Tritax Big Box REIT plc Full Year Results (2434S)

TIDMBBOX

RNS Number : 2434S

Tritax Big Box REIT plc

16 March 2016

16 March 2016

Tritax Big Box REIT plc

(the "Group" or the "Company")

FULL YEAR RESULTS FOR THE PERIOD FROM 1 JANUARY TO 31 DECEMBER 2015

Tritax Big Box REIT plc (ticker; BBOX), the only real estate investment trust dedicated to investing in very large logistics warehouse assets ("Big Boxes") in the UK, is today reporting its full year results for the Group for the period from 1 January to 31 December 2015.

 
                                     2015        2014   Increase 
----------------------------  -----------  ----------  --------- 
 Dividend declared per 
  share                             6.00p       4.15p      1.85p 
 Total return                       19.4%       10.4%      86.5% 
 Contracted rent roll per 
  annum                         GBP68.37m   GBP36.16m      89.1% 
 Adjusted earnings per 
  share                             6.12p       4.86p      1.26p 
 EPRA NAV per share               124.68p     107.57p      15.9% 
 Portfolio valuation            GBP1,311m     GBP619m     111.7% 
 Weighted average unexpired       16.5yrs     13.9yrs     2.6yrs 
  lease term 
 Total comprehensive income    GBP133.98m   GBP41.84m     220.2% 
----------------------------  -----------  ----------  --------- 
 

Financial highlights

-- Dividends declared in respect of 2015 totalled 6.0 pence per share, in line with our target.

-- Total return for the year of 19.4%, compared to the FTSE EPRA/NAREIT UK REITs Index of 10.5%.

-- We agreed a new GBP500 million debt facility, reducing our average cost of borrowing by 35bps to 1.42% above 3 month Libor and extending our average unexpired loan term to 4.67 years.

-- The EPRA net asset value per share increased by 17.11 pence (or 15.91%) to 124.68 pence (31 December 2014: 107.57 pence).

-- We raised GBP229 million of equity during 2015 under our share issuance programme which expired on 7 July 2015.

-- The portfolio is 100% let, or pre-let with developer licence fee income, across 25 properties.

   --      Our investment properties were independently valued at GBP1.31 billion(1) . 
   --      GBP106.75 million valuation gain on our investment property portfolio during 2015. 

-- The portfolio's contracted rental income has increased to GBP68.37 million(1) per annum (31 December 2014: GBP36.16 million(1) ), including forward funded developments.

Operational highlights

-- We acquired 11 Big Boxes during the year, five of which were forward funded pre-let developments. The acquisitions further diversified the portfolio by geography, tenant and building size.

-- At the year end, the portfolio contained 25 assets, covering approximately 13 million sq ft of logistics space.

-- The total expense ratio for the year was 1.09%, down from 1.13% for the prior period, which compares favourably with our real estate peers.

-- At the year end, the weighted average unexpired lease term ("WAULT") was 16.5 years (31 December 2014: 13.9 years), against our target of at least 12 years.

-- The average net initial yield of the portfolio at acquisition is 5.8% against our year end valuation of 4.9% net initial yield.

-- 33% Loan to Value ("LTV"). On a fully invested basis, including the fulfilment of our forward funded development commitments this increases to c.40%.

   --      Our shares were: 

o included in the FTSE EPRA/NAREIT Global Developed Index from 23 March 2015

o included in the FTSE 250 Index from 8 June 2015

o included in the MSCI Global Small Cap Index from 30 November 2015

-- This helped to attract new investors and broaden liquidity in the shares with daily average traded value of GBP2.2 million in 2015

Post balance sheet highlights

-- On 16 February 2016, the Company completed a GBP200 million equity fundraising in order to fund its near term investment pipeline.

   --      Progressive dividend target of 6.2 pence per share set for 2016. 

