Tritax spends more than half a billion so far in 2018 insisting ‘Brexit is not affecting occupier demand’

By James Wallace - Thursday, August 09, 2018 9:46

Tritax Big Box REIT expects to close on the purchase of a number of assets together worth £160m in the coming months, which will take its total spending in the year to date to just over half a billion pounds.

Tritax Big Box REIT expects to close on the purchase of a number of assets together worth £160m in the coming months, which will take its total spending in the year to date to just over half a billion pounds.

To support this spending spree, Tritax raised £155.57m of equity in April 2018, through a substantially oversubscribed placing.

In its interim results this morning, Tritax confirmed that assets under offer, in exclusivity and in solicitors’ hands totalling approximately £160m. This follows the forward funded new logistics facility pre-let to Amazon UK Services for an investment price of £120.70m at the turn of Q3.

Richard Jewson, Chairman of Tritax Big Box REIT, said: “We feel that Brexit does not yet appear to be affecting occupier demand for Big Box space significantly.

“Our pipeline of identified investments, forward funded developments and land is strong. We have under offer opportunities which, assuming they proceed to completion, would see our last equity raise fully invested on a geared basis.”

In addition, Over H1, Tritax bought four Big Boxes off market with an aggregate purchase price of £221.6m. Three of which were forward funded pre-let developments with an average unexpired lease term of 26 years. These three assets will add a total of approximately 1.8m sq ft of new Big Box logistics space to the portfolio and increase the rent roll by £9.44m pa.

As a result, Tritax’s portfolio comprised 50 assets, covering more than 24.9m sq ft of logistics space. Up to H1, the portfolio was valued at £2.9bn, including all forward funded development commitments. Contracted annual rent roll increased to £139.36m, while operating profit increased by 34.7% to £57.42m.

“We expect to see continued healthy occupier requirements for well-located logistics buildings which enable occupiers to remain competitive by delivering economies of scale benefits, cost savings and improved operational efficiencies,” Jewson added.

“Market rental growth remains ahead of underlying inflation and we believe that trend will continue in the near term. This supports the continued strong investment demand for UK logistics assets which produced further yield compression in the first half of this year.”

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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