Tritax portfolio breaks £2bn barrier as NAV rises

Tritax Big Box REIT has revealed a 3.3% rise in net asset value (NAV) per share as the value its portfolio of logistics assets broke the £2bn barrier in the first six months of its financial year.

NAV per share increased to 133.3p from 129p at the end of 2016, while the portfolio valuation leapt 10.9% to £2.1bn, from £1.89bn six month earlier.

Annual rental income at 30 June stood at £108.65m, a rise of 9%, while pre-tax profits leapt 49.9% to £80.53m, compared to £53.72m at the same point last year.

Adjusted earnings per share nudged up 1.6% to 3.21p, while Tritax declared a dividend increase of 3.2% to 3.2p.

The group’s weighted average unexpired lease term stood at 15.1 years, slight down from the 15.3 years at the same point last year.

‘Logistics remains attractive’

Colin Godfrey, fund manager of Tritax, said: “Heightened investment demand and asset management have helped enhance the value of our portfolio and we consider that market values may improve further. Whilst our asset valuations have benefitted from compressed yields, the tightening investment market means that patience, capital pricing discipline and stock selection will be increasingly important in underpinning our future performance.

The logistics market continues to dynamically influence the UK economy

“Nonetheless, investments in the logistics sector remain attractive compared to other asset classes and the company is well positioned and well capitalised to take advantage with an identified, largely off-market, pipeline of opportunities. Looking forwards, maintaining the quality of our investment purchases will be key. 

“The logistics market continues to dynamically influence the UK economy. We believe that the development of the big box logistics market remains in its infancy, with operational efficiencies and e-commerce likely to drive occupational demand for some time to come. 

“Investors seeking robust values and income protection are drawn by long term lease commitments and strong market fundamentals, but also the possibility of maintaining the impressive levels of rental growth witnessed during the last couple of years. These positive attributes are expected to continue, underpinning our ambition to deliver attractive and growing, fully covered, dividends. We view the remainder of 2017 and 2018 with optimism.”

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