Interim Management Statement

RNS Number : 3811H

Tritax Big Box REIT plc

19 May 2014

 



19 May 2014

TRITAX BIG BOX REIT PLC

(The "Company")

INTERIM MANAGEMENT STATEMENT

The Board of Tritax Big Box REIT plc (ticker: BBOX), the UK incorporated Real Estate Investment Trust focused on delivering income and capital returns to shareholders through investment in Big Box logistics assets in the United Kingdom, is issuing this Interim Management Statement in accordance with FCA Disclosure and Transparency Rule 4.3. This statement relates to the period from admission on 9 December 2013 to 15 May 2014.

HIGHLIGHTS

·      IPO in December 2013 fully subscribed raising £200m

·      Admitted to the Specialist Fund Market of the London Stock Exchange and listed on the Channel Islands Stock Exchange on 9 December 2013

·      Over £187m of net IPO proceeds invested in portfolio of four distribution centres let to institutional-grade tenants

·      Secured £23.5m senior debt financing in April 2014 to Sainsbury's distribution centre in Sherburn-in-Elmet, Leeds

·      Initial portfolio is performing in line with management expectations

·      Healthy pipeline of further suitable new investment opportunities being pursued

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

"We are delighted to have completed the acquisition of four Big Box distribution centres across the UK since the Company's IPO. The Company remains on course to deliver on shareholders' expectations for steady income with the potential for growth through upward-only rent reviews in a sector experiencing strong rental growth."

Colin Godfrey, Partner of Tritax, said:

"Tritax continues to identify pre-let and built opportunities for the Company in this exciting and fast-growing sector of the market.

Through our track record, experience, established contacts and access to off-market transactions, the Company remains at a significant competitive advantage in a market experiencing increased activity. We will continue to capitalise on the opportunities in the "Big Box" asset class and deliver a portfolio of high quality assets for the Company."

PORTFOLIO

Since Admission, the Company has announced the acquisition of four assets:

·      Sainsbury's distribution centre in Sherburn-in-Elmet, Leeds from a fund advised by Ekistics Property Advisors LLP for a purchase price of £48.75 million (net of acquisition costs), reflecting a net initial yield of 6.65% (December 2013)

·      Marks & Spencer East Midlands Distribution Centre at Castle Donington, Leicestershire for a purchase price of £82.575 million (net of acquisition costs) reflecting a net initial yield of 5.2%  (December 2013)

·      Tesco's Distribution Centre at Barlborough Links, Chesterfield, Derbyshire for a purchase price of £28.64 million (net of acquisition costs) reflecting a net initial yield of 6.6% (March 2014)

·      Tesco Distribution Centre at Southmead Industrial Estate, Didcot for a purchase price of £27.2 million (net of acquisition costs), reflecting a net initial yield of 6.9% (April 2014)

In April 2014, the Company also signed an agreement with Barclays Bank PLC to provide £23.5 million of senior debt financing to Sainsbury's distribution centre in Sherburn-in-Elmet, Leeds. This reflects a loan to value of approximately 48%. The debt financing is for a term of four years, with an option to extend prior to the end of year two and three up to a maximum of six years, with a margin of 175 bps above LIBOR. The Company continues to pursue an overall initial gearing target of 45% LTV, on average, across the portfolio.

CALENDAR

In accordance with the Company's stated intentions in the prospectus dated 18 November 2013, the Company has changed its accounting reference date from 31 October to 31 December. The first accounting period of the Company will end on 31 December 2014 and the first financial report to be issued by the Company will be for the interim period ending on 30 June 2014.

OUTLOOK & MARKET UPDATE

The Company remains on track to deliver an initial targeted annual dividend yield (on a fully invested and geared basis) of 6% by reference to the issue price of 100p. The Board expects to declare an interim dividend for the initial period to 30 June 2014 in August 2014, which it expects to pay in September.

All the main sectors of the commercial property market have experienced increased investor demand during 2014, with the industrials sector witnessing particularly strong value growth. The availability of logistics investment stock remains tight, against which a significant weight of money has produced yield compression across the risk curve from prime through to secondary quality investments. Lettings during the early part of 2014 and those currently being transacted have further reduced an already thin band of modern, well located distribution buildings. Whilst speculative development is now starting to be undertaken, the rate at which take up exceeds the production of new stock will serve to further exacerbate the occupational supply/demand imbalance. There is evidence of healthy levels of rental growth and this is expected to strengthen; this expectation is being factored into investment prices demonstrated by recent transactions.

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 Tel: [phone] Akur Limited Anthony Richardson Tom Frost 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 between 12 and 25 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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