TRADING UPDATE

RNS Number : 8966W

Tritax Big Box REIT plc

13 November 2014

 



13 November 2014

Tritax Big Box REIT plc

(the "Group" or the "Company")

TRADING UPDATE

The Board of Tritax Big Box REIT plc (ticker: BBOX), the UK incorporated Real Estate Investment Trust focused on investing in Big Box logistics assets in the UK, is issuing this trading update statement for the period from 1 July 2014 to 12 November 2014.

HIGHLIGHTS

·    Raised £150 million of gross proceeds in July 2014 pursuant to an oversubscribed Placing, Open Offer and Offer for Subscription of new ordinary shares at an issue price of 103 pence per share 

·    Trading moved from the Specialist Fund Market to the Main Market of the London Stock Exchange and the Company was listed on the premium listing segment of the FCA's Official List

·    Market capitalisation now approximately £400 million; included in the FTSE UK All Share Index from September 2014

·    Unaudited Net Asset Value per share increased from 101.85 pence as at 30 June 2014 to 102.60 pence as at 31 October 2014, an increase of 0.74%

·    Interim dividend of 1.85 pence per share in respect of the period from IPO to 30 June 2014 declared on 8 July 2014 and paid on 8 August 2014

·    Target dividend of 2.3 pence per share for the six months ending 31 December 2014¹Four Big Box assets acquired during the period in prime logistics locations across the UK let to institutional-grade tenants for a total investment of approximately £107.1 million

·    Additional forward funding development completed on a new logistics facility pre-let in its entirety to Rolls-Royce Motor Cars Limited for an investment price of £37 million

·    Property portfolio independently valued as at 31 October 2014 at £516.1 million²

·    Weighted average unaudited net initial yield (at acquisition and net of costs) of the Group's eleven properties of 6.00%

·    Weighted average unexpired lease term across the portfolio of 14.9 years

·    Aggregate borrowings of 34.8% of gross assets with current long term debt of £179.48 million³

·    Weighted average term to maturity of Group debt facilities of 4.3 years with options to extend in each case

·    Several new loan facilities at advanced stages of negotiation in line with a medium term loan to value target of 40%  

·    Blended margin payable across the Company's financings to date of approximately 1.77% above three month LIBOR³

·    Portfolio performing in line with management expectations with 100% occupancy during the period

·    Strong pipeline of attractive new investment opportunities under active negotiation

1.     This is a target only and not a profit 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 expected or future results.

2.     Including The Range, Doncaster at purchase cost.

3.     Based on valuations as at 31 October 2014 and including the acquisition of The Range, Doncaster with associated completion and drawdown of its loan facility.

Richard Jewson, Chairman of Tritax Big Box REIT plc, commented:

"The Company's performance goes from strength to strength as we continue to expand successfully our portfolio of high quality Big Box assets. The Board and Manager remain confident of delivering excellent returns to our investors through a stable and growing income stream, coupled with the potential for capital appreciation in a dynamic market."

Colin Godfrey, Partner of Tritax, said:

"Through our track record, experience and established network of contacts, Tritax is well-placed to source a strong pipeline of attractive new investments, whilst remaining disciplined in our investment approach. We look forward to cementing our leading position in the Big Box market by continuing to acquire well and diversifying the portfolio, whilst delivering value to our shareholders."

PORTFOLIO

Over the period, the Group acquired a further four Big Box logistics assets and also completed on a forward funding for the pre-let development of a new logistics facility:

·    Freehold investment leased to DHL Supply Chain Limited ("DHL") at Langley Mill, Nottingham, for a purchase price of £17.53 million (net of acquisition costs), reflecting a net initial yield of 6.5% on the asset acquisition, assuming 6.6% costs (August 2014)

·    Freehold investment leased to DHL at Skelmersdale, Lancashire, for a purchase price of £28.87 million (net of acquisition costs), reflecting a net initial yield of 6.5% on the asset acquisition, assuming 6.6% costs (August 2014)

·    Freehold investment leased to Wolseley UK in Melmerby, approximately 4 miles from Ripon Town Centre, for  a purchase price of £12.24 million (net of acquisition costs), reflecting a net initial yield of 6.73% on the corporate acquisition, assuming 1.8% costs (August 2014)

·    Forward funding for the freehold development of a new logistics facility located near Bognor Regis, West Sussex, pre-let in its entirety to Rolls-Royce Motor Cars Limited for an investment price of £37 million, reflecting a yield of 6.25% (net of 2.8% acquisition costs) (September 2014)

·    Freehold investment leased to The Range in Doncaster for a purchase price of £48.5 million (net of acquisition costs), reflecting a net initial yield of 6.1%, assuming 5.8% costs (November 2014)

VALUATION AND NET ASSET VALUE UPDATE

The Group's investment properties have been independently valued as at 31 October 2014 at £516.1 million², representing an increase of approximately 4.9% above the aggregate acquisition price (excluding acquisition costs).

The Company's unaudited Net Asset Value per Ordinary Share as at 31 October 2014 is 102.60 pence, which represents an increase of 0.74% as compared to the unaudited Net Asset Value as at 30 June 2014 of 101.85 pence (prior to adjustment for the interim dividend of 1.85 pence per Ordinary Share declared on 8 July 2014).

MARKET UPDATE & OUTLOOK

There has been significant activity in the logistics sector, with transactions over the past 12 months at the highest level since 2007. While rental growth across the sector has stabilised over the last quarter, the Directors believe that Big Box assets offer attractive yields compared to other asset classes and other sectors within the property market.

The Board believes that there is a healthy pipeline of suitable new investment opportunities. Further to the acquisition of The Range in Doncaster announced today, the Company is currently in advanced negotiations in relation to the acquisition of three additional assets, each of which is under offer and in exclusivity. 

In addition, the Manager is engaged in detailed discussions with the current owners of a number of other suitable assets which meet the Company's Investment Policy.  In order to assist in the financing of these investment opportunities, the Company is currently considering a further equity fundraising in the near term pursuant to its share issuance programme.  Further details will be published in due course.

For further information, please contact:

Tritax Group Colin Godfrey (Partner, Fund Manager)	via Newgate Communications
Newgate Communications (Financial PR) James Benjamin Clotilde Gros Georgia Lewis	Tel: [phone] Email: [e-mail]
Jefferies International Limited Gary Gould Stuart Klein Alex Collins	Tel: [phone]
Akur Limited Anthony Richardson Tom Frost Siobhan Sergeant	Tel: [phone]

NOTES:

Tritax Big Box REIT plc is a real estate investment trust to which Part 12 of the UK Corporation Tax Act 2010 applies ("REIT"). The Company invests in a portfolio of well-located, modern "Big Box" assets, typically greater than 500,000 sq. ft., let to institutional-grade tenants on long-term leases (typically at least 12 years in length) with upward-only rent reviews (giving inflation linked earnings growth), and with 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 in high growth areas of the economy and limited stock supply. The Company is the first listed vehicle to give pure exposure to the "Big Box" asset class in the UK.

Further information on Tritax Big Box REIT is available at www.tritaxbigboxreitplc.co.uk 

 

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