Tritax Big Box announcement Placing, Open Offer and Offer for Subscription

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Our current portfolio under management has an acquisition value of approximately £2.3 billion, consisting of over 20.7m sq ft of real estate assets including Big Box distribution warehouses, industrial properties, office, retail and hotels.

As at 31 March 2017 the portfolio had a rent roll collection of more than £119.9 million from tenants including Amazon, Next Group plc, Intercontinental Hotels Group, Sainsbury’s, RBS, Royal Mail, Tesco, IBM, HMRC, Halfords, GDF Suez, Morrisons, Accor, Marks & Spencer and Asda.

Central to our investment philosophy and rational is a strategic focus in which we target investment opportunities likely to produce a robust income stream and/or capital growth, as well as offering significant tax advantages through appropriate structuring.

Since 2000, as a group we have delivered an average exit IRR across all non-tax products of approximately 16%** pa with a number of our tax products achieving a performance in excess of this average.

The examples which follow are a selection from our portfolio of funds under management. For information on current investment opportunities click here.

**This figure does not include Tritax Big Box REIT or returns generated from exited tax products

The Tritax Amazon Fund

Key Facts

In May 2012 The Tritax Amazon Fund acquired the newly constructed c. 1m sq ft purpose built distribution warehouse.
Total fund size:
£47.1m
Bank funding:
56% LTV
Target fund life:
4.6 years
Target coupon:
7.25% pa
Projected IRR: 9.28% pa

Investment rationale

Investment Rationale

In May 2012, the Tritax Amazon Fund acquired the newly constructed c.1m sq ft purpose built distribution warehouse prominently located next to the M90 motorway, north of Edinburgh. At a time when many investors are in need of attractive income returns but remain cautious, the Tritax Amazon Fund offered a highly attractive 7.25% pa income distribution (paid quarterly), underpinned by 20 year lease to the European arm of the world’s no.1 E-retailer – Amazon.co.uk.

Suitable for SIPPs, SSASs and Charities, the simple and tax efficient investment structure also allowed Direct Investors to benefit from the very generous Capital Allowances available. For example, the Tritax Amazon Fund provides a 50% taxpayer (45% from 2013) with an enhanced gross-equivalent income distribution of c.13.9% p.a. (as a 5 yr. average). Similarly, the projected IRR of 9.28% p.a. is enhanced to a gross-equivalent IRR of 16.79%.

Tritax Aberdeen HQ Office Fund

Key Facts

In January 2013 the fund acquired a new office headquarter building in central Aberdeen, one the UK’s strongest economic growth centres.
Total fund size:
 £18.5m
Bank funding: 
57% LTV
Target fund life:
 5 years
Target coupon: c. 7.5% pa
Projected IRR: c. 9.8% pa

Investment rationale

Investment Rationale

Constructed over the course of c. 12 months, this c. 42,000 sq ft Grade A office is pre-let to GDF Suez E&P UK Limited, the UK arm of the world’s largest Utility company, for a term of 15 years. The Fund negotiated an attractive entry price of 7.0% net initial yield, which would suggest a discount to prime current investment yields for Grade A offices.

his opportunity capitalised on the Granite City’s unique economic profile and dynamic occupational market, providing investors with a highly attractive 7.5% pa target income distribution, paid quarterly, throughout the life of the Fund. Capital Allowances enhance pre-tax distributions to a 5 year average of c.10.2% pa (for a 45% tax payer).

The new Aberdeen Office underlines our commitment to the UK North Sea as we invest in existing and new exploration and production development”  

Jean-Claude Perdigues, Managing Director, GDF SUEZ E&P UK

Tritax Brindleyplace (7, 8 & 10) Unit Trust

Key Facts

In 2009, the Trust purchased three interconnected office buildings in the award winning Brindleyplace development.
Total fund size:
£109.6m
Bank funding:
59.3% LTV
Fund life:
c. 5 years
Coupon:
8% pa
IRR: 12.08% pa

Investment rationale

Investment Rationale

Totalling c. 301,000 sq ft, all three buildings are let to The Royal Bank of Scotland Plc. with Sainsbury’s Supermarkets Ltd occupying the ground floor retail unit. Upon purchase, there was a weighted average unexpired lease term of 14.8 years until tenant break options.

Suitable for SIPPs, SSASs and Charities this Fund provided investors with an 8% pa distribution (paid quarterly). Originally purchased for £107.8m (before costs) and was then sold to a German pension company in March 2015 for a total consideration of £130.73 million, providing investors with a return of 12.08% pa over the fund life.

Brindleyplace comprises mixed-use development of over 1.2m sq ft of office, restaurant, café, bars and parking space approximately three quarters of a mile from Birmingham city centre.

