Tritax reports £1.4bn three-year pipeline

The large-scale industrial property investment trust announced a £102m pre-tax profit for the half year ending 30 June in a results update on the London Stock Exchange.

The pre-tax profit figure represented a substantial loss from the same period last year for Tritax Big Box REIT. The investment trust justified the discrepancy by citing a “substantial gain on revaluation of the portfolio” which occurred around that time.

While the pre-tax numbers are down, the operating profit saw an increase of 7.5%, going from £89m as of 30 June 2022 to £96m June this year.

Factoring into the profit figures was the £125m disposal of three sites in Knowsley, Skelmersdale, and Worksop.

The company said that its development pipeline remains strong.

With £83m worth of projects under construction and another £1.3bn with a potential start within the next three years, Tritax was optimistic about its place in the industrial market in its results for the half-year ending 30 June.

The £83m under construction comprises 2.6m sq ft. Of that, 65% is let and will add £12.5m to Tritax’s passing rent figures.

The £1.3bn near-term pipeline includes 11m sq ft that the group is currently awaiting planning decisions on. Tritax said those projects would be capable of delivering £102m in annual rent.

Beyond the three-year period, Tritax said it has another 1,248 acres available that could support up to 26.7m sq ft of development.

“Our development pipeline provides a high degree of flexibility to ramp up or down our level of investment to accurately match prevailing or anticipated market conditions,” said Tritax chairman Aubrey Adams.

He added: “With asset values stabilising, continuing strength within the occupational market, and development still offering attractive returns, we have prudently commenced new construction starts during H1 2023 and anticipate being at the lower end of our 2m-3m sq ft guidance for 2023.

“Our development sites are located in the leading regions for logistics in the UK and we are seeing good levels of customer enquiries across all of them.”

Tritax also reported a 3% increase in passing rent, going from £205m in December 2022 to £212m.  The group’s portfolio was valued at £5bn.

“The group owns and manages what we believe is the highest-quality real estate portfolio in Europe, with long leases and a strong customer line-up,” Adams said.

“Our modern buildings have excellent ESG credentials and are in prime logistics locations, where occupiers desire,” he continued.

“This quality is reflected in our record of never having a single day of rental vacancy in any of our investment properties, since the group was founded nearly 10 years ago. This underpins the security of our income generation and our progressive dividend aspirations.

Tritax also reiterated its sustainability goals to have all new buildings meet a minimum of BREEAM Excellent standards and achieve an EPC A grade. Tritax also revealed it had flirted with solar, having discussed nine solar projects that could generate 13.5 MW of energy for customers.

Tritax also said it had put into place an embodied carbon target of 400kg of CO2 per square metre for its projects.

On the day of the announcement, the price of Tritax stocks was up 2.66%.