Results for the six months ended 30 June 2024

Attractive earnings growth – extensive opportunities – strengthening market

H1 2024 key figures 

Completion of strategic acquisition of UK Commercial Property REIT Limited (UKCM)

• High-quality urban logistics portfolio complements existing strategy to broaden client offer and increases income and capital growth potential with 41% rental reversion.
• Delivers cost savings supporting immediate earnings growth and enhances balance sheet strength by reducing leverage.
• Non-strategic assets provide enhanced scope for capital recycling with first disposals expected in Q4 2024.

Higher net rental income and DMA contribution supporting Adjusted EPS growth

• 10.4% increase in Adjusted EPS to 4.35 pence (H1 2023: 3.94 pence) driven by net rental income growth and Development Management Agreement (DMA) income. Adjusted EPS excluding additional DMA income grew 4.1% to 4.10p (H1 2023: 3.94p).
• 34.7% increase in contracted annual rent to £303.4 million (31 December 2023: £225.3 million) driven by UKCM acquisition, rent reviews and asset management.  
• EPRA cost ratio of 12.5% (H1 2023: 12.6%), expected to reduce further over near term with realisation of UKCM synergies.

Future earnings growth supported by record logistics portfolio reversion

• 27.2% increase in total portfolio value to £6.40 billion (31 December 2023: £5.03 billion), following the acquisition of UKCM, with equivalent yield remaining broadly stable at 5.7% (31 December 2023: 5.6%).  
• 1.9% Like-for-like Estimated Rental Value (ERV) growth across logistics portfolio for the period.
• Record 25.5% logistics portfolio reversion provides potential to capture £68.2 million of additional rent, of which £43.4 million is subject to lease events by the end of 2026, supporting future earnings growth.  

Growing rental income through active management and investment acquisition

• £8.0 million added to annual contracted rent through rent reviews and asset management initiatives:
  • 10.7% increase in passing rent across rent reviews and lease events in H1 2024. 
  • 17.4% of the portfolio is subject to lease events during the remainder of the financial year.  
  • £46.0 million acquisition of 0.5 million sq ft East Midlands cold store let to Co-Op, with 7.3% reversionary yield.
• 5.1% annualised rental growth across all leases subject to rent review in period (H1 2023: 3.3%). EPRA like-for-like rental growth of 2.1% (H1 2023: 3.6%) over the period, reflecting lower number of rent reviews in period. 

Developing best in class logistics assets to drive future earnings growth

• Over 1.8 million sq ft of lettings in solicitors’ hands with potential rental income of £18.1 million.
• £1.3 million added to annual contracted rent from 0.1 million sq ft of new development lettings in period.  
• £7.4 million added to passing rent from 0.8 million sq ft of development lease completions.  
• 0.9 million sq ft of construction starts, of which 0.4 million pre-sold under DMA:
  • DMA income guidance increased – £25.0 million expected in FY24; £10.0 million expected in FY25.
• As expected, targeting lower end of development start guidance range of 2-3 million sq ft for FY 2024 (inclusive of DMA activity), and average yield on cost of c.7.0%.

Strong balance sheet well positioned to support our strategy

• 29.9% LTV at 30 June 2024 (31 December 2023: 31.6%) and Net Debt/EBITDA⁵ of 7.1x (31 December 2023: 8.2x). 
• 3.0% weighted average cost of debt (31 December 2023: 2.93%), with 95% of drawn debt either fixed or hedged.
  • UKCM RCF refinanced post period end, with margin reduction of 70bps.
• Over £550 million of available liquidity as at 30 June 2024, and 5.0 year average debt maturity. 
• Upgrade from Moody’s of credit rating outlook to Baa1 (positive) from Baa1 (stable). 