Tritax Next EZ Unit Trust

Key Facts

In 2006 the Trust acquired two new “state of the art” high-bay distribution warehouses of c. 1.85m sq ft GIA, on a site of circa 48 acres which is pre-let to Next Group Plc.
Fund size:
£115.8m
Bank funding: 
63% LTV
Fund life: 
7 years
Net equity: 
0.13%
Post tax yield: 
6.1%-7.8%

Investment rationale

Investment Rationale

In 2006 the Trust acquired two new “state of the art” high-bay distribution warehouses of c. 1.85m sq ft GIA, on a site of circa 48 acres and which is pre-let to Next Group Plc. for 25 years with no breaks and fixed rental uplifts of 2.5% p.a. compounded every five years. This distribution centre is located at Brookfields Park, a new high quality business park development extending to circa 86 acres within an established business area and capable of accommodating up to 2m sq ft of B8 warehouse, B2 industrial and B1offices with supporting amenities.

Investors were able to shelter tax at 100% under the Enterprise Zone allowances regime. The investment was structured as an off-shore Unit Trust based in the Isle of Man.

In June 2013, following restructuring and optimisation of the asset it was sold to Legal & General at a 5.5% yield, delivering an IRR of over 15% for Trust investors.

Tritax Prime Distribution Income Fund

Key Facts

Acquired in November 2013, this modern c. 750k sq ft national distribution unit is located in one of the UK’s strongest logistics locations.
Total fund size: £39.8m
Bank funding: 46% LTV
Fund life
: 16 months (original target 4.5 years)
Coupon: c. 8.85% pa
IRR: c. 30.92% pa

Investment rationale

Investment Rationale

In May 2013, the Tritax Prime Distribution Income Fund acquired a modern c. 750,000 sq ft national distribution unit let on a 20 year lease (19.5 years unexpired), to CDS (Superstores International) Limited trading as “The Range”, one of the UK’s leading value retailers.  Located in one of the UK’s strongest logistics locations, this Big Box asset was acquired at an effective property cost reflecting a 7.66% net initial yield.

Suitable for SIPPs, SSASs and Charities, the simple and tax efficient investment structure also allowed Direct Investors to benefit from the very generous Capital Allowances available. For example, the Tritax Prime Distribution Income Fund offered high rate tax payers with an enhanced gross-equivalent income distribution of c.13.18% p.a. (as an average over the 4.5 year fund life). Similarly, the projected IRR of 12.79% p.a. is enhanced to a gross-equivalent IRR of 18.55%p.a (for a 45% tax payer).

The original strategy was to hold the asset for four years whilst values improved, with the intention of completing a sale in September 2017. However, in October 2014 an unsolicited offer was received and property was sold in November for 5.85% net initial yield, providing investors with an IRR of over 30% pa over the 16 month period.

The Tritax Amazon Fund

In May 2012 The Tritax Amazon Fund acquired the newly constructed c. 1m sq ft purpose built distribution warehouse prominently located next to the M90 motorway, north of Edinburgh.

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Tritax Aberdeen HQ Office Fund

This c. 42,000 sq ft Grade A office is pre-let to GDF Suez E&P UK Limited, the UK arm of the world’s largest Utility company, for a term of 15 years.

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Tritax Brindleyplace (7, 8 & 10) Unit Trust

In November 2009, Tritax Brindleyplace (7, 8 & 10) Unit Trust purchased three interconnected office buildings in the award winning Brindleyplace development in Birmingham. Totalling c. 301,000 sq ft, all three buildings are let to The Royal Bank of Scotland Plc with Sainsbury's Supermarkets occupying the ground floor retail unit.

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Tritax Next EZ Unit Trust

In 2006 the Trust acquired two new "state of the art" high-bay distribution warehouses of c. 1.85m sq ft GIA, on a site of circa 48 acres which is pre-let to Next Group Plc.

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Tritax Prime Distribution Income Fund

In May 2013, the Tritax Prime Distribution Income Fund acquired a modern c. 750,000 sq ft national distribution unit let on a 20 year lease (19.5 years unexpired), to CDS (Superstores International) Limited trading as "The Range", one of the UK's leading value retailers.

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Investment Opportunities

Since 1995 we have delivered high quality commercial property investments and tax efficient solutions for both direct and pension investors. Central to our Investment philosophy and rationale is a strategic focus in which we target investment opportunities likely to produce a robust income stream and/or capital growth, as well as often offering significant tax advantages.

To hear more about current investment opportunities please email marketing@tritax.co.uk or call +44(0) 1234 720188.

CONTACTS

Marketing & Sales Department

marketing@tritax.co.uk
Tel: +44 (0)1234 720188

Investor Services Department

investorservices@tritax.co.uk
Tel: +44 (0)1234 720188