REG - Tritax Big Box REIT - Results for the 12 months ended 31 December 2024
28/02/2025 07:15
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RNS Number : 8054Y Tritax Big Box REIT plc 28 February 2025
Results for the
12 months ended
31 December 2024
tritaxbigbox.co.uk
28 February 2025
Transformational year with significant strategic progress and excellent
operational performance
Record rental reversion, attractive development pipeline and compelling data
centre opportunities
Delivering highest total accounting return level since 2021
2024 key figures
31 December 2024 31 December 2023 Change
Net rental income £276.0m £222.1m 24.3%
Operating profit(1) £265.3m £193.2m 37.3%
Adjusted earnings per share(2,6) 8.91p 7.75p 15.0%
Adjusted earnings per share (ex. additional development management income) (3, 8.05p 7.75p 3.9%
6)
IFRS earnings per share 19.67p 3.72p 428.8%
Dividend per share 7.66p 7.30p 4.9%
Dividend pay-out ratio (ex. additional development management income) (3, 6) 95% 94% 1.0pts
Total Accounting Return 9.0% 2.2% 6.8pts
EPRA cost ratio (excluding vacancy cost) (6) 12.6% 13.1% -0.5pts
EPRA cost ratio (including vacancy cost) (6) 13.6% 13.1% 0.5pts
Contracted annual rent roll £313.5m £225.3m 39.1%
EPRA Net Tangible Assets per share(6) 185.56p 177.15p 4.7%
IFRS net asset value per share 184.12p 175.13p 5.1%
Portfolio value(4, 6) £6.55bn £5.03bn 30.2%
Loan to value (LTV)(6) 28.8% 31.6% -2.8pts
Completion of £1.2bn strategic acquisition of UK Commercial Property REIT
Limited (UKCM)
· High-quality urban logistics assets complement existing portfolio,
broaden client offer and increase income and capital growth potential, with
39% rental reversion at acquisition.
· Quality of acquired logistics assets reflected in 3.9% ERV growth and
a 5.8% uplift in asset values since June 2024.
· Cost savings support earnings growth and enhance balance sheet
strength by lowering LTV.
· £181.2 million or 38% of non-strategic assets disposals exchanged or
completed since acquisition at a premium to book value.
Rental income growth supporting Adjusted EPS growth, enhanced by DMA
contribution
· 39.1% increase in contracted annual rent to £313.5 million (31
December 2023: £225.3 million) driven by UKCM acquisition, asset management
and development activity.
· 15.0% increase in Adjusted EPS to 8.91 pence (2023: 7.75 pence)
driven by net rental income growth and Development Management Agreement (DMA)
income.
o Adjusted EPS excluding additional DMA income grew 3.9% to 8.05p (2023:
7.75p).
· 12.6% EPRA cost ratio excluding vacancy costs (2023: 13.1%) reduction
driven by UKCM synergies and efficient externally managed structure. 13.6%
EPRA cost ratio including vacancy costs (2023: 13.1%), reflecting assumed
vacancy from UKCM acquisition.
Future earnings growth supported by record logistics portfolio reversion
· 5.4% like-for-like Estimated Rental value (ERV) growth across
logistics portfolio for the period (2023: 6.9%).
· Record 27.9% logistics portfolio reversion provides potential to
capture £79.2 million of additional rent, of which 79% has the potential to
be captured by 2027, supporting future earnings growth.
· Increase in total portfolio value to £6.55 billion (31 December
2023: £5.03 billion), following the acquisition of UKCM, with equivalent
yield remaining broadly stable at 5.68% (31 December 2023: 5.60%).
· 2.8% portfolio capital value increase (2023: 0.8% reduction) driven
by income growth and asset management, increasing to 3.7% when including the
£67.8 million net gain on the UKCM acquisition.
Growing rental income through active management
· £11.6 million added to annual contracted rent through rent reviews
and asset management initiatives:
o Including 34.6% increase in aggregate across open market linked rent
reviews settled in period.
o 4.1% annualised rental growth across rent reviews settled in period (2023:
3.3%).
· 3.9% EPRA like-for-like rental growth reflects ongoing market rental
growth and higher proportion of reviews (2023: 3.6%).
3.3% premium achieved on £306.2 million of disposals - 38% of non-strategic
UKCM assets sold
· £181.2 million, representing 38% of UKCM non-strategic exchanged or
sold:
o 6.2% blended NIY, achieving a 2.8% premium to the market value at time of
acquisition:
o £86.8 million of which is scheduled to complete in Q1 2025.
o Further approximate £177.4 million of UKCM related non-strategic assets
currently under offer.
· £125.0 million of additional disposals from logistics portfolio at a
5.0% NIY, achieving a 4.1% premium to book values, £79.0 million of which
completed in Q1 2025.
· £46.0 million acquisition of 479k sq ft East Midlands cold store let
to Co-Op, with 7.3% reversionary yield.
· Post period end completed £74.3 million acquisition of 627k sq ft
cold-store building in the North West let to Sainsburys at a 6.0% NIY,
expected to achieve a running yield of 7% by 2028.
Developing best-in-class logistics assets to drive earnings growth
· £11.1 million of new contracted rent secured from development
lettings, including 1.0 million sq ft pre-let to a global leader in
e-commerce, representing one of the UK's largest pre-lets in 2024.
· 1.9 million sq ft of development starts in 2024, including 0.4
million sq ft which has been pre-sold under a DMA contract, and expected to
deliver a 7% average yield on cost.
· Development starts for FY25 expected to be in line with FY24 levels
and within our 2-3 million sq ft guidance.
o DMA income expected to contribute £10 million to FY25 operating profit.
· Development yield on cost expected to be at the upper end of 6-8%
guidance for 2025 starts.
· 21% reduction in weighted average embodied carbon from completed
developments to 287 kg CO(2)e per m(2) (2023: 365 kg CO(2)e per m(2)).
Strong balance sheet well positioned to support our strategy
· 28.8% LTV at 31 December 2024 (31 December 2023: 31.6%) and Net
Debt/EBITDA(5) of 7.3x (31 December 2023: 8.2x).
· 3.05% weighted average cost of debt (31 December 2023: 2.93%), with
93.4% of drawn debt either fixed or hedged.
· Over £550 million of available liquidity as at 31 December 2024, 4.5
year average debt maturity and no refinancings prior to June 2026.
· Upgrade from Moody's of credit rating outlook to Baa1 (positive) from
Baa1 (stable).
147 MW data centre opportunity and 1 GW pipeline announced post year end
· Phase 1 Manor Farm targeting 9.3% yield-on-cost and significant
development profits.
· Expected to be one of the UK's largest data centres, targeting
delivery of 107 MW Phase 1 data centre in H2 2027, with a possible second
phase data centre of 40 MW.
· Accelerated power delivery via joint venture with a leading European
renewable and low carbon energy power generator.
· Additional c.1 GW pipeline of UK opportunities identified.
Commenting on the results, Aubrey Adams, Chairman of Tritax Big Box REIT,
said:
"This has been an exceptional year for the Company, marked by significant
transformational change alongside strong operational performance. The
acquisition of UKCM has complemented our portfolio with high-quality urban
logistics assets offering substantial rental reversion potential. The quality
and liquidity of UKCM's assets is further demonstrated by our ability to sell
non-strategic assets above their December 2023 valuations, unlocking
additional capital to fund future growth. Operationally, the Manager has
captured significant rental income through proactive asset management and
development activities, including securing one of the year's largest pre-lets.
"We enter 2025 well positioned with three powerful growth drivers in our
business: capturing record rental reversion, advancing our highly attractive
logistics development pipeline, and leveraging opportunities to develop data
centres with the potential for exceptional returns."
Results presentation and Q&A
A Company presentation for analysts and investors will take place via a
webcast with live Q&A at 8.00am (GMT) today and can be viewed at:
https://brrmedia.news/BBOX_FY_24 (https://brrmedia.news/BBOX_FY_24)
If you would like to ask a question verbally rather than through the webcast
viewer, please join the presentation conference call:
UK: +44 (0) 33 0551 0200
USA: +1 786 697 3501
Password: Tritax FY24
Retail investor webcast and Q&A
The Company will also host a live interactive presentation aimed at retail
investors on the Engage Investor platform, at 2:00pm (UK time) today. This
can be accessed via:
https://engageinvestor.news/BBOX_IP25 (https://engageinvestor.news/BBOX_IP25)
Colin Godfrey (CEO) and Frankie Whitehead (CFO), who will host the event,
welcome current shareholders and interested investors to join. Questions can
be submitted prior to the webcast via the Engage Investor platform, or at
any time during the live presentation.
Investors can sign up to Engage Investor at no cost and follow Tritax Big
Box REIT plc from their personalised investor hub.
Notes
1. Operating profit before FV movements and other adjustments.
2. See Note 15 to the financial statements for reconciliation.
3. The anticipated run rate for Development Management Agreement (DMA)
income is £3.0-5.0 million per annum over the medium term. We classify income
above this as 'additional' development management income, which can be highly
variable over time. We therefore present a calculation of Adjusted EPS that
excludes additional development management income. £23.0 million of DMA
income is included in the 8.91p Adjusted earnings per share in 2024. 2023:
£nil included in 7.75p Adjusted earnings per share).
4. The Portfolio Value includes the Group's investment assets and
development assets, land assets held at cost, the Group's share of joint
venture assets and other property assets.
5. Calculated based on pro-forma EBITDA inclusive of full twelve
months contribution of UKCM, adjusted for fair value of UKCM debt at
acquisition.
6. An alternative performance measure. The Group uses a number of
financial measures to assess and explain its performance, some of which are
considered to be alternative performance measures as they are not defined
under IFRS. For further details, see the Financial review and Notes to the
EPRA and other key performance indicators section, as well as definitions in
the Glossary.
For further information, please contact:
Tritax Group
Colin Godfrey,
CEO
+44 (0) 20 8051 5060
Frankie Whitehead,
CFO
bigboxir@tritax.co.uk
Ian Brown, Head of Corporate Strategy & Investor Relations
Kekst CNC
Tom Climie/Guy Bates
+44 (0) 77 601
60 248 / +44 (0) 75 810 56 415
Email: tritax@kekstcnc.com (mailto:tritax@kekstcnc.com)
The Company's LEI is: 213800L6X88MIYPVR714
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.
The Company is a real estate investment trust to which Part 12 of the UK
Corporation Tax Act 2010 applies, is listed on the Official List of the UK
Financial Conduct Authority and is a constituent of the FTSE 250, FTSE
EPRA/NAREIT and MSCI indices.
Further information on Tritax Big Box REIT is available at
www.tritaxbigbox.co.uk (http://www.tritaxbigbox.co.uk/)
Chairman's statement
A transformational year with significant strategic progress and excellent
operational performance
In 2024, we made significant progress across all our strategic priorities. The
acquisition of UK Commercial Property REIT Limited (UKCM) expanded our client
offering and strengthened our presence in key urban logistics markets. At
the same time, we accelerated contracted rent growth through capturing
portfolio rental reversion, active asset management and strong leasing
activity within our development pipeline. We also successfully executed asset
disposals at the top end of our guidance and ahead of book values, enabling us
to recycle capital into accretive growth opportunities. We enter 2025 with an
outstanding portfolio, exceptional clients, the UK's largest logistics
development land platform and substantial opportunities for further growth,
including the expansion into data centres.
Maximising value and income growth from the UKCM acquisition
Since we acquired UKCM in May 2024 we have completed the integration process
and are firmly on track to realise the benefits we expected. UKCM added £1.2
billion of assets to our portfolio, including £740 million of logistics
assets with strong income growth potential, including an embedded 39%
reversion, which we have already begun to capture. The quality of the
logistics assets within the portfolio was reflected in 3.9% ERV growth and a
5.8% uplift in asset values since June 2024. We have also made excellent
progress in divesting, ahead of their market value at the time of the
acquisition, nearly 40% of UKCM's non-strategic assets, with £94.4 million of
disposals completed by the year end, a further £86.8 million exchanged post
year end and a further approximate £177.4 million under offer. We are seeing
encouraging levels of interest in the remaining non-strategic assets and are
confident of divesting them within 24 months from the date of the acquisition
as planned.
Multi-year and inherent opportunities to drive earnings and dividend growth
We operate in a highly attractive market, underpinned by strong structural
drivers of occupier demand. Businesses are increasingly nearshoring to build
shorter, more resilient supply chains; optimising efficiencies and economies
of scale to protect margins; and leveraging automation to mitigate rising
employment costs. The Board believes improving sustainability performance, as
reflected in our very strong GRESB ratings, positively impacts the Company's
performance, with our Clients preferring modern buildings that can both reduce
costs and provide attractive and safe working environments for their
employees.
At the same time, we have clear and significant opportunities to drive
earnings and dividend growth from prospects inherent within our business,
capitalising on our investment, asset management and development expertise.
There are three distinct elements embedded within our business that offer
multi-year opportunities to drive earnings and dividend growth:
1. capture the record rental reversion in the investment portfolio and
secure lettings for vacant space, which together have the potential to
increase rental income by 27.9% or £79.2 million of which 79% has the
potential to be captured by 2027;
2. construct additional best-in-class logistics assets from our
development platform which can more than double our current rental income over
the longer term and, for 2025, targets a yield on costs of towards the top end
of our 6-8% range, and;
3. deliver data centre development opportunities, including our first at
Manor Farm, Heathrow, which is expected to deliver exceptional returns for
shareholders and a potential 8-10% yield on cost.
"Power first" approach delivering significant opportunities in data centres
Post our year end, we announced the acquisition of a site at Manor Farm,
Heathrow. Subject to planning, this provides us with the opportunity to
develop one of Europe's largest and highest-quality data centres, subject to
planning permissions, which we believe will be attractive to the world's
largest data centre operators. Crucially the Manager, having adopted a "power
first" approach, has secured contracted and accelerated power delivery of 147
MW to the site using pre-existing grid connection agreements, 107 MW of which
will be provided in H2 2027 and 40 MW in 2029. The anticipated yield on cost
from Phase 1 is approximately 9.3%, complementing the returns within our
logistics development pipeline. Phase 2, leveraging the investment in Phase 1,
has the potential for an even higher yield on cost.
Ongoing investment by the Manager in its capabilities
We have previously noted the Manager's strong track record of adding skills
and experience to support our growth. In 2023 and 2024, it strengthened the
asset management team to maximise performance of our urban logistics assets
and deepen relationships with our expanded client base. Additionally, the
Manager led the way in establishing a dedicated power infrastructure and data
centre team, helping to future-proof our existing assets and development
pipeline, while also unlocking new opportunities in the data centre market for
us.
This is driven by the Manager's entrepreneurial culture and agile approach
which supports the exploration of new ideas and opportunities by speculatively
investing in specialist resource. This is a key advantage of our externally
managed structure, with the Manager absorbing the cost of identifying and
incubating new opportunities - such as data centres, where Tritax Big Box now
holds a first right of refusal. While recognising these qualities, the Board
continues to provide constructive challenge to the Manager to ensure the best
interests of the Company's shareholders.
Performance and dividends
The quality of our investment portfolio and continued growth in income through
our asset management and development programmes enabled us to deliver record
headline earnings in 2024. Excluding additional DMA income in the year,
Adjusted EPS was 3.9% higher at 8.05 pence, supporting a covered total
dividend of 7.66 pence per share, up 4.9% on 2023.
Carefully managing the balance sheet and deploying our resources to implement
our strategy remain a major focus. A reduced LTV of 28.8% benefitted from
improving asset valuations and UKCM's lower gearing at the point of
acquisition. We also continue to have significant headroom in our debt
facilities, allowing us to be opportunistic in the market. Our development
programme remains highly flexible, with limited financial commitments, so we
can adapt quickly to any changes in market conditions.
Outlook ‒ well positioned for growth with multiple opportunities to deploy
capital accretively
Client engagement across both our standing portfolio and development schemes
remains high. Clients are renewing on existing space and market take-up
volumes are healthy, with the potential to increase in 2025. Corporates
continue to evolve their supply chains in response to the ongoing supportive
structural trends, albeit decision making is taking time.
New supply remains disciplined and speculative space under construction is at
similar levels to 12-months ago. As was the case in 2024, speculative
completions will be front loaded which will impact the quarter-by-quarter
trajectory of vacancy. Overall, however, this gives us confidence in the scope
for further rental growth, particularly in locations or building size bands
where supply remains restricted.
Framed by these dynamics, our business has three clear multi-year growth
drivers.
First, our portfolio is highly reversionary, with market rental growth in 2024
enhancing this opportunity further. The capture of this reversion over time
helps drives net rental income and in turn earnings growth. With 20.9% of the
portfolio subject to lease events in 2025, we expect to see a further increase
in the rate of like for like rental growth translate into higher net rental
income.
Our second growth driver is our targeted and client-led development activity,
both speculative and build to suit, with the potential to add £306 million of
rental income over time. Despite a tighter market for build to suit
opportunities in 2024, we signed £11.1 million of pre-let agreements. We aim
to keep our level of capex and development starts at a similar level to 2024.
We expect to deliver an increase in development yield on cost, potentially
towards the upper end of our 6-8% guidance, based upon the mix of schemes in
the pipeline, stable construction costs and continuing attractive levels of
market rental growth.
And finally, exciting opportunities in data centres have the potential to
deliver exceptional returns for the Company. We look to progress Manor Farm
over the course of 2025, with the securing of planning consent, the first
major milestone.
2024 has been a transformational year with the successful integration of the
UKCM portfolio, the asset management opportunities it creates and the disposal
of associated non-core assets. Supported by our strong balance sheet we enter
2025 well positioned with three powerful growth drivers in our business:
capturing record rental reversion, advancing our highly attractive logistics
development pipeline, and leveraging opportunities to develop data centres.
Aubrey Adams
Chairman
Manager's report
Market review
Long-term structural drivers support our sector
Shifting consumer behaviour, evolving supply chains and a corporate drive for
sustainability are underpinning demand for high-quality, mission critical,
modern logistics real estate and data centre facilities.
Shifting consumer behaviour
Consumer demand for an ever faster and more convenient purchasing/returns
experience is driving e-commerce and the omnichannel retail network evolution.
This includes network consolidation and realignment, and a shift to larger,
high-quality, modern buildings that help lower the cost to serve. Meanwhile,
our increasingly digital world is driving greater demand for data centres to
house burgeoning cloud and AI demand.
Evolving supply chains
For occupiers navigating a fast-moving and often volatile market environment,
resilience is now a priority, alongside optimising for efficiency,
productivity and cost. This has translated into solutions such as holding
higher stock volumes and a focus on supply chain visibility and technology
adoption/automation.
Drive for sustainability
Building performance, clean energy and fleet transition are top of mind for
many occupiers, as they look to enhance the sustainability of their operations
and meet more stringent regulatory and stakeholder requirements. Meanwhile,
the need to attract and retain skilled labour (in a tight employment market)
has seen a focus on the provision of a better working environment, including
onsite amenities.
Combined, these drivers mean that not only is location and access to skilled
labour vital, but provision and resilience of power supply is increasingly in
focus as energy needs increase.
Diverse demand continues to underpin market activity
Occupational demand remains healthy with 21.3 million sq ft of take up in 2024
(2023: 22.1 million sq ft) 1 (#_ftn1) . We continue to see high levels of
engagement across both standing assets and new space resulting in strong
renewal rates alongside continuing demand for new buildings.
Leading companies continue to invest for the future, driven by growing
revenues and improving margins. Supply chains are a multi-year area of focus
with the potential to contribute to both improved financial performance
(lowering the cost to serve, facilitating new revenue streams etc) and
enhanced business resilience. High quality logistics real estate that can
support modern day, technology led supply chain requirements is therefore seen
by many as core to future operations. This is leading to sustained and diverse
demand from companies across all sectors.
2024 saw new space account for 61% of demand, of which newly developed
speculative space contributed 39% (2023: 25%)1. This highlights the ongoing
trend towards high-quality, technically capable buildings that support
improved productivity and efficiency facilitated by increased use of
automation and advancing technologies. The East Midlands, the UK's most
important big box logistics market, remained the most active, accounting for
34% of take up across the UK1. 11.5 million sq ft was under offer at year end
(2023: 11.1 million sq ft)1 and our own occupier hub continues to see high
levels of enquiries.
Manufacturers remained prominent, contributing 25% of demand in 20241, as they
continue to build resilience, diversify their supplier base and improve supply
chain visibility. Many still expect to hold more stock onshore, with 29% of
manufacturers suggesting, in our occupier survey delivered in partnership with
Savills, that they plan to do so over the next three years.
Retailers accounted for 28% of take up1; most were omni-channel businesses
evolving their supply chains to meet shifting consumer needs. Online-only
retailers returned to the market through the second half of the year, with our
1.0 million sq ft letting at Kettering accounting for the majority of 2024
take up. We expect to see further activity in 2025 from both online-only
retailers and parcel carriers.
Third Party Logistics companies ("3PLs") were less active in the market than
in the previous year but still accounted for 23% of demand in 20241,
underpinned by several large lettings. Leading 3PLs were part of the shift
towards higher quality, often newer, space that can facilitate operational
shifts such as adopting more building level automation; consolidating into
larger units; decarbonising supply chains; and providing a better working
environment, including improved amenities to help attract and retain staff.
