Tritax Big Box REIT delivered a NAV total return of 9.0% over 2024, its largest annual return since 2021, as the logistics property market rebounds.

The company’s EPRA net tangible assets (NTA) were up 4.7% over the year to 185.56p per share, while the company paid dividends of 7.66p (up 4.9% on 2023). These were fully covered by adjusted earnings of 8.05p (which were up 3.9%).

When including development management agreement income, earnings were up 15.0% to 8.91p.

Contracted annual rent was up 39.1% to £313.5m (Dec 2023: £225.3m) driven by acquisition of UK Commercial Property REIT (UKCM), asset management and development activity.

Total portfolio value increased to £6.55bn (from £5.03bn), following the acquisition of UKCM, with equivalent yield remaining broadly stable at 5.68% (Dec 2023: 5.60%).

The portfolio value grew 2.8% over the year driven by income growth and asset management, increasing to 3.7% when including the £67.8m net gain on the UKCM acquisition.

Estimated Rental value (ERV) was up 5.4% on a like-for-like basis (2023: 6.9%), with the logistics portfolio now displaying a record 27.9% portfolio reversion providing the company with the potential to capture £79.2m of additional rent (of which 79% has the potential to be captured by 2027).

The company’s EPRA cost ratio reduced to 12.6% (2023: 13.1%) driven by UKCM synergies and efficient externally managed structure.

LTV reduced to 28.8% at 31 December 2024 (Dec 2023: 31.6%) and Net Debt to EBITDA ratio improved to 7.3x (Dec 2023: 8.2x).

The weighted average cost of debt now stands at 3.05% (Dec 2023: 2.93%), with 93.4% of drawn debt either fixed or hedged. The company has over £550m of available liquidity as at 31 December 2024.

Average debt maturity is 4.5 years and no refinancings are due prior to June 2026. Rating agency Moody’s upgraded the comapny’s credit rating outlook to Baa1 (positive) from Baa1 (stable).

Acquisition

Post period end, the company completed a £74.3m acquisition of a 627,000 sq ft cold-store building in the North West let to Sainsburys at a 6.0% net initial yield, which is expected to achieve a running yield of 7% by 2028.

Portfolio changes during the year

The company made £306.2m of disposals during the year at an average 3.3% premium to their book value. A total of £181.2m, or 38%, of non-strategic UKCM assets have now been exchanged or sold. This has been achieved at a 6.2% blended net initial yield at a 2.8% premium to the market value at time of acquisition.

A further £177.4m of UKCM related non-strategic assets are currently under offer.

From its logistics portfolio, the company sold £125.0m of assets at a 5.0% net initial yield, achieving a 4.1% premium to book values.

The company also acquired a 479,000 sq ft East Midlands cold store let to Co-Op, for £46.0m, with a 7.3% reversionary yield.

Development highlights

• £11.1m of new contracted rent secured from development lettings during the year, including a 1.0m sq ft pre-let to a global leader in e-commerce, representing one of the UK’s largest pre-lets in 2024.
• 1.9m sq ft of development starts in 2024, including 0.4m sq ft which has been pre-sold under a DMA contract, and expected to deliver a 7% average yield on cost.
• Development starts for 2025 expected to be in line with 2024 levels and within its 2-3m sq ft guidance.
• DMA income expected to contribute £10m to 2025 operating profit.
• Development yield on cost expected to be at the upper end of 6-8% guidance for 2025 starts.

Data centre pipeline

As announced earlier this year, the company has embarked on a data centre development programme, with a 147 MW data centre opportunity near Heathrow airport and a further 1 GW potential pipeline.

Phase 1 at Manor Farm is targeting a 9.3% yield-on-cost and significant development profits.

Commenting on the results, Aubrey Adams, chairman of Tritax Big Box REIT, said:

“This has been an exceptional year for the Company, marked by significant transformational change alongside strong operational performance. The acquisition of UKCM has complemented our portfolio with high-quality urban logistics assets offering substantial rental reversion potential. The quality and liquidity of UKCM’s assets is further demonstrated by our ability to sell non-strategic assets above their December 2023 valuations, unlocking additional capital to fund future growth. Operationally, the Manager has captured significant rental income through proactive asset management and development activities, including securing one of the year’s largest pre-lets.

“We enter 2025 well positioned with three powerful growth drivers in our business: capturing record rental reversion, advancing our highly attractive logistics development pipeline, and leveraging opportunities to develop data centres with the potential for exceptional returns.”