REG - Tritax Big Box REIT - ACQUISITION OF EXCEPTIONAL £1.04 BILLION PORTFOLIO

Tritax Big Box REITAnnouncement

Mon 08:15

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RNS Number : 0885D  Tritax Big Box REIT plc  13 October 2025

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INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
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JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

13 October 2025

ACQUISITION OF EXCEPTIONAL £1.04 BILLION LOGISTICS PORTFOLIO

 

High-quality, well-located urban and big box assets purchased below
replacement cost

Delivering mid-single digit EPS accretion from year one onwards, with returns
above BBOX's cost of capital

Blackstone to become c.9% shareholder, with shares issued at 13.5% premium to
current share price

The Board of Tritax Big Box REIT plc ("BBOX" or the "Company") is pleased to
announce it has exchanged contracts to acquire a high-quality portfolio of
logistics assets valued at £1,035 million (the "Target Portfolio") from
certain real estate funds advised by affiliates of Blackstone Europe LLP
("Blackstone") (the "Acquisition"). The acquisition is expected to complete on
or around 22 October 2025, subject to the satisfaction of certain conditions
including (amongst others) the Company entering into a debt facility to fund
the cash consideration.

 

The consideration for the Acquisition is a mix of cash and newly issued BBOX
shares as follows:

 

·      £632 million in cash, to be funded via a new £650 million debt
facility; and

·      Up to 233.1(1) million or c. £375(2) million of new ordinary
shares (the "Consideration Shares") to be issued at a price of 161p per share,
representing:

o  a premium of 13.5 per cent. to the BBOX closing price of 141.9 pence on 10
October 2025 (being the last practicable date prior to this announcement)

o  a premium of 14.0 per cent. to the BBOX 3-month VWAP of 141.3 pence on 10
October 2025 (being the last practicable date prior to this announcement)

o  Approximately 8.6 per cent. of the Company's enlarged issued share
capital.

 

(1) Further Consideration Shares may be issued by the Company following
completion pursuant to a customary mechanism for post-completion adjustments
to the consideration payable under the sale and purchase agreement relating to
the Acquisition.

(2) Total cash and share consideration of £1,007 million for portfolio net of
normalised net working capital and £20 million Reversionary Bridge

Compelling strategic rationale

BBOX continues to drive performance through its three attractive growth
drivers, specifically seeking to: (i) capture record rental reversion and
drive further active management; (ii) pursue its flexible logistics
development pipeline; and, (iii) deliver exceptional returns through pre-let
data centre development.

 

The Board believes this Acquisition has compelling strategic and financial
rationale, particularly with respect to the first of these three growth
drivers, building on its existing strategy and proven track record of
delivering attractive and long-term growing, sustainable returns for BBOX
shareholders:

 

·   An exceptional portfolio of high-quality, well-located assets with
significant near-term rental reversion potential: The Acquisition adds a high
quality, well located urban logistics weighted portfolio of scale with rental
reversion potential of c. 28 per cent. These assets have been carefully
acquired over several years to create a portfolio notable for its quality and
scale, and which would be difficult to replicate through piecemeal acquisition
strategy. The shorter-dated last mile and urban leases provide an accelerated
pathway to capturing this significant rental reversion and are complemented by
modern, high specification big box assets generating significant and resilient
income.

·     Compelling entry point with replacement costs ahead of acquisition
price: The replacement cost of the assets within the acquisition portfolio
exceed the acquisition price ensuring an attractive entry point, particularly
within key urban locations where development of new assets is structurally
constrained.

·     Attractive fringe prime assets with affordable ERVs: The assets
within the portfolio have an average passing rent of £8.23 per sq ft and an
ERV of £10.49 per sq ft, offering the opportunity for income growth whilst
remaining affordable to clients.

·     Increases urban / small box logistics offering: The Acquisition
builds on BBOX's recent acquisitions and further expands its urban footprint
across key micro-locations in the South East and the Midlands, which are
underpinned by strong market fundamentals and limited levels of new supply.
Competition for land and shifting demographics have reduced logistics space in
UK cities, severely constrained new supply and decreased options for
occupiers. Meanwhile, rising demand for rapid delivery is reshaping supply
chains and broadening the occupier base, supporting sustainable rental growth.

·    Leverages Tritax's efficient platform and significant expertise:
BBOX's efficient structure, with its low EPRA cost ratio, supports an
efficient flow of rental income through to earnings for shareholders. There is
an opportunity to enhance the earnings potential of the portfolio further
through Tritax's exclusive focus on UK logistics, entrepreneurial culture and
strong track record of active asset management - consistently enhancing value
for shareholders, as demonstrated most recently through the successful
integration of urban logistics assets obtained through the acquisition of UK
Commercial Property REIT Limited in 2024.

