Prologis Ao Crewe
Tritax paid £36m for part of AO's Crewe distribution centre, in January 2018

Tritax profits up in ‘robust’ industrial market

Tritax Big Box REIT, now a majority shareholder in developer DB Symmetry, has reported a 21% increase in profit for the year to December 2018, up from £94m to £113m.

Tritax, the only REIT solely dedicated to big box logistics assets in the UK, has a portfolio valued at £3.4bn across 54 assets, plus 114 acres of land, and an annual rent roll of £161m, up from £125m.

Throughout 2018, Tritax spent £641m acquiring eight large warehouses, including’s 388,000 sq ft Crewe distribution facility.

In the North West, highlights for the year included completing a 10-year lease extension with Kellogg’s at the company’s distribution centre in Trafford Park, increasing rent by 20%.

Outside of the reporting period, at the start of this year Tritax successfully raised £250m in equity to fund the acquisition of fellow warehouse specialist DB Symmetry.

DB Symmetry was one of the largest privately-owned developers in the UK, formed out of a 60:40 joint venture between clients of Delancey and Barwood, and delivering several projects in the region.

DBS HoldCo, a wholly-owned subsidiary of Tritax, acquired 87% of DB Symmetry in February, through a payment of £202.4m in cash, and £52.6m in shares. In its financial results, Tritax said the deal has the potential to deliver 38.2m sq ft of logistics assets.

Richard Jewson, chairman of Tritax Big Box REIT, said: “The quality of the group’s portfolio and customer base mean that we are confident of continuing to deliver secure dividends to shareholders, resulting in attractive returns in a low interest rate environment. While the continued delays and lack of clarity over Brexit presents a substantial uncertainty for the UK economy, our market has remained robust. Since the referendum in June 2016, occupiers have continued to search for space, rents have risen and yields have hardened.

“Brexit is also encouraging manufacturers and retailers to hold additional stock domestically, increasing occupational requirements for UK warehouse space while supply constraints continue. This reinforces the favourable dynamics for landlords. Nonetheless, Brexit does present significant risk for the UK economy which could impinge upon the current positive attributes of our market.

“We see good opportunities to continue to add assets to the portfolio at prices that create value at the point of purchase. Following the DB Symmetry acquisition, we now have the ability to bring through our own developments which are expected to contribute materially to earnings growth and our progressive dividend policy over the medium term.”

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