Tritax Big Box Reit Share Discussion Threads

[jonwig] 09/10/2017 07:12

Comparison between Hansteen and Tritax:



Top of the market?

[izztre] 05/10/2017 21:49

Any reason for today's rise?

[tyranosaurus] 02/10/2017 13:36

Like Jaffa cake packets the big boxes purchased seem to be getting smaller.
272,000 sq ft must be one of the smallest.
Yield of 5.0% and unexpired lease term of 6 years does not sound that great to me, but a site cover of 18% does leave scope for future development.

[skinny] 02/10/2017 07:24

ACQUISITION OF THE ROYAL MAIL DISTRIBUTION FACILITY AT DANES WAY,

DAVENTRY INTERNATIONAL RAIL FREIGHT TERMINAL, NORTHAMPTONSHIRE

FOR £48.82 MILLION

The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that it has exchanged contracts to acquire a National Distribution Centre at Danes Way, Daventry International Rail Freight Terminal ("DIRFT"), Northamptonshire let to Royal Mail Group Limited ("Royal Mail"), the main subsidiary of Royal Mail plc, one of the UK's leading postal and delivery companies and the UK's designated universal postal service provider. The total consideration is £48.82 million (excluding purchaser's costs), reflecting a net initial yield of 5.0%. The purchase is being funded from equity.

Purpose-built in 2003, this modern, high specification parcel delivery hub with a 24/7 on site operation provides a centrally located and adaptable National Distribution Centre to all Royal Mail parcel hubs across the UK. The cross-docked property has a gross internal area of 272,603 sq ft, an eaves height of between 6 and 13 metres, 360-degree circulation and an extensive service yard area, providing an exceptionally low site cover of c.18%. The investment has been acquired with an unexpired lease term of approximately 6 years, subject to annual upward only rent reviews indexed to the Retail Price Index capped at 3%. The next rent review is due in August 2018.

Situated within the 'Golden Triangle' of logistics, in a prime location, the property has excellent road, airport and rail connectivity. DIRFT is a rail-road intermodal freight terminal with associated logistics in Northamptonshire. DIRFT is located at the intersection of junction 18 of the M1 motorway, the A5 and A428 roads being 4 miles east of Rugby and 6 miles north of Daventry; it has a rail connection from the Northampton loop of the West Coast Main Line to other National and European Rail Freight Terminals. As an established core logistics location, it has attracted a significant number of major occupiers, including DHL, Eddie Stobart Logistics, Sainsbury's and Tesco. The Company recently acquired the Royal Mail's RDC for the Midlands at Atherstone.

DTRE represented the Company on the acquisition.

Colin Godfrey, Partner of Tritax, commented:

"We are very pleased to have acquired our second Distribution Centre let to Royal Mail, which with annual upward rent reviews linked to RPI offers the potential for strong and frequent rental growth. The modern, high specification facility, which is situated in an established core logistics location, also has the potential for future value enhancement."

[belgraviaboy] 30/9/2017 12:42

I think we could see some rotation out of infrastructure funds (due to the political risks) into property REITS offering similar yields, of which BBOX is one of the highest quality. I can't see Labour confiscating big distribution centres. I am happy to add to my holding at these levels.

[riverman77] 28/9/2017 13:42

Bbox now looking a good buy after recent dip, currently at 140 which is around 5% premium, typically trades at double digit premium. Solid 4.5% dividend.

[jonwig] 20/9/2017 11:50

Warehouse REIT [WHR} says it successfully raised the amount wanted (£150m gross) meaning 150m shares at 100p. Yet today 166m shares were issued for trading. Uh?

Did anyone here look at this company? I must admit I didn't and there's no thread. Intend paying 5.5p.

EDIT: OK, it's in the prospectus - 16m consideration shares for purchase of seed portfolio. Nice work if you can get it, and rather puts me off!

[barney8000] 07/9/2017 07:50

New acquisition announced today, see

Located in Atherstone, 21 miles north-east of Birmingham, the facility is situated within the 'Golden Triangle' of logistics. Apparently!

[nimbo1] 30/8/2017 17:10

Hi speedsgh, you might be right - I have no idea on timing. Another 3 months is soon in my book but appreciate that isn't the same for everyone. I wasn't trying to predict the exact timing, just saying we know there will almost certainly be one at some point. I still hold quite a few here but sold some at 149 to go into other industrial holdings. My holding here is useful, pays a nice income and price doesn't really change much. As you say lovely for the income part of a portfolio. If you can trade a little around the edges why not : )

[joe say] 30/8/2017 15:55

But don't forget that in the real world there are no boxes available at all at the bigger end of the scale

That in itself supports the market no matter how many new players try and jump in to capture a piece of the pie

[speedsgh] 30/8/2017 15:01

jonwig - Concur with your sentiments. Big box has been the stand-out sector in the commercial property arena for some time. That of course won't last forever; I have seen several interviews (including with BBOX execs) in which they have guided towards most future gains being driven by rental growth as opposed to yield compression. The sector feels like it is beginning to get a bit crowded and I am inclined to take its current star status as an early warning signal. Have built a fairly decent sized holding over the past 18 months as a long term holding for income. So like yourself, going forward I am likely to roll with what I've got & at most take up minimum entitlement under future fundraisings, assuming that they aren't made available to IIs only. BBOX is at least a holdng that doesn't keep me awake at night!

[jonwig] 30/8/2017 14:24

The last fundraising included an open offer. From now, they can issue shares on a non-preemptive basis up to (I think) about 200m.

Actually in May I was advised to apply for the minimum only (1/11). Next time I'm not sure I'll want any. Every time you read an article about "boxes" they're described as a red-hot sector. I'd be a bit sceptical about that, given also the new issue pending of Warehouse REIT. Let's see how that does.

[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.