Tritax Big Box £500 million Debut Senior Unsecured Notes and new £350 million Unsecured Revolving Credit FacilityRead more
31 January 2018
The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has acquired a National Distribution Centre at Weston Road, Crewe, Cheshire. The property is let to Expert Logistics Ltd (“Expert Logistics”), a wholly owned subsidiary of AO World Plc (“ao.com”), a leading European online electrical retailer listed on the London Stock Exchange, which will act as guarantor. The total consideration is £36.10 million.
The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to provide the following trading update ahead of the publication of the Company’s results for the year ended 31 December 2017, which are to be published on Wednesday 7 March 2018.
HIGH QUALITY PORTFOLIO FOCUSED ON BIG BOX LOGISTICS ASSETS
· Acquired 11 new Big Box investments in 2017 (including one pre-let forward funded development), with an aggregate purchase price of £435 million, along with 124 acres of prime London distribution development land for a total consideration of £62.5 million (excluding purchaser’s costs)
· Four pre-let forward funded developments, totalling 2.0 million sq ft., reached practical completion in 2017
· As at 31 December 2017, £2.46 billion1 (including forward funded commitments) invested in a portfolio of 46 Big Box assets (the “Portfolio”) as well as the 124 acres of development land at Littlebrook, Dartford
o Portfolio 100% let or pre-let to 36 institutional quality tenants with contracted annual rental income of £124.6 million and all leases provide for upward only rent reviews2
o Weighted average purchase yield since inception of 5.7%2
o Weighted average unexpired lease term across the portfolio of 13.9 years2
o Since 31 December 2017, a further 3 Big Box assets have been acquired with an aggregate purchase price of £139.8 million, increasing the Portfolio to a total of 49 assets and extending the weighted average unexpired lease term across the portfolio to 14.5 years2
FINANCING ACTIVITY REDUCING COST OF DEBT AND EXTENDING MATURITY
· Debut issue of £500 million senior unsecured loan notes, with an average term of 11.5 years, rated Baa1 by Moody’s following the establishment of a £1.5 billion Euro Medium Term Note Programme
· New five-year £350 million unsecured revolving credit facility, with an uncommitted £200 million accordion option, and the repayment in full of £550 million secured syndicated facility due 2020 and £7.0 million and £11.6 million Helaba facilities due 2019
· Weighted average term to maturity of debt facilities of 8.9 years as at 31 December 2017 (4.8 years as at 31 December 2016). Weighted average running cost of debt of 2.38% pa4, primarily comprising fixed rate debt
· Successful significantly oversubscribed £350 million equity issue in May 2017
PROGRESSIVE DIVIDEND POLICY
· The Company is targeting an aggregate dividend of 6.4 pence per share for the year ended 31 December 2017, payable quarterly, of which 4.8 pence per share has been paid for the nine months ended 30 September 20173
· Consistent with its progressive dividend policy, the Company today confirms it is targeting an aggregate dividend of 6.7 pence per ordinary share for the year ending 31 December 2018:
o A 4.7% increase over the dividend target of 6.4 pence per Ordinary Share for 2017
o In excess of the rate of RPI inflation over the 12 month period to 31 December 2017
o Dividends are expected to be fully covered by Adjusted earnings from the Company’s portfolio
Colin Godfrey, Partner of Tritax, said:
“We continue to implement the Company’s strategy, further diversifying our portfolio by geography and tenant whilst remaining patient and disciplined in our approach. During 2017, whilst maintaining a high proportion of Foundation assets to underpin the portfolio’s core, low-risk income (74% of the portfolio by value), we have also sought to selectively acquire some Value Add opportunities, which included 124 acres of prime development land at Dartford, which offer the potential to deliver further value to our shareholders in 2018 and beyond.
Our increased scale brought further strategic benefits including the issuance of our £500m debut unsecured loan notes, which nearly doubled our average term to maturity at an attractive fixed cost of debt.
The compelling fundamentals of our market remain largely undisturbed by the ongoing uncertainties associated with the economic and geopolitical backdrop. The weight of occupier and investor demand for Big Box logistics assets, coupled with a lack of meaningful supply, ensured that values and rental growth remained robust during 2017, with evidence suggesting that such attractive dynamics are likely to continue to support the performance of the sector into 2018.”
1) Valuation as at 30 June 2017 plus acquisition price for subsequently acquired properties.
2) Excludes development site at Littlebrook, Dartford
3) The target dividend is a target only and not a forecast. There can be no assurance that the target will be met and it should not be taken as an indication of the Company’s actual or expected future results.
4) Based on gross debt, excluding commitment fees