Reduced supply contributed to well-balanced market fundamentals
New supply of logistics space declined markedly year on year with 14.7 million
sq ft of completions (2023: 30.3 million sq ft). Completions were heavily
front-loaded with 9.5 million sq ft delivered in the first quarter1.
Space under construction at Q4 2024, however, picked up year on year to 26.0
million sq ft (2023: 21.4 million sq ft)1. Importantly, the increase is almost
entirely from an uptick in "build to suit" activity. The speculative pipeline
stands at 12.8 million sq ft (2023: 12.3 million sq ft)1. Much of this is
concentrated in a handful of geographic locations with a significant
proportion scheduled to complete early in 2025.
Well-located supply is typically constrained by factors such as land
availability, planning and power. This makes our strategically located land
portfolio a particularly attractive attribute of the Company. It is held
through capital efficient option agreements (which link our land purchase
price to prevailing open market value, less a prescribed discount). This
enables us to deliver on our 6-8% yield on cost development guidance.
Vacancy increased from 5.1% at Q4 2023 to 5.6% at Q4 2024 but was flat across
the second half of the year1. Overall, market fundamentals remain well
balanced but nuanced, as local market dynamics are diverse with significant
differences at both a regional and sub-market level.
Strong rental growth in 2024
2024 has seen strong rental growth at both a headline and portfolio level.
Prime headline logistics rents increased across all regions by between 25p and
50p (ex-Inner London where they held flat)1. Headline prime rents reported by
CBRE reflect the top tier of rent for buildings of the highest quality and
specifications in the best locations. MSCI ERV data, which better reflects
portfolio-wide performance and a broader mix of buildings, shows UK
distribution warehouse ERVs grew by 5.3% in 2024 (2023: 7.1%).
Logistics real estate capital market activity increasing
Big box logistics transaction activity totalled £3.1 billion in 2024, with a
further £4.9 billion of multi-let and urban deals 2 . Significant pools of
global capital continue to look to access the market. Two of the largest deals
completed late in the year were, for example, by new entrants to the UK
logistics sector.
Prime market pricing for logistics buildings remains at 5.25%1. Deal activity
has continued to evidence market pricing with a significant pool of
prospective purchasers for high-quality, prime product.
Investor interest in the sector remains high with prospective purchasers
underwriting further rental growth on top of repriced yields. As a result,
logistics pricing continues to look attractive despite ongoing uncertainty in
global capital markets. The composition of returns also continues to appeal to
investors with ongoing rental growth underpinning the scope for further income
growth. Moreover, many buildings continue to have reversionary potential given
the healthy market rental growth that leases often fail to capture fully
during their term.
Record level of data centre demand
London remains the largest data centre market in Europe with 1,141MW in
operation across an estimated 135 data centres 3 . 2024 take up in London
totalled 116MW which exceeded new supply (65MW) for the third consecutive
year1. Strong demand and low availability have resulted in rental rates
increasing. Providers are, however, having to develop data centres in areas
further afield to meet growing demand given the severe land and power
constraints that exist in London.
With the same planning designation as logistics buildings, data centres have
become an additional source of demand, further constraining the supply of land
for logistics real estate. Furthermore, in September 2024, UK data centres
were designated as Critical National Infrastructure: strengthening industry
resilience, regulatory support and reinforcing the UK as an attractive
destination for data centre users.
A clear and consistent strategy that is delivering
Our strategy has three clear interlinked components that aim to deliver
sustainable income and capital growth, robust performance through the economic
cycle and an attractive and progressive dividend, while ensuring we meet our
wider responsibilities and carefully manage risk.
The components of our strategy are:
1) High-quality assets attracting world-leading clients - delivering
long-term, resilient and growing income.
2) Direct and active management - protecting, adding and realising value.
3) Insight driven development and innovation - creating value, future proofing
and capturing occupier demand.
Sustainability is intrinsic to each of these elements and is a key enabler of
business performance. Information on how we implemented the strategy during
the period, including our sustainability initiatives, is set out in the
following sections.
1) High-quality assets attracting world-leading clients
Our total portfolio comprises:
· The investment portfolio: These are logistics assets with a lease or
agreement for lease in place. We believe our investment portfolio is the
strongest in the UK in terms of asset quality, client financial covenant
strength and lease length.
· The development portfolio: This comprises land, options over land
and buildings under construction, generating best-in-class logistics assets
for the investment portfolio (see insight driven development and innovation
below).
· Non-strategic assets: These are modern, high-quality non-logistics
assets acquired with UKCM, which we are divesting to provide funding for
higher-returning logistics opportunities, particularly our logistics
development programme.
Investment portfolio and non-strategic assets - key figures
31 December 2024 31 December 2023 Change
Total portfolio value - investment portfolio (£bn) 5.77 5.03 14.7%
Total portfolio value - non-strategic assets (£bn) 0.39 - -
Tot
Number of investment assets - investment portfolio 102 78 30.8%
Number of investment assets - non-strategic assets 14 - -
Gross lettable area - investment portfolio (million sq ft) 41.8 35.6 17.4%
Gross lettable area - non-strategic (million sq ft) 1.5 - -
Portfolio estimated rental value - investment portfolio (£m) 362.9 277.0 31.0%
Portfolio estimated rental value - non-strategic assets (£m) 32.5 - -
Number of clients - investment portfolio 128 61 109.8%
Number of clients - non-strategic assets 78 - -
Portfolio vacancy - investment portfolio 5.8% 2.5% 3.3pts
Portfolio vacancy - non-strategic assets 4.3% - -
Total portfolio vacancy 5.7% 2.5% 3.2pts
WAULT - investment portfolio (years) 10.6 11.4 -0.8
WAULT - non-strategic assets (years) 7.3 - -
2024 2023 Change
Like-for-like ERV growth - investment portfolio 5.4% 6.9% -1.5pts
Our priorities for 2024
We set the following priorities for 2024 in relation to the investment
portfolio:
Priority Progress
Evaluate the overall composition of the portfolio, identifying assets for We continued to optimise the portfolio, identifying further assets to divest
potential disposals and to inform our asset management and investment so we can recycle the capital into higher-returning opportunities. The UKCM
activities. non-strategic assets were a particular focus, as we fully assessed each and
determined which were ready for sale and which would benefit from asset
management to maximise their value. See the direct and active management
section for more information on our successful disposal programme in 2024.
Evaluate the balance between larger and smaller assets, with a view to While the portfolio remains focused on big boxes, we increased our weighting
selectively increasing our weighting to urban logistics. to urban logistics primarily through the UKCM acquisition. We also added
further smaller units to the investment portfolio through development
completions.
Continue to closely monitor client financial performance. We continue to monitor our clients' performance as a standard part of our
asset management process. See direct and active management for more
information.
Resilient portfolio with embedded opportunities for value creation
The investment portfolio is split between:
· foundation assets, which provide attractive, lower-risk and
resilient long-term income; and
· value add assets, which offer opportunities for capital or income
growth through asset management.
Assets can move between these categories, as our asset management turns value
add assets into foundation, or as foundation assets become value add, for
example as a lease nears expiry.
At 31 December 2024, our total portfolio comprised:
Investment portfolio % of GAV
Foundation assets 57.9%
Value-add assets 30.2%
Total investment portfolio 88.1%
Development portfolio 5.8%
Non-strategic assets 6.1%
Total portfolio 100.0%
At the year end, the total portfolio value was £6.55 billion (31 December
2023: £5.03 billion), with the increase primarily due to the addition of the
UKCM assets. The total portfolio capital value increase was 2.8% higher, with
asset values steadily improving, generated from further development gains, the
benefits of our active asset management and 5.4% like-for-like ERV growth over
the year. When including the net gain made on the acquisition of UKCM, the
capital value increase is 3.7% over the year.
As discussed in the direct and active management section, at the date of this
report we have exchanged or completed contracts to divest £181.2 million of
non-strategic assets. Post completion of these disposals, the non-strategic
assets will reduce to a pro-forma 4.0% of total GAV.
A broad and well-located client offering
While big boxes make up most of our investment portfolio, over recent years
our investment strategy and development programme have increased the range of
building sizes we can offer our clients. This allows us to meet our client
needs for "first mile" mission critical logistics assets through to
"last-mile" urban delivery units. UKCM has further broadened the portfolio,
adding 4.2 million sq ft of logistics space, primarily in "last-mile" urban
locations across 19 estates.
At the year end, the investment portfolio contained the following mix of
building sizes:
Investment portfolio Contracted rent Contracted rent
31 December 2024
31 December 2023
<100k sq ft 11.0% 1.7%
100 - 250k sq ft 10.7% 9.7%
250 - 500k sq ft 28.9% 31.5%
>500k sq ft 49.4% 57.1%
The investment portfolio is well-diversified geographically, with a good
balance of exposure to key logistics locations in the South East, the Midlands
and the North of England:
Investment portfolio locations by market value 31 December 2024 31 December 2023
South East 35.9% 34.2%
South West 3.0% 2.7%
East Midlands 14.3% 13.7%
West Midlands 22.3% 21.0%
North East 16.0% 18.5%
North West 6.8% 8.5%
Scotland 1.7% 1.3%
Secure client base underpins income generation
The Group's diversified client base includes some of the world's
most-important companies, with 64.5% being part of groups included in major
stock market indices, such as the DAX 30, FTSE All Share, SBF 120, NYSE and
S&P 500.
The number of logistics clients increased from 61 to 128 during the year, as
the UKCM acquisition further diversified our client base. The occupiers of the
acquired assets include major corporations, such as existing Group clients
Ocado, Iron Mountain and GXO, as well as a range of smaller businesses. This
offers us greater scope to engage with clients and meet their evolving needs
through new developments or any vacancy that may arise over time.
The table below lists the Group's top ten clients across the investment
portfolio:
Client % of contracted annual rent Client % of contracted annual rent
Amazon 15.5% B&Q 3.1%
Morrisons 4.4% Argos 2.9%
Iron Mountain 4.4% Ocado 2.7%
The Co-Operative Group 4.0% Marks & Spencer 2.6%
Tesco 3.3% Bosch 2.0%
Upward-only rent reviews provide attractive income growth
Most of our logistics leases benefit from upward-only rent reviews. Of total
contracted rents for logistics assets:
· 15.1% are reviewed annually; and
· 83.3% are reviewed in five-yearly cycles, with the timings
staggered so there are reviews taking place each year.
The table below shows the rent review types across the total investment
portfolio at the year end:
Rent review type % of rent roll at % of rent roll at
31 December 2024
31 December 2023
Fixed uplifts 9.4% 8.7%
RPI/CPI linked 45.0% 49.0%
Open market 31.1% 29.9%
Hybrid (higher of inflation or open market) 12.9% 12.4%
No reviews 4 1.6% -
Logistics leases with inflation-linked reviews specify minimum and maximum
rental growth, which average 1.6% and 3.6% respectively. In tandem with fixed
rent reviews, this provides certainty on the minimum rental increases the
portfolio will generate each year.
We supplement this through open market and hybrid rent reviews, which can
capture uncapped market rental growth, and other forms of active management to
increase rental income. Approximately 82.0% of contracted rent from the UKCM
logistics assets is subject to either hybrid or open market review, which is
another attractive feature of its portfolio. This has increased our weighting
to these types of rent reviews to 44.1% across the portfolio.
Due to the balance of open market and inflation-linked rent reviews, and the
growing rental reversion in the portfolio (see below), we remain positive
about continuing to deliver attractive, long-term income growth from our
investment assets. Information on rent reviews in the period can be found in
the direct and active management section below.
Increasing ERVs and record rental reversion provide significant opportunity to
grow rental income
At each valuation date, the valuer independently assesses the estimated rental
value (ERV) of each asset in the investment portfolio. This is the rent the
property would be expected to secure through an open-market letting at that
date.
At 31 December 2024, the investment portfolio ERV was £362.9 million (31
December 2023: £277.0 million), which is £79.2 million or 27.9% (31 December
2023: 23.0%) above the contracted rent. The increase in the ERV reflects the
addition of the UKCM logistics assets and the like-for-like ERV growth in the
investment portfolio of 5.4% during the year. We have opportunities to capture
this reversionary potential through open-market rent reviews, lease renewals,
new leases or lease regears.
In addition to capturing reversion, we can grow income through filling vacancy
in the investment portfolio, which stood at 5.8% at the year end (31 December
2023: 2.5%). The increase is part driven by the consolidation of the UKCM
assets which has a naturally higher vacancy level and three speculatively
developed buildings that reached practical completion in November / December
2024. As our business has evolved, including both a higher amount of shorter
leased urban logistics and an element of speculative development, we expect to
maintain a level of available to let buildings to capture demand in the
market.
To assist in understanding our portfolio reversion, and the likely timing and
quantum of its capture, we have provided additional disclosure in the tables
below. These outline the split between review type and frequency over the next
three years.
Vacancy and outstanding reviews
Contracted rent (£m) % of contracted rent ERV (£m)
Vacancy - n/a 20.3
Outstanding reviews from prior periods 5 6.7 2.4% 8.7
Total 6.7 2.4% 29.0
Rent reviews and expiries 6
2025 2026 2027
Review type Frequency Rent (£m) % of contracted ERV (£m) Rent (£m) % of contracted ERV (£m) Rent (£m) % of contracted ERV (£m)
Indexation Annual 32.5 10.4 38.4 32.5 10.4 38.4 32.5 10.4 38.4
5-yearly 8.2 2.6 9.6 26.7 8.5 33.2 17.6 5.6 22.6
OMR / Hybrid Annual - - - - - - - - -
5-yearly 9.7 3.1 12.6 24.2 7.7 32.3 17.7 5.6 20.9
Fixed Annual 10.4 3.3 10.4 7.2 2.3 6.7 7 2.2 6.4
5-yearly - - - 8.5 2.7 9.2 6.5 2.1 8.5
Total rent reviews 60.8 19.4 71.0 99.1 31.6 119.8 81.3 25.9 96.8
Lease expiries 10.7 3.4 15.1 9.7 3.1 13.6 15.5 5.0 18.5
Total lease events in year 71.5 22.8 86.1 108.8 34.7 133.4 96.8 30.9 115.3
Long leases enhance income security
At the year end, the investment portfolio's WAULT was 10.6 years (2023: 11.4
years), with the foundation assets having a WAULT of 13.6 years (2023: 15.0
years).
Of total investment portfolio rents:
· 23.4% is generated by leases with 15 or more years to run; and
· 25.2% comes from leases expiring in the next five years,
providing near-term opportunities to capture the growing reversion within the
portfolio.
UKCM's logistics portfolio had a WAULT of 6.7 years on acquisition, creating
opportunities to capture the reversionary potential of these assets over the
coming years.
Full repairing and insuring ("triple net") leases result in high conversion of
gross to net rental income
Most of our logistics asset leases are full repairing and insuring (FRI),
equivalent to "triple net" leases in the United States. This means our clients
are responsible for property maintenance during the lease term and for
dilapidations at the end of the lease. This minimises our irrecoverable
property costs, which resulted in 98.2% conversion of gross to net rental
income for the year. Rotating the UKCM non-strategic assets into FRI leases on
new logistics assets should deliver further direct property cost savings over
the medium term, in addition to the immediate cost savings from the
combination (see the financial review for more information).
Portfolio quality reinforced by strong sustainability characteristics
EPC ratings are a key benchmark for both investors and occupiers and we are
continuing to work with our clients and consultants to improve the EPC ratings
of our buildings where possible. We are also constructing all our new
developments to a minimum standard of EPC A and BREEAM Excellent.
At 31 December 2024, 98% of the investment portfolio had an EPC rating of C or
above (31 December 2023: 97%). The movement reflected our continued progress
with improving EPC ratings through asset management, and the addition of the
UKCM logistics assets. At the year end, all assets certified or expected to be
certified by BREEAM (50%) had a rating of Very Good or above (31 December
2023: 51%).
Our priorities for 2025
In 2025, our priorities for the investment portfolio are to continue to:
· optimise our portfolio and recycle capital into higher-returning
opportunities; and
· allocate capital to income-generating assets that meet our return
criteria and enhance our portfolio, for example by further diversifying our
assets geographically or broadening our client offer.
2) Direct and active management
2024 2023 Change
Completed disposals (£m gross proceeds) 7 (#_ftn7) 140.4 327.0 -57.1%
Completed disposals (million sq ft) 0.6 3.0 -80.0%
Completed disposals (£m contracted rent) 7.6 14.1 -46.1%
Acquisitions (£m consideration) 1,262.9 108.0 -
Acquisitions (million sq ft) 6.4 0.5 -
Portfolio subject to rent review in year (%) 26.7 19.0 7.7pts
Proportion of portfolio reviewed (%) 24.4 22.5 1.9pts
Change in contracted rent from lease expiries / new lettings (£m) -0.3 0.0 -
Contracted rent uplifts - reviews and lease events (£m) 11.9 4.9 142.9%
Contracted rent uplifts - reviews and lease events (%) 12.5 9.6 2.9pts
EPRA Like-For-Like Rental Growth (%) 3.9 3.6 0.3pts
Our priorities for 2024
We set the following priorities for 2024 in relation to active management:
Priority Progress
Seek to dispose of £100-200 million of assets, subject to market conditions The UKCM acquisition has provided us with non-strategic assets, which we are
and opportunities within the investment market, in line with our ongoing successfully divesting, with £181.2 million of disposals, representing 38% of
approach to capital rotation. non-strategic assets, exchanged or completed so far. We also continue to
optimise our investment portfolio and recycle capital, with £125.0 million of
logistics disposals. Total disposals were therefore £306.2 million.
Implement our asset management plans, with a particular focus on recently We have made excellent progress with our asset management plans, including
acquired urban logistics assets with significant reversionary potential. capturing rental reversion in our existing urban logistics assets and UKCM
assets, through lease events and rent reviews. In total, our asset management
activities added £11.6 million to contracted rents during the year.
Enhance our sustainability performance, including a programme to determine We have continued to achieve market-leading sustainability performance. Our
viable projects and costs for works to achieve net zero carbon. work in the year included commissioning a platform to enable us to analyse
projects to improve EPC ratings and update asset by asset decarbonisation
pathways. See enhancing sustainability through integration, engagement and
active management for more information.
Realising value and recycling capital through disposals
Capital recycling is a key part of our business model. We have deliberately
constructed the portfolio to ensure it contains highly attractive assets with
good liquidity, enabling us to sell when we choose, reinvest the proceeds into
higher-returning opportunities - such as our development pipeline - and
thereby improve the quality and returns prospects for the overall portfolio.
We constantly review the portfolio, to identify assets where:
1) we have completed our asset management plans and maximised value;
2) the asset's investment characteristics no longer fit our desired portfolio
profile; or
3) the asset's future performance may be below others in the portfolio or have
more risk attached to it.
We identify assets for disposal by analysing the associated risk and return
profile. Risk criteria we consider include age, location, covenant strength,
geographic and client concentration, rental income profile, energy and carbon
performance and the opportunity for rental growth. We analyse the potential
return expectations based on our asset management plans, view of rental
growth, capex requirements and any marketing void and tenant incentive, in
addition to considering further sustainability performance enhancements.
We also look closely at the capital market conditions, to establish whether we
are acting at the correct point in the market cycle. We continually profile
the most active buyers to establish their desired income profile, coupled with
their transactional experience and credibility, to ensure we engage with
purchasers with high execution abilities.
When we completed the UKCM combination in May 2024, our plan was to divest the
non-strategic assets within 24 months. We have made excellent progress since
then, exchanging or completing contracts to dispose of seven assets for a
total of £181.2 million to date (representing 38% of the non-strategic
assets), with a further approximate £177.4 million under offer and high
levels of interest in the balance of these assets. We therefore remain
confident of being able to exit the position within our planned timeframe.
These disposals reflect a blended NIY of 6.2%, a 2.8% premium to the assets'
31 December 2023 book value.
While the UKCM non-strategic assets are the main focus of our disposal
programme, we remain highly disciplined in reviewing the logistics investment
portfolio and identifying assets for divestment, as well as being
opportunistic when we receive attractive proposals. In 2024, we exchanged on
the sale of a 755k sq ft asset at Doncaster (let to Next) and sold a 388k sq
ft asset at Crewe (let to AO.com) for total consideration of £125.0 million.
This represented a blended NIY of 5.0% and a 4.1% premium to their book value
at 31 December 2023.
Overall, the disposal activity noted above, which totals £306.2 million of
assets exchanged or completed, has been conducted at a blended 3.3% average
premium to book values.
Acquiring investments with asset management potential and a broader client
offering
We continue to look for investments that can generate accretive total returns,
support our income growth and broaden our client offering. This forms part of
our ongoing portfolio optimisation and complements our development activity by
typically offering lower risk and more immediate income.
In January 2024, we completed the acquisition of a 479,000 sq ft cold store
building in Castlewood, a key East Midlands location. The property is let to
Co-Op on a lease with 7.7 years remaining on purchase and 2.7 years to the
next rent review at which point the rent is reviewed to the equivalent of 2.5%
per annum compounded for the previous five year term. The purchase price of
£46.0 million equates to a NIY of 5.75% and a reversionary yield of 7.3%.
Post period, in January 2025, we acquired a 627k sq ft cold-store building in
Haydock, a core North West location, for £74.3 million. The property is let
to Sainsbury's as its principal North West hub. Under the lease there is c.13
years unexpired term with a tenant break in c.8 years. The rent is reviewed on
an uncapped basis to RPI every five years. The purchase price reflects a 6.0%
NIY which, based on current and expected RPI growth rates, should create a
running yield of 7.0% in 2028.
