Tritax Big Box posted a rise in profit for 2019, a year its chairman described as “an important year in the evolution of the company”, although its net asset value and total returns both dipped.
The UK logistics investor’s annual operating profit stood at £122.5m, a 7.7% increase on 2018. EPRA NAV of 151.06p was 1.2% lower, while a total return of 3.3% was almost nine percentage points lower year-on-year. Tritax pinned both falls on costs linked to its 87% stake in logistics specialist db Symmetry. The company increased its dividend by 2.2% to 7p.
Chairman Richard Jewson said: “2019 was an important year in the evolution of the company – we acquired and integrated a prime logistics platform to complement our high-quality investment portfolio. The core of our business remains unchanged, with 89% of our portfolio comprising of new, modern standing assets, strategically located in prime logistics locations.”
Titax ended the year with a 58-asset investment portfolio covering almost 31m sq ft, with 99% of the portfolio let or prelet. Plans for “selective” disposals “are already under way” for this year, and the company said it expects these to finance the capital requirements for the rebranded Titax Symmetry business.
Five of its forward-funded prelet developments completed during the year, spanning 4.3m sq ft, and three more sites of a combined 3m sq ft will practically complete early in 2021. Portfolio value was £3.94bn at the end of the year, up from £3.42bn.
Jewson added that the prospects for 2020 “look good”, with demand outpacing supply, although he acknowledged that the effect on the occupational and investment markets from the spreading Covid-19 coronavirus may “temper” that positivity.
“Investors continue to re-weight their portfolios away from retail, into industrial logistics and alternatives,” Jewson said. “We believe this trend will continue in 2020. There are already signs that investment interest has increased, particularly from overseas buyers, having been held back by economic and political uncertainty in 2019. Stable yields and increasing land prices may encourage developers to seek higher rents, in order to maintain their returns.”
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