Tritax Big Box REIT doubles down on developments as market improves

Tritax Big Box REIT eyes sales as focus shifts to development

Tritax Big Box REIT has said improving market conditions has reinforced its conviction for logistics development projects.

In annual results for the period to 31 December 2023, the company said that easing inflation, continuing rental growth, and improving yields on cost make its development programme more attractive.

It added that it will continue to sell portfolio assets that have achieved their full potential to reinvest the proceeds into higher-returning opportunities in the development pipeline.

The company added £13.6m to passing rent from 2.2 million sq ft of development lease completions in the year. £7.8m of annual contracted rent was added in the year through development lettings at a 6.7% yield on cost, with a further £8.3m potential rent in solicitors hands.

This added to £4.9m of annual contracted rent from rent reviews and asset management initiatives from the portfolio.

Development starts in 2023 amounted to 1.7 million sq ft, with the potential to add £15.6m per annum to contracted rent at a yield on cost of around 7.0%. A further 0.9 million sq ft of new planning consents were secured, bringing its total consented undeveloped land portfolio to 6.3 million sq ft.

The company announced the potential merger with UK Commercial Property REIT in February, a further update for which will be made soon. This will add logistics property to the portfolio and also give the company the option to sell non-core assets to reinvest into the development pipeline.

Results highlights

  • Adjusted earnings per share of 7.75 pence (2022: 7.79 pence) with higher underlying earnings growth impacted by £nil income from development management agreements (DMA – income from managing developments for third parties) in the period (2022: £9.3m DMA income).
    • 3.2% growth in adjusted earnings per share (excluding additional DMA income), driven by rental income from completed developments, like-for-like rental growth and lower management fees, offset in part by the impact of disposals.
    • 6.2% adjusted earnings per share growth excluding all DMA income in current and prior period.
    • Deferred 2023 DMA income expected to be recognised in 2024, with total 2024 DMA income expected to be in excess of £8m.
  • 4.3% increase in dividend per share to 7.30 pence (2022: 7.00 pence) reflecting payout of 94% of adjusted EPS (excluding additional DMA income).
  • 5.8% increase in passing rent to £217.0 million (2022: £205.1 million).
  • 13.1% EPRA cost ratio (2022: 15.7%), supported by 15.4% reduction in management fees and rental income growth.


  • Portfolio valued at £5.03 billion (2022: £5.06 billion)
    • 0.8% decline in like-for-like value of investment assets (H2 2023: 1.7% reduction) with second half reductions offsetting gains in first half.
  • 6.9% like-for-like estimated rental value (ERV) growth, supporting valuation and resulting in record 23.0% portfolio reversion.
    • Company said that it has the potential to capture 78% of the £51.7 million portfolio rental reversion and vacancy in three years.
  • 11.4 years WAULT (2022: 12.6 years)
  • 2.5% portfolio vacancy (31 December 2022: 2.1%).
  • 97.3% of portfolio rated EPC A-C.
  • £327 million of assets sold in period, at or above book value, reflecting a blended net initial yield of 4.3%.
  • Acquired two urban logistics estates for a total of £108 million, reflecting a blended reversionary yield of 6.3%.

Balance sheet

  • 31.6% LTV at 31 December 2023 (2022: 31.2%)
  • 8.2x Net Debt/EBITDA (2022: 8.6x)
  • 2.9% weighted average cost of debt – 96% of drawn debt either fixed or hedged
  • Over £550 million of available liquidity
  • 5.2 year average debt maturity – no debt facilities maturing before mid-2026.
  • Credit rating of Baa1 with “Stable” outlook from Moody’s.

Aubrey Adams, chairman, commented:

We continue to drive portfolio performance by selling assets that have achieved their full potential in our ownership, reinvesting into higher-returning opportunities in our development pipeline and the investment market. Easing inflation, continuing rental growth, and improving yields on cost all reinforce our conviction in our development programme. In parallel, by leveraging our close customer relationships, we continue to create value through active management, making progress in capturing the record reversion embedded within our portfolio to further grow rental income.

“We are confident in delivering our strategy and are well positioned to take advantage of the opportunities both inherent within our business, and from an increasing number of opportunities in the market. The Group has very good potential for long-term income and capital growth, supported by enduring structural drivers in the logistics real estate market.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…