LONDON (ShareCast) - (Sharecast News) - Tritax Big Box reported a strong 2024 operational performance in an update on Friday, having secured £22.7m in additional contracted rent, including one of the UK's largest pre-lets of the year - a one million square foot facility leased to a global e-commerce company.
The FTSE 250 real estate investment trust said active management contributed £11.6m in new contracted rent, more than doubling the £4.9m achieved in 2023.

That included £8.4m from rent reviews, reflecting an 11.7% average increase in passing rent, and £3.2m from asset management initiatives, which were 15.9% ahead of previous rental levels.

Like-for-like portfolio estimated rental value grew 5.4% during the year, supported by strong demand for high-quality logistics assets.

Development activity remained robust, adding £11.1m in contracted rent, up from £7.8m in 2023.

The company started 1.9 million square feet of new developments, of which 79% were either pre-let or pre-sold.

Tritax said those projects were expected to generate an average yield on cost of 7.0%.

It also secured planning consents for 1.2 million square feet, with a further 11.1 million square feet submitted for approval.

The company noted its expansion into data centres with its first major project at Manor Farm, targeting a 9.3% yield on cost.

Completion of the first phase could come as early as the second half of 2027, with a broader 1 GW pipeline of potential developments from 2028 onwards.

Tritax Big Box said it completed £306.2m of disposals above book value, including £181.2m from non-strategic assets, meeting the upper end of its £150m to £200m disposal target for UKCM assets.

An additional £150m in non-strategic assets was currently under offer.

The firm also sold £125m in logistics properties at a 3.3% premium to their June book value.

It said its portfolio was valued at £6.5bn at year-end, up from £5bn in 2023, with a total rental reversion opportunity of 26.1%.

The vacancy rate stood at 3.3%, with a further 2.4% from recently completed speculative developments, offering the potential for an additional £21.5m in annual rent.

Its weighted average unexpired lease term was 10.3 years.

Tritax Big Box said it maintained a strong balance sheet, reducing its loan-to-value ratio to 29% from 32% a year earlier.

The company's weighted average cost of debt was 3.1%, with 93% of drawn debt fixed or hedged.

Liquidity exceeded £500m, providing financial flexibility to support future growth.

"We are delivering and enhancing performance across all aspects of our business as we make excellent progress implementing our strategy," said chief executive officer Colin Godfrey.

"In line with guidance, we saw an uptick in activity in H2 2024, most notably securing one of the UK's largest pre-lets of the year of nearly one million square feet to a global leader in ecommerce.

"Strong development activity complements the active management of our portfolio, including the successful integration of UKCM assets."

Godfrey said the company had leveraged its full expertise to enhance the UKCM assets, with the team working rapidly to capture higher rental income and sell non-strategic assets in aggregate at a premium to book cost.

"Across our portfolio we have added £11.6m in additional rental income from asset management with a pipeline of further opportunities identified.

"These asset management initiatives, together with our development activities, have further enhanced our attractive income characteristics by adding a total of £22.7m to contracted rent.

"We enter 2025 with growing confidence, driven by improving occupational market conditions, our expanded range of growth drivers - which now include highly accretive data centre developments - and enabled by ongoing investment in our high-calibre team, dedicated to achieving continued success for Tritax Big Box."

At 0846 GMT, shares in Tritax Big Box were down 0.07% at 142.6p.

Reporting by Josh White for Sharecast.com.

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