Tritax Big Box: Profit up as market reaches ‘inflection point’
Tritax Big Box, a real estate investment trust (REIT), reported strong first-half trading results and expressed optimism about investment opportunities in the strengthening UK real estate market.
Tritax Big Box specialises in managing and investing in logistics-oriented real estate – also known as “big box” properties – which have become especially popular REITs since the pandemic.
The company reported operating profit of £123.8m for the six months ended June 30, up 29.6 per cent year on year.
The company said that adjusted earnings per share rose by over 10 per cent to reach 4.35p, driven by net rental income growth.
The group increased its interim dividend by 4.3 per cent to 3.65p.
Aubrey Adams, Chairman of Tritax Big Box REIT plc, said: “This has been a transformational half year for Tritax Big Box… We believe both the occupational and investment markets are at an inflection point, with the potential to both accelerate and amplify opportunities to drive shareholder returns.”
Contracted annual rent rose to £303.4m, up from £225.3m at the end of last year on rent reviews, asset management and the acquisition of UK Commercial Property (UKCM), the company said.
“The completion of the UKCM transaction and increased investor optimism in the logistics real estate sector provide the Company with further opportunities… [we have] the opportunity to more than double our rental income over the longer term,” Adams said.
“We look forward to driving additional value from UKCM’s logistics assets… [we] continue to see high-levels of interest in the non-strategic assets in the portfolio,” he added.
Tritax Big Box and UKCM merged earlier this year, to create a £6.3bn company.
The acquisition was largely responsible for the boost in Tritax’s portfolio value: it rose 27.2 per cent to £6.4bn over the period, a £1.37bn jump.
It’s another example of consolidation in a sector which has suffered from lower liquidity, devalued assets and lower share prices in a time of high interest rates and inflation.