Strong demand and e-commerce growth deliver strong results for warehouse investor
Strong demand for large commercial warehouse facilities and a growing penetration of the ecommerce sector have helped deliver strong full year results for specialist investor, Tritax Big Box.
The real estate investment trust (REIT) is the only listed vehicle dedicated to investing in very large logistics warehouse assets in the UK.
It is heavily represented in both the East and Midlands due to the area’s strategic location.
Full year results show pre-tax profit rose almost 170% to £247.8m (2016: £91.9m), whilst operating profit before changes in the fair value of investment properties increased by 49.1% to £93.78m.
Adjusted earnings per share (EPS) came in at 6.37p (2016: 6.51p), which it said substantially covered a dividend of 6.40p.
The EPRA net asset value per share was 142.24p, up 13.24p or 10.3%.
A continued focus on keeping down costs and achieving economies of scale helped reduce EPRA cost ratio to 13.1%, (2016: 15.8%).
In outlook, it said: “We have a sector-leading portfolio of UK Big Box assets that are benefiting from structural change driven by increasing e-commerce penetration, and the operational and financial benefits which they can provide to our customers.
“The fundamentals of our market remain positive and are largely unaffected by current geopolitical and economic uncertainties.
“Despite the uncertainties it brings, Brexit may provide a silver lining, since with increased border controls our customers will require more warehousing domestically, further supporting our business case.”
It is also planning to add to its already significant portfolio by targeting strategic acquisitions with the aim of further diversifying its portfolio.
It added: “The continued imbalance between occupational supply and demand means that we expect rental growth and values to remain robust in 2018. The assets we acquired towards the end of 2017 will add to our rental income in 2018.”
Almost two-thirds of the trust’s properties are in the South-East and Midlands.
The Midlands portfolio includes:
• a 653,670 sq ft Argos distribution hub in Burton upon Trent
• an 880,175 sq ft B&Q distribution hub in Worksop
• a 255,690 sq ft unit for DHL in Langley Mill, Derbyshire
• a 725,799 hub for DSG Retail in Newark
• a 526,953 sq ft facility for Dunelm in Stoke-on-Trent
• the 780,977 sq ft Euro Car Parts warehouse in Birmingham
• the new 545,998 sq ft factory for Gestamp in South Staffordshire
• a 657,000 sq ft warehouse and a second 658,971 sq ft facility for Howden in Raunds, Northamptonshire
• an under-development 300,000 sq ft warehouse marking phase three of the Raunds scheme (due for completion in winter 2019)
• the 343,248 sq ft Kuehne+Nagel unit in Derby
• the 906,240 sq ft Marks & Spencer distrubution hub in Castle Donington
• a 814,329 sq ft hub for Morrisons in Staffordshire
• the 398,618 sq ft New Look warehouse in Newcastle-under-Lyme
• the 381,091 sq ft Royal Mail distribution hub in Atherstone
• a similar 272,603 sq ft facility in Daventry
• a 561,767 sq ft distribution warehouse for Screwfix in Fradley
• a 501,751 sq ft Tesco warehouse in Chesterfield
• the newly-acquired 541,157 sq ft Unilever distribution hub in Cannock, and
• the 473,263 sq ft unit for Whirlpool in Raunds
The trust has a market cap of £2.03bn and its entire portfolio is independently valued at £2.61bn, spread across 46 assets plus 114 acres of strategic land.
The portfolio’s contracted annual rent roll increased to £125.95m by the end of 2017 (2016 year-end £99.66m).