Aubrey Adams, Chairman of Tritax Big Box REIT plc, commented: 

“This has been a transformational half year for Tritax Big Box. The completion of the UKCM transaction and increased investor optimism in the logistics real estate sector provide the Company with further opportunities. Capturing record reversion in our investment portfolio and delivering new logistics buildings from our land platform provide clear drivers to deliver attractive earnings growth for shareholders. Together, these give us the potential to add £121 million to rents in the nearer term and the opportunity to more than double our rental income over the longer term. We believe both the occupational and investment markets are at an inflection point, with the potential to both accelerate and amplify opportunities to drive shareholder returns. We expect this change in environment to result in greater leasing activity in the second half of the year and into 2025.

“The integration of the UKCM portfolio is proceeding well and we look forward to driving additional value from UKCM’s logistics assets. We continue to see high-levels of interest in the non-strategic assets in the portfolio and expect to complete on our first sales in the second half.

“Looking forward, in addition to the growth from within our investment and development portfolios, we continue to explore additional ways of leveraging our expertise into near adjacencies, including power and datacentres, where we are actively progressing potential opportunities.”

Presentation for analysts and investors 

A Company presentation for analysts and investors will take place via a webcast with live Q&A at 9.00am (BST) today and can be viewed at: https://stream.brrmedia.co.uk/broadcast/668522a6e51f6490a5ef0b28

If you would like to ask a question verbally rather than through the webcast viewer, please join the presentation conference call:

UK: +44 (0) 33 0551 0200

US: +1 786 697 3501

Password: Tritax Big Box

The presentation will also be accessible on-demand later in the day on the Company website: https://www.tritaxbigbox.co.uk/investors/results-and-presentations/ 

Notes 

1. Operating profit before FV movements and other adjustments. 
2. See Note 7 to the financial statements for reconciliation. 
3. The anticipated run rate for Development Management Agreement (DMA) income is £3.0-5.0 million per annum over the medium term. Adjusted EPS is 4.10p when excluding DMA income above this anticipated run rate (‘additional’ DMA income). £12.2 million of DMA income is included in the 4.35p Adjusted earnings per share in H1 2024 (H1 2023: £0.0 million included in 3.94p Adjusted earnings per share). 
4. The Portfolio Value includes the Group's investment assets and development assets, land assets held at cost, the Group's share of joint venture assets and other property assets. 
5. Calculated based on pro-forma EBITDA inclusive of full twelve months contribution of UKCM.
6. An alternative performance measure. The Group uses a number of financial measures to assess and explain its performance, some of which are considered to be alternative performance measures as they are not defined under IFRS. For further details, see the Financial review and Notes to the EPRA and other key performance indicators section, as well as definitions in the Glossary.

For further information, please contact: 

Tritax Group 

Colin Godfrey, CEO                                                                             Tel: +44 (0) 20 8051 5060 
Frankie Whitehead, CFO                                                                    bigboxir@tritax.co.uk 
Ian Brown, Head of Corporate Strategy & Investor Relations 

Kekst CNC 

Neil Maitland/Guy Bates                                                                     Tel: +44 (0) 7971 578 507 

+44 (0) 7581 056 415 

Email: tritax@kekstcnc.com 

The Company's LEI is: 213800L6X88MIYPVR714 

Notes: 

Tritax Big Box REIT plc (Tritax Big Box or the Company) is the UK’s specialist in logistics real estate with the UK’s largest investment portfolio and largest logistics-focused land platform. Tritax Big Box is committed to delivering attractive and sustainable returns for shareholders by investing in and actively managing existing built investments and land suitable for logistics development. The Company focuses on well-located, modern logistics assets, typically let to institutional-grade tenants on long-term leases with upward-only rent reviews and geographic and tenant diversification throughout the UK. The Company seeks to capture the significant opportunity provided by long-term global structural drivers, together with the imbalance between strong occupational demand and constrained supply of modern logistics real estate in the UK. 

The Company is a real estate investment trust to which Part 12 of the UK Corporation Tax Act 2010 applies, is listed on the premium segment of the Official List of the UK Financial Conduct Authority (Ticker: BBOX) 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