Tritax Big Box Reit Share Discussion Threads

[skinny] 12/8/2016 11:09

And a new high @141.40p.

[sogoesit] 12/8/2016 11:00

Chronic Investor says today Jefferies says 143p NAV for 2017.

[shauney2] 12/8/2016 08:14

From HL.

We view Tritax as a "get rich, slowly" scheme

[gilotron] 11/8/2016 10:20

Liberum
UK | REAL ESTATE | BBOX LN | MARKET CAP £1.2bn | 11 August 2016

Tritax Big Box
Structural resilience

HOLD
Target price 135p | Published price 137p

H1 results were broadly in line and highlight the defensive strength of a portfolio of 28 fully occupied big box assets, yielding 4.8% with an average unexpired lease length of 16 years. H1 NAV +3% to 129p, was aided by a 2.5% LFL property gain and was just below our forecast. Earnings growth was supported by acquisitions and continued improvement in the expense ratio. Management continues to review its investment pipeline, however the completion of three post balance sheet deals highlights a clear appetite to further grow the portfolio. The shares trade on a CY16E P/NAV of 1.13x vs the UK Real Estate sector on 0.89x. We maintain a HOLD.

Broadly in line H1: NAV +3.4% & EPS +15.8%

H1 results were broadly in line with EPRA NAV +3.4% to 129p, 2% below our forecast of 132p. Adjusted EPS (EPRA + licence fee income) was +15.8% to 3.2p, 4% below our 3.3p forecast.

DPS +3.3% to 3.1p was 3% ahead of our 3.0p forecast, albeit BBOX remains committed to a progressive, fully covered dividend policy, targeting 6.2p for the full year, in line with our expectation.

LFL portfolio value +2.5%, +16.6% total to £1.53bn

A £41m +2.5% LFL revaluation gain reflected ~10bps of yield compression with the net initial yield now at 4.8%. Our current forecasts factor H2 yield expansion of ~20bps, which does not seem excessive.

The total portfolio value increased +16.6% to £1.53bn. 3 assets were acquired in H1 for a total of £177m at an average net initial yield of 5.5% (above the existing portfolio average 4.8%). Subsequent to H1 a further three deals have been announced totalling £122.7m at an average NIY of ~5.6%.

Contracted rent +14.9%, 4.7% reversion potential

Contracted rent increased 14.9% to £78.6m with reversion upside now at 4.7% (FY15: 5.2%). All leases contain upward only rent reviews offering visible earnings growth. Leases with explicit RPI linked uplifts total ~17% and provide useful inflation hedging.

The total expense ratio fell from 1.09% to 0.54%, one of the lowest in the sector, reducing income leakage. The portfolio remains fully let (or pre-let) at 100%, with a weighted average unexpired lease length of 16.3yrs, the longest of our real estate coverage.

Successful delivery of 4 pre-let forward funded developments

BBOX successfully delivered 4 forward funded developments in H1, with a total value of £271m, including the £102m, 0.6m sfqt distribution centre for Ocado in Erith. Since period end BBOX has entered into a further £56.3m forward funded agreement in Wolverhampton.

Net debt was stable in H1 with LTV down by 100bps from 33.2% to 32.2%. The Group’s weighted average margin payable on its borrowings remained at 1.42%. Substantially all of BBOX's drawn debt is hedged with an average capped borrowing rate of 2.85%.

Structural support from e-commerce

BBOX’s portfolio of 28 big box assets will continue to benefit from secular growth of e-commerce and more efficient distribution practices. The sector is not immune from greater EU referendum uncertainty, but we expect industrial to remain relatively resilient boosted by e-commerce, a lack of new supply as well as supportive demand from export-led occupiers (aided by weaker Sterling). CBRE's latest data confirmed industrial has, to date, suffered the lowest capital value shock with values falling only 2.2% in July. The shares trade on a CY16E P/NAV of 1.13x vs the UK Real Estate sector 0.89x. HOLD.