(1 Including forward funded development commitments)

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

"The outlook for the Company in 2016 is positive. Following the hugely successful equity issue in February 2016, with investor demand leading to significant over subscription against a raise of GBP200 million, we are in a very strong position to diversify further our high-quality portfolio and continue to embed our leading position in e-commerce supply chain fulfilment. There remain good opportunities for the Company to acquire attractive assets and create capital value enhancement at both point of purchase and through asset management.

Although we see the potential for further yield compression in the Big Box sector and logistics more generally, we expect this could be modest compared with 2015. The balance of occupational supply and demand is, however, causing rents to rise in the sector and the balanced profile of rent review dates linked to a combination of open market, RPI and fixed increases across our portfolio, provides the opportunity to grow income year on year. This underpins our ability to increase the dividend in 2016, with an ambition of further dividend growth thereafter.

We remain confident of delivering attractive total returns to Shareholders, the composition of which will be increasingly driven by income, as well as opportunities for further capital value enhancement."

For further information, please contact:

 
 
 Tritax Group               via Newgate (below) 
  Colin Godfrey (Partner, 
  Fund Manager) 
 Newgate (PR Adviser)       Tel: [phone] 
  James Benjamin             Email: [e-mail] 
  Alex Shilov 
  Lydia Thompson 
 
 Jefferies International    Tel: [phone] 
  Limited 
  Gary Gould 
  Stuart Klein 
  David Watkins 
 
 Akur Limited               Tel: [phone] 
  Anthony Richardson 
  Tom Frost 
  Siobhan Sergeant 
 

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 and asset manages a portfolio of well-located, modern "Big Box" assets, typically targeting buildings 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 only 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.tritaxbigbox.co.uk

Meeting for investors and analysts and audio recording of results available

A meeting for investors and analysts will be held at 10.30am today at:

Newgate:

Sky Light City Tower

50 Basinghall Street

London, EC2V 5DE

In addition, later in the day an audio recording of this meeting and the presentation will also be available to download from the Company's website: www.tritaxbigbox.co.uk

The Annual Report and Accounts will today be available on the Company's website at www.tritaxbigbox.co.uk. In accordance with Listing Rule 9.6.1, copies of these documents will also be submitted today to the UK Listing Authority via the National Storage Mechanism and will be available for viewing shortly at www.morningstar.co.uk/uk/NSM.

Hard copies of the Annual Report and Accounts will be sent to shareholders, along with the notice for Annual General Meeting 2016, on or around 4 April 2016.

CHAIRMAN'S STATEMENT

This was an excellent year for the Group, during which we further strengthened and diversified the portfolio and secured the funding necessary for our next phase of growth. Market conditions remain favourable for landlords and we are confident of delivering further value for Shareholders.

Overview

2015 was an excellent year for the Group and a rewarding one for Shareholders, as we achieved our dividend and total return objectives and continued to deliver on our investment strategy. The Group declared an aggregate dividend for the year of 6.0 pence per share and achieved a total return of 19.4%.

During the year, we acquired a further 11 Big Boxes, including five forward funded developments, as the Manager drew on its market intelligence and excellent relationships with vendors, agents and developers to identify and acquire high-quality Big Box assets. These investments further diversified the portfolio by tenant, geography and range of building sizes. Our portfolio is 100% fully let or pre-let and income producing.

At the year end, our portfolio of 25 assets was independently valued at GBP1.31 billion. This is on a fully completed basis and includes forward funded commitments. This represents a valuation uplift of GBP164.03 million or 14.3% over the aggregate acquisition price (excluding acquisition costs).

The attractiveness of Big Boxes has contributed to further yield compression. Notwithstanding this, we have maintained the average net initial purchase yield across the portfolio at 5.8% by exercising strong capital discipline and maintaining our pricing policy. The valuation uplift and the high net initial yield reflect the Manager's ability to identify and negotiate attractive off-market deals and our discipline in not pursuing overpriced assets. To date, we have acquired 78% of the portfolio through off-market transactions. At the same time, we have increased the weighted average unexpired lease term across the portfolio to 16.5 years at 31 December 2015 (31 December 2014: 13.9 years), well above our target of at least 12 years.

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