Tritax Big Box declares dividend as portfolio value rises

Large logistics asset real estate investment trust Tritax Big Box reported its interim results for the six months to 30 June on Thursday.

The FTSE 250 firm confirmed dividends declared for the six month period of 3.1p per share, putting the group on track to hit the target of 6.2p for the full year.

It said the dividend remained fully covered by adjusted earnings.

Adjusted earnings per share totalled 3.16p for the six month period, while the total return for the six month period was 5.8%, which the board compared to the FTSE EPRA/NAREIT UK REITs Index total return of -11.7%.

Tritax’s portfolio was independently valued on 30 June at £1.53bn, reflecting a £41.1m or 2.8% valuation gain during the period.

EPRA net asset value per share increased by 4.23p or 3.4% to 128.91p during the period, while contracted rental income, including forward funded developments, increased to £78.59m per annum, from £68.37m at the start of the period.

The company raised £200m of equity during the period, through a substantially oversubscribed share issue.

Loan to value at period end was 32%, from 33% at the start of the period, which the board claimed increases to approximately 40% including the fulfilment of its forward funded development commitments.

The total expense ratio was 0.54% for the six month period, compared to 1.09% for the full year to 31 December 2015.

“Despite a backdrop of uncertainty, and perhaps partially because of it, I believe the future of our company remains favourable,” said Tritax Big Box chairman Richard Jewson.

“UK retail continues to evolve, with e-commerce growth leading the way.

“Many of our properties have an e-retail focus and/or automation, aiding home deliveries or store replenishment,” Jewson explained.

He said these facilities have been delivering economies of scale benefits and cost savings crucial to competitiveness and efficiency in a market where the consumer has become more demanding.

“Our aim is to invest in modern, best in class properties that are mission critical to the tenants that operate from them.

“This also ensures that our portfolio is defensive whilst offering the strongest potential for value growth,” Jewson said.

Tritax’s board was continuing to work closely with tenants, supporting their business objectives whilst delivering value growth through asset management, Jewson claimed.

He said occupational demand continued to outweigh the supply of quality logistics buildings in the UK, but added that the situation is even more acutely favourable for “big box” properties.

“The resultant strong rental growth is expected to continue, helping to grow our income and support our progressive dividend policy.

“Our investment manager has continued to perform well, identifying value whilst exercising capital discipline and building a strong, best-in-class portfolio of big box investments,” Jewson commented.

“Subject to continued support from our shareholders, the board considers that the company has both the opportunity and ability to deliver further value growth to our shareholders through attractive investments.”