Figure 1: Summary Financials & Valuation (not updated forH1 results)

Valuation Summary (CY)
2015A
2016E
2017E
2018E
P/NAV (x)
1.10
1.13
1.11
1.07
P/E (x)
29.2
21.3
19.6
19.3
Div Yield (%)
4.4%
4.5%
4.7%
4.8%
EV/Sales (x)
27.3
19.2
18.0
18.1
EV/EBITDA (x)
33.3
22.4
20.9
21.0
EV/EBIT (x)
33.3
22.4
20.9
21.0
FCF Yield (%)
4.3%
7.0%
8.1%
8.4%





Financials (FY - Dec y/e)
2015A
2016E
2017E
2018E
Gross rental income (£m)
43.8
72.2
82.6
85.8
Net rental income (£m)
43.8
72.2
82.6
85.8
Gross to net (%)
100.0%
100.0%
100.0%
100.0%
Adj. EBITDA (£m)
35.9
62.0
71.3
73.9
EBITDA margin (%)
82.1%
85.8%
86.3%
86.1%
Adj. EBIT (£m)
35.9
62.0
71.3
73.9
EBIT margin (%)
82.1%
85.8%
86.3%
86.1%
Adj. net Interest (£m)
-8.7
-9.7
-12.5
-14.2
Adj. PBT (£m)
27.2
52.3
58.8
59.7
Adj. EPRA EPS - diluted (p)
4.7
6.4
7.0
7.1
DPS (p)
6.0
6.2
6.4
6.6
Cover (x)
0.8
1.0
1.1
1.1





Diluted EPRA NAV (p)
124.2
121.4
123.0
127.5
Net cash/(debt) (£m)
-316.4
-505.8
-611.6
-670.1
LTV (%)
27%
33%
37%
38%

[joe say] 11/8/2016 08:08

Agreed 18BT

Unusual way of wording the dividend imo - not seen this before

"payable on or around 25 August 2016"

What's with the "or around"?

[18bt] 11/8/2016 07:12

Steady results as expected. Move to quarterly dividends from Jan will help some.

[gilotron] 10/8/2016 14:40

Tritax Big Box REIT Plc (BBOX LN, BUY, PT: 150.00p, Mkt. Cap: £1.15B) First View: Kellogg's Acquisition; Snap, Crackle and Pop [Mike Prew]

BBOX has acquired a Kellogg distribution facility at Trafford Park, Manchester, for £23.5m (before costs) on an unexpired lease of 1.75yrs with a passing rent of £4.50psf and a capital value cost equiv to £75psf. This is a investment grade covenant on a highly accretive 5.9% initial yield, reflecting the short lease term but with significant rental reversionary growth on re-letting or lease re-gear. The asset will be funded from existing equity with senior debt finance introduced in the near term at a 30%-40% LTV. This is one of three Kellogg distribution and production facilities at Trafford Park close to Kellogg's largest European manufacturing facility. The asset was built to a high specification in 2007 with eaves height of c.15m, offices and extensive parking and loading facilities, with significant tenant capital investment and a gross internal floor area of 311,602 sq ft and a site cover of approximately 46%.

[skinny] 10/8/2016 08:25

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has acquired the distribution centre at Kingston Park, Peterborough, let to Amazon UK Services Ltd ("Amazon") (and guaranteed by Amazon EU Sarl), for a purchase price of £42.9 million (net of acquisition costs), reflecting a net initial yield of 5.6% on the corporate acquisition. The purchase is being funded from equity proceeds, with senior debt finance expected to be introduced in the near term.

The property is one of Amazon's major distribution centres in the UK, fulfilling general merchandise online orders and groceries throughout the UK and Europe. The distribution centre has benefited from significant capital investment from the tenant with further initiatives currently underway. The property was built to a high specification in 2006, comprising an eaves height of 15 metres, offices, a secure HGV trailer park and extensive parking. The facility has a gross internal floor area of 549,788 sq ft with a low site cover of approximately 42%.

Kingston Park, Peterborough is well positioned in a core logistics location with excellent motorway connectivity across the UK, located just off junction 17 of the A1M, and links to the M1 (via A47) and A14, which provides a direct route to the Port of Felixstowe and the Midlands. Furthermore, Peterborough was the second fastest growing UK city over the last 10 years (as at 2015), thereby providing a large and growing workforce to draw from, underpinning the longevity of the area as a major UK distribution location.

The property is being acquired with an unexpired lease term of approximately 8.7 years subject to five yearly upward only rent reviews indexed to the Consumer Price Index (collared and capped at 1.5% p.a. and 2.75% p.a.). The next rent review is due in April 2020. The passing rent is c. £4.50 per sq ft with a capital value cost equivalent to approximately £78 per sq ft.

