Tritax Big Box shares edge up on strong FY24 outlook

Published 31/01/2025, 10:10
© Reuters.

Investing.com -- Shares of Tritax Big Box REIT PLC (LON:BBOX) saw a modest increase of 0.6% following the release of its FY24 Interim Management Statement (IMS) ahead of the full results due on February 28. The company reported significant growth in rental income and unveiled robust development activity, suggesting a positive outlook for the upcoming fiscal year.

The IMS highlighted an increase in rent to £11.6 million for FY24, up from £4.9 million in the previous year. This rise was attributed to rent reviews, which resulted in an 11.7% uplift, and asset management initiatives that achieved rents 15.9% higher than previous levels.

Like-for-like Estimated Rental Value (ERV) grew by 5.4%, indicating strong underlying growth. The company also noted that 26% of embedded growth remains to be realized from current rents, with a low vacancy rate of 3.3% and a weighted average unexpired lease term (WAULT) of 10.3 years, down slightly from 11.4 years.

Developments have secured £11.1 million of rent for FY24, compared to £7.8 million in FY23, including a significant 1 million square foot prelet and 1.9 million square feet of development starts. Of these, 79% are considered de-risked through lettings or sales, aligning with the targeted 7% yield on cost. Pre-sold developments are expected to contribute an additional £23 million in Development Management Agreement (DMA) fees.

In a strategic move, Tritax Big Box has launched a power-led data center (DC) initiative, with its first 147 MW development offering up to 1 GW potential. The initiative is projected to yield 9.3% on cost, which compares favorably against investment yields of 5-5.5%, signaling potential profitability in this new venture.

Portfolio sales amounted to £306 million, including £125 million from Big Box assets sold at 3.3% above book value and £181 million from UK Commercial Property REIT assets at 2.8% above book value, exceeding initial guidance. With £150 million under offer, the company has effectively optimized its loan-to-value (LTV) ratio at 29%, with a cost of debt (kd) at 3.9%, 93% of which is fixed with an average term of 4.5 years. The firm also reported robust liquidity of £0.5 billion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.