m sq ft but still its third highest year on record and 33% above the 10-year average.
Its total rent book grew over the period by 14.5% to stand at £224m, from a portfolio now valued at £5.1bn. This reflects a fall in value from the £5.5bn clocked in December 2021.
Chief executive Colin Godfrey said: “We delivered excellent operational performance in FY 2022 underpinned by record development lettings and further development starts as we continued to capitalise on a strong occupational market.”
Tritax made 2.9m sq ft of development starts in 2022, of which 2.4m sq ft has been let.
Godfrey added that some silver linings were beginning to appear in the otherwise cloudy macroeconomic picture.
“The macroeconomic backdrop has been challenging, with increasing inflation and interest rates leading to a significant weakening of the investment market and material falls in asset values in the second half of the year across the sector. More recently, however, given the attractive long-term fundamentals of UK logistics, we are seeing encouraging early signs of stabilisation in the investment market and greater discernment over asset quality, which plays to the quality and strength of our portfolio.”
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