(Alliance News) - Tritax Big Box REIT PLC on Wednesday said it recorded a significant increase in take-up of space in the first quarter of 2022 and made a positive start to the year overall, on the back of strong occupier demand.
The London-based real-estate investment trust focused on distribution centres recorded a take up of 10.4 million square feet in the quarter to March 31, more than doubled from the comparable quarter in 2021.
Tritax Big Box explained that strong demand from a broad range of occupiers supported the growth in the period.
This coupled with historically low levels of availability is leading to further rental growth across the UK, it said.
Logistics investment volumes totalled GBP2.5 billion in the first quarter, up 19% year-on-year.
The FTSE 250-listed firm noted some headwinds from price inflation but said it is mitigating much of the construction cost inflation in its near-term development pipeline "through our specialist approach to procurement, locking in fixed price building contracts, and our ability to pass through increased costs to rents."
"Our active management of open market rent reviews, the significant proportion of inflation linked leases and strong occupier demand combined provide a good degree of inflation protection," Chief Executive Colin Godfrey said.
The company said it is well positioned to capitalise on the near record levels of occupier demand though its development pipeline.
It remains on track to deliver 3 million to 4 million square feet of development starts in 2022, within its 6% to 8% yield on cost target range. Tritax Big Box expects the impact on earnings to be delivered through 2023 and 2024.
"We have made a positive start to the year as we continue to drive performance across all business areas. Demand from a broad range of occupiers for new logistics space remains very strong, underpinning our confidence in our growth prospects," CEO Godfrey commented.
Shares were down 1.7% at 219.12 pence each on Wednesday morning in London.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Tritax Big Box (BBOX)