[18bt] 10/8/2016 07:44

Are these new acquistions being funded in the short term thorugh the new loan facilty agreed earlier this month or is the reason they are announcing before the results tomorrow that another placing is coming? I probably don't mind if there is another placing provided that I get the chance to subscribe again and follow my investment at a discount.

[rathlindri] 10/8/2016 01:20

That is quite a recovery since Brexit referendum result

[gswredland] 09/8/2016 16:50

Yep good stuff eh?

[skinny] 09/8/2016 11:30

A new high @140.10p.

[skinny] 09/8/2016 11:29

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has acquired a distribution facility at Trafford Park, Manchester, let to Kellogg Company of Great Britain Limited ("Kellogg's"), whose ultimate parent is the Kellogg Company. The purchase price is £23.5 million (excluding purchaser's costs), reflecting a net initial yield of 5.9% on the asset acquisition. The purchase is being funded from equity proceeds, with senior debt finance expected to be introduced in the near term.

The property is one of three distribution and production facilities located at Trafford Park, Manchester let to Kellogg's and is in close proximity to its production facility at Barton Dock Road, Trafford Park, which is the Kellogg Company's largest manufacturing facility in Europe and where it manages its national and some international operations. The asset was built to a high specification in 2007 and includes an eaves height of c.15 metres, offices and extensive parking and loading facilities. The facility has also benefited from significant capital investment including recent investment to improve racking efficiency. The facility has a gross internal floor area of 311,602 sq ft and a site cover of approximately 46%.

Trafford Park remains one of the largest and most successful business parks in Europe with one of the highest concentration of industrial and logistics facilities in the UK, principally due to its excellent rail, shipping and airport connectivity together with its proximity to the greater Manchester conurbation. It has a dedicated rail freight terminal, which is the largest in the North West, running straight through to mainland Europe, direct access to the M60 and the Manchester Ship canal and Manchester International Airport.

The property is being acquired with an unexpired lease term of approximately 1.75 years with a passing rent of £4.50 per sq ft and a capital value cost equivalent to approximately £75 per sq ft.

[skinny] 02/8/2016 07:22

FORWARD FUNDED PRE-LET INVESTMENT IN A NEW LOGISITICS FACILITY AND HEADQUARTERS AT FOUR ASHES, WOLVERHAMPTON

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has exchanged contracts (conditional on detailed planning consent) to provide forward funding for the development of a new logistics facility and headquarters at Four Ashes, Wolverhampton. The investment price is £56.3 million, reflecting a net initial yield of 5.14% (net of land acquisition costs).

The site is strategically located in the West Midlands, close to J12 of the M6, providing good access to Birmingham and Nottingham. The new facility will comprise a gross internal area of 543,692 sq ft. with expansion land to accommodate up to a further 101,139 sq ft. The property will include modern specifications, with a clear height of 15 and 12 metres and a low site cover of approximately 43%.

Agreement has been reached with a leading global designer and manufacturer of components and assemblies to enter into a new 25-year lease for the new facility, conditional upon detailed planning consent. The lease will be subject to five yearly upward only rent reviews indexed to the Retail Price Index, providing a minimum 2% pa rental growth (capped at 4% pa). During the construction phase, the Company will receive an income return equivalent to the agreed rent from the developer. Further details regarding the tenant will be made available in due course.

The development is being undertaken by Bericote Properties. Construction of the main works is expected to commence during September 2016 with practical completion anticipated for July 2017. The land purchase is expected to be funded by the Company from equity proceeds, with senior debt finance to be introduced in the near term.

Jones Lang LaSalle represented the Company and Dowley Turner Real Estate LPP represented the vendor.

Colin Godfrey, Partner of Tritax, commented:

"We are very pleased to be investing in this new logistics facility and UK headquarters which will benefit from significant capital investment by the tenant with the capacity to expand the unit to accommodate future growth plans. This investment provides further tenant, geographic and business sector diversification whilst maintaining a WAULT of over 16 years. This is our seventh pre-let forward funded development and the third with Bericote, one of the UK's leading developers of Big Box assets, following the successful completion of the Rolls-Royce Motor Cars and Ocado facilities."

[skinny] 01/8/2016 07:57

Following completion of the Ocado distribution warehouse at Erith, the Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that the Company has agreed terms to extend the maturity of its £50.866 million loan facility (the "Facility") secured on the asset with Landesbank Hessen-Thüringen Girozentrale ("Helaba") from July 2020 to July 2023.

