Tritax Big Box Reit Share Discussion Threads

[speedsgh] 30/8/2017 13:32

I appreciate that they may want to tap investors as much as possible while markets/the economy is OK but isn't it a bit early for another fundraising, nimbo? Last one was only 3 months ago in May. Previous to that was Oct 2016, so 7 months in between.

[gswredland] 30/8/2017 13:15

Thanks for your view Nimbo

[nimbo1] 30/8/2017 10:57

IMO it will be a bit of both but also because the market expects there will be another fund raise soon. So as usual the price will head down towards the fund raise level, which as per the last one will probably be at a small premium to NAV but a discount to the share price! BBOX in hindsight is a fantastic trading share - buy when the raise is announced or when it gets close to the raise price and sell at 148p + - infact I might take my own advice and start trying it. easy 10% = 2 years worth of the dividend!

[gswredland] 29/8/2017 19:37

Is the fall market sentiment in general or something company specific?

[jonwig] 21/8/2017 07:09

The ITF for the above:



Interesting that they are targeting shorter lease periods (average 7 years) as being 'more secure'. That puzzles me a bit!

[jonwig] 20/8/2017 09:32

Telegraph, Warehouse REIT:

A property company which provides logistics and warehouse space for Argos, Boots and Amazon is to float part of its business on the London Stock Exchange in order to raise up to £150m.

Warehouse Real Estate Investment Trust (REIT) is a new company spun off from existing industrial property business Tilstone with a seed portfolio of 27 industrial buildings.

The firm is expected to launch its intention to float on Aim this morning [Monday], with an initial offering of 150 million shares valued at £1 each. It is understood to be targeting a dividend yield of 5.5pc in its first year.



Strictly speaking, the shares are priced at 100p, but probably valued at around 98p. Since BBOX has latest NAV of 133p (premium 7.5%) that could see the new one oversubscribed and open around 105p. Having an existing portfolio of properties is a help.

Looking at the starting yield, I'd guess these are not very big boxes they have, and not prime sites: BBOX has a gross yield of around 5.2%, net 4.3%.

[cheshire man] 19/8/2017 08:42

Missed that speedsgh all looking very promising :-)

[speedsgh] 18/8/2017 11:43

Interesting update in Investors Chronicle yday...

Tritax ticking all the big boxes -

"...Competition for space from other users remains strong, and management has walked away from a number of potential site acquisitions because the price has not offered an acceptable return. Fortunately, through experience and market contacts, Tritax has managed to acquire 80 per cent of its acquisitions off market.

The latest of these is likely to be transformational, as it will increase the size of the portfolio by nearly 9 per cent. In late July Tritax bought the freehold for the former Littlebrook power station in Dartford for £65m. This is an amazing coup for a number of reasons. It was a clear example of the management skills and experience because to win the deal Tritax had to beat 24 other interested parties. Then there’s the all-in cost of around £625,000 per acre against an average £1.2m for commercial space in the surrounding area.

But the biggest attraction is the location. The 124-acre site is right next to the M25 Dartford river crossing, which means it’s minutes away from the A2/M2 and the M20 with its direct link to the Channel Tunnel. It even has its own docking facilities on the River Thames. Around a third of the site already has planning consent for storage and distribution, and subject to planning consent on the remainder, construction will begin in Autumn 2018 on a pre-let basis with site preparation expected to cost around £25m. And a number of potential tenants have already expressed an interest..."

IC VIEW: Tritax is in the right place at the right time, and is taking advantage of a lost decade when construction of new distribution centres was conspicuous by its absence. Building big ensures economies of scale and helps to encourage tenants to stay put for longer. And with strict criteria for acquisitions and building on a pre-let basis only, there is no risk element in the development arm. There’s a decent dividend, too, and the modest premium to forecast net asset value looks justified. Buy.

[skinny] 10/8/2017 07:40

Financial highlights
· Fully covered dividends declared for the six-month period of 3.20 pence per share, putting the Company on track to hit its full-year target of 6.40 pence2.

· EPRA net asset value ("NAV") per share increased by 4.30 pence or 3.3% to 133.30 pence as at 30 June 2017 (31 December 2016: 129.00 pence).

· Profit before taxation has increased by 49.9% to £80.53 million (30 June 2016: £53.72 million).

· Contracted annual rent roll increased to £108.65 million (31 December 2016: £99.66 million), including all forward funded development commitments.

· Portfolio independently valued at £2.10 billion3 as at 30 June 2017, including all forward funded development commitments.

· Total return for the period was 5.78% compared to the FTSE EPRA/NAREIT UK REITs Index total return of 4.09%.

