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Tritax Big Box fundraise pulls in £250m to fund db Symmetry acquisition

Tritax Big Box REIT BBOX

Tritax Big Box REIT (BBOX) has announced the results of its recent fundraising under which the Company has raised approximately £250 million (before expenses). The net proceeds of the issue are to be used by to fund the acquisition of an 87 per cent. economic interest in db Symmetry as well as further investments. The db Symmetry acquisition is expected to complete on 19 February 2019.

[QD comment: regular readers of our news will have seen our comments, when the issue was announced, that it was dilutive as the issue price was below BBOX’s NAV. As a consequence, BBOX’s share price fell some 3.5% in reaction on the day the announcement was made (click here to read Tritax Big Box dives as it announces dilutive share issue). We’ll now have to wait and see whether this was just a one off or if BBOX will come back with another dilutive issue (we hope not) and whether BBOX can now build on the extra space and revalue the new properties in line with its existing assets, thereby creating the upside shareholders will be hoping for].

Tritax Big Box £250m fundraise

BBOX has raised £250m through the issue of 192,291,313 new ordinary shares at an issue price of 130 pence per share. BBOX says that under its open offer, which was significantly over-subscribed, valid applications were received for 152,562,386 new ordinary shares in respect of qualifying shareholders and these will be satisfied in full. Valid applications were also received for 204,679,211 excess shares under the excess application facility and a scaling back exercise has been undertaken in accordance with the terms set out in the prospectus.

Board pleased with shareholders response

The Board says that it is “pleased with the response from the Company’s Shareholders and the strength of their support to complete this fund raising successfully.  It enables the Company to move forward with the Acquisition of db Symmetry which represents a significant opportunity for the future further growth of the Company, investing in assets on attractive terms and helping to ensure we maintain the high quality nature of our portfolio.

The Acquisition is expected to contribute materially to the Company’s ability to continue to deliver strong earnings growth and a progressive dividend policy as well as significant valuation gains as these assets move through development to become income producing. On behalf of the Board and the Manager, I would like to thank Shareholders for their support.”

db Symmetry acquisition provides access to attractive and high quality development opportunities

Colin Godfrey, Partner of Tritax, says, “The Acquisition provides the Company with access to a large portfolio of attractive and high quality development opportunities over the longer term that we, along with the Board, believe can be delivered at a yield on cost significantly higher than is currently available in the investment market from acquisitions of built and let or pre-let forward funded assets. This means that we expect to continue to deliver new, high quality assets which have the potential to attract the highest quality institutional-grade tenants over the short and longer term.”

2 thoughts on “Tritax Big Box fundraise pulls in £250m to fund db Symmetry acquisition”

  1. SHED did this dilution too, very poor form REITs doing this to ordinary shareholders, though i guess there is great diversification and maybe a great deal here buying something this big… It is a very big box… Bet the discount sticks now as people fear further dilution or is it too big to care/impact as index trackers pile in

  2. Well REITs have to distribue 90% to shareholders with a divi. Expansion is always going to funded through raises and or borrowing. Would expect at least one a year from both BBOX and SHED. I own both.

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