Including the Facility, the blended margin payable across the Company's financings will be 1.43% above three month LIBOR. When taking into account the Company's hedging arrangements, the all-in capped cost of borrowing is 2.86%. The Company has 99.7% of its drawn debt subject to hedging arrangements.

[skinny] 30/6/2016 09:05

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to provide the following update ahead of the half year period ending 30 June 2016.

PORTFOLIO HIGHLIGHTS
· £1,488 million (net of acquisition costs)1 invested in 28 UK Big Box assets let to 22 tenants

· 27 standing assets and one pre-let forward funded development with a combined floor space of 14.7 million sq. ft. (of which 0.6 million sq. ft. is under construction)

· 75% of assets acquired off-market with average purchase yield of 5.8%

· Nine new investments made in the last 12 months for an aggregate purchase price of £473 million

· Current weighted average unexpired lease term ("WAULT") across the portfolio of 16.3 years

· Portfolio 100% let with contracted annual rental income of £78.5 million2 as at 29 June 2016

· All leases provide for upward only rent reviews, of which 43% are open market, 32% are fixed uplift, 17% are RPI linked and 8% are hybrid

· High quality institutional grade tenant mix with strong financial covenants - 84%3 of tenants are listed PLCs (71% in the FTSE 100 or FTSE 250)

· Forward funded developments pre-let to Rolls-Royce Motor Cars, Ocado, NicePak, Dunelm and Howdens have all completed on schedule and on budget

1 as at 31 December 2015 valuation plus acquisition price for subsequently acquired properties
2 including forward funded assets
3 based on the ultimate parent entity of the lessee


FINANCIAL HIGHLIGHTS
· Targeting fully covered aggregate dividend of 6.2p per share for the year ending 31 December 20164

· Low cost base with 2015 total expense ratio of 1.09%

· £569.5 million of committed debt financing in place of which £472.9 million is currently drawn (32% LTV)

· Weighted average term to maturity of debt facilities of 4.3 years, which could be increased to 6.1 years by triggering extension options

· Current blended margin payable of 1.42% above three month LIBOR, capped at an all-in rate of 2.84% using interest rate caps which run coterminous with the Group's bank facilities

· Successful oversubscribed £200 million equity issue in February 2016

4 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 expected or actual future results.

[alter ego] 28/6/2016 12:45

likewise WirralOwl, not quite as cheaply as you but added a good chunk for the same reasons as you. Rent roll underpins the yield and scarcity of this type of property is likely to support its value while the mess is sorted out.

[wirralowl] 28/6/2016 11:25

I added another 20% to my holding this morning at 117.5, so now a top 5 holding of mine. Hoping it proves a decent decision, rare to get at such a discount to NAV. I think BBOX's particular niche should set them apart from other property valuations, though as cyfran says, there's a chance NAV progression might not be quite so straight forward now.

[cyfran101] 28/6/2016 00:11

The slide appears to be a market correction on applying premiums to certain shares based on queries over asset values after Brexit.

Although property shares that have particular interest in London and housing shares have been rightly marked downwards I don't really agree with BBOX taking a plunge.

I'll take a keen eye to the next RNS for NAV to see how they value their assets differently if at all.

With all shares in free fall there are some bargains around.

[gilotron] 27/6/2016 23:54

I had a nibble too. I fluffed my rights issue so didn't get some at 20 something so making up for that now.

[belgraviaboy] 27/6/2016 13:13

Just bought my first stake at 115. A couple of days pre-Brexit I looked at it at around 140 but held off on valuation grounds.

I can't see that the sell off makes any sense here, average unexpired lease is over 16 years.

If it goes down more, I am buying more...

[getscenic] 24/6/2016 16:20

Think we have been very lucky here. SEGRO off 11%. Others down around 20% Expected more here but thankful only 5%, added today but trading very difficult through H L!

[stonesfan] 24/6/2016 15:17

Tripled my stake. Brexit will have no ill effect.

[lomcovaks] 24/6/2016 14:00

Same here. Great opportunity to accumulate. Are people going to stop buying things because we've left Europe? I don't think so.

[wirralowl] 24/6/2016 12:06

Back around historic NAV and now trading well below forecast EOY NAV of 134p...added.