·    Earnings enhancing: The Acquisition is additive to the existing
income profile with BBOX group passing rental income growing from £311
million as to June 2025 to £364 million (c.17 per cent. increase) and ERV
from £397 million to £464 million (c. £67 million increase) both on a pro
forma basis. The Acquisition is expected to be mid-single digit EPS accretive
in the first full year post-Acquisition and meaningfully accretive thereafter,
supporting BBOX's income-led growth strategy, and enhancing its ability to
target sustainable earnings and dividend progression.

·    Enhancing risk adjusted returns: The Acquisition enhances BBOX's
position as the UK's leading listed logistics pure play platform, with a
portfolio value of c.£7.9 billion. The Acquisition continues BBOX's strategy
of enhancing overall risk adjusted returns by strengthening its competitive
edge through increased asset depth across big box, urban and MLI formats -
broadening its customer offering and supporting a diverse range of occupier
needs with greater operational flexibility. The Target Portfolio is expected
to deliver compelling returns ahead of BBOX's cost of capital and be accretive
to total returns.

·    Consideration shares issued to Blackstone at a premium to the share
price: The Consideration Shares will be issued at 161p per share, representing
a premium of 13.5 per cent. to the BBOX closing price of 141.9 pence on 10
October 2025, demonstrating Blackstone's strong conviction in BBOX and its
future growth prospects, as well as in the UK logistics real estate market.
Blackstone is a global leader in real estate investing, with a global real
estate portfolio value of $611 billion as of 30 June 2025.

 

An exceptional portfolio of high-quality urban and big box assets in key
locations

Target Portfolio Overview

                          Urban     Big Box  Total Target Portfolio
 GAV (£m)                 591       444      1,035
 Estates / Units (#)      32 / 400  9 / 9    41 / 409
 Passing rent (£ sq ft)   8.79      7.68     8.23
 ERV (£ sq ft)            12.15     8.88     10.49
 Reversion (%)            38        16       28
 NRY (%)                  6.4       6.4      6.4
 WAULT (yrs)              4.7       7.1      5.9

 

·      6.5 million sq ft portfolio across 409 units, enhancing the
Company's urban/small box offering via a broader range of property sizes and
complementary tenant base with 28 per cent. existing BBOX clients

·      32 urban logistics/small box and 9 big box assets located in core
regions across the UK with 36 per cent. weighting to the South East and 53 per
cent. weighting to urban logistics market based on contracted rent

·      An aggregate passing rent of approximately £53 million per
annum. The Target Portfolio is 95 per cent. occupied with a weighted average
unexpired leased term ("WAULT") of 5.9 years

·      Significant rental reversion potential with an estimated rental
value ("ERV") of £67 million, representing an increase of c. 28 per cent.
over passing rent and reflecting a net reversionary yield ("NRY") of 6.4 per
cent.

·   The opportunity to capture >80 per cent. of this rental reversion
prior to the end of 2028 via a combination of contractual lease events, lease
expiries, reducing the current vacancy rate and other asset management
initiatives.

·   Blackstone will be providing an aggregate £20 million rental
reversion bridge (the "Reversionary Bridge"), which will act as a bridge
between the current passing rent and the portfolio ERVs, spread over three
years across the occupied units. The Reversionary Bridge accelerates the
capture of a significant portion of the reversion, providing an enhanced
day-one running yield of c.6.0 per cent.

Balance sheet and new debt facility terms

As a result of the Acquisition and its related funding, BBOX's gross asset
value will increase to £7,857 million and loan to value ("LTV") to
approximately c.35 per cent. Over the next 12-18 months, the Company intends
to undertake select targeted disposals amounting to approximately £300
million (in addition to its previous disposal guidance), in order to reduce
LTV to the lower end of the 30-35 per cent range.

 

The Acquisition is conditional upon BBOX entering into a binding £650 million
facility to be provided by Santander Corporate & Investment Banking to
fund the cash consideration, with key terms including:

·      Opening margin of 80bps margin above SONIA; and

·      Initial term of 12 months with optional 18 month extension fully
at the Company's discretion

 

Key Debt Metrics

                       30-Jun-25 BBOX  Pro Forma BBOX
 Gross Debt            2,203           2,853
 Fixed or Hedged (%)   86%             67%
 Net LTV               31%             35%
 Average Cost of Debt  3.2%            3.6%
 Average Maturity      4.8 Years       4.0 Years

 

Rental reversionary bridge

·    Blackstone will be providing an aggregate £20 million rental
Reversion Bridge, which will act as a substantial bridge between the current
passing rent and the ERVs, across the occupied units.