Growing and lengthening income
Through our active management approach we are making good progress in
leveraging the rental reversion opportunity, growing income by £11.6 million
through 70 initiatives, such as lettings, lease re-gears and rent reviews.
In 2024, 26.7% (19.0% in 2023) of the investment portfolio was due for a rent
review (excluding the UKCM logistics assets). We completed 33 reviews in the
year, including three open-market or hybrid reviews that were outstanding from
2023, with the table below showing the strong rental uplifts from the
open-market reviews concluded.
EPRA like-for-like rental growth in 2024 was 3.9% (2023: 3.6%).
2024 settled rent reviews and lease events
Number % of contracted rent £m increase Growth in passing rent
Index linked 14 18.1% 4.1 7.7%
Open market / hybrid 15 4.0% 4.1 34.6%
Fixed 4 2.3% 0.2 2.9%
Total rent reviews 33 24.4% 8.4 11.7%
Lease events (comprising lease renewals and extensions) 25 7.7% 3.5 15.1%
Total for all rent reviews and lease events 58 32.1% 11.9 12.5%
Significant lease events during the year included agreeing:
· A new 15-year agreement for lease with Greene King at the
Stakehill asset formerly occupied by Tesco, where we achieved vacant
possession upon lease expiry in December 2023. The agreement for lease was
signed with a rental increase of 38.1% against the passing rent at the point
Tesco vacated, resulting in a significant rise in the asset's valuation. Our
refurbishment prior to the letting included a solar PV scheme, which helped
increase the EPC from B to A+ and provides additional income to us through a
power purchase agreement.
· A five-year lease extension at L'Oreal, Trafford Park, Manchester,
at a new record rent for Trafford Park of £8.50 psf. The rental uplift was
c.£400k pa or 22.1%.
· A reversionary lease renewal for a 15-year term with Next on the
Doncaster asset, creating significant value add prior to the asset's disposal
(see above).
Across our urban logistics assets we completed 32 lease events across new
lettings, rent reviews and lease renewals. Significant uplifts through rent
reviews and asset management were achieved at Ventura Park Radlett, Newton's
Court Dartford, and Emerald Park Bristol delivering between 35% and 75%
increases in rent. Our improvements to the multi-let estates include a pilot
project at J6 Birmingham, to enhance signage, amenities such as food and
beverage outlets, landscaping incorporating outside seating areas, and
increased security provisions. We have identified the potential on some
estates, such as Rugby and Kettering, to add multi-use games areas and running
circuits.
We are particularly focused on capturing the reversionary potential of the
logistics assets acquired from UKCM, having developed a comprehensive asset
management plan as part of our due diligence, identifying short, medium and
long-term initiatives and their potential impact on income and capital values.
We have continued to refine our business plans for each asset and made good
progress with implementing them. By the year end, we had completed 18 asset
management initiatives, adding approximately £3.1 million to contracted rents
of the acquired UKCM logistics assets.
Enhancing sustainability performance through integration, engagement and
active management
By working in partnership with our clients on sustainability initiatives, we
can increase rental income and capital values, while helping them to progress
their own ESG targets. We have therefore integrated sustainability
considerations throughout the investment lifecycle, as well as our management
of the Group's supply chain and engagement with our clients.
Our overall objective is to achieve market-leading ESG performance, with a
focus on practical action. Data is integral to maximising our effectiveness,
ensuring we are tracking our performance and continuing to add value to our
buildings through proactive asset management and innovation.
Our ESG strategy has four themes, as set out below. Our achievements in 2024
in relation to actively managing our portfolio included:
· Sustainable buildings: We have continued to refine our integration of
ESG criteria into the investment process, including engaging with our advisers
to understand how ESG factors are influencing transactions in the market. We
utilised our updated ESG due diligence template to support the acquisition of
UKCM and to integrate its assets into our ESG programme.
· Climate and carbon: We engaged Mace Consulting to build a bespoke
interactive technology platform for us, which is allowing us to refine our net
zero pathway into a timetabled and costed programme at both portfolio and
asset levels. We have begun entering our asset-level plans and will be able to
model and interrogate the impact of initiatives on the EPC rating and net zero
carbon pathway for that asset, as well as the associated cost. We can then
analyse the best point to begin works, such as a lease extension proposal or a
potential void, integrate the initiatives into the business plan for the asset
and use the information to support client negotiations and inform our
portfolio management strategy and disposal decisions.
The decarbonisation platform can also incorporate analysis of power resilience
on an asset-by-asset basis. This will enable us to consider if assets may be
constrained if clients require more power in future, for example due to
increased use of electric vehicles or automation. The platform enables us to
model the impact of adding solar generation capacity or the potential for
additional supply via the Grid.
In addition, we undertook a climate risk assessment of the entire expanded
portfolio, to understand the impact of climate change to the real estate we
own to enable us to identify risk and consider appropriate mitigation
strategies. We disclosure further details relating to climate risk, including
Task Force on Climate-Related Disclosures (TCFD), subsequently in our Annual
Report.
· Natural capital: We continue to identify and implement biodiversity
improvements across our standing assets, as well as generating wellbeing
benefits through initiatives such as landscaping and exercise facilities at
our urban logistics assets, as described above.
· Social value: We have put in place a new five-year social impact
strategy for the Group, with a focus on improving educational outcomes and
opportunities for young people. We are seeking to reach 250,000 young people
over five years, by continuing to support the Schoolreaders charity and
working with organisations such as the King's Trust and the charity Education
and Employers. The strategy is overseen by the Tritax Social Impact
Foundation, which was established in 2023 to be a centre of excellence and
governance and to help us deliver and measure impact.
Our strong ESG performance continues to be reflected in the Group's external
ratings. GRESB awarded us four Green Stars (out of a maximum of five) for the
fourth consecutive year and an overall score of 85/100. Tritax Big Box
Developments, the development arm of the Group, was awarded five Green Stars
and scored 99/100, ranking it first in its peer group. It also achieved Global
Sector Leader and Global Listed Sector Leader status in the Industrial
category, and Regional Sector Leader and Regional Listed Sector Leader status
in the Industrial and Europe categories. The Group retained its EPRA sBPR Gold
Level certification, which recognises best practice in corporate ESG
disclosures, and further improved its Sustainalytics score from 7.6 to 6.4
(Negligible Risk), as well as receiving the Region and Industry Top Rated
badges.
Resourcing our asset management team for success
During 2024, the number of leases under management increased from around 90 to
approximately 300. The Manager has continued its investment in its dedicated
Big Box team, adding asset management expertise from other parts of the
Manager, from UKCM's former manager and through direct recruitment. The asset
management team has been further complemented with additional property
management, development and ESG resource. The Manager's investment supports
our hands-on approach to asset management, including building strong
relationships with clients, understanding their supply chain and business
plans, and identifying opportunities through regular engagement.
To ensure each client has a single point of contact for all the assets it
occupies, we have split the asset management team by skillset, resulting in
dedicated teams for single-let big boxes, urban logistics, newly developed
assets and the remaining non-strategic assets. This also enables swifter
execution of initiatives common to a type of asset, such as estate improvement
works on our urban logistics parks, which can enable financial savings through
efficiencies and economies of scale.
Continuing to digitalise our processes
In addition to the decarbonisation platform described above, we continue to
invest in digitalisation to support our asset management programme.
Initiatives in 2024 included:
· A new client engagement platform, to ensure our asset managers
have easy access to key information on all our clients, are well informed
ahead of meetings and asset inspections, and can shape bespoke asset
management proposals. Information on the platform will include clients'
financial accounts, supply chain information, ESG targets, and records of our
client interactions.
· An app-based inspection report system, so our on-site
intelligence gathering is quickly and efficiently shared with the wider team.
· Further developments to our asset business plan modelling system
and enhanced reporting. The modelling system holds millions of data points
incorporating legal, financial, development, specification, operational and
ESG information. This enables our reporting to be more holistic and consider
the portfolio-level impact of an individual asset initiative.
Monitoring client performance
We closely monitor all clients' financial performance and covenant strength
each month. The analysis includes an INCANS score, which is driven by the
clients' financial results, aged debt, late filings and other indicators. We
also track performance over time, so we can work with clients to proactively
address any potential issues. The new client engagement platform enables our
team to instantly see the latest financial score for each client.
Priorities for 2025
Our asset management priorities for the year ahead are to:
· Continue to rotate out of non-strategic UKCM assets in line with
our ambition to completely exit from this position within two years of the
acquisition completion in May 2024.
· Continue to capture the significant rental reversion within the
investment portfolio, with a focus on delivery of open market reviews
scheduled in the year, and ensure we maximise the potential of the recently
acquired UKCM assets.
· Continue to develop our client insights to identify further
opportunities to create incremental value through our active and hands-on
approach to management.
3) Insight driven development and innovation
2024 2023 Change
Development completions (million sq ft) 1.7 2.2 -22.7%
Development completions let (million sq ft) 0.8 1.9 -57.9%
Development completions let (£m to passing rent) 7.4 13.6 -45.6%
Development starts (million sq ft) 1.9 1.7 11.8%
Of which DMA starts (million sq ft) 8 0.4
Development starts (£m ERV) 14.4 15.6 -7.7%
Development lettings (million sq ft) 1.0 0.9 11.1%
Development lettings (£m) 11.1 7.8 42.3%
Average yield on cost for development lettings (%) 7.1 6.7 0.4pts
Planning consents secured (million sq ft) 1.2 0.9 33.3%
Total planning consented land at the year end (million sq ft) 5.3 6.3 -15.9%
Our priorities for 2024
We set the following priorities for 2024 in relation to development:
Priority Progress
Commence construction on approximately 2-3 million sq ft of new developments, Given increased macroeconomic and political uncertainty in 2024, we began
subject to changes in the macroeconomic backdrop, in a range of building sizes construction on 1.9 million sq ft of developments. This included a 0.4 million
and with an average targeted yield on cost of c.7.0%. sq ft unit in Oxford we have pre-sold to Siemens Healthineers under a DMA
contract, enabling accelerated delivery of the rest of the site by opening up
the infrastructure and utilities.
Secure a blend of pre-lets and lettings of speculatively constructed assets. Despite the aforementioned uncertainty, we continued to make excellent
progress. 79% of 2024 starts were either pre-let or pre-sold by the year end,
including one of the largest pre-lets across the market during 2024. We
secured £11.3 million of contracted rent on 2024 development starts, with a
further £3.2 million under offer.
Progress planning consents and ensure sufficient consented land is in a We secured 1.2 million sq ft of new planning consents, with an additional 11.1
credible delivery state to support our long-term development activity, and aim million sq ft awaiting determination. In aggregate, we have 5.3 million sq ft
to replenish land once developed. of land with planning.
Continue to develop our low-carbon baseline specification and work towards Our low-carbon baseline specification is used on each project and we continue
embodied and whole-life carbon performance targets. to update it to reflect the evolving market. We are also progressing towards
our embodied carbon target and undertake whole-life performance analysis where
we know who will occupy the asset being developed and how they will use it.
A carefully considered and low-risk approach to development
Development complements our investment portfolio by enhancing overall returns,
as we target a yield on cost for new logistics assets of 6-8%, while carefully
managing risk. We expect our 2025 development starts to achieve the top end of
our 6-8% yield on cost range.
We control the UK's largest land portfolio for logistics development. It has
the potential to deliver approximately 37.2 million sq ft of new space through
developments, which could more than double our contracted rent roll. The
pipeline is diversified geographically in prime locations and is highly
flexible, enabling us to match our clients' requirements from urban or last
mile assets to mega boxes. Once built and let these developments become
investment assets for us.
We hold most of the land portfolio through long-dated options. These are
capital efficient and reduce risk, as we typically only buy the land once we
have received planning consent. This provides control over the quantum and
timing of our purchases. The options include a typical 15-20% discount to
prevailing land prices and additionally we can offset much of the site's
planning and infrastructure costs against the purchase price. This means we
typically secure an attractive development profit on drawdown and are
insulated from the impact of changing land values over the longer term.
Another significant benefit of holding land under long-dated options is the
flexibility it gives us to adjust our development activity upwards or
downwards to match prevailing market conditions. This helps us to ensure the
delivery of new space is optimised to drive performance.
Given the current position in the market cycle, we are seeing opportunities to
acquire sites with planning consent already in place and vendors who are
motivated to sell. We will consider these opportunities where they will
support delivery of our development objectives and offer attractive returns.
Our Investment Policy limits land and development exposure to 15% of GAV,
including a maximum exposure to speculative development of 5% of GAV. At the
year end we remained well within these limits:
· land and development exposure was 5.8% of GAV; and
· speculative exposure (based on aggregated costs) was 3.4%.
Continued development progress in 2024
We continued to make excellent progress with the development programme in
2024. The level of construction starts, lettings and planning consents
achieved are discussed under our 2024 objectives above.
In addition, we reached practical completion on 1.7 million sq ft of
developments in the year, with the potential to add a total of £16.2 million
to passing rent. Of this new space, approximately 47% was pre-let or let
during construction and 53% was unlet at the year end. The unlet space
comprised three speculatively developed assets which commenced construction in
2023 and reached practical completion in November and December 2024. The
location is strong and we are seeing good levels of interest from potential
occupiers.
A controlled level of speculative development is an important part of our
development programme, as it enables us to meet the needs of clients with
short-term requirements for new space. We take a very calculated and measured
approach to speculative development and only proceed in locations where we
have a clear indication of occupier demand. Since our acquisition of our
development platform, we have let 69% of speculative space prior to
completion. We allow for up to 12 months' void period when appraising
speculative development opportunities.
We place a very high priority on health and safety, and in 2024, we
implemented several new measures for assessment, reporting, and review. We
continue to make health and safety performance a key consideration in
selecting contractors for our construction projects.
The UK's largest land portfolio for logistics development
We categorise our development portfolio as follows, based on the timing of
opportunities:
1. Current Development Pipeline - assets under construction, which are
either pre-let, let during construction or speculative developments. The Group
owns these sites.
2. Near-term Development Pipeline - sites with planning consent received
or submitted, and where we aim to begin construction in the next three years.
The Group will own some of these sites, with others held under option and
either pending planning consent or where we have achieved outline planning but
have yet to acquire the land.
3. Future Development Pipeline - longer-term land opportunities, which are
principally held under option, and which are typically progressing through the
planning process.
1) Current development pipeline - assets under construction
At 31 December 2024, the Group had the following assets in the current
development pipeline. The total estimated cost to complete is £101.2 million
and the assets have the potential to add £21.8 million to annual passing
rents.
Costs to completion
H1 2025 H2 2025 H1 2026 Total Total Contractual
rent / ERV
sq ft
£m £m £m £m m £m
Current speculative 24.0 0.5 0.3 24.8 0.7 5.7
Current pre-let 24.6 44.8 7.0 76.4 1.2 16.1
Total 48.6 45.3 7.3 101.2 1.9 21.8
2) Near-term development pipeline - construction expected to commence within
the next 12 to 36 months
At the year end, the near-term development pipeline consisted of land capable
of accommodating 5.7 million sq ft of logistics space and delivering £53.7
million of annual rent. Of this:
· 4.3 million sq ft relates to land with planning consent; and
· 0.3 million sq ft relates to sites where we have submitted a
planning application.
As at 31 December 2024, the Group was awaiting decisions on planning
applications totalling 11.1 million sq ft.
The table below presents the near-term development pipeline at the year end.
Movements in the figures are driven by construction starting (which will move
space to the current development pipeline), or changes in our view on the
likely timing of starts, resulting in movements between the two categories
below. The ERVs in the table are based on current market rents and therefore
assume no further rental growth before the schemes become income producing.
Total sq ft Current book value Estimated cost to completion ERV
(Uncommitted)
£m £m £m
Potential starts in the next 12 months 1.9m 49.4 207.3 20.9
Potential starts in the following 24 months 3.8m 67.5 418.3 32.8
5.7m 116.9 625.6 53.7
3) Future development pipeline
The future development pipeline is predominantly controlled under longer-term
option agreements. Most option agreements contain an extension clause,
allowing us to extend the option expiry date where necessary.
The future development pipeline has sites at various stages of the planning
process, with multiple sites being currently promoted through local plans. We
have continued to replenish the pipeline by securing options over new sites.
At 31 December 2024, the future development pipeline comprised 1,539 net acres
with the potential to support up to 30.9 million sq ft of development and
generate around £247.7 million of contracted rent, assuming no future market
rental growth.
Development Management Agreements
While our development programme primarily creates assets for the investment
portfolio, we occasionally work with a client to develop an asset for freehold
sale to them, where this may help us to gain planning, open up a site and
accelerate our profit capture.
We undertake these freehold sales through a Development Management Agreement
(DMA), under which we manage the development of an asset in return for a fee
and/or profit share. The Group does not own the site during construction or
the completed investment and DMAs are therefore excluded from our asset
portfolio. DMAs deliver a high-return, capital light but variable source of
profit, which we can recycle into other development or investment activity.
Included with the DMA categorisation are pre-sales, where we sell land, or a
project, prior to commencement of construction. In 2024, we pre-sold 0.4
million sq ft at Oxford and commenced construction of a unit for Siemens
Healthineers. We also exchanged contracts with Greggs for a 0.3 million sq ft
DMA which will commence construction in early 2025, following receipt of
planning consent in November 2024.
The Group recorded £23.0 million of DMA income in 2024 (2023: £nil) and our
guidance for 2025 is £10.0 million. The treatment and impact of DMA income is
further discussed in the financial review.
Leveraging our expertise into power and data centres
Adopting a "power first" approach, Tritax Management has secured accelerated
access to significant quantities of power in key locations around London.
Shortly after the period end, we announced that we had acquired a site at
Manor Farm, Heathrow along with a 50% stake in a joint venture with a European
leader in renewable energy to develop a 147 MW data centre. This has the
potential to deliver one of the UK's largest data centres in a prime London
location and deliver exceptional returns for the Company's shareholders
including a 9.3% yield on cost and a profit on cost of over 40%.
Critically, by undertaking a power first strategy, we can deliver the 107 MW
Phase 1 at Manor Farm significantly quicker than by applying for power today.
As such, subject to planning and securing a pre-let, Phase 1 could be
completed and income producing as early as H2 2027. In addition, Tritax Big
Box has secured a right of first refusal over future data centre opportunities
identified by Tritax Management, including a potential 1GW of power pipeline.
Enhancing ESG through our development activities
ESG is a core element of our approach to development. Our progress in the year
included:
· Sustainable buildings: We have introduced a low-carbon baseline
development specification, which we use for each project and regularly update
to reflect market evolution. We have also progressed our approach to
delivering our embodied carbon target of 400kg CO(2)e per m(2), including
engaging with industry-leading suppliers to understand how key construction
materials are transitioning to lower carbon emissions and beginning trials of
different specifications of lower-carbon concrete. The embodied carbon target
for each project is incorporated into the main building contract, with
financial penalties for non-performance. The weighted average embodied carbon
intensity performance for 2024 was 287 9 (#_ftn9) kg CO(2)e per m(2). Our
overall carbon performance assessment for each product includes analysis of
the use of low-carbon and recycled materials. During 2024, the average
recycled content of steel frames used in our development projects was 34%.
· Natural capital: New biodiversity net gain (BNG) regulations for
developments came into force at the start of 2024. The regulations apply a
mandatory 10% biodiversity uplift for new development projects, with
developers having the option of providing biodiversity uplifts either onsite
or offsite. BNG analysis already forms part of our development process for
each site, and we are examining ways to effectively deliver this across the
portfolio.
Our priorities for 2025
Our priorities for the year ahead for the development programme are to:
· commence construction on new developments consistent with our level
of activity in 2024, subject to changes in the macroeconomic backdrop, with an
average targeted yield on cost towards the upper end of our 6 - 8% guidance
range;
· secure a blend of pre-lets and lettings of speculatively
constructed assets;
· progress planning applications and ensure sufficient consented land
is in a credible delivery state to support our long-term development activity;
and
· aim to replenish land once developed, including considering
acquiring land with existing planning consents.
Financial review
Our priorities for 2024
We set the following priorities for 2024 in relation to our financial
performance and balance sheet:
Priority Progress
Maintain the Group's strong balance sheet and liquidity, and keep the LTV Our LTV reduced to 28.8% at the year end (31 December 2023: 31.6%), largely
within guidance of below 35%. reflecting UKCM's low LTV of 14.2% on acquisition.
Target further growth in income and Adjusted earnings and therefore enhance We increased net rental income and adjusted earnings per share excluding
the dividend on a sustainable basis. additional DMA income by 24.3% and 3.9% respectively, supporting an 4.9%
increase in the total dividend in respect of 2024.
Continue to monitor the inherent shorter-term risks brought by the We monitored the financial markets during the year and concluded that our
macroeconomic environment, with a view to providing the business with current debt facilities remained appropriate and that our asset disposal
financial flexibility around the financing of its strategy. programme gave us sufficient flexibility to finance our strategy.
Overview
The combination with UKCM completed on 16 May 2024, resulting in an
approximate 7.5-month impact to the Statement of Comprehensive Income and full
consolidation of all assets and liabilities within the Statement of Financial
Position.
The Group delivered strong financial performance in 2024. Net rental income
increased by 24.3%, reflecting the contribution of UKCM, development
completions and rent reviews, less the impact of asset disposals in the prior
year. The Group also recognised £23.0 million of DMA income in the year
(2023: £nil).
