Growing e-commerce penetration is good news for Tritax Big Box (BBOX), the only real estate investment trust (Reit) dedicated to investing in very large warehouse assets. Demand for distribution centres of greater than 500,000 square feet is significant, and Tritax was able to combine this with securing long-term leases, typically around 12 years, with upward-only rent reviews.
Headline profits included a £176m valuation uplift compared with £47.5m a year earlier, but more importantly, net rental income jumped 45 per cent to £108m. These factors helped to push adjusted net asset value ahead by 10.3 per cent to 142.2p.
A total of £350m of new equity was raised during 2017, which helped to finance 11 more big boxes at a cost of £435m, of which 93 per cent by value were secured in off-market deals, thereby avoiding the cost of engaging in a competitive bidding process. Typical of these is the former Littlebrook power station at Dartford for £62.5m. Part of the site already has consent for storage, and its position, just by the M25, M2 and M20 motorways couldn’t be better. Tritax also controls risk by only developing buildings on a pre-let basis.
Analysts at Numis are forecasting adjusted net asset value at the December 2018 year-end of 143p.
| TRITAX BIG BOX (BBOX) | ||||
| ORD PRICE: | 142.9p | MARKET VALUE: | £ 1.95bn | |
| TOUCH: | 142.8-143p | 12-MONTH HIGH: | 151p | LOW: 137p |
| DIVIDEND YIELD: | 4.5% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 0% | |||
| INVESTMENT PROP: | £2.6bn | NET DEBT: | 33% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 98 | - | - | - |
| 2014* | 107 | 42 | 15.1 | 4.15 |
| 2015 | 124 | 134 | 21.6 | 6 |
| 2016 | 128 | 92 | 10.5 | 6.2 |
| 2017 | 142 | 248 | 19.5 | 6.4 |
| % change | +11 | +170 | +86 | +3 |
| Ex-div: | 15 Mar | |||
| Payment: | 29 Mar | |||
| *For the period 1 Nov 2013 to 31 Dec 2014 | ||||
