Tritax Big Box lifts final dividend

Investor in massive logistics buildings, Tritax Big Box, increased its dividend on Wednesday by 1.85p to 6p, as its released its full year results for 2015.

The FTSE 250 real estate investment trust invests in the so-called big box warehouse properties, and saw total return for the year of 19.4%. That compared with the FTSE EPRA/NAREIT UK REITs Index total return of 10.5%.

Tritax Big Box also talked up its new £500m debt facility, which reduced its average cost of borrowing by 35 basis points to 1.42% above three month Libor, and extended its average unexpired loan term to 4.67 years.

Its EPRA net asset value per share increased by 17.11p, or 15.91%,, to 124.68p.

The group also raised £339m of equity during 2015 under its share issuance programme, which expired on 7 July 2015.

In its portfolio, Tritax claimed it was 100% let or pre-let with developer licence fee income across 25 properties. Its investment properties were independently valued at £1.31bn, with a £106.75m valuation gain on the portfolio during the year.

Tritax's contracted rental income had increased to £68.37m per annum, from £36.16m in 2014, which included forward funded developments.

"The outlook for the company in 2016 is positive," said chairman Richard Jewson.

"Following the hugely successful equity issue in February 2016, with investor demand leading to significant over subscription against a raise of £200m, we are in a very strong position to diversify further our high-quality portfolio and continue to embed our leading position in e-commerce supply chain fulfilment."

Jewson said there were still good opportunities for the company to acquire attractive assets, and create capital value enhancement at both point of purchase and through asset management.

"Although we see the potential for further yield compression in the big box sector and logistics more generally, we expect this could be modest compared with 2015," he explained.

"The balance of occupational supply and demand is, however, causing rents to rise in the sector and the balanced profile of rent review dates linked to a combination of open market, RPI and fixed increases across our portfolio, provides the opportunity to grow income year on year."

Jewson said that underpinned the company's ability to increase the dividend in 2016, with an ambition of further dividend growth going forward.

"We remain confident of delivering attractive total returns to shareholders, the composition of which will be increasingly driven by income, as well as opportunities for further capital value enhancement."