Adjusted EPS grew by 15.0% to 8.91 pence (2023: 7.75 pence), which was a
record performance for the Group. This resulted from the income growth
described above, noting the increase in shares in issue as a result of the
UKCM combination (see below). Adjusted EPS excluding additional DMA income
grew by 3.9% to 8.05 pence (2023: 7.75 pence) (see note 15 for the
calculation).
The key constituents of Adjusted EPS growth in the year are shown in the table
below:
Pence
Adjusted EPS in 2023 7.75
Net revenue:
- Investment asset rental growth 0.31
- Development completions 0.36
- Acquisitions 0.30
- UKCM acquisition 10 0.45
- Disposals (0.35)
Administrative expenses (0.21)
Net finance costs (0.82)
Other 0.08
DMA 0.18
Adjusted EPS in 2024 (exc. Add DMA) 8.05
Additional DMA 0.86
Adjusted EPS in 2024 8.91
The total dividend for the year is 7.66 pence per share (2023: 7.30 pence), an
increase of 4.9% and in line with the Group's dividend policy.
The EPRA NTA per share at 31 December 2024 increased by 4.7% to 185.56 pence
(31 December 2023: 177.15 pence), with growth driven by the £243.7 million
change in fair value of investment properties.
The business remains soundly financed, as UKCM's comparatively low gearing and
our portfolio valuation growth helped to reduce the Group's LTV to 28.8% (31
December 2023: 31.6%). We were pleased that Moody's Ratings upgraded the
Company's credit rating outlook to Baa1 (positive) from Baa1 (stable) and
reaffirmed its long-term corporate credit rating during the year.
Acquisition of UKCM
The all-share acquisition of UKCM was completed by a Scheme of Arrangement on
16 May 2024 through the issue of 576.9 million new shares, at a price of 166.9
pence per share. This reflected consideration paid of £962.9 million, at an
exchange ratio of 0.444 new ordinary shares in the Company for every UKCM
share held, based on an NTA for NTA approach. The fair value of the net assets
acquired was £1,047.6 million, as set out below.
The difference between the total consideration paid of £962.9 million and the
fair value of the net assets acquired of £1,030.7 million, net of acquisition
costs, was a net gain on acquisition of £67.8 million. The transaction has
been accounted for as an asset acquisition, resulting in these assets and
liabilities initially being accounted for in the balance sheet at fair value.
The consideration paid in shares of the company has been allocated across the
net assets acquired by fair valuing the debt acquired, fair valuing working
capital acquired (given the short term nature of the amounts these values have
been taken to represent cost), fair valuing cash acquired (being the principal
amount) with the remaining consideration being allocated across the investment
properties acquired (refer to note 17 and 26).
The property assets were subsequently revalued at 30 June 2024, in line with
the Group's accounting policy, and the gain was therefore recognised within
changes in fair value of investment property during the period. Please also
see Note 37 to the financial statements.
Acquisition of UKCM
Assets and liabilities acquired £m
Investment property fair value 1,216.9
Discount to cost on acquisition (67.8)
Investment property recognised at cost 1,149.1
Cash 26.7
Third party debt (169.6)
Other net assets (26.4)
Acquisition costs (16.9)
Consideration paid - shares 962.9
Presentation of financial information
The financial information is prepared under IFRS. The Group's subsidiaries are
consolidated at 100% and its interests in joint ventures are equity accounted
for.
The Board continues to see Adjusted EPS(1) as the most relevant measure when
assessing dividend distributions. Adjusted EPS is based on EPRA's Best
Practices Recommendations and, in addition, excludes items considered to be
exceptional, not in the ordinary course of business or not supported by
recurring cash flows.
Financial results
Net rental income
Net rental income grew by 24.3% to £276.0 million (2023: £222.1 million).
Contracted annual rent at the year end was £313.5 million (31 December 2023:
£225.3 million), with the movement reconciled below. The annual passing rent
at the year end was £296.8 million (31 December 2023: £217.0 million). EPRA
like-for-like rental growth was 3.9%.
Contracted annual rent
£m
As at 31 December 2023 225.3
Development lettings 11.2
Rental reviews and asset management 15.4
Lease expiry (3.8)
UKCM acquisition 70.3
Other asset acquisitions 2.8
Disposals (7.7)
As at 31 December 2024 313.5
Other operating income - Development Management Agreement (DMA) income
As described in the insight driven development and innovation section, the
Group earns DMA income from managing developments for third parties or
pre-selling developments to owner-occupiers. This is an attractive and
profitable activity as the third party typically funds the development,
resulting in a high return on capital for us. We include DMA income within
Adjusted earnings as it is supported by cash flows.
However, DMA income is more variable than property rental income and its
timing can affect our earnings from period to period. In 2023, the Group
recognised no DMA income due to a timing delay on a project. This project
subsequently contributed to the £23.0 million of DMA income we recorded in
2024 and we currently expect DMA income of at least £10.0 million in 2025.
Over the medium-term, we expect the run rate for DMA income to be £3.0-5.0
million per year. To aid comparability across periods and to give us a
recurring earnings figure to base our dividend on, we also calculate Adjusted
earnings excluding DMA income above this run rate (see profit and earnings
below). The additional DMA income is then available to be recycled into
further opportunities across our development pipeline and/or other investment
opportunities.
Administrative and other expenses
Administrative and other expenses, which include all the operational costs of
running the Group, were £33.7 million (2023: £28.9 million). The Investment
Management fee for the year was £24.6 million (2023: £22.0 million),
reflecting the increased capital base following the UKCM acquisition.
The EPRA Cost Ratio (including vacancy cost) increased to 13.6% due to
increased vacancy levels (2023: 13.1%). The EPRA Cost Ratio (excluding vacancy
cost) reduced to 12.6% (2023: 13.1%).
We have delivered administrative cost synergies through the acquisition of
UKCM, driven by a proportionately lower investment management fee and savings
across other corporate overheads.
These savings contributed to 2024 earnings growth and we expect to generate
further savings from operational and financial synergies in the medium term as
we fully exit from the UKCM non-strategic assets and recycle capital into
higher returning opportunities.
Operating profit
Operating profit before changes in fair value and other adjustments was
£265.3 million (2023: £193.2 million).
Share-based payment charge and contingent consideration
Following the Group's acquisition of Tritax Big Box Developments ("TBBD" and
formerly known as Tritax Symmetry) in 2019, senior members of the TBBD team
became B and C shareholders in Tritax Big Box Developments Holdings Limited.
The Group extinguished these shares in August 2023, and as a result no
share-based payment or contingent consideration charges have been expensed in
2024 (2023: £2.9 million and £0.4 million respectively). In 2023, we
recognised an early extinguishment charge in the Statement of Comprehensive
Income of £21.1 million.
Financing costs
Net financing costs for the year were £63.5 million (2023: £44.9 million),
excluding the loss in the fair value of interest rate derivatives of £5.3
million (2023: £11.2 million loss). The weighted average cost of debt at the
year end was 3.05% (31 December 2023: 2.93%), with 93% of the Group's drawn
debt being either fixed rate or covered by interest rate caps (see hedging
policy below) (31 December 2023: 96%).
The movement in net financing costs reflects the higher average cost of debt
and the increase in average drawn debt throughout the year to £1,921.9
million (2023: £1,629.2 million), which included the notional drawn amounts
of the debt facilities acquired with UKCM totalling £200.0 million (see
below). We capitalised £6.0 million of interest expense (2023: £4.6
million), reflecting the capital deployed into active development projects in
the period.
The interest cover ratio, calculated as operating profit before changes in
fair value and other adjustments divided by net finance expenses, was 4.4x 12
(#_ftn12) (2023: 4.3x). The net debt to EBITDA ratio was 7.3x 13 (#_ftn13)
(31 December 2023: 8.2x).
Tax
The Group has continued to comply with its obligations as a UK REIT and is
exempt from corporation tax on its property rental business.
A tax charge of £0.3 million arose in the year (2023: £0.6 million) on
profits not in relation to property rental business.
Profit and earnings
Profit before tax was £445.8 million (2023: £70.6 million), with the
increase primarily reflecting higher operating profit before changes in fair
value and other adjustments, alongside stronger valuations for the Group's
investment property. Basic EPS was 19.67 pence (2023: 3.72 pence). Basic EPRA
EPS, which excludes the impact of property valuation movements but for FY23
included the one-off early extinguishment charge, was 8.93 pence (2023: 6.55
pence, restated).
Adjusted EPS i (#_edn1) for the year was 8.91 pence (2023: 7.75 pence) with
the supporting calculation located in note 15 to the accounts. The metric we
see as closest to recurring earnings is Adjusted EPS excluding DMA income
above the anticipated run-rate, which was 8.05 pence for 2024 (2023: 7.75
pence).
Dividends
We aim to deliver an attractive and progressive dividend. The Board's policy
is for the first three quarterly dividends to each represent 25% of the
previous full-year dividend, with the fourth-quarter dividend determining any
progression. The aim is to achieve an overall pay-out ratio in excess of 90%
of Adjusted earnings (excluding additional DMA).
The Board has declared the following interim dividends in respect of 2024:
Declared Amount per share In respect of three months to Paid/to be paid
2 May 2024 1.825p 31 March 2024 7 June 2024
7 August 2024 1.825p 30 June 2024 6 September 2024
10 October 2024 1.825p 30 September 2024 27 November 2024
28 February 2025 2.185p 31 December 2024 28 March 2025
Total dividend for 2024 7.660p
The total dividend of 7.66 pence was 4.9% up on the 7.30 pence paid in respect
of 2023. The pay-out ratio was 95% of Adjusted EPS.
The cash cost of the dividends in relation to the year was £174.9 million
(2023: £135.6 million), with the increase reflecting the new shares issued to
acquire UKCM (see equity issuance below), which were eligible to receive all
of the interim dividends paid in respect of this financial year.
Portfolio valuation
For assets that are leased, pre-leased or under construction, the Group has
appointed CBRE and JLL to independently value a select group of assets. These
assets are recognised in the Group Statement of Financial Position at fair
value. Colliers independently values all owned and optioned land. Land options
and any other property assets are recognised at cost, less amortisation or
impairment charges under IFRS.
The share of joint ventures comprises 50% interests in two sites at Middlewich
and Northampton, relating to land and land options. These two sites are equity
accounted for and appear as a single line item in the Statement of
Comprehensive Income and Statement of Financial Position.
The total portfolio value at 31 December 2024 was £6.55 billion (31 December
2023: £5.03 billion), including the Group's share of joint ventures:
31 December 2024 31 December 2023
£m £m
Investment properties 5,929.4 4,843.7
Other property assets 1.7 2.3
Land options (at cost) 148.8 157.4
Share of joint ventures 24.4 24.7
Financial assets 3.2 2.2
Assets held for sale 440.4 -
Portfolio value 6,547.9 5,030.4
The gain recognised on revaluation of the Group's investment properties was
£243.7 million (2023: £38.1 million), which includes the gain recognised on
acquisition of UKCM. The investment portfolio equivalent yield at the year end
was 5.7% (31 December 2023: 5.6%). The growth in portfolio value over the year
is due to the UKCM portfolio acquisition (contributing £1.2 billion at the
time of purchase) and was supplemented by gains recognised from asset
management along with further growth in ERVs, which were 5.4% higher over the
year.
Capital expenditure
Capital expenditure into developments was £221.7 million in 2024 (2023:
£191.3 million). The acquisition of the UKCM portfolio added £1,149.1
million and was funded via a share for share exchange. Excluding the UKCM
portfolio, total capex was £285.3 million in the year, with its deployment
focused on development. The Group acquired one standing asset for £47.7
million in 2024.
Embedded value within land options
Under IFRS, land options are recognised at cost and subject to impairment
review. As at 31 December 2024, the Group's investment in land options
totalled £148.8 million (31 December 2023: £157.4 million). We continue to
progress strategic land through the planning process. During the year we
transferred £21.9 million of land held under option to assets under
construction.
As the land under option approaches the point of receiving planning consent,
any associated risk should reduce and the fair value should increase. When
calculating EPRA NTA, the Group therefore makes a fair value mark-to-market
adjustment for land options. At the year end, the fair value of land options
was £18.0 million greater than costs expended to date (31 December 2023:
£26.5 million greater).
Net assets
The EPRA NTA per share at 31 December 2024 was 185.56 pence (31 December 2023:
177.15 pence). The table below reconciles the movement during the year:
pence
As at 31 December 2023 177.15
Operating profit 8.16
Investment assets 4.78
Development assets 2.64
Land options (0.34)
UKCM acquisition 0.35
Dividends paid (7.05)
Other (0.13)
As at 31 December 2024 185.56
The Total Accounting Return for 2024, which is the change in EPRA NTA plus
dividends paid, was 9.0% (2023: 2.2%).
Debt capital
At 31 December 2024, the Group had the following borrowings:
Lender Maturity Loan commitment Notional amount drawn at 31 December 2024 Carrying value per balance sheet
31 December 2024
£m £m £m
Loan notes
2.625% Bonds 2026 Dec 2026 250.0 250.0 249.8
2.86% Loan notes 2028 Feb 2028 250.0 250.0 250.0
2.98% Loan notes 2030 Feb 2030 150.0 150.0 150.0
3.125% Bonds 2031 Dec 2031 250.0 250.0 248.3
1.5% Green Bonds 2033 Nov 2033 250.0 250.0 247.4
Bank borrowings
RCF (syndicate of seven banks) Oct 2029 500.0 257.0 257.0
RCF (syndicate of six banks) Jun 2026 300.0 99.0 99.0
Helaba Jul 2028 50.9 50.9 50.9
PGIM Real Estate Finance Mar 2027 90.0 90.0 90.0
Canada Life Apr 2029 72.0 72.0 72.0
Barclays RCF July 2026 75.0 0.0 0.0
Barclays term loan July 2026 75.0 75.0 75.0
Barings Real Estate Advisers Apr 2027 100.0 100.0 92.9
Barings Real Estate Advisers Feb 2031 100.0 100.0 81.5
Total 2,512.9 1,993.9 1,963.8
There were no changes to the Group's existing banking arrangements during the
year, other than exercising a one-year extension option on the £500.0 million
RCF, which now expires in October 2029.
The Group acquired the following facilities through the UKCM transaction:
· a £150.0 million revolving credit facility with Barclays Bank,
which was due to mature in January 2026 and carried a margin of 1.90% above
SONIA;
· a £100.0 million term loan with Barings Real Estate Advisers, at
a fixed interest rate of 3.03% per annum. The loan matures in April 2027 and
was fully drawn at the year end; and
· a second £100.0 million term loan with Barings Real Estate
Advisers, at a fixed rate of 2.72% per annum. The loan matures in February
2031 and was also fully drawn at 31 December 2024.
In July 2024, we refinanced the £150.0 million Barclays RCF via entry into a
new £150.0 million two-year facility, split between a £75.0 million term
loan and a £75.0 million RCF. The revised facility is provided on an
unsecured basis, so all previous security was released, and the margin was
reduced and brought into line with the Company's corporate RCF pricing. The
facility has two separate one-year extension options available, which subject
to lender consent, could extend the maturity of the facility to 2028.
We also amended the security pool for the loans with Barings. These are now
secured on logistics assets that we intend to hold for the long term, allowing
us to freely dispose of the non-strategic assets previously used as security.
Of the Group's drawn debt as at 31 December 2024, 80% was at fixed interest
rates (2023: 80%). For the majority of its variable rate debt, the Group uses
interest rate caps which run coterminous with the respective loan and protect
the Group from significant increases in interest rates. As a result, the Group
had either fixed or capped rates on 93% of its drawn debt at the year end (31
December 2023: 96%). The weighted average cost of borrowing at 31 December
2024 was 3.05% (31 December 2023: 2.93%).
Debt maturity
At the year end, the Group's debt had an average maturity of 4.5 years (31
December 2023: 5.2 years). Following the refinancing of the Barclays RCF in
July 2024, the Group has no debt maturing prior to mid-2026.
Loan to value (LTV)
The Group has a conservative leverage policy. At the year end, the LTV was
28.8% (31 December 2023: 31.6%), with the reduction largely reflecting the
benefit of UKCM's low LTV of 14.2% on acquisition.
Net debt and operating cash flow
Net debt at the year end was £1,883.3 million (31 December 2023: £1,590.3
million), comprising £1,963.9 million of gross debt less £80.6 million of
cash (31 December 2023: £1,626.7 million gross debt, £36.4 million cash).
Net operating cash flow was £195.4 million for the year (2023: £185.4
million).
Equity issuance
In relation to the all-share combination with UKCM, the Company issued
576,939,134 new ordinary shares to UKCM's shareholders. These shares were
admitted to trading on 17 May 2024. Following this, the Company had
2,480,677,459 ordinary shares in issue at 31 December 2024, an increase of
30.3% in the year.
Priorities for 2025
Our financial priorities for the year ahead are to:
· maintain the Group's strong balance sheet and liquidity, and keep
the LTV below 35%;
· continue to rotate capital into higher-returning opportunities;
· deliver further growth in income, Adjusted earnings and
dividends.
Guidance
We consolidate guidance provided throughout this report for the financial year
2025 into the table below:
Aspect Guidance
Portfolio rental reversion capture Potential opportunity to capture 79% by 2027
Logistics - FY25 development capex £200-250 million
Logistics - FY25 Development yield on cost Targeting 7-8% for FY 2025 logistics development starts
Data centre - FY25 development capex Up to £100 million
Data centre - FY25 Development yield on cost Targeting 9.3% for Manor Farm Phase 1
DMA income £10.0 million in 2025. Expected run rate of £3.0-5.0 million per year
thereafter, although we will guide accordingly
Disposals FY25 Targeting £350-450 million, with £166 million already exchanged / completed
in FY25
LTV Below 35%
Going concern
We continue to have a healthy liquidity position, with strong levels of rent
collection, a favourable debt maturity profile and debt costs which are
substantially fixed or hedged.
The Directors have reviewed our current and projected financial position over
a five-year period, making reasonable assumptions about our future operational
performance. Various forms of sensitivity analysis have been performed, in
particular regarding the financial performance of our clients and expectations
over lease renewals, along with assumptions over future liquidity and
particularly around debt refinancing events. As at 31 December 2024, our
property values would have to fall by more than 50% before our loan covenants
are breached at the corporate level.
At the year end, we had £519.0 million of undrawn commitments under our
senior debt facilities and £80.6 million of cash, of which £101.2 million
(see note 35) was committed under various development and purchase contracts.
The Group had also exchanged to dispose of a big box investment asset for
£79.0 million at the year end date. Our loan to value ratio stood at 28.8%,
with the debt portfolio having an average maturity term of approximately 4.5
years.
As at the date of approval of this report, we had substantial headroom within
our financial loan covenants. Our financial covenants have been complied with
for all loans throughout the period and up to the date of approval of these
financial statements. As a result, the Directors have a reasonable expectation
that the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future, which is considered to be to
28 February 2026.
Credit rating
The Group has a Baa1 (positive) long-term credit rating from Moody's Investor
Services, which was upgraded from Baa1 (stable) during the financial year,
reflecting the growing scale of the business along with strong credit ratios.
Alternative Investment Fund Manager (AIFM)
The Manager is authorised and regulated by the Financial Conduct Authority as
a full-scope AIFM. The Manager is therefore authorised to provide services to
the Group and the Group benefits from the rigorous reporting and ongoing
compliance applicable to AIFMs in the UK.
As part of this regulatory process, Langham Hall UK Depositary LLP (Langham
Hall) is responsible for cash monitoring, asset verification and oversight of
the Company and the Manager. In performing its function, Langham Hall conducts
a quarterly review during which it monitors and verifies all new acquisitions,
share issues, loan facilities and other key events, together with shareholder
distributions, the quarterly management accounts, bank reconciliations and the
Company's general controls and processes. Langham Hall provides a written
report of its findings to the Company and to the Manager, and to date it has
not identified any issues. The Company therefore benefits from a continuous
real-time audit check on its processes and controls.
Post balance sheet activity
In January 2025, the Company announced it had purchased a 74-acre site at
Heathrow, London within the Slough Availability Zone, a key FLAP-D prime EMEA
data centre location (the "Manor Farm site"), for £70.0 million.
Simultaneously, the Company acquired a 50% share in a joint venture with a
leading European renewable and low carbon energy power generator. The JV
enables accelerated power delivery to the Manor Farm site using pre-existing
grid connection agreements.
In connection with these arrangements, the Company has entered into a
development management agreement with Tritax Management pursuant to which
Tritax Management has been appointed to provide development management and
technical services, including pursuing planning, overseeing construction,
pre-letting services, technical electricity expertise and overseeing the
technical aspects of the Company's role in the JV and all power related
elements.
In January 2025, the Company acquired a 627k sq ft asset in Haydock, a core
North West location, for £74.3 million.
In January and February 2025, the Company sold or exchanged to sell £86.8
million of non-strategic assets and £79.0 million of logistics investment
assets.
Key performance indicators
Our objective is to deliver attractive, low-risk returns to Shareholders, by
executing the Group's Investment Policy and operational strategy. Set out
below are the key performance indicators we use to track our progress. For a
more detailed explanation of performance, please refer to the Manager's
Report.