·     The Reversionary Bridge will be recognised in the Company's
adjusted earnings, with the cash being fully retained by Tritax. The
Reversionary Bridge will be recognised over the next three financial years, on
a reducing annual basis, to reflect the actual capture of the rental reversion
as passing rent increases over the period.

·     The combination of net rental income and recognised Reversionary
Bridge is expected to deliver a total contribution to earnings of c.£66-68
million per annum for the next three full financial years, translating to a
day-one running yield of c.6.0 per cent.

 

Blackstone Consideration Shares

It is expected that the Consideration Shares will be issued in two tranches.
The initial tranche of the Consideration Shares will be issued to Blackstone
on completion. Any further Consideration Shares, will be issued shortly after
completion, following finalisation of the completion accounting relating to
the holding companies of the Target Portfolio.

As part of the consideration for the Acquisition, applications will be made to
the Financial Conduct Authority ("FCA") and to the London Stock Exchange plc
(the "London Stock Exchange") for the initial tranche of Consideration Shares
of 221,444,706 to be admitted to the closed-ended investment funds category of
the Official List of the FCA and to trading on the main market for listed
securities of the London Stock Exchange ("Admission"). It is expected that
Admission will become effective and dealings will commence at 8.00am on 22
October 2025. The Acquisition is conditional upon Admission occurring.

Following Admission, the Company will have 2,702,122,165 ordinary shares of 1
pence each in issue. There are no shares held in treasury. Therefore,
following Admission the total number of voting rights in the Company will be
2,702,122,165 (the "Voting Rights Figure"), and this Voting Rights Figure may
be used by the Company's shareholders as the denominator for the calculations
by which they will determine if they are required to notify their voting
rights interest, or a change to that interest, in the Company under the FCA's
Disclosure Guidance and Transparency Rules.

Blackstone has agreed to enter into a lock-up arrangement in respect of the
Consideration Shares until 31 December 2026 and a standstill arrangement until
31 December 2027, in each case subject to customary exceptions.

Blackstone will be permitted to sell a small number of Consideration Shares in
order to satisfy certain liabilities it may incur in connection with a
customary mechanism for post-completion adjustments to the consideration
payable under the sale and purchase agreement relating to the Potential
Acquisition.

Colin Godfrey, BBOX CEO, commented:

"Aligned with our strategic objectives, this exceptional portfolio offers
strong rental reversion and numerous asset management opportunities. It also
significantly broadens our client proposition across key urban logistics
markets and reinforces our leading position in mission critical big boxes; in
combination growing our GAV to over £7.9 billion.

The acquisition also delivers immediate financial benefits, including
mid-single-digit EPS accretion and enhanced returns well above our cost of
capital. I welcome Blackstone as a new 8.6 per cent. shareholder in Tritax Big
Box; their investment at a material share price premium demonstrates
confidence in our team, our leading position in UK logistics, the strong
attributes of the transaction and positive outlook for both our business and
the market."

James Seppala, Chairman of Blackstone Europe and the Head of Real Estate Europe, commented:

"This transaction reflects our conviction in BBOX and its market-leading
position, as well as our continued conviction in the UK logistics sector. This
portfolio represents a rare aggregation of high-quality properties with
meaningful embedded rental growth potential. The Tritax team's strong asset
management track record make them an excellent steward for these assets in the
future. Our decision to take an ownership stake in BBOX as part of this
transaction reflects our belief in the Company's long-term strategy and
outlook, and we are excited by the opportunity to participate in the future
success of the enlarged business."

Presentation and Q&A

The Company will host a presentation and live Q&A for analysts and
investors via conference call and webcast at 9.30am (UK time) today. To
participate in this conference call or webcast, please use the following
access details:

 

Webcast: https://us06web.zoom.us/webinar/register/WN_Gf8ZR8qVRIKTiYSyPNsjHA
(https://us06web.zoom.us/webinar/register/WN_Gf8ZR8qVRIKTiYSyPNsjHA)

 

Conference Call:

The presentation will also be accessible on-demand later today on BBOX's
website:

https://www.tritaxbigbox.co.uk/investors/results-presentations.

 

BBOX was advised by Akur Limited, Jefferies International Limited, J.P. Morgan
Securities plc (trading as J.P. Morgan Cazenove) and DTRE.

 

Blackstone was advised by Rothschild & Co, Barclays Bank PLC and Newmark
Group, Inc.

