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Tritax Big Box Q1 Trading Update

Positive start to the year; continued development and asset management progress

04 May 2022

Tritax Big Box REIT plc (the Company), in conjunction with its Annual General Meeting, announces an update on its performance for the period 1 January 2022 to date.  

“We have made a positive start to the year as we continue to drive performance across all business areas. Demand from a broad range of occupiers for new logistics space remains very strong, underpinning our confidence in our growth prospects. We are actively managing our portfolio, completing several rent reviews and lease extensions during the period which will deliver attractive levels of income growth. With 3.1 million sq ft of space currently under construction we have growing visibility on accelerating earnings growth over the medium-term.”

“The UK has entered a period of higher inflation however I am reassured by how the Company is positively responding to date. We are mitigating much of the construction cost inflation in our near-term development pipeline through our specialist approach to procurement, locking in fixed price building contracts, and our ability to pass through increased costs to rents. Our active management of open market rent reviews, the significant proportion of inflation linked leases and strong occupier demand combined provide a good degree of inflation protection.”

Colin Godfrey, CEO

Strong demand from a broad range of occupiers supports market strength

Strong and diversified occupier demand combined with historically low levels of availability are leading to further rental growth across the UK.

  • Near record levels of demand from a range of occupier types with 10.4 million sq ft of take up in Q1 2022, up 102% on Q1 2021.
  • Nationwide vacancy rate remains at 1.6%[1]. The shortage of vacant space is encouraging occupiers to lease speculative buildings under construction or commit faster to new build to suit projects.
  • Q1 2022 logistics investment volumes totalled £2.5 billion, up 19% on Q1 2021[2], with yields for high-quality investments tightening to approximately 3.25%1.

Development on track to deliver 3-4 million sq ft of starts in FY2022

We are well positioned to capitalise on near record levels of occupier demand for high-quality logistics space though our development pipeline. Development progress in the year-to-date include:

  • 1.8 million sq ft of construction commenced, 56% pre-let, securing £6.0 million of contracted rent.
  • 3.1 million sq ft of developments currently under construction:
    • 1.3 million sq ft pre-let or let during construction, securing £8.4 million of contracted rent.
    • Remaining units have the potential to add a further £15.2 million to contracted rent.
  • Planning consent secured for a further 0.6 million sq ft of development, across two sites.
  • As outlined at our FY results presentation in March 2022, well reported cost inflation is impacting our nearer term development pipeline. We are mitigating much of this by our careful approach to procurement, the use of fixed price construction costs and our ability to capture rental growth.
  • We remain on-track to deliver an accelerated level of 3-4 million sq ft of development starts in FY 2022, within our 6-8% yield on cost target range, the earnings impact of which will be delivered through FY2023 and FY2024.

Active management driving value for shareholders

We are actively managing our portfolio to support our customers’ requirements, drive value for shareholders, and enhance ESG performance. With 35% of the portfolio subject to rent reviews in FY 2022, across a blend of open market, fixed and inflation linked review types, we are well placed to capture attractive levels of accelerating rental growth. During the period we have:

  • Undertaken rent reviews and lease extensions delivering a £1.3 million increase in annual contracted passing rent; including:
    • 10-year lease[3] renewal at Tesco Nursling, acquired in November 2020, delivering a 23% increase in rent.
    • Lease extension at BSH, Corby increasing the term to 15 years, adding significant value.
  • We are on track to complete the remaining 30% of contracted rent roll subject to review in FY22.

High-quality portfolio underpinning performance

Our high-quality portfolio of prime assets in strong locations continues to perform well, benefitting from an attractive blend of open market and inflation linked rent reviews:

  • Robust portfolio fundamentals with 100% occupancy, let to institutional grade occupiers on long leases efficiently converting rental income into value for shareholders.
  • We are well placed to take advantage of the strength of the investment market for high-quality logistics assets and are progressing selective asset disposals in line with our aim of recycling capital into higher returning opportunities.

Strong balance sheet with capacity to finance our growth opportunities

We actively maintain a strong balance sheet which provides an attractive combination of significant capacity and a high-level of fixed cost or hedged debt, enabling us to finance our operations and strategic growth objectives. 

  • Extended a £50.9 million loan facility with Helaba by 3-years to a new maturity of July 2028 with no change in margin.
  • We remain well capitalised with a loan to value at Q1 2022 of 24.2%[4].
  • Current weighted average cost of debt is 2.27% of which 69% is fixed and benefits from an average 6.5 year maturity.

Annual General Meeting

Our Annual General Meeting will be held today at 10:00am at Taylor Wessing LLP, 5 New Street Square, London, EC4A 3TW. Please refer to the Notice of Annual General Meeting on the Company’s website for more details.


[1] Market data from CBRE for >15 year lease lengths

[2] Market data from Property Data

[3] Subject to five year tenant only break option

[4] With reference to 31 December 2021 valuation


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