KPI Relevance to strategy Performance
1. Total accounting return (TAR) TAR calculates the change in the EPRA net tangible assets (EPRA NTA) over the 9.0% for the year to 31 December 2024
period plus dividends paid. It measures the ultimate outcome of our strategy,
which is to deliver value to our shareholders through our portfolio and to (2023: 2.2%)
deliver a secure and growing income stream.
2. Dividend The dividend reflects our ability to deliver a low-risk but growing income 7.66p per share for year to 31 December 2024
stream from our portfolio and is a key element of our TAR.
(2023: 7.30p)
3. EPRA NTA per share(1) The EPRA NTA reflects our ability to grow the portfolio and to add value to it 185.56p at 31 December 2024
throughout the lifecycle of our assets.
(31 December 2023: 177.15p).
4. Loan to value ratio (LTV) The LTV measures the prudence of our financing strategy, balancing the 28.8% at 31 December 2024
potential amplification of returns and portfolio diversification that come
with using debt against the need to successfully manage risk. (31 December 2023: 31.6%).
5. Adjusted earnings per share The Adjusted EPS reflects our ability to generate earnings from our portfolio, 8.91p per share for the year to 31 December 2024
which ultimately underpins our dividend payments.
(2023: 7.75p)
Excluding additional development management income, Adjusted EPS was 8.05p
(2023: 7.75p). See note 1 within EPRA and other key performance indicators.
6. Total Expense Ratio This is a key measure of our operational performance. Keeping costs low 0.83% at 31 December 2024
supports our ambition to maximise returns for shareholders.
(31 December 2023: 0.86%).
7. Weighted average unexpired lease term (WAULT) The WAULT is a key measure of the quality of our portfolio. Long lease terms 10.3 years at 31 December 2024
underpin the security of our income stream.
(31 December 2023: 11.4 years).
8. Global Real Estate Sustainability Benchmark (GRESB) score The GRESB score reflects the sustainability of our assets and how well we are 85/100(2) and 4 Green Star rating for 2024
managing ESG risks and opportunities. Sustainable assets protect us against
climate change and help our clients to operate efficiently. 99/100 and 5 Green Star rating for developments for 2024 and the GRESB 2024
Regional Listed Sector Leader and Regional Sector Leader for Europe, and
Global Listed Sector Leader and Global Sector Leader, all for the Industrial
sector.
(1) EPRA NTA is calculated in accordance with the Best Practices
Recommendations of the European Public Real Estate Association (EPRA). We use
these alternative metrics as they provide a transparent and consistent basis
to enable comparison between European property companies.
(2) GRESB changed its scoring methodology in 2024 and the result is not
directly comparable to previous years.
EPRA performance indicators
The table below shows additional performance measures, calculated in
accordance with the Best Practices Recommendations of the European Public Real
Estate Association (EPRA). We provide these measures to aid comparison with
other European real estate businesses.
For a full reconciliation of all EPRA performance indicators, please see Notes
to the EPRA and other key performance indicators.
Measure and Definition Purpose Performance
1. EPRA Earnings (Diluted) A key measure of a company's underlying operating results and an indication of £202.3m / 8.93p per share
the extent to which current dividend payments are supported by earnings.
See note 15 (2023 restated: £123.3m / 6.55p per share) see note 2 within EPRA and Other
Key Performance Indicators.
2. EPRA Net Tangible Assets Assumes that entities buy and sell assets, thereby crystallising certain £4,603.2m / 185.56p per share as at 31 December 2024
levels of unavoidable deferred tax.
See note 31 (31 December 2023: £3,372.5m / 177.15p per share).
3. EPRA Net Reinstatement Value (NRV) Assumes that entities never sell assets and aims to represent the value £5,048.5m / 203.51p per share as at 31 December 2024
required to rebuild the entity.
(31 December 2023: £3,715.9m / 195.19p per share).
4. EPRA Net Disposal Value (NDV) Represents the shareholders' value under a disposal scenario, where deferred £4,777.8m / 192.60p per share as at 31 December 2024
tax, financial instruments and certain other adjustments are calculated to the
full extent of their liability, net of any resulting tax. (31 December 2023: £3,501.9m / 183.95p per share).
5 EPRA Net Initial Yield (NIY) This measure should make it easier for investors to judge for themselves how 4.26% as at 31 December 2024
the valuations of two portfolios compare.
(31 December 2023: 4.15%).
6 EPRA 'Topped-Up' NIY This measure should make it easier for investors to judge for themselves how 4.61% as at 31 December 2024
the valuations of two portfolios compare.
(31 December 2023: 4.60%).
7. EPRA Vacancy A "pure" (%) measure of investment property space that is vacant, based on 5.7% as at 31 December 2024
ERV.
(31 December 2023: 2.5%).
8. EPRA Cost Ratio A key measure to enable meaningful measurement of the changes in a company's 13.6% including vacancy costs (2023: 13.1%). 12.6% excluding vacancy costs
operating costs. (2023: 13.1%)
9. EPRA LTV A key shareholder-gearing metric to determine the percentage of debt comparing 30.1%
to the appraised value of the properties.
(31 December 2023: 33.3%).
Principal risks and uncertainties
The Board has overall responsibility for risk management and internal
controls, with the Audit and Risk Committee reviewing the effectiveness of the
risk management process on its behalf. We aim to operate in a low-risk
environment, focusing on a single subsector of the UK real estate market to
deliver attractive, growing and secure income for Shareholders, together with
the opportunity for capital appreciation. The Board recognises that effective
risk management is important to our success. Risk management ensures a defined
approach to decision making that decreases uncertainty surrounding anticipated
outcomes, balanced against the objective of creating value for Shareholders.
Approach to managing risk
Our risk management process is designed to identify, evaluate, manage and
mitigate (rather than eliminate) the significant risks we face. The process
can therefore only provide reasonable, and not absolute, assurance. As an
investment company, we outsource key services to the Manager, the
Administrator and other service providers, and rely on their systems and
controls.
At least twice a year, the Board undertakes a formal risk review, with the
assistance of the Audit and Risk Committee, to assess the effectiveness of our
risk management and internal control systems. During these reviews, the Board
has not identified or been advised of any failings or weaknesses which it has
determined to be material.
Risk appetite
The Group's risk appetite is reviewed annually and approved by the Board in
order to guide the business. The risk appetite defines tolerances and targets
for our approach to risk, with our risk appetite likely to vary over time due
to broader economic or property cycles. In addition, we have a specific
Investment Policy, which we adhere to and for which the Board has overall
responsibility. For example, we have a limit within our Investment Policy,
which allows our exposure to land and unlet development to be up to 15% of
gross asset value, of which up to 5% can be invested in speculative
development.
Principal risks and uncertainties
Further details of our principal risks and uncertainties are set out below.
They have the potential to materially affect our business. Some risks are
currently unknown, while others that we currently regard as immaterial and
have therefore not been included here, may turn out to be material in the
future. The principal risks are the same as detailed in the 2023 Annual
Report.
Emerging Risks
As well as the Principal risks, the Directors have identified a number of
emerging risks which are considered as part of the formal risk review. On a
biannual basis the Directors, along with the Manager, undertake a horizon
scanning exercise to identify possible emerging risks. Emerging risks
encompass those that are rapidly evolving, for which the probability or
severity are not yet fully understood. As a result, any appropriate
mitigations are also still evolving. However, these emerging risks are not
considered to pose a material threat to the Company in the short term,
although this could change depending on how these risks evolve over time.
Senior members of the Manager are responsible for day-to-day matters and have
a breadth of experience across all corporate areas; they consider emerging
risks and any appropriate mitigation measures required. These emerging risks
are then raised as part of the bi-annual risk assessment where it is
considered whether these emerging risks have the potential to have a
materially adverse effect on the Company.
Given the significance of the UKCM corporate transaction during the year, the
Board did consider whether this transaction and the integration of the UKCM
portfolio influenced the principal risks as set out below. In short, the Board
did not perceive this transaction to present any additional principal risks to
the business, but any impact on existing principal risks has been fully taken
into account. The emerging risks that could impact the Company's performance
cover a range of subjects which include, but are not restricted to,
technological advancement/AI, cyber risk, supply chain disruption and ongoing
macro-economic uncertainty.
The Board is conscious of recent geopolitical events such as the change in the
UK government and subsequent budget changes, along with the ongoing conflict
in the Middle East and between Russia and Ukraine. Added to these are the new
US government with the threat of trade tariffs, a new relationship with China
and security considerations for NATO which are all events that have the
potential to cause uncertainty in a short space of time. The Board continue to
monitor interest rates and the general financial markets closely given the
direct impact on the business.
PROPERTY RISK
1. Client default - the risk around one or more of our clients
defaulting
Net probability
High
Net Impact
Moderate - The default of one or more of our clients would immediately reduce
revenue from the relevant asset(s). If the client cannot remedy the default,
we have to evict the client or the client becomes insolvent, there may be a
continuing reduction in revenues until we are able to find a suitable
replacement client, which may affect our ability to pay dividends to
Shareholders.
Mitigation
Our investment policy limits the exposure to any one client to 20% of gross
assets or, where clients are members of the FTSE, up to 30% each for two such
clients. This prevents significant exposure to a single client. To mitigate
geographical shifts in client's focus, we invest in assets in a range of
locations, with easy access to large ports and key motorway junctions. Before
investing, we undertake thorough due diligence, particularly over the
financial strength of the underlying covenant and any group financial
covenants. We select assets with strong property fundamentals (good location,
modern design, sound fabric), which should be attractive to other clients if
the current client fails. We continually monitor and keep the strength of our
client covenants under review. In addition, we focus on assets that are
strategically important to the client's business. Our maximum exposure to any
one client (calculated by contracted rental income) was 15.5% as at
31 December 2024.
2. Portfolio strategy and industry competition - the ability of the Company to
execute on its strategy and deliver performance.
Net probability
Medium
Net impact
Slight - An adverse change in the performance of our property portfolio may
lead to lower returns for Shareholders or a breach of our banking covenants.
Market conditions may lead to a reduction in the revenues we earn from our
property assets, which may affect our ability to pay dividends to
Shareholders. A severe fall in values may result in a fall in our NAV as well
as a need to sell assets to repay our loan commitments. In a high inflationary
environment, certain caps within rent review clauses may prevent us from
capturing the full benefit of higher inflation. Competitors in the sector may
be better placed to secure property acquisitions, as they may have greater
financial resources, thereby partly restricting the ability to grow our NAV,
deliver value to shareholders, further diversify the portfolio and add
additional liquidity to our shares. Stubborn interest rates have prevented
resurgent investment confidence such that investment yields have held flat in
2024.
Mitigation
The Group is focused on a single sector of the commercial property market, the
property portfolio is 94.3% let, with long unexpired weighted average lease
terms and an institutional-grade client base. Occupier demand is structurally
supported by a range of sectors. All our leases contain upward-only rent
reviews, which are either fixed, RPI/CPI linked or at open market value. These
factors help support our asset values and overall portfolio performance. We
undertake ongoing reviews of asset performance along with a review over the
balance of our portfolio, split between Foundation, Value Add and Land as well
as considerations over covenant, location and building type. Our asset
performance is regularly appraised and where we feel the assets are mature in
terms of performance, they are ear-marked for potential disposal. Our
development portfolio is executed in a low-risk manner utilising capital
efficient option agreements and only deploying significant capital once we
have secured a pre-let or where a depth of occupier demand supports the case
for speculative development.
3. Performance of the sectors clients operate in
Net probability
Medium
Net impact
Moderate - Our focus on UK logistics means we directly rely on a number of
sub-sectors to lease our assets and pay rent. Insolvencies and CVA's among
these occupiers could affect our revenues and property valuations. Poor
performance and low profitability could affect our ability to collect rental
income and the overall level of demand for space. This could in turn impact
future rental growth. A broad range of sectors to some degree diversifies
risk.
Mitigation
The diversity of our institutional-grade client base means the impact of
default of any one of our clients is low-moderate. In addition to our due
diligence on clients before an acquisition or letting, we regularly review the
performance of the sub-sectors, the position of our clients against their
competitors and, in particular, the financial performance of our clients. We
have also increasingly been diversifying our client exposure to various
sub-sectors, for instance within the retail sector i.e. online, food,
homeware, fashion, other. The breadth of client sector exposure has been
enhanced following the UKCM transaction. The risk around traditional retail is
mitigated by the increase in online retail sales and supply chain concerns
which has driven occupational demand through Covid-19 and beyond. Our
portfolio is modern and of a high-quality nature and therefore is attractive
to those with an online presence.
4. Execution of development business plan - there may be a higher degree of
risk within our development portfolio.
Net probability
Low
Net impact
Slight - Our development activities are likely to involve a higher degree of
risk than is associated with standing assets. This could include general
construction risks, delays in the development or the development not being
completed, cost overruns or developer/contractor default. If any of the risks
associated with our developments materialise, this could affect the value of
these assets or result in a delay to lease commencement and therefore rental
income. The occupational market remains stable and while UK vacancy rates have
increased over 2024, they have stabilised at around 5.6% and rental growth
remains healthy.
Mitigation
The Company has a significant development pipeline, it represents 5.8% of our
gross assets as of 31 December 2024. Our development strategy is low risk, and
we target only investing significant capital into a development project once
planning has been obtained, a pre-let agreement has been secured or where a
depth of occupier demand supports the case for speculative development. Our
appetite for speculative development is low and we have a limit of 5% of GAV
exposed to speculative developments within our Investment Policy. The risk of
cost overruns is mitigated by our experienced development team which includes
a thorough procurement and tender process on all contracts, including agreeing
fixed priced contracts. We undertake thorough covenant analysis and ongoing
reviews of our contractors and secure guarantees in relation to build
contracts where possible.
FINANCIAL RISK
5. Debt financing - LTV, availability and cost of debt
Net probability
Medium
Net impact
Moderate - Without sufficient debt funding, we may be unable to pursue
suitable investment/development opportunities in line with our investment
objectives. If we cannot source debt funding at appropriate rates, either to
increase the level of debt or re-finance existing debt, this may impair our
ability to maintain our targeted dividend level and deliver attractive returns
to shareholders. Interest rates on the majority of our debt facilities are
fixed or subject to interest rate hedging providing protection against
significant increases in interest rates. We do, however, have modest levels of
exposure to variable rate debt. Our next loan expiry is mid-2026, the rate of
which is lower than prevailing rates and this is likely to mean that any new
debt entered into is more expensive that our average cost of borrowing.
Mitigation
The Group has diversified sources of long-term unsecured borrowings in the
form of £500 million in Public Bonds, £400 million in Unsecured Private Loan
Notes and £250 million in Green Bonds. We also have £950 million of bank
finance available split across three revolving credit facilities and a term
loan, and £412.9 million of secured debt across five separate facilities.
This helps keep lending terms competitive. This access to multiple debt
markets should enable the Group to raise future liquidity in a more efficient
and effective manner via an unsecured platform whilst at competitive rates.
The Board keeps liquidity and gearing levels under review, as well as
monitoring the bank covenants and any associated headroom within covenant
levels. The Group has undrawn headroom of over £500 million within our
current debt commitments, at 31 December 2024. The Group aims, where
reasonable to minimise the level of unhedged debt with Sonia exposure, by
using hedging instruments with a view to keeping variable rate debt
approximately 90%+ hedged.
CORPORATE RISK
6. We rely on the continuance of the Manager
Net probability
Medium
Net impact
Moderate- We continue to rely on the Manager's services and its reputation in
the property market. As a result, the Company's performance will, to a large
extent, be underpinned by the Manager's abilities in the property market and
its ability to asset manage and develop the Company's property portfolio.
Termination of the Investment Management Agreement would severely affect the
Company's ability to effectively manage its operations and may have a negative
impact on the share price of the Company.
Mitigation
Unless there is a default, either party may terminate the Investment
Management Agreement by giving not less than 24 months' written notice. The
Management Engagement Committee regularly reviews and monitors the Manager's
performance. In addition, the Board meets regularly with the Manager, to
ensure that a positive working relationship is maintained and from time to
time with the Manager's ultimate parent abrdn. Following the acquisition of
60% of the Manager by abrdn, this enhances the resources available to the
Manager. In May 2022, Shareholders approved the extension of the Agreement
with a new 5 year term. A 24 month written notice cannot be served by either
party, unless there is a default, prior to May 2025.
TAXATION RISK
7. UK REIT status - we are a UK REIT and have a tax-efficient corporate
structure, which is advantageous for UK Shareholders. Any change to our tax
status or in UK tax legislation could affect our ability to achieve our
investment objectives and provide favourable returns to Shareholders.
Net probability
Low
Net impact
Moderate - If the Company fails to remain a REIT for UK tax purposes, our
property profits and gains will be subject to UK corporation tax.
Mitigation
The Board is ultimately responsible for ensuring we adhere to the UK REIT
regime. It monitors the REIT compliance reports provided by:
• the Manager on potential transactions;
• the Administrator on asset levels; and
• our Registrar and brokers on shareholdings.
The Board has also engaged third-party tax advisers and auditors to help
monitor REIT compliance requirements.
None of the compliance tests are close to exceeding the relevant thresholds.
OTHER RISKS
8. Macro-economic uncertainty
Net probability
Low
Net impact
Moderate - a severe downturn in the economy could impact a number of the
Group's clients, contractors, and service providers, which could mean a loss
of rental income and disruption to operations. Following Covid-19, there has
been severe pressure on supply chains which led to high levels of inflation
and whilst inflation has moderated, interest rates have reduced more slowly
and this has meant that occupier confidence has remained subdued, resulting in
slower occupier decision making.
Mitigation
A severe economic downturn could be caused by geopolitical events, civil
unrest, terrorism or a pandemic.
The Group mitigates the impact of macro-economic issues by investing in
high-quality investment assets that operate in a sector that has strong
structural drivers and a supply demand imbalance in favour of owners. The
Group monitors its client's financial health regularly and where appropriate
and possible, enters into long leases.
The Manager continues to monitor the business continuity plan of its suppliers
to ensure the impact to the Group and its service providers is minimised.
The Manager continues to monitor the impact that the prevailing economic
environment is having on the Group's clients in order to protect the Group's
cash flow regarding rent collection, impact on dividends and banking
covenants.
Covid-19 and supply chain concerns accelerated behavioural patterns such as
online shopping, which have resulted in healthy levels of occupational demand.
These factors are supportive of our business model.
9. Physical and transitional risks from climate change
Net probability
Medium
Net Impact
Slight - Environmental sustainability is a challenge that is currently
affecting people and businesses. Changes in social attitudes, laws,
regulations, taxation, and particularly client and investor preferences
associated with this has the potential to cause significant reputational
damage and financial impact on our business, should the Company not comply
with laws and regulations, meet its ESG targets, or not meet stakeholder
expectations in addressing these challenges. ESG requirements are likely to
increase over time, including in relation to a transition to a low-carbon
economy, and therefore the impact of a failure to comply has the potential to
be even greater in the future, including through impacts on the value and
liquidity of real estate assets.
Climate change has become increasingly relevant to real estate, particularly
physical damage caused by wind, fire and flood. The Group's properties are
generally modern and designed to withstand demanding weather but extreme
events can exceed construction design parameters and damage from such events
can impact on operational continuity for our clients.
TCFD risk management response is included in the Annual Report.
Mitigation
The Manager operates with a dedicated sustainability team as well as an ESG
Committee who take operational responsibility for the Company's ESG matters.
The Manager regularly reports to the Board, including monitoring against the
Company's stated ESG targets and providing updates on future initiatives. ESG
is embedded within our investment and development processes such that
climate-related risks are assessed when purchasing assets and minimum
standards of BREEAM Excellent, EPC A and net zero carbon in construction are
targeted for development. We also actively participate and engage in several
Real Estate and Sustainability organisations (such as GRESB, the Better
Buildings Partnership, the UK Green Building Council and the British Property
Federation) to ensure we are aware of future initiatives and challenges. We
measure and report annually on our key ESG metrics to demonstrate how we are
managing our ESG risks.
In 2024, TBBR updated its physical and transition climate risk assessments to
understand the potential impacts of climate change on standing assets, using
scenario analysis. We continue to integrate the outcomes of the assessments
into our investment processes, including pre-acquisition due diligence, design
specifications, and asset management plans.
We are rated by ESG Rating Agencies that demonstrate our ability to manage ESG
risks, for example:
· Our Sustainalytics rating remained as Negligible Risk in 2024 in
reflection of our management processes, as well as being awarded the Global
Top 50 Badge;.
· We were awarded 4 Green Stars by GRESB and the Global Sector
Leader for Development
· We were awarded an EPRA sBPR Gold for sustainability reporting
for the fourth consecutive year.
· We achieved a CDP B rating for the second year in a row.
The buildings we develop are designed for increased resilience against the
impact of extreme weather.
In respect of risks resulting from climate change, all our properties are
insured. Our leases are 'Full Repairing and Insuring' (triple net) and so in
the event that a property is unoccupiable due to damage from extreme weather,
rent remains payable under the terms of the lease; correspondingly our clients
can insure against loss of trade resulting from such events.