· EPRA cost ratio continued to fall, to 13.7%, reflecting the benefits of increased scale (31 December 2016: 15.8%).

· Further diversified our sources of borrowing, with a new £90 million, long-term, fixed-rate facility with PGIM. Loan to Value ("LTV") as at 30 June 2017 was 27.0% (31 December 2016: 30.0%).

· Market capitalisation of approximately £2.0 billion as at 30 June 2017.

2 This is a target only not a profit forecast. There can be no assurances that the target will be met and it should not be taken as an indicator of the Company's expected or actual future results
3 See note 10 for reconciliation


Operational highlights
· Acquired three Big Boxes with an aggregate purchase price of £142.47 million, adding two new Customers to the portfolio.

· Three forward funded pre-let developments reached practical completion in the year to date, with a total value of £155 million.

· Average net initial yield of the property portfolio at acquisition is 5.7%, against our period end valuation of 4.9% net initial yield.

· At the period end, the portfolio comprised 38 assets, covering more than 19.6 million sq ft of logistics space.

· The portfolio was fully let, or pre-let and income producing, during the period.

· At 30 June 2017, the weighted average unexpired lease term ("WAULT") was 15.1 years, against our target of at least 12 years.

· Raised £350 million of equity in May 2017, through a substantially oversubscribed share issue.

Post Balance Sheet Highlights

· On 24 July 2017, exchanged conditional contracts to purchase a 124 acre development site at Littlebrook, Dartford for £62.5 million.

Colin Godfrey, Fund Manager of Tritax Big Box REIT plc, commented:

Heightened investment demand and asset management have helped enhance the value of our portfolio and we consider that market values may improve further. Whilst our asset valuations have benefitted from compressed yields, the tightening investment market means that patience, capital pricing discipline and stock selection will be increasingly important in underpinning our future performance. Nonetheless, investments in the logistics sector remain attractive compared to other asset classes and the Company is well positioned and well capitalised to take advantage with an identified, largely off-market, pipeline of opportunities. Looking forwards, maintaining the quality of our investment purchases will be key.

The logistics market continues to dynamically influence the UK economy. We believe that the development of the Big Box logistics market remains in its infancy, with operational efficiencies and e-commerce likely to drive occupational demand for some time to come.

Investors seeking robust values and income protection are drawn by long term lease commitments and strong market fundamentals, but also the possibility of maintaining the impressive levels of rental growth witnessed during the last couple of years. These positive attributes are expected to continue, underpinning our ambition to deliver attractive and growing, fully covered, dividends. We view the remainder of 2017 and 2018 with optimism.


more.....

[jonwig] 10/8/2017 07:24

H1 results. No cloud in the sky for big boxers, it seems:

[nimbo1] 02/8/2017 10:25

many thanks for that article. I had not appreciated the 3rd option in this space. Andrew jones at london metric is a very good operator. As we are discussing it here are the 3 portfolios they wanted to acquire - I imagine they will now go for the largest portfolio and use debt to do it but we shall see. It is all set out here.



Portfolio Description Value
1. 9 assets. Capital value GBP45.5 million at
of GBP61 per square 7.3 per cent. NIY
foot. WAULT of 2.7
years. Low average
rents of GBP4.80 per
square foot.
2. 6 assets. Capital value GBP31 million at 7.0
of GBP79 per square per cent. NIY
foot. WAULT of 5.8
years. Low average
warehouse rents of
GBP4.35 per square
foot.
3. 12 assets. Low capital GBP83 million at 7.2
value of GBP71 per per cent. NIY
square foot. WAULT
of 7.1 years. Low local
rents of GBP5.46 per
square foot.

[shauney2] 02/8/2017 08:34

nimbo,thanks for the info re PILR.Don't worry about tyranosaurus he seems like a bit of a dinosaur;-)

I was vaguely aware from a piece in Share magazine.


Be interesting to see what they do with the proceeds from their latest fundraise.

[tudes100] 02/8/2017 01:34

Thanks for flagging Nimbo, wasn't even on my radar but is now.
Will have a look in more detail.

[jonwig] 01/8/2017 14:12

nimbo - thanks ... that's OK, I have PLIR (and the thread) on watch!

[nimbo1] 01/8/2017 12:42

Hi Jonwig, PILR is absolutely 'little' boxes and lot sizes which are not institutional (or BBOX size). PILR is an active management play where you have to be comfortable backing the management team - lease regears, refurbishment, potential development etc with a cost of acquisition of 30-70% of the replacement cost. Higher risk and potentially higher reward. They paid out 6p in dividend income in their first year also and increased the NAV by c.16%. As you say its v illiquid - i had to pay 119.5 to buy shares and they have just done the raise at 115p.

