TIDMBBOX
RNS Number : 1318N
Tritax Big Box REIT plc
28 January 2021
28 January 2021
Q4 2020 UPDATE
STRATEGY DELIVERING GROWING RETURNS ACROSS THE PORTFOLIO
Tritax Big Box REIT plc (the Company) today announces an update
on its performance for the final quarter of its 2020 financial
year.
We are well aligned to accelerating long-term trends
2020 saw record demand for logistics real estate space in the
UK:
-- Record take-up in 2020 of 43-50 million sq ft representing
year-on-year growth of over 50% (1) .
-- Estimated to be 112 million sq ft of demand requirements (2)
across the logistics market, the highest level ever recorded,
sustaining demand levels in 2021 and beyond.
-- Supply of prime logistics assets remains constrained.
-- High levels of investment demand in Q4 2020 drove prime logistics yields below 4%.
Portfolio performance driven by high-quality assets
Our strategic focus on high-quality assets is reflected in
ongoing strong levels of rent collection in the quarter. In line
with our expectations:
-- 99% of Q4 2020 rents have now been received, taking the rent
collection level across FY2020 to 99%.
-- Remaining c.1% subject to deferral arrangements which we
expect to be recovered by mid-2021.
-- No rent-free periods or rent reductions have been agreed across the portfolio.
We expect that 100% of Q1 2021 rents will be collected by the
end of March 2021, comprised of the following:
-- 93% of rents have been paid to date.
-- 7% is scheduled to be collected monthly over the remainder of the quarter.
As recently announced by the Company, the strength of our
investment and development portfolio has been reflected in a
material increase in valuation of approximately 8% since 30 June
2020. This increase in value has been driven by the strength of the
market, the quality of the portfolio and the positive impact of our
active management and development activities as assets transitioned
from development to the investment portfolio.
Actively managing to deliver value for our stakeholders
We directly and actively manage our portfolio, working with our
customers to meet their needs and deliver value for our
shareholders. Achievements during the quarter included:
-- The acquisition in November of a prime temperature-controlled
distribution unit in the core South Coast location of Nursling
Industrial Estate, Southampton.
o GBP44.2 million consideration, reflecting a net initial yield
of 5.24% in an off-market transaction.
o Provides opportunities to deliver value accretion through
asset management initiatives.
-- Completed three rent reviews to deliver an average increase
of 8.4% and adding GBP0.65 million to annual rent roll.
Ongoing progress within our development platform
The occupier market continued to strengthen, and we have seen
high levels of enquiries for space within our large, high quality,
well-located development platform, from both existing and potential
new customers. Achievements during the quarter included:
-- All speculatively built units within the Tritax Symmetry
(TSL) portfolio have been fully let following a letting to Ocado in
December 2020 on a 20-year term, for a 164,000 sq ft building in
Bicester, which achieved a rent 20% higher than appraisal
levels.
o In total, lettings across the TSL portfolio during 2020 added
GBP4.6 million to the contracted rent roll.
-- Littlebrook Phase 2, pre-let to Amazon, has become wind and
watertight as the construction of Europe's largest logistics
facility continues to progress on schedule.
-- Securing 2.5 million sq ft of planning consents at our Rugby
(1.9 million sq ft) and Biggleswade (0.6 million sq ft) sites,
further increasing the size of the UK's largest logistics focused
land bank.
Following the positive progress made since the purchase of TSL,
the Company has made changes to the development management
agreement between TSL and DB Symmetry Management Limited to better
reflect the growth in the TSL portfolio and general inflationary
increases since February 2019. These amendments support the
incentivisation of the broader TSL team via, inter alia, the
introduction of a bonus scheme for TSL employees based on and
aligned with the successful delivery of the development pipeline
between now and at least 2027 and averaging approximately 3% of
profits contributed to the Company. The TSL management team,
including Richard Bowen, a Director of TSL and therefore a related
party of the Company under Chapter 11 of the FCA's Listing Rules,
continue to be aligned through the holding of 13% of the TSL
development assets via C shares. These amendments to the
development management agreement constitute a smaller related party
transaction under Listing Rule 11.1.10.
Ongoing investment by Tritax Management in its team
Tritax Management has appointed Phil Redding as a Partner, with
responsibility for investment strategy, to support its mandates,
including Tritax Big Box. Phil brings a wealth of experience in
logistics real estate, from a career spanning 25 years at Segro
where he rose to become Chief Investment Officer of the FTSE 100
REIT.
Colin Godfrey, CEO, Fund Management, commented:
"Despite the broader challenges and uncertainty created by
Covid-19 and Brexit, the disciplined execution of our strategy
delivered increasing momentum in growth through to the end of 2020,
supported by a strengthening UK prime logistics market. Across the
business our strategy is delivering value, from our strong and
resilient portfolio, effective asset management and accelerating
progress on development. The significant uplift in our portfolio
valuation was driven by both the strength of the market and the
value we are creating through active asset management and
controlled development activity. Constrained supply is being
outstripped by strong occupational demand for logistics real
estate, particularly for Big Boxes. We are benefitting from
excellent customer relationships, a large and high-quality landbank
and strong balance sheet, which together ensure that we are well
placed to capture this opportunity and deliver sustainable value
growth for our shareholders and wider stakeholders.
"We are delighted that Phil Redding has joined Tritax
Management. His extensive experience of investment strategy and
acquisition of major logistics portfolios will further enhance our
team and the quality of our platform for the benefit of the
Company's shareholders."
The Company will announce its FY 2020 results on 10 March 2021.
To register to view the webcast please visit
www.tritaxbigbox.co.uk/investors
FOR FURTHER INFORMATION, PLEASE CONTACT:
Tritax Group Tel: +44 (0) 20 8051 5057
Colin Godfrey (CEO, Fund Management)
Frankie Whitehead (Finance Director)
Ian Brown / Jo Blackshaw (Investor
Relations)
Tel: +44 (0) 20 7379 5151
Maitland/AMO (Media enquiries) tritax-maitland@maitland.co.uk
James Benjamin
The Company's LEI is: 213800L6X88MIYPVR714
(1) (Source: CBRE, Savills)
(2) (Source: Savills)
NOTES:
Tritax Big Box REIT plc (ticker: BBOX) is the only listed
vehicle dedicated to investing in very large logistics warehouse
assets (Big Boxes) in the UK and is committed to delivering
attractive and sustainable returns for Shareholders. Investing in
and actively managing existing built investments, land suitable for
Big Box development and developments predominantly delivered
through pre-let forward funded basis, the Company focuses on large,
well-located, modern Big Box logistics assets, let to
institutional-grade tenants on long-term leases (typically at least
12 years in length) with upward-only rent reviews and geographic
and tenant diversification throughout the UK. The Company seeks to
exploit the significant opportunity in this sub-sector of the UK
logistics market owing to strong tenant demand and limited supply
of Big Boxes.
The Company is a real estate investment trust to which Part 12
of the UK Corporation Tax Act 2010 applies (REIT), is listed on the
premium segment of the Official List of the UK Financial Conduct
Authority and is a constituent of the FTSE 250, FTSE EPRA/NAREIT
and MSCI indices.
Further information on Tritax Big Box REIT is available at
www.tritaxbigbox.co.uk
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