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
Note Year ended Year ended
31 December 31 December
2024 2023
£m £m
Gross rental income 6 281.1 222.2
Service charge income 6 13.1 6.2
Service charge expense 7 (15.6) (6.3)
Direct property expenses (2.6) -
Net rental income 276.0 222.1
Other operating income 8 86.3 -
Other operating costs 9 (63.3) -
Other operating income 23.0 -
Administrative and other expenses 10 (33.7) (28.9)
Operating profit before changes in fair value and other adjustments(1) 265.3 193.2
Changes in fair value of investment properties 17 243.7 (38.1)
Gain/(loss) on disposal of investment properties 17 8.4 (1.6)
Share of profit from joint ventures 19 0.1 0.4
Dividend income 0.2 -
Fair value movements in financial asset 27 0.9 (0.1)
Impairment of intangible and other property assets (4.0) (2.7)
Share-based payment charge 25 - (2.9)
Changes in fair value of contingent consideration payable 25 - (0.4)
Extinguishment of B and C share liabilities 25 - (21.1)
Operating profit 514.6 126.7
Finance income 12 8.4 10.4
Finance expense 13 (71.9) (55.3)
Changes in fair value of interest rate derivatives 27 (5.3) (11.2)
Profit before taxation 445.8 70.6
Taxation 14 (0.3) (0.6)
Profit and total comprehensive income 445.5 70.0
Earnings per share - basic and diluted 15 19.67p 3.72p
(1) Operating profit before changes in fair value of investment properties,
gain/(loss) on disposal of investment properties, share of profit from joint
ventures, dividend income, fair value movements in financial assets,
impairment of intangible and other property assets and share-based payment
charges.
GROUP STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Note At At
31 December 31 December
2024 2023
£m £m
Non-current assets
Investment property 17 5,929.4 4,843.6
Investment in land options 18 148.8 157.4
Investment in joint ventures 19 24.4 24.8
Other property assets 1.7 2.3
Intangible assets 0.7 1.1
Financial assets 27 3.2 2.3
Interest rate derivatives 27 7.6 11.1
Trade and other receivables 22 3.9 1.0
Total non-current assets 6,119.7 5,043.6
Current assets
Trade and other receivables 22 56.0 22.0
Assets held for sale 20 440.4 -
Cash at bank 23 80.6 36.4
Tax asset 14 2.0 -
Total current assets 579.0 58.4
Total assets 6,698.7 5,102.0
Current liabilities
Deferred rental income (59.5) (38.6)
Trade and other payables 24 (112.5) (106.9)
Tax liabilities 14 (1.9) (2.2)
Total current liabilities (173.9) (147.7)
Non-current liabilities
Trade and other payables 24 (3.9) (1.0)
Bank borrowings 26 (811.7) (474.7)
Loan notes 26 (1,141.8) (1,140.5)
Deferred consideration - (4.1)
Total non-current liabilities (1,957.4) (1,620.3)
Total liabilities (2,131.3) (1,768.0)
Total net assets 4,567.4 3,334.0
Equity
Share capital 30 24.8 19.0
Share premium reserve 30 49.2 49.2
Capital reduction reserve 30 1,289.0 1,463.9
Merger reserve 30 957.0 -
Retained earnings 30 2,247.4 1,801.9
Total equity 4,567.4 3,334.0
Net asset value per share - basic and diluted 31 184.12p 175.13p
EPRA Net Tangible Asset per share - basic and diluted 31 185.56p 177.15p
These financial statements were approved by the Board of Directors on 27
February 2025 and signed on its behalf by:
Aubrey Adams, Chairman
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Note Share capital Share premium Merger reserve Capital reduction reserve Retained earnings Total
£m £m £m £m £m £m
1 January 2024 19.0 49.2 - 1,463.9 1,801.9 3,334.0
Profit for the year and total comprehensive income - - - - 445.5 445.5
19.0 49.2 - 1,463.9 2,247.4 3,779.5
Contributions and distributions:
Share issue in relation to the UKCM acquisition 30 5.8 - 957.0 - - 962.8
Dividends paid 16 - - - (174.9) - (174.9)
31 December 2024 24.8 49.2 957.0 1,289.0 2,247.4 4,567.4
Note Share capital Share premium Merger reserve Capital reduction reserve Retained earnings Total
£m £m £m £m £m £m
1 January 2023 18.7 764.3 - 835.1 1,731.9 3,350.0
Profit for the year and total comprehensive income - - - - 70.0 70.0
18.7 764.3 - 835.1 1,801.9 3,420.0
Contributions and distributions:
Shares issued in relation to extinguishment of share-based payment 30 0.3 49.3 - - - 49.6
Transfer between reserves - (764.4) - 764.4 - -
Share-based payments - - - - 4.5 4.5
Transfer of share-based payments to liabilities to reflect settlement - - - - (4.5) (4.5)
Dividends paid 16 - - - (135.6) - (135.6)
31 December 2023 19.0 49.2 - 1,463.9 1,801.9 3,334.0
GROUP CASH FLOW STATEMENT
For the year ended 31 December 2024
Note Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash flows from operating activities
Profits for the period (attributable to the shareholders) 445.5 70.0
Tax charge 0.3 0.6
Changes in fair value of contingent consideration payable - 0.4
Finance income 12 (8.4) (10.4)
Finance expense 13 71.9 55.3
Changes in fair value of interest rate derivatives 5.3 11.2
Share-based payment charges - 2.9
Extinguishment of B and C share liabilities - 21.1
Impairment of intangible and other property assets 4.0 2.7
Amortisation of intangible property assets 0.6 -
Movement on valuation of financial asset (0.9) -
Share of profit from joint ventures (0.1) (0.4)
(Gain)/loss on disposal of investment properties (8.4) 1.6
Changes in fair value of investment properties 17 (243.7) 38.1
Accretion of tenant lease incentive 6 (21.4) (16.2)
(Increase)/decrease in trade and other receivables (33.4) 3.5
Increase in deferred income 12.7 3.9
(Decrease)/increase in trade and other payables (26.0) 0.6
Cash generated from operations 198.0 184.9
Taxation (charge)/credit (2.6) 0.4
Net cash flow generated from operating activities 195.4 185.3
Investing activities
Additions to investment properties (196.2) (308.9)
Additions to land options 18 (16.9) (16.8)
Net working capital acquired on the acquisition of UKCM (8.1) -
Purchase of equity investment - (66.6)
Purchase of financial asset - (2.4)
Additions to joint ventures - (0.3)
Net proceeds from disposal of investment properties 137.8 326.8
Interest received 12 0.7 0.2
Dividends received from joint ventures 0.4 0.8
Net cash flow used in investing activities (82.3) (67.2)
Financing activities
Proceeds from issue of ordinary share capital - 49.6
Bank borrowings drawn 26 340.0 409.0
Bank and other borrowings repaid 26 (178.0) (407.0)
Interest derivatives received 12 7.0 9.9
Loan arrangement fees paid (1.2) (5.1)
Bank interest paid (60.6) (47.9)
Interest cap premium paid (1.8) (2.4)
Dividends paid to equity holders (174.1) (135.3)
Net cash flow used from financing activities (68.7) (129.2)
Net increase/(decrease) in cash and cash equivalents for the year 44.4 (11.2)
Cash and cash equivalents at start of year 23 36.2 47.4
Cash and cash equivalents at end of year 23 80.6 36.2
NOTES TO THE CONSOLIDATED ACCOUNTS
1. Corporate information
The consolidated financial statements of the Group for the year ended 31
December 2024 comprise the results of Tritax Big Box REIT plc (the "Company")
and its subsidiaries (together, the "Group") and were approved by the Board
for issue on 27 February 2025. The Company is a public limited company
incorporated and domiciled in England and Wales. The Company's Ordinary Shares
are admitted to the official list of the UK Listing Authority, a division of
the Financial Conduct Authority, and traded on the London Stock Exchange. The
registered address of the Company is disclosed in the Company information.
The nature of the Group's operations and its principal activities are set out
in the Strategic Report.
Accounting policies
2. Basis of preparation
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The comparative information disclosed relates to the year ended 31 December
2023.
The Group's financial statements have been prepared on a historical cost
basis, other than as explained in the accounting policies below.
The consolidated financial statements are presented in Sterling, which is also
the Company's functional currency, and all values are rounded to the nearest
£0.1 million, except where otherwise indicated.
The Group has chosen to adopt European Public Real Estate Association ("EPRA")
best practice guidelines for calculating key metrics such as net asset value
and earnings per share (www.epra.com/finance/financial-reporting/guidelines).
2.1. Going concern
The Board has assessed the appropriateness of the going concern basis in
preparing these financial statements. Any going concern assessment considers
the Group's financial position, cash flows, liquidity and capital commitments
including its continued access to its debt facilities and headroom under
financial loan covenants.
The Directors have considered the cash flow forecasts for the Group for a
period of at least twelve months from the date of approval of these
consolidated financial statements. These forecasts include the Directors'
assessment of plausible downside scenarios. The Directors have reviewed the
current and projected financial position of the Group, making reasonable
assumptions about its future trading performance. Various forms of sensitivity
analysis have been performed having particular regard to the financial
performance of its clients' track record of rental receipts, whilst taking
into account any discussions held with the client surrounding their future
rental obligations. The analysis also included sensitising the impact of
portfolio valuation movements through market volatility, rent collection and
client default. These scenarios all paid regard to the current economic
environment.
The Group has a strong track record around rent collection with no history of
significant levels of bad debt or arrears. Generally speaking, we have strong
clients with robust balance sheets and strong cash flows. The Directors have
also considered the arrears position in light of IFRS 9, expected credit loss
model, see Note 22 for further details.
As at 31 December 2024, the Group had an aggregate £519.0 million of undrawn
commitments under its senior debt facilities as well as £80.6m of cash held
at bank, of which £101.2 million was committed under various development
related contracts. In January and February 2025 the Group also acquired a
logistical asset for £74.3 million and sold or exchanged to sell £86.8
million of non-strategic assets and £79.0 million of logistics investment
assets.
At 31 December 2024 the Group's loan to value ratio stood at 28.8%, with the
debt portfolio having an average maturity term of approximately 4.5 years. As
at the date of approval of this report, the Group has substantial headroom
within its financial loan covenants. As at 31 December 2024 property values
would have to fall by more than 50% before loan covenants are breached.
The Group's financial covenants have been complied with for all loans
throughout the period and up to the date of approval of these financial
statements.
The Directors have assessed the ability of the Group and Company to continue
as a going concern and are not aware of any material uncertainties that may
cast significant doubt upon the ability of the Group and Company to continue
as a going concern. Therefore the Directors are satisfied that the Group has
the resources to continue in business until at least 28 February 2026.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities at the reporting date. However, uncertainty about these
assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in future
periods.
3.1. Judgements
In the process of applying the Group's accounting policies, management has
made the following judgements, which have the most significant effect on the
amounts recognised in the consolidated financial statements:
Other operating income
Other operating income is receivable from development management agreements
("DMA") in place with third parties. Development management income is
recognised in the accounting period in which the services are rendered and a
significant reversal is not expected in future periods.
Judgement is exercised in identifying performance obligations including the
sale of land with planning consent, completing land and infrastructure works
and managing the construction of an asset. The transaction price is allocated
fairly between the different performance obligations (refer to notes 8 and 9).
Certain performance obligations are recognised at a point in time (for example
a land transaction) and others are recognised over time (such as services
under a DMA) each contract outlines the scope, deliverables, milestones, and
payment terms. Revenue is recognised based on the work completed to date using
the percentage-of-completion method (input method), which is based on costs
incurred relative to total expected costs.
Acquisitions of property through corporate vehicles
Some property transactions are large or complex and require management to make
judgements when considering the appropriate accounting treatment. These
include acquisitions of property through corporate vehicles, which could
represent either asset acquisitions or business combinations under IFRS 3
(refer to note 4.9).
During the period the Group acquired the entire issued share capital of UK
Commercial Property REIT ('UKCM'). UKCM was a real estate investment trust
with its operations managed by abrdn Fund Managers Limited ('abrdn'). The
management contract with abrdn made them responsible for the operations
required to manage the properties owned by the UKCM. Simultaneously upon
acquisition, the management contract between abrdn and UKCM was immediately
cancelled as the operations of the Group were taken over by Tritax Management
LLP who remain the Investment Manager to the enlarged Group.
As the Group did not acquire any of UKCM's critical processes which enabled
them to create outputs, it was concluded that the transaction did not meet the
definition of a business combination under IFRS 3, and therefore has been
accounted for as an asset acquisition (refer to note 37).
Land options
Land options, and other non-financial assets, are initially capitalised at
cost and considered for any impairment indication annually. The impairment
review includes consideration of the resale value of the option, likelihood of
achieving planning consent and current recoverable value as determined by an
independent external valuer. In the calculation of the resale value or
recoverable value of land options, several estimates are required which
includes the expected size of the development, expected rental and
capitalisation rates, estimated build costs, the time to complete the
development and anticipated progress with achieving planning consent, as well
as the associated risks of achieving the above.
3.2. Estimates
Fair valuation of investment property
The market value of investment property is determined by an independent
property valuation expert (see note 17) to be the estimated amount for which a
property should exchange on the date of the valuation in an arm's-length
transaction. Properties have been valued on an individual basis. The valuation
expert uses recognised valuation techniques and the principles of both IAS 40
and IFRS 13.
The valuations have been prepared in accordance with the RICS Valuation -
Global Standards January 2022 (the "Red Book"). Factors reflected comprise
current market conditions including Net Initial Yield applied, annual rents
and estimated rental values, lease lengths, location and building
specification which would include climate-related considerations. The Net
Initial Yield, being the most significant estimate, is subject to changes
depending on the market conditions which are assessed on a periodic basis. The
significant methods and assumptions used by the valuers in estimating the fair
value of investment property, together with the sensitivity analysis on the
most subjective inputs, are set out in note 17.
4 Material accounting policies
4.1. Segmental information
The Directors are of the opinion that the Group is engaged in a single segment
business, being the investment in UK logistics assets and land options with a
view to developing logistics and holding these for investment purposes. The
Directors consider that these properties have similar economic characteristics
in nature and as a result they have been reported as a single reportable
operating business. During the current year, the Group acquired non-logistics
assets as part of the UKCM acquisition. These assets share similar economic
characteristics to the existing portfolio and collectively they form an
insignificant proportion of the Group's portfolio. In addition to this, the
monitoring and strategic decision-making processes are no different from the
existing logistics core portfolio. Therefore, the Directors consider there to
be a single reportable segment.
4.2. Investment property and investment property under
construction
Investment property comprises completed property that is held to earn rentals
or for capital appreciation, or both. Property held under a lease is
classified as investment property when it is held to earn rentals or for
capital appreciation or both, rather than for sale in the ordinary course of
business or for use in production or administrative functions.
The corresponding entry upon recognising lease incentives or fixed/minimum
rental uplifts is made to investment property. For further details see
accounting policy note 4.11.
Investment property is recognised once practical completion is achieved and is
measured initially at cost including transaction costs. Transaction costs
include transfer taxes, professional fees for legal services and other costs
incurred in order to bring the property to the condition necessary for it to
be capable of operating. Subsequent to initial recognition, investment
property is stated at fair value. Gains or losses arising from changes in the
fair values are included in the Group Statement of Comprehensive Income in the
year in which they arise under IAS 40 "Investment Property".
Long leaseholds are accounted for as investment property as they meet the
criteria for right of use assets.
Investment properties under construction are financed by the Group through
development contracts to build logistics assets, in the form of pre-let
development and with an allowance of up to 5% of GAV in speculative
development (with no pre-let secured). Investment properties under
construction are initially measured at cost (including the transaction costs),
which reflect the Group's investment in the assets. Subsequently, the assets
are remeasured to fair value at each reporting date. The fair value of
investment properties under construction is estimated as the fair value of the
completed asset less any costs still payable in order to complete, which
include an appropriate developer's margin.
Additions to properties include costs of a capital nature only. Expenditure is
classified as capital when it results in identifiable future economic
benefits, which are expected to accrue to the Group. Capitalised expenditure
also includes finance costs incurred on qualifying assets under construction.
All other property expenditure is expensed in the Group profit or loss as
incurred.
Investment properties cease to be recognised when they have been disposed of
or withdrawn permanently from use and no future economic benefit is expected
from disposal. The difference between the net disposal proceeds and the
carrying amount of the asset would result in either gains or losses at the
retirement or disposal of investment property. Any gains or losses are
recognised in the Group Statement of Comprehensive Income in the year of
retirement or disposal.
4.3. Financial instruments
Fair value hierarchy
Level 1: Quoted (unadjusted) market prices in active markets for identical
assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable.
Level 3: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Group determines whether transfers have occurred
between levels in the hierarchy by reassessing categorisation at the end of
each reporting period.
4.3.1. Financial assets
The Group classifies its financial assets into one of the categories discussed
below. The Group's accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises in‑the‑money derivatives and out‑of‑money
derivatives where the time value offsets the negative intrinsic value. They
are carried in the Group Statement of Financial Position at fair value with
changes in fair value recognised in the Group Statement of Comprehensive
Income in the finance income or expense line. It also comprises of
non-controlling minority interest equity investments, the Group has
voluntarily classified these assets to be held at fair value through profit
and loss.
Amortised cost
These assets arise principally from the provision of goods and services to
clients (e.g. trade receivables), but also incorporate other types of
financial assets where the objective is to hold these assets in order to
collect contractual cash flows and contractual cash flows are solely payments
of principal and interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or issue
and are subsequently carried at amortised cost, being the effective interest
rate method, less provision for impairment.
Impairment provisions for current and non‑current trade receivables are
recognised based on the simplified approach within IFRS 9 using a provision
matrix in the determination of the lifetime expected credit losses. During
this process the probability of the non‑payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the expected
loss arising from tenant default (being the failure of a tenant to timely pay
rent due) to determine the lifetime expected credit loss for the trade
receivables. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off against the
associated provision.
The Group's financial assets measured at amortised cost comprise trade and
other receivables and cash and cash equivalents in the Group Statement of
Financial Position.
Cash and cash equivalents includes cash in hand, deposits held at call with
banks and other short-term highly liquid investments with original maturities
of three months or less.
4.3.2. Financial liabilities
The Group classifies its financial liabilities into one of two categories,
depending on the purpose for which the liability was acquired.
The Group's accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises out‑of‑the‑money derivatives where the time
value does not offset the negative intrinsic value. They are carried in the
Group Statement of Financial Position at fair value with changes in fair value
recognised in the Group Statement of Comprehensive Income. Other than these
derivative financial instruments, the Group does not have any liabilities held
for trading nor has it designated any financial liabilities as being at fair
value through profit or loss.
Other financial liabilities
Other financial liabilities include the following items:
Bank borrowings and the Group's loan notes are initially recognised at fair
value net of any transaction costs directly attributable to the issue of the
instrument. Such interest bearing liabilities are subsequently measured at
amortised cost using the effective interest rate method, which ensures that
any interest expense over the period to repayment is at a constant rate on the
balance of the liability carried in the Group Statement of Financial Position.
For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as well as
any interest or coupon payment while the liability is outstanding.
Debt modification
Debt modifications are subject to a qualitative and quantitative test to
determine if a substantial modification has occurred. The outcome of the tests
will determine if the modification should be treated as a substantial
modification under extinguishment accounting or an adjustment to the existing
liability under modification accounting.
4.4. Joint arrangements
The Group is a party to a joint arrangement when there is a contractual
arrangement that confers joint control over the relevant activities of the
arrangement to the Group and at least one other party. Joint control is
assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either:
· joint ventures: where the Group has rights to only the net assets
of the joint arrangement; or
· joint operations: where the Group has both the rights to assets
and obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group
considers:
· the structure of the joint arrangement;
· the legal form of joint arrangements structured through a
separate vehicle;
· the contractual terms of the joint arrangement agreement; and
· any other facts and circumstances (including any other
contractual arrangements).
The Group does not have any joint operations.
Joint ventures are initially recognised in the Group Statement of Financial
Position at cost. Subsequently joint ventures are accounted for using the
equity method, where the Group's share of post-acquisition profits and losses
and other comprehensive income is recognised in the Group Statement of
Comprehensive Income.
Profits and losses arising on transactions between the Group and its joint
ventures are recognised only to the extent of unrelated investors' interests
in the associate. The investor's share in the joint venture's profits and
losses resulting from these transactions is eliminated against the carrying
value of the joint venture.
Any premium paid for an investment in a joint venture above the fair value of
the Group's share of the identifiable assets, liabilities and contingent
liabilities acquired is capitalised and included in the carrying amount of the
investment in joint venture. Provision for impairment in value is made where
there is objective evidence that the investment in a joint venture has been
impaired.
4.5. Goodwill
Goodwill is capitalised as an intangible asset, with any impairment in
carrying value being charged to the Group Statement of Comprehensive Income.
Where the fair value of identifiable assets, liabilities and contingent
liabilities exceed the fair value of consideration paid, the excess is
credited in full to the Group Statement of Comprehensive Income on the
acquisition date as a gain on bargain purchase or negative goodwill.
4.6. Intangible assets
As a result of the acquisition of Tritax Big Box Developments, the DMA between
the Company and Tritax Big Box Developments Management Limited is assessed as
a favourable contract. It is recognised as an intangible asset on the Group
Statement of Financial Position and is amortised over the original eight year
term of the DMA. The favourable element of the DMA was assessed with reference
to a reasonable mark-up that may be expected for these services if the
agreement were set up at arm's-length, discounted over the eight-year period.
4.7. Land options
Land options are classified as non-financial assets as they are non-liquid
assets with no active market and they cannot be readily converted into cash.