That growth if sustained will be way ahead of what BBOX are able to achieve from here - there isn't really any more room for yield compression for BBOX in the opinion of anyone you talk to in the industry, any growth will be predominantly driven by increases to income and hopefully therefore the dividend. Clearly BBOX has a blue chip tenant base and very secure income streams - its a quality diversified bond play. The fact they have invested so much money in a development site also shows where they now have to go looking for growth.

I won't mention PILR again here but the comparison between the 2 is interesting and I will continue to hold both.

[skinny] 01/8/2017 12:06

Liberum Capital Hold 149.55 135.00 135.00 Reiterates

[jonwig] 01/8/2017 12:04

Correct, nimbo. I haven't really looked at PILR, and it got off to a slow start. I have the impression that it's more into 'little' boxes than big ones. It also seems a bit illiquid.

[nimbo1] 01/8/2017 11:16

Who are you the message board police?

Writing about another investment trust, on one bb, which invests in the same asset class as BBOX - just lower down the value chain does not count as ramping.

I own more that enough BBOX shares to have a right to mention relevant things going on in the industry.

[tyranosaurus] 01/8/2017 09:02

PILR only raised half of what they wanted.
NO interest from me.
GO RAMP IT ELSEWHERE

[nimbo1] 31/7/2017 21:48

may not be of interest - but just incase, they got the raise done. c.£55 mil.

BBOX doing well. JC in the IC tipped it again with a small comment after the development purchase.

[nimbo1] 24/7/2017 21:32

have any of you ever looked at pacific industrial and logistics (PILR?) - smaller lot size logistics. Higher yield - (risk?). Good track record in first year. Downside - cap raising at the mo could be dilutive and illiquid currently. interesting to hear your thoughts on that board if you have any. (Im a holder of BBOX and like the logistics play as my property exposure). Nice rns for BBOX today.

[greatgiginthesky] 24/7/2017 15:58

Great location.

[skinny] 24/7/2017 10:03

ACQUISITION OF 124 ACRES OF PRIME LONDON DISTRIBUTION DEVELOPMENT LAND AT LITTLEBROOK, DARTFORD FOR £65 MILLION

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has exchanged conditional contracts to purchase a development site at Littlebrook, Dartford. The freehold of the former Littlebrook Power Station site has been acquired, for a total consideration of £65million (excluding purchaser's costs), which is being funded by the Company from equity.

The site occupies a prime location within the M25 motorway and adjacent to the Dartford Thames River Crossing, providing the opportunity for the efficient distribution of goods across London and the home counties. With the Queen Elizabeth II Bridge and Dartford Tunnel to the east, the site has easy access via J1A to the M25 Motorway and the wider national motorway network. The site also has excellent rail and port connectivity.

The site, the location of a former power station which was decommissioned in 2015, extends to approximately 124 acres. The entire site is capable of supporting the potential development of approximately 1.7 million sq ft of logistics distribution buildings, including several Big Box logistics facilities of over 400,000 sq ft, together with some smaller urban logistics facilities. Part of the site benefits from existing B8 use class (storage and distribution) planning consent for c.517,000 sq ft of the expected c.1.7m sq ft total.

The Company, working in partnership with one of the leading specialist logistics developers in the UK, Bericote Properties, intends to apply for planning consent for the remaining land. The site will be developed in phases, with site preparation costs estimated at c. £25 million. The construction of new buildings will commence on a pre-let basis and the Company will retain the developed investment properties to further enhance its existing investment portfolio.

The Company aims to be able to commence building construction by Autumn 2018 and, working alongside Bericote Properties aims to deliver on a pre-let basis one of London's largest Big Box logistics parks inside the M25 motorway.

Colin Godfrey, Partner of Tritax, commented:

"We are delighted to be acquiring this prime distribution development site in Dartford. Large strategic sites for Big Box distribution buildings within the M25 are scarce and are in strong demand from occupiers. The site is capable of supporting several Big Box distribution facilities as well as smaller urban logistics facilities for serving the London and South East markets in particular. The development of the buildings, in partnership with Bericote, will only commence on a pre-let basis and provide an opportunity for the Company to enhance our existing portfolio with further prime logistics investments at an attractive yield on cost."

[skinny] 18/7/2017 07:38

Tritax Big Box REIT plc (ticker: BBOX), the only real estate investment trust dedicated to investing in very large logistics warehouse assets in the UK, will announce its half year results for the six months ended 30 June 2017 on Thursday, 10 August 2017.