(Alliance News) - Tritax Big Box REIT PLC on Monday said it expects strong trading in 2020 as the value of its warehouse portfolio rose in 2019, due to the continued growth of the market for very large logistics assets.
The stock was trading 0.1% up at 139.80 pence each on Monday morning in London.
The FTSE 250-listed real estate investment trust's portfolio was valued at GBP3.94 billion at December 31, up from GBP3.42 billion at the end of 2018. At the end of June 2019, the portfolio value had stood at GBP3.85 billion. On a like-for-like basis, it reported a 1.8% valuation uplift in portfolio value during 2019.
Tritax Big Box said 58 assets were let or pre-let to 40 institutional tenants with contracted annual rental income of GBP166.6 million as at December 31. It added that the weighted average purchase yield of its total portfolio is 5.5% compared to a valuation yield of 4.5%.
The company said it is targeting an aggregate dividend of 6.7 pence for 2019. It paid out a total of 5.025p in the first nine months of the year. It said it intends to maintain its progressive dividend policy in 2020 and beyond.
Tritax said it has GBP1.7 billion of committed debt financing in place, of which GBP1.2 billion was drawn as at the end of December, adding that 87% of its committed debt is financed on an unsecured basis.
In the next 12 months, it expects to complete two pre-let forward-funded developments totalling 2.3 million square feet and three Tritax Symmetry developments totalling 0.8 million square feet.
Looking ahead, Chief Executive Colin Godfrey said: "We see the potential for further sectoral yield compression after a largely static 2019, which was impacted by the uncertainty of Brexit and the general election. Investment volumes have the potential to increase, driven by activity from overseas investors and institutions continuing to re-weight their portfolios.
"Occupier take-up looks promising for 2020 with over 10 million square feet of lettings reported to be under offer and carried over from 2019. Speculative supply has slightly decreased from 2018, but importantly reduced by around 50% for buildings over 500,000 sq ft, where demand continues to outstrip supply. Attractive levels of rental growth are therefore expected to continue, which when combined with 53% of our contracted rental income receiving fixed or minimum increases, will support our progressive dividend policy."
By Ife Taiwo; ifetaiwo@alliancenews.com
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Tritax Big Box (BBOX)