The options are exercisable at a future date subject to receiving planning
consent. They are initially carried at cost and are tested for impairment
annually and whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. Where the carrying value of an asset
exceeds its recoverable amount, the higher of value in use and fair value less
costs to sell, the option is written down accordingly as a charge to the Group
Statement of Comprehensive Income. Once the options are exercised and the land
is drawn down, they are transferred into investment property.
4.8. Impairment of assets
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end. Other
non-financial assets including intangible assets, investment in joint ventures
and land options are subject to annual impairment tests, or whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount, the higher of value in use and fair value less costs to sell, the
asset is impaired accordingly.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest group of assets to
which it belongs for which there are separately identifiable cash flows, its
cash-generating units ("CGUs"). Goodwill is allocated on initial recognition
to each of the Group's CGUs that are expected to benefit from a business
combination that gives rise to the goodwill.
Impairment charges are included in Group Statement of Comprehensive Income. An
impairment loss recognised for goodwill is not reversed.
4.9. Business combination
The Group acquires subsidiaries that own investment properties. At the time of
acquisition, the Group considers whether each acquisition represents the
acquisition of a business or the acquisition of an asset. Under the Definition
of a Business (Amendments to IFRS 3 "Business Combinations"), to be considered
a business an acquired set of activities and assets must include, at a
minimum, an input and a substantive process that together significantly
contribute to the ability to create outputs. The optional "concentration test"
is also applied; where substantially all of the fair value of gross assets
acquired is concentrated in a single asset (or a group of similar assets), the
assets acquired would not represent a business. Therefore the Group accounts
for an acquisition as a business combination where an integrated set of
activities is acquired in addition to the property.
Where an acquisition is considered to be a business combination the
consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the Group Statement of Financial
Position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. Any excess of the cost of a business combination over the Group's
interest in the fair value of identifiable assets, liabilities and contingent
liabilities acquired is treated as goodwill. Where the fair value of
identifiable assets, liabilities and contingent liabilities acquired exceeds
the fair value of the purchase consideration, the difference is treated as
gain on bargain purchase and credited to the Group Statement of Comprehensive
Income. The results of acquired operations are included in the Group Statement
of Comprehensive Income from the date on which control is obtained until the
date on which control ceases.
Where such acquisitions are not judged to be the acquisition of a business,
they are not treated as business combinations. Rather, the cost to acquire the
corporate entity is allocated between the identifiable assets and liabilities
of the entity based upon their relative fair values at the acquisition date.
Accordingly, no goodwill or additional deferred tax arises.
Where amounts payable for the acquisition of a business are subject to a
contingent consideration arrangement in which the payments are automatically
forfeited if employment terminates, the amounts are treated as remuneration
for post-combination services rather than consideration for the acquisition of
a business.
4.10. Share-based payments
The Company entered into an agreement with the Tritax Big Box Development
Shareholders where future amounts payable are based on the Adjusted NAV of
Tritax Big Box Developments Limited and subject to certain provisions around
continuing employment. 25% of the amounts payable are to be settled in cash
with the remaining 75% settled in cash or shares at the discretion of the
Company. Where the Company had a present obligation to settle the amounts in
cash, either through its stated intention or past practice, the Company
accounted for the amounts as cash settled share-based payments. The fair value
of the cash settled obligation was recognised over the vesting period and
presented as a liability in the Group Statement of Financial Position. The
liability was remeasured at each reporting date with the charge to the profit
or loss updated over the vesting period.
4.11. Property income
4.11.1. Rental income
Rental income arising from operating leases on investment property is
accounted for on a straight‑line basis over the lease term and is included
in gross rental income in the Group Statement of Comprehensive Income. A
rental adjustment is recognised from the rent review date in relation to
unsettled rent reviews, where the Directors are reasonably certain that the
rental uplift will be agreed. Initial direct costs incurred in negotiating and
arranging an operating lease are recognised as an expense over the lease term
on the same basis as the lease income. Rental income is invoiced, either
monthly or quarterly in advance, and for all rental income that relates to a
future period this is deferred and appears within current liabilities on the
Group Statement of Financial Position.
For leases, which contain fixed or minimum uplifts, the rental income arising
from such uplifts is recognised on a straight‑line basis over the lease
term.
Tenant lease incentives are recognised as a reduction of gross rental income
on a straight‑line basis over the term of the lease. The lease term is the
non‑cancellable period of the lease together with any further term for which
the tenant has the option to continue the lease where, at the inception of the
lease, the Directors are reasonably certain that the tenant will exercise that
option.
When the Group enters into a pre-let development agreement no rental income is
recognised under the agreement for lease until practical completion has taken
place, at which point rental income is recognised in the Group Statement of
Comprehensive Income from the rent commencement date.
4.11.2. Other operating income
The other operating income is generated through the Group providing
development management services to third parties. It is recognised on an
accruals basis in the period in which the services have been rendered,
performance obligations have been satisfied and a significant reversal is not
expected in future periods.
4.12. Taxation
Taxation on the profit or loss for the period not exempt under UK REIT
regulations comprises current and deferred tax. Current tax is expected tax
payable on any profit not relating to the property rental business for the
year, using tax rates enacted or substantively enacted at the year-end date,
including any adjustment to tax payable in respect of previous years. A
deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
5. New standards issued
5.1 New standard issued and effective from 1 January 2024
The following standard and amendment to existing standards has been applied in
preparing the financial statements.
The following amendments are effective for the period beginning 1 January
2024:
· Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants - Amendments to IAS 1.
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16.
· Disclosures: Supplier Finance Arrangements - Amendments to IAS 7
and IFRS 7.
There was no material effect from the adoption of the above-mentioned
amendments to IFRS effective in the period. They have no significant impact to
the Group as they are either not relevant to the Group's activities or require
accounting which is already consistent with the Group's current accounting
policies.
5.2. New standards issued but not yet effective
The following standards and amendments are effective for the annual reporting
period beginning 1 January 2027:
· IFRS 18 "Presentation and Disclosure in Financial Statements"
and;
· IFRS 19 "Subsidiaries without Public Accountability:
Disclosures".
The Group is assessing the impact of IFRS 18, issued by the IASB in April
2024, which replaces IAS 1 and introduces major amendments to IFRS Standards,
including IAS 8. While IFRS 18 does not affect recognition or measurement, it
will significantly impact presentation and disclosure, including, but not
limited to profit or loss categorization, aggregation/disaggregation,
labelling, and management-defined performance measures. The Group does not
expect to be eligible to apply IFRS 19.
There are no standards that are not yet effective that would be expected to
have a material impact on the Group in the current or future reporting periods
and on the foreseeable future transactions.
6. Total property income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Rental income - freehold property 225.5 175.3
Rental income - long leasehold property 33.8 30.5
Spreading of tenant incentives and guaranteed rental uplifts 21.4 16.2
Other income 0.4 0.2
Gross rental income 281.1 222.2
Property insurance recoverable 4.9 4.5
Service charges recoverable 8.2 1.7
Total property insurance and service charge income 13.1 6.2
Total property income 294.2 228.4
There was one individual tenant representing more than 10% of gross rental
income, constituting £37.3 million of rental income in 2024 (2023: £32.6
million).
7. Service charge expense
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Property insurance expense 5.2 4.6
Service charge expense 10.4 1.7
Total property expenses 15.6 6.3
8. Other operating income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
DMA income 67.4 -
Sale of land 18.9 -
Total other operating income 86.3 -
9. Other operating costs
Year ended Year ended
31 December 31 December
2024 2023
£m £m
DMA expense 47.2 -
Cost of land 16.1 -
Total other operating costs 63.3 -
10. Administrative and other expenses
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Investment management fees 24.6 22.0
Directors' remuneration (note 11) 0.5 0.5
Auditor's fees:
Fees payable for the audit of the Company's annual accounts 0.8 0.4
Fees payable for the review of the Company's interim accounts 0.1 0.1
Fees payable for the audit of the Company's subsidiaries 0.1 0.1
Total Auditor's fee 1.0 0.6
Development management fees 1.0 1.0
Corporate administration fees 0.8 0.6
Regulatory fees 0.2 0.2
Legal and professional fees 1.8 1.6
Marketing and promotional fees 1.6 0.6
Other costs 2.2 1.8
Total administrative and other expenses 33.7 28.9
11. Directors' remuneration
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Directors' fees 0.4 0.4
Employer's National Insurance 0.1 0.1
Total directors' remuneration 0.5 0.5
12. Finance income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interest received on bank deposits 0.7 0.2
Interest received on swaps and other derivatives 7.7 10.2
Total finance income 8.4 10.4
13. Finance expense
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interest payable on bank borrowings 36.9 23.7
Interest payable on loan notes 29.8 29.7
Commitment fees payable on bank borrowings 2.7 2.0
Unwinding of deferred consideration 0.4 0.1
Amortisation of loan arrangement fees 4.3 4.4
Unwinding of discount on fixed rate debt 3.8 -
77.9 59.9
Borrowing costs capitalised against development properties(1) (6.0) (4.6)
Total finance expense 71.9 55.3
(1) The rate at which interest is capitalised is the Group's weighted average
cost of debt, as detailed in note 26.
14. Taxation
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Tax charge 0.3 0.6
The UK corporation tax rate for the financial year is 25%. Accordingly, this
rate has been applied in the measurement of the Group's tax liability at 31
December 2024.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Profit on ordinary activities before taxation 445.8 70.6
Theoretical tax at UK corporation tax rate of 25% (31 December 2023: 23.5%) 111.5 16.6
REIT exempt income (50.2) (37.3)
Non-taxable items (62.3) 15.6
Residual losses 1.3 5.7
Total tax charge 0.3 0.6
Non‑taxable items include income and gains that are derived from the
property rental business and are therefore exempt from UK corporation tax in
accordance with Part 12 of CTA 2010.
REIT exempt income includes property rental income that is exempt from UK
corporation tax in accordance with Part 12 of CTA 2010.
The current year tax asset of £2.0 million relates to tax over paid on
anticipated non-property profits arising in the year. The prior year there was
a current liability of £0.3 million.
A deferred tax liability is recognised for appropriation tax charges of £1.9
million (2023: £1.9 million) in relation to the business combination which
occurred in 2019.
A deferred tax asset is not recognised for UK revenue losses or capital losses
where their future utilisation is uncertain. At 31 December 2024, the total of
such losses was £52.5 million (2023: £41.0 million) and the potential tax
effect of these was £13.1 million (2023: £10.3 million)
15. Earnings per share
Earnings per share "EPS" are calculated by dividing profit for the period
attributable to ordinary equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the period.
The calculation of basic and diluted earnings per share is based on the
following:
For the year ended 31 December 2024 Net profit attributable to Ordinary Shareholders Weighted average number of Ordinary Shares(1) Earnings per share
£m '000 pence
EPS - basic and diluted 445.5 2,264,719 19.67p
Adjustments to remove:
Changes in fair value of investment property (243.7)
Changes in fair value of interest rate derivatives 5.3
Share of profit from joint ventures (0.1)
Gain on disposal of investment properties (8.4)
Amortisation of other property assets 0.6
Changes in fair value of financial asset (0.9)
Impairment of intangible contract and other property assets 4.0
EPRA EPS (1) - basic and diluted 202.3 2,264,719 8.93p
Adjustments to include:
Fixed rental uplift adjustments (8.9)
Amortisation of loan arrangement fees and intangibles 4.1
Unwinding of discount on fixed rate debt and deferred consideration 4.2
Adjusted EPS (1) - basic and diluted 201.7 2,264,719 8.91p
1. Based on the weighted average number of Ordinary Shares in issue throughout
the year.
For the year ended 31 December 2023 (Restated, due to change in EPRA guidance) Net profit attributable to Ordinary Shareholders Weighted average number of Ordinary Shares(1) Earnings per share
£m '000 pence
EPS - basic and diluted 70.0 1,881,931 3.72p
Adjustments to remove:
Changes in fair value of investment property 38.1
Changes in fair value of interest rate derivatives 11.2
Share of profit from joint ventures (0.4)
Loss on disposal of investment properties 1.6
Share of profit from joint ventures 2.30
Changes in fair value of financial asset 0.1
Impairment of intangible contract and other property assets 0.4
EPRA EPS (2) - basic and diluted (restated) 123.3 1,881,931 6.55p
Adjustments to include:
Share-based payment charge 2.9
Fair value movement in contingent consideration 0.4
Extinguishment of B & C share liabilities(4) 21.1
Fixed rental uplift adjustments (6.2)
Amortisation of loan arrangement fees and intangibles 4.4
Adjusted EPS(2) - basic and diluted (restated) 145.9 1,881,931 7.75p
For the year ended 31 December 2023 (reported) Net profit attributable to Ordinary Shareholders Weighted average number of Ordinary Shares(1) Earnings per share
£m '000 pence
EPS - basic and diluted 70.0 1,881,931 3.72p
Adjustments to remove:
Changes in fair value of investment property 38.1
Changes in fair value of interest rate derivatives 11.2
Finance income received on interest rate derivatives(3) (10.2)
Share of profit from joint ventures (0.4)
Loss on disposal of investment properties 1.6
Share of profit from joint ventures 2.30
Changes in fair value of financial asset 0.1
Impairment of intangible contract and other property assets 0.4
EPRA EPS (2) - basic and diluted (reported) 113.1 1,881,931 6.01p
Adjustments to include:
Share-based payment charge 2.9
Fair value movement in contingent consideration 0.4
Extinguishment of B & C share liabilities(4) 21.1
Fixed rental uplift adjustments (6.2)
Amortisation of loan arrangement fees and intangibles 4.4
Finance income received on interest rate derivatives(3) 10.2
Adjusted EPS(2) - basic and diluted (reported) 145.9 1,881,931 7.75p
1. Based on the weighted average number of Ordinary Shares in issue throughout
the year.
2. Based on the weighted average number of Ordinary Shares in issue throughout
the year, plus potentially issuable dilutive shares.
3. In accordance with the EPRA guidance the finance income received on
interest rate derivatives was taken out of EPRA Earnings and was added back
into Adjusted Earnings as it gave a better reflection of the Group's net
interest expense which was supported by cash flows. During 2024 this guidance
has since change and it is no longer required to be excluded from the ERPA EPS
and the prior year has been restated to reflect this change.
4. This is a one-off charge in the prior year relating to the B &C
settlement (please refer to note 25 for further details).
Adjusted earnings is a performance measure used by the Board to assess the
Group's dividend payments. The metric reduces EPRA earnings by other non-cash
items credited or charged to the Group Statement of Comprehensive Income, such
as fixed rental uplift adjustments and amortisation of loan arrangement fees.
Fixed rental uplift adjustments relate to adjustments to net rental income on
leases with fixed or minimum uplifts embedded within their review profiles.
The total minimum income recognised over the lease term is recognised on a
straight-line basis and therefore not fully supported by cash flows during the
early term of the lease, but this reverses towards the end of the lease.
Share-based payment charges related to the B and C Shareholders. Whilst
impacting on earnings in the prior year, this value was considered capital in
nature from the perspective it relates to a B&C Share equity holding in
Tritax Big Box Developments Limited. It was therefore removed from Adjusted
earnings.
16. Dividends paid
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Fourth interim dividend in respect of period ended 31 December 2023 at 2.050 39.0 36.9
pence per Ordinary Share (fourth interim for 31 December 2022 at 1.975 pence
per Ordinary Share)
First interim dividend in respect of year ended 31 December 2024 at 1.825 45.3 32.7
pence per Ordinary Share (31 December 2023: 1.750 pence)
Second interim dividend in respect of year ended 31 December 2024 at 1.825 45.3 32.7
pence per Ordinary Share (31 December 2023: 1.750 pence)
Third interim dividend in respect of year ended 31 December 2024 at 1.825 45.3 33.3
pence per Ordinary Share (31 December 2023: 1.750 pence)
Total dividends paid 174.9 135.6
Total dividends paid for the year (pence per share) 5.475 5.250
Total dividends unpaid but declared for the year (pence per share) 2.185 2.050
Total dividends declared for the year (pence per share) 7.660 7.300
On 27 February 2025, the Company approved the fourth interim dividend for
declaration in respect of the year ended 31 December 2024 of 2.185 pence per
share payable on 28 March 2025. The total dividends declared for the year of
7.66 pence are all property income distribution ("PID").
17. Investment property
In accordance with IAS 40, investment property is stated at fair value as at
31 December 2024. The investment property has been independently valued by
CBRE Limited ("CBRE"), Jones Lang LaSalle Limited ("JLL") and Colliers
International Valuation UK LLP ("Colliers"), they are accredited independent
valuers with recognised and relevant professional qualifications and with
recent experience in the locations and categories of the investment properties
being valued. CBRE and JLL value all investment property with leases attached
or assets under construction. Colliers values all land holdings and land
options. The valuations have been prepared in accordance with the RICS
Valuation - Global Standards January 2022 (the "Red Book") and incorporate the
recommendations of the International Valuation Standards and the RICS
Valuation - Professional Standards UK January 2014 (revised April 2015) which
are consistent with the principles set out in IFRS 13.
The valuers, in forming their opinion, make a series of assumptions, which are
market related, such as Net Initial Yields and expected rental values, and are
based on the valuer's professional judgement. The valuers have sufficient
current local and national knowledge of the particular property markets
involved and has the skills and understanding to undertake the valuations
competently. There have been no changes to the assumptions made in the year as
a result of a range of factors including the macro-economic environment,
availability of debt finance and physical and transition risks relating to
climate change.
The valuers of the Group's property portfolio have a working knowledge of the
various ways that sustainability and environmental, social and governance
factors can impact value and have considered these, and how market
participants are reflecting these in their pricing, in arriving at their
Opinion of Value and resulting valuations as at the date of the Statement of
Financial Position. Currently, assets with the highest standards of ESG are
commanding higher rental levels, have lower future capital expenditure
requirements, and are transacting at lower yields.
The valuations are the ultimate responsibility of the Directors. Accordingly,
the critical assumptions used in establishing the independent valuation are
reviewed by the Board.
All corporate acquisitions during the year and prior year have been treated as
asset purchases rather than business combinations because they are considered
to be acquisitions of properties rather than businesses.
Investment property freehold Investment property long leasehold Investment property under construction Total
£m £m £m £m
As at 1 January 2024 4,004.3 580.9 258.4 4,843.6
Property additions (1) 1,090.5 93.8 210.7 1,395.0
Fixed rental uplift and tenant lease incentives(2) 20.5 1.9 - 22.4
Disposals (134.6) - (22.2) (156.8)
Transfer of completed property to investment property 188.4 - (188.4) -
Transfer from land options - - 21.9 21.9
Transfer to assets held for sale (326.1) (34.0) (80.3) (440.4)
Change in fair value during the year 158.5 19.5 65.7 243.7
As at 31 December 2024 5,001.5 662.1 265.8 5,929.4
Investment property freehold Investment property long leasehold Investment property under construction Total
£m £m £m £m
As at 1 January 2023 3,811.2 637.2 398.9 4,847.3
Property additions 109.1 0.1 195.8 305.0
Fixed rental uplift and tenant lease incentives(2) 20.3 0.7 - 21.0
Disposals (256.2) (52.2) - (308.4)
Transfer of completed property to investment property 357.2 - (357.2) -
Transfer from land options - - 16.8 16.8
Change in fair value during the year (37.3) (4.9) 4.1 (38.1)
As at 31 December 2023 4,004.3 580.9 258.4 4,843.6
(1) Acquisitions include UKCM assets at a valuation of £1,216.9 million less
a price discount on acquisition of £67.8 million and other acquisitions
of £245.9 million (refer to note 37).
(2) Included within the carrying value of Investment property is £114.0
million (31 December 2023: £91.6 million) in respect of accrued contracted
rental uplift income. This balance arises as a result of the IFRS treatment of
leases with fixed or minimum rental uplifts and rent‑free periods, which
requires the recognition of rental income on a straight‑line basis over the
lease term. The difference between this and cash receipts changes the carrying
value of the property against which revaluations are measured.
31 December 31 December
2024 2023
£m £m
Investment property at fair value per Group Statement of Financial Position 5,929.4 4,843.6
Assets held for sale 440.4 -
Total investment property valuation 6,369.8 4,843.6
The Group has other capital commitments which represent financial commitments
made in respect of direct construction, asset management initiatives and
development land. The Group had also completed on the purchase of an
investment asset at year end (refer to note 35).
Fees payable under the DMA totalling £2.5 million (2023: £nil) have been
capitalised in the year, being directly attributable to completed development
projects during the year.
Fair value hierarchy
The Group considers that all of its investment properties fall within Level 3
of the fair value hierarchy as defined by IFRS 13. There have been no
transfers between Level 1 and Level 2 during any of the periods, nor have
there been any transfers between Level 2 and Level 3 during any of the
periods.
The valuations have been prepared on the basis of market value ("MV"), which
is defined in the RICS Valuation Standards, as:
"The estimated amount for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's‑length
transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion."
Market value as defined in the RICS Valuation Standards is the equivalent of
fair value under IFRS.
The following descriptions and definitions relating to valuation techniques
and key unobservable inputs made in determining fair values are as follows:
Valuation techniques
The yield methodology approach is used when valuing the Group's properties
which uses market rental values capitalised with a market capitalisation rate.
This is sense-checked against the market comparable method (or market
comparable approach) where a property's fair value is estimated based on
comparable transactions in the market.