 

For further information, please contact:

BBOX

Colin Godfrey,
CEO
Tel: +44 (0) 20 8051 5060

Frankie Whitehead,
CFO
Email: bigboxir@tritax.co.uk (mailto:bigboxir@tritax.co.uk)

Ian Brown, Head of Corporate Strategy & Investor Relations

 

Kekst CNC

Tom Climie / Guy
Bates
Tel: +44 (0) 7760 160 248 / +44 (0) 7581 056 415

Email: tritax@kekstcnc.com (mailto:tritax@kekstcnc.com)

 

 

Notes

Tritax Big Box REIT plc (ticker: BBOX) is the largest listed investor in
high-quality logistics warehouse assets and controls the largest
logistics-focused land platform in the UK. Tritax Big Box is committed to
delivering attractive and sustainable returns for shareholders by investing in
and actively managing existing built investments and land suitable for
logistics development. The Company focuses on well-located, modern logistics
assets, typically let to institutional-grade clients on long-term leases with
upward-only rent reviews and geographic and client diversification throughout
the UK. Additionally, having adopted a "power first" approach, the Company has
recently secured its first 147MW data centre development opportunity, and a
further 1GW pipeline, offering the potential to deliver exceptional returns on
an accelerated basis.

 

The Company is a real estate investment trust to which Part 12 of the UK
Corporation Tax Act 2010 applies, is a constituent of the FTSE 250, FTSE
EPRA/NAREIT and MSCI indices and has its Ordinary Shares admitted to the
Official List of the UK Financial Conduct Authority.

 

The Company's LEI is: 213800L6X88MIYPVR714.

 

Inside Information

 

This announcement contains inside information as defined in the UK version of
the Market Abuse Regulation (EU) No.596/2014, which is part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018, as amended. Upon
publication of this announcement via a Regulatory Information Service, such
inside information will be considered to be in the public domain.

 

Further information

 

This announcement is for information purposes only and does not constitute an
offer or inducement to sell or an invitation to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of, any securities or a solicitation
of an offer to buy any securities. Certain figures included in this
announcement have been subjected to rounding adjustments. This announcement,
oral statements made regarding the Acquisition, and other information
published by BBOX contain certain statements, beliefs or opinions, with
respect to the financial condition, results of operations and business of BBOX
which are or may be deemed to be "forward looking statements". These forward-
looking statements can be identified by the fact that they do not relate only
to historical or current facts. Forward-looking statements often use words
such as "anticipate", "target", "expect", "envisage", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will", "may",
"should", "would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by BBOX, in light of
its experience and its perception of historical trends, current conditions,
future developments and other factors it believes appropriate. By their
nature, forward-looking statements involve risk and uncertainty, because they
relate to events and depend on circumstances that will occur in the future and
the factors described in the context of such forward-looking statements in
this announcement could cause actual results and developments to differ
materially from those expressed in or implied by such forward-looking
statements. Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given by BBOX
that such expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward- looking statements
which speak only as at the date of this announcement. All subsequent oral or
written forward-looking statements attributable to any member of the BBOX
group, or any of its associates, directors, officers, employees or advisers,
are expressly qualified in their entirety by the cautionary statement above.
BBOX does not assume any obligation, and disclaims any intention or
obligation, to update or correct the information contained in this
announcement (whether as a result of new information, future events or
otherwise), except as required by applicable law or regulation (including
under the UK Listing Rules and the Disclosure Guidance and Transparency Rules
of the FCA).

Jefferies International Limited ("Jefferies") and Akur Limited ("Akur"), which
are each authorised and regulated by the FCA in the United Kingdom, are acting
exclusively for BBOX and no one else in connection with the matters set out in
this announcement and will not be responsible to anyone other than BBOX for
providing the protections afforded to clients of Jefferies or Akur nor for
providing advice in relation to any matter referred to in this announcement.
Neither Jefferies nor Akur, nor any of their affiliates, owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Jefferies or Akur in connection with this announcement, any
statement contained herein or otherwise.

J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in
the United Kingdom by the Prudential Regulation Authority (the "PRA") and
regulated by the PRA and the FCA, is acting as financial adviser exclusively
for BBOX and no one else in connection with the Acquisition and will not
regard any other person as its client in relation to the Acquisition and will
not be responsible to anyone other than BBOX for providing the protections
afforded to clients of

J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation
to the Acquisition or any other matter or arrangement referred to in this
Announcement.

 

Further information on Tritax Big Box REIT is available at: tritaxbigbox.co.uk
(http://www.tritaxbigbox.co.uk/)

 

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