For investment property under construction and the land held for development,
the properties are valued using both the residual method approach and
comparable method approach. Under the residual approach, the valuer initially
assesses the investment value (using the above methodology for completed
properties). Then, the total estimated costs to complete (including notional
finance costs and developer's profit) are deducted from the value to take into
account the hypothetical purchaser's management of the remaining development
process and their perception of risk with regard to construction and the
property market (such as the potential cost overruns and letting risks). Under
the comparable approach, the value of the land is considered in the context of
market transactions and what a hypothetical purchaser may pay for the land,
typically on a per acre basis. It is common for the valuer to consider both
approaches when formulating their opinion of value, where appropriate. Land
values are sense-checked against the rate per acre derived from actual market
transactions.
The key unobservable inputs made in determining fair values are as follows:
Unobservable input: estimated rental value ("ERV")
The rent per square foot at which space could be let in the market conditions
prevailing at the date of valuation.
Passing rents are dependent upon a number of variables in relation to the
Group's property. These include: size, location, tenant covenant strength and
terms of the lease.
Unobservable input: Net Initial Yield
The Net Initial Yield is defined as the initial gross income as a percentage
of the market value (or purchase price as appropriate) plus standard costs of
purchase.
31 December 2024 Unobservable Inputs
ERV range ERV average Net Initial Yield Net Initial Yield
Industrials £ psf £ psf range% average%
South East 6.25 - 19.00 11.52 3.99 - 5.94 4.51
South West 7.00 - 12.07 8.34 3.99 - 4.92 4.57
East Midlands 3.18 - 9.00 7.80 3.55 - 5.46 4.55
West Midlands 7.32 - 10.74 8.80 3.87 - 6.44 4.78
North East 4.90 - 8.00 6.42 4.39 - 5.74 4.93
North West 5.01 - 11.50 8.73 4.10 - 5.72 4.95
Scotland 5.03 - 7.15 6.14 5.50 - 7.53 6.10
ERV range ERV average Net Initial Yield Net Initial Yield
Non-strategic £ psf £ psf range% average%
Office 22.31 - 39.19 30.13 6.72 - 12.85 8.86
Retail 16.59 - 30.88 23.69 5.69 - 7.40 6.51
Alternative 13.63 - 44.20 23.96 4.88 - 14.40 6.66
31 December 2023 Unobservable Inputs
ERV range ERV average Net Initial Yield Net Initial Yield
£ psf £ psf range% average%
South East 5.46 - 16.81 10.20 3.86 - 5.82 4.77
South West 6.50 - 6.50 6.50 4.75 - 4.75 4.75
East Midlands 6.39 - 11.25 7.88 3.75 - 5.82 4.72
West Midlands 6.82 - 9.96 8.10 3.27 - 6.00 4.54
Yorkshire and the Humber 6.20 - 8.00 6.99 4.32 - 6.00 4.96
North East 3.91 - 4.25 4.08 4.75 - 4.83 4.79
North West 5.00 - 11.25 7.95 4.23 - 5.75 4.90
Sensitivities of measurement of significant unobservable inputs
As set out within significant accounting estimates and judgements above, the
Group's property portfolio valuation is open to judgements and is inherently
subjective by nature.
As a result the following sensitivity analysis has been prepared:
-5% in passing rent +5% in passing rent +0.25% Net Initial yield -0.25% Net Initial Yield
£m £m £m £m
(Decrease)/increase in the fair value of investment properties as at 31 (283.2) 283.2 (282.6) 313.9
December 2024
(Decrease)/increase in the fair value of investment properties as at 31 (229.3) 229.3 (238.2) 265.9
December 2023
The above includes data from the standing portfolio and does not include data
from investment properties under construction. No reasonable change in
unobservable inputs in relation to investment properties under construction
would have a material impact on the carrying value of investment properties.
18. Investment in land options
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Opening balance 157.4 157.4
Costs capitalised in the year 16.9 16.8
Transferred to investment property (21.9) (16.8)
Impairment (3.6) -
Closing balance 148.8 157.4
The average maturity date across land options held is approximately 7.4 years
(2023: 8.0 years) term remaining.
Fees payable under the DMA totalling £2.2 million (2023: £5.9 million) have
been capitalised in the year, being directly attributable to the ongoing
development projects.
19. Investment in joint ventures
As at 31 December 2024 the Group has two joint ventures which have been equity
accounted for.
The Group has the following joint ventures as at 31 December 2024:
Principal activity Country of incorporation Ownership
Joint venture partner
HBB (J16) LLP Property development UK 50% HB Midway Limited
Magnitude Land LLP Property investment UK 50% Pochin Midpoint Limited
The registered office for the above joint ventures is: Unit B, Grange Park
Court, Roman Way, Northampton, England NN4 5EA.
31 December 2024 31 December 2023
Net investment Total 100% Group's share Total 100% Group's share
£m £m £m £m
At beginning of year 49.6 24.8 54.4 27.2
Total comprehensive income 0.2 0.1 0.8 0.4
Impairment of JV asset (0.2) (0.1) (4.6) (2.3)
Capital repaid (0.8) (0.4) (1.6) (0.8)
Cash contributed - - 0.6 0.3
As at 31 December 2024 48.8 24.4 49.6 24.8
The joint ventures have a 31 December year end. The aggregate amounts
recognised in the Group Statement of Financial Position and Statement of
Comprehensive Income are as follows:
Comprehensive Income Statement 31 December 2024 31 December 2023
Year ended 31 December 2024 Total 100% Group's share Total 100% Group's share
£m £m £m £m
Net income 0.6 0.3 0.8 0.4
Administrative expenses - - - -
Profit before taxation 0.6 0.3 0.8 0.4
Taxation - - - -
Total comprehensive Profit 0.6 0.3 0.8 0.4
Statement of Financial Position 31 December 2024 31 December 2023
As at 31 December 2024 Total 100% Group's share Total 100% Group's share
£m £m £m £m
Investment property 5.4 2.7 4.8 2.4
Options to acquire land 43.2 21.6 43.2 21.6
Non-current assets 48.6 24.3 48.0 24.0
Other receivables - - - -
Cash 0.6 0.3 1.9 1.0
Current assets 0.6 0.3 1.9 1.0
Trade and other payables (0.4) (0.2) (0.3) (0.2)
Current liabilities (0.4) (0.2) (0.3) (0.2)
Net assets 48.8 24.4 49.6 24.8
20. Assets held for sale
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Industrial 79.0 -
Land 29.4 -
Non-strategic 332.0 -
Assets held for sale 440.4 -
As shown above, assets held for sale relate to one industrial asset which
completed on 11 February 2025, one piece of land which forms part of a DMA
contract which completed on 6 January 2025 and 10 non-strategic assets
acquired a part of the UKCM acquisition which management has committed to a
plan to dispose of these assets, with disposal expected to occur within a 12
month period.
Please refer to note 17 details into the inputs and assumptions used in
determining the fair value of these assets as at 31 December 2024.
21. Investments
The Group comprises a number of Special Purpose Vehicle (SPV) subsidiaries.
All SPV subsidiaries that form these financial statements are noted within the
Company financial statements in note 5.
22. Trade and other receivables
Non-current trade and other receivables Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash in public institutions 3.9 1.0
The cash in public institutions is a deposit of £3.9 million paid by certain
tenants to the Company, as part of their lease agreements.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Trade receivables 26.5 9.4
Prepayments, accrued income and other receivables 29.5 7.4
VAT - 5.2
Total trade and other receivables 56.0 22.0
The carrying value of trade and other receivables classified at amortised cost
approximates fair value. The increase in trade receivables in the period was
due to an increase in receivables relating to DMA projects as well as the
acquisition of UKCM.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
To measure expected credit losses on a collective basis, trade receivables are
grouped based on similar credit risk and ageing.
The expected loss rates are based on the Group's historical credit losses
experienced over the three‑year period prior to the year end. The historical
loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's clients. The expected credit loss
provision as at 31 December 2024 was £0.6 million (31 December 2023: £0.3
million). No reasonably possible changes in the assumptions underpinning the
expected credit loss provision would give rise to a material expected credit
loss.
23. Cash held at bank
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash and cash equivalents 80.6 36.2
Restricted cash - 0.2
Total cash held at bank 80.6 36.4
Restricted cash is cash where there is a legal restriction to specify its type
of use, i.e. this may be where there is a joint arrangement with a tenant
under an asset management initiative.
Cash and cash equivalents reported in the Consolidated Statement of Cash Flows
totalled £80.6 million (2023: £36.2 million) as at the year end, which
excludes long‑term restricted and ring-fenced cash deposits totalling £nil
million (2023: £0.2 million). Total cash held at bank as reported in the
Group Statement of Financial Position is £80.6 million (2023: £36.4
million).
24. Trade and other payables
Year ended Year ended
31 December 31 December
2024 2023
Non-current trade and other payables £m £m
Other payables 3.9 1.0
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Trade and other payables 72.5 57.4
Bank loan interest payable 12.1 9.3
Deferred consideration 4.3 4.8
VAT 5.2 -
Accruals 18.4 35.4
Total trade and other payables 112.5 106.9
The carrying value of trade and other payables classified as financial
liabilities measured at amortised cost approximates fair value.
25. Amounts that were due to B and C Shareholders
Amounts that were due to B and C Shareholders comprised the fair value of the
contingent consideration element of B and C Shares along with the fair value
of the obligation under the cash settled share-based payment element of B and
C Shares.
Amounts that were due to B and C Shareholders are detailed in the table below:
31 December 2023 Contingent consideration Share-based payment Extinguishment Fair value
£m £m £m £m
Opening balance 25.6 16.6 - 42.2
Fair value movement recognised 0.4 - - 0.4
Share-based payment charge - 2.9 - 2.9
Extinguishment of B and C share liabilities - - 21.1 21.1
Settlement of liabilities (26.0) (19.5) (21.1) (66.6)
Closing balance - - - -
The Group considered that the amounts due to the B and C Shareholders fall
within Level 3 of the fair value hierarchy as defined by IFRS 13. There have
been no transfers between Level 1 and Level 2 during any of the periods, nor
have there been any transfers between Level 2 and Level 3 during any of the
periods.
26. Borrowings
The Group has a £300 million and £500 million sustainably linked unsecured
revolving credit facility (RCF), providing significant operational
flexibility. Both facilities are provided by a syndicate of large
multi-national banks.
During the period, the Group acquired an undrawn RCF of £150 million through
the acquisition of UKCM on 16 May 2024. This facility was extinguished on 24
July 2024, and the Group entered into a new £150 million RCF agreement on the
same date. This RCF includes a fixed element of £75 million, drawn at
inception, with the remaining £75 million being variable. The loan matures on
24 July 2026, although the facility benefits from two one year extension
periods.
The Group also extended the term of the £500 million RCF by one year, from 12
October 2028 to 12 October 2029. This extension was not considered a
substantial modification as there were no significant changes to the loan's
terms and conditions.
As of 31 December 2024, 63% (December 2023: 61%) of the Group's drawn debt is
fixed term, with 37% floating term (December 2023: 39%). Including interest
rate hedging, the Group has fixed term or hedged facilities totalling 93.4% of
drawn debt as of 31 December 2024 (December 2023: 96%).
The weighted average cost of debt was 3.05% as of 31 December 2024 (December
2023: 2.93%). On the same date, the Group had undrawn debt commitments of
£519.0 million (31 December 2023: £531.0 million).
To remain compliant with its tightest financial covenants, the Group must
maintain an interest cover above 1.5x, a loan-to-value ratio below 60%, and a
gearing ratio below 150%. As at 31 December 2024, the Group had an interest
cover of 4.4x, a loan-to-value ratio of 28.8%, and a gearing ratio of 42.8%.
Consequently, the Group has adhered to all these covenants throughout the year
and is also expected to comfortably meet these targets over the next twelve
months.
A large part of the Group's borrowings are unsecured financing arrangements.
Below is a summary of the drawn and undrawn bank borrowings for the period:
Bank borrowings Bank borrowings Total
drawn undrawn £m
£m £m
As at 1 January 2024 481.9 531.0 1,012.9
Bank borrowings drawn in the year under existing facilities 265.0 (265.0) -
Bank borrowings repaid in the year under existing facilities (178.0) 178.0 -
Book value of UKCM borrowings 200.0 - 200.0
New bank borrowing facility 75.0 75.0 150.0
As at 31 December 2024 843.9 519.0 1,362.9
Bank borrowings Bank borrowings Total
drawn undrawn £m
£m £m
As at 1 January 2023 479.9 483.0 962.9
Bank borrowings drawn in the year under existing facilities 215.0 (215.0) -
Bank borrowings repaid in the year under existing facilities (260.0) 260.0 -
Cancellation of bank borrowing facility (147.0) (303.0) (450.0)
New bank borrowing facility 194.0 306.0 500.0
As at 31 December 2023 481.9 531.0 1,012.9
31 December 31 December
2024 2023
£m £m
Bank borrowings drawn: due in more than one year 843.9 481.9
Less: unamortised costs on bank borrowings (6.7) (7.2)
Fair value gain on UKCM borrowings on acquisition (25.5) -
Total net drawn bank borrowings 811.7 474.7
Bonds 31 December 31 December
2024 2023
£m £m
2.625% Bonds 2026 249.8 249.7
3.125% Bonds 2031 248.3 248.0
2.860% USPP 2028 250.0 250.0
2.980% USPP 2030 150.0 150.0
1.500% Green Bonds 2033 247.4 247.1
Less: unamortised costs on loan notes (3.7) (4.3)
Total net bonds 1,141.8 1,140.5
The weighted average term to maturity of the Group's debt as at the year end
is 4.5 years (31 December 2023: 5.2 years).
Maturity of borrowings
31 December 31 December
2024 20
23
£m £m
Repayable between one and two years 424.0 -
Repayable between two and five years 819.9 909.9
Repayable in over five years 750.0 722.0
Total borrowings repayable 1,993.9 1,631.9
27. Financial instruments and fair values
27.1. Financial assets
31 December 31 December
2024 2023
£m £m
Non-current assets: financial asset 3.2 2.3
On 31 March 2023, the Group retained a 4% interest after the disposal of
certain investment properties. The asset is valued using Level 2 observable
inputs.
31 December 31 December
2024 2023
£m £m
Financial asset valuation brought forward 2.3 -
Additions - 2.4
Changes in fair value of financial asset 0.9 (0.1)
Total finances assets 3.2 2.3
27.2. Interest rate derivatives
To manage the interest rate risk from variable rate loans, the Group has
entered into several interest rate derivatives. These include interest rate
caps and one interest rate swap, which fix or cap the rate to which compounded
SONIA can rise. These derivatives match the initial term of the respective
loans.
As of the year end, the weighted average capped rate, excluding any margin
payable, was 2.59% (2023: 2.43%). This effectively caps the level to which
SONIA can rise on £349.3 million (2023: £249.3 million) of notional hedged
debt, limiting the impact of an interest rate rise on this amount. The
interest rate derivatives ensure that 93.4% of the Group's drawn borrowings at
the year end have a fixed or hedged interest rate. The Group's weighted
average cost of debt at year end was 3.05% (2023: 2.93%). The total premium
paid during the year to secure the interest rate caps was £1.8 million (2023:
£2.4 million).
The Group aims to hedge at least 90% of its total drawn debt portfolio using
interest rate derivatives or fixed-rate loan arrangements.
As of the year end, the total proportion of drawn debt either hedged via
interest rate derivatives or subject to fixed-rate loan agreements was 93.4%,
as shown below:
31 December 31 December
2024 2023
£m £m
Non-current assets: interest rate derivatives 7.6 11.1
The interest rate derivatives are valued by the relevant counterparty banks on
a quarterly basis in accordance with IFRS 9. Any movement in the
mark-to-market values of the derivatives are taken to the Group Statement of
Comprehensive Income.
31 December 31 December
2024 2023
£m £m
Interest rate derivative valuation brought forward 11.1 19.9
Premium paid 1.8 2.4
Changes in fair value of interest rate derivatives (5.3) (11.2)
Total interest rate derivatives 7.6 11.1
31 December 31 December
2024 2023
Drawn Drawn
£m £m
Total borrowings drawn (note 26) 1,993.9 1,631.9
Notional value of effective interest rate derivatives and fixed-rate loans 1,862.3 1,561.4
Proportion of hedged debt 93.4% 95.7%
Fair value hierarchy
The fair value of Group's interest rate derivatives is recorded in the Group
Statement of Financial Position and is determined by forming an expectation
that interest rates will exceed strike rates and discounting these future cash
flows at the prevailing market rates as at the year end. This valuation
technique falls within Level 2 of the fair value hierarchy as defined by IFRS
13. There have been no transfers between Level 1 and Level 2 during any of the
years, nor have there been any transfers between Level 2 and Level 3 during
any of the years.
28. Financial risk management
Financial instruments
The Group's principal financial assets and liabilities are those that arise
directly from its operations: trade and other receivables, trade and other
payables and cash held at bank. The Group's other principal financial assets
and liabilities are bank borrowings and interest rate derivatives. The main
purpose of bank borrowings and derivatives is to finance the acquisition and
development of the Group's investment property portfolio and hedge against the
interest rate risk arising.
Set out below is a comparison by class of the carrying amounts and fair value
of the Group's financial instruments that are carried in the financial
statements:
Book value Fair value Book value Fair value
31 December 31 December 31 December 31 December
2024 2024 2023 2023
£m £m £m £m
Financial assets
Interest rate derivatives 7.6 7.6 2.3 2.3
Trade and other receivables(1) 26.5 26.5 9.4 9.4
Cash held at bank 80.6 80.6 36.4 36.4
Financial liabilities
Trade and other payables(2) 107.3 107.3 90.1 90.1
Borrowings 1,989.4 1,797.0 1,626.7 1,485.3
1. Excludes certain VAT, prepayments and other debtors.
2. Excludes tax and VAT liabilities.
Financial assets, interest rate derivatives are the only financial instruments
measured at fair value through profit and loss. All other financial assets and
all financial liabilities are measured at amortised cost. All financial
instruments were designated in their current categories upon initial
recognition.
The following table sets out the fair value of those financial liabilities
measured at amortised cost where there is a difference between book value and
fair value.
Total Quoted prices in active markets Significant observable inputs Significant unobservable inputs
(Level 1) (Level 2) (Level 3)
Date of valuation £m £m £m £m
Borrowings 31 December 2024 1,315.1 992.5 322.6 -
Borrowings 31 December 2023 1,165.4 1,012.1 153.3 -
The Group has four fixed-rate loans totalling £362.0 million, provided by
PGIM (£90.0 million), Canada Life (£72.0 million) and Barings (£200.0
million). The fair value is determined by discounting the delta between
contractual and market cash flows at a weighted average cost of capital
discount rate. Market cash flows were built using the 12-year UK Gilt of 4.74%
with an implied margin of 1.99% for the 2027 loan and 1.90% for the 2031 loan.
The loans are considered to be a Level 2 fair value measurement. For all other
bank loans there is considered no other difference between fair value and
carrying value.
The fair value of financial liabilities traded on active liquid markets,
including the 2.625% Bonds 2026, 3.125% Bonds 2031, 1.5% Bonds 2033, 2.860%
USPP 2028 and 2.980% USPP 2030, is determined with reference to the quoted
market prices. These financial liabilities are considered to be a Level 1 fair
value measure.
The fair value of the financial liabilities at Level 1 fair value measure were
£992.5 million (2023: £1,012.1 million) and the financial liabilities at
Level 2 fair value measure were £322.6 million (2023: £153.3 million).
Risk management
The Group is exposed to market risk (including interest rate risk), credit
risk and liquidity risk. The Board of Directors oversees the management of
these risks. The Board of Directors reviews and agrees policies for managing
each of these risks that are summarised below.
Market risk
Market risk is the risk that the fair values of financial instruments will
fluctuate because of changes in market prices. The financial instruments held
by the Group that are affected by market risk are principally the Group's cash
balances and bank borrowings along with a number of interest rate derivatives
entered into to mitigate interest rate risk.
The Group monitors its interest rate exposure on a regular basis. A
sensitivity analysis performed to ascertain the impact on the Group Statement
of Comprehensive Income and net assets of a 100 basis point shift in interest
rates would result in an increase of £4.8 million (2023: £3.2 million) or a
decrease of £4.8 million (2023: £3.2 million).
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or client contract, leading to a financial loss.
The Group is exposed to credit risks from both its leasing activities and
financing activities, including deposits with banks and financial
institutions. Credit risk is mitigated by tenants being required to pay
rentals in advance under their lease obligations. The credit quality of the
tenant is assessed based on an extensive credit rating scorecard at the time
of entering into a lease agreement.
Outstanding trade receivables are regularly monitored. The maximum exposure to
credit risk at the reporting date is the carrying value of each class of
financial asset. We conduct ongoing covenant analysis of our clients and
strengthened our team to support this work during the period. The analysis
combines publicly available financial and trading information with our own
observations and client conversations as well as the opinions of third-party
professionals to form a view over the credit risk of counter-parties under our
leases.
Trade receivables
Trade receivables, primarily tenant rentals, are presented in the Group
Statement of Financial Position net of allowances for doubtful receivables and
are monitored on a case by case basis. Credit risk is primarily managed by
requiring tenants to pay rentals in advance and performing tests around
strength of covenant prior to acquisition and on an ongoing annual basis.
Credit risk related to financial instruments and cash deposits
One of the principal credit risks of the Group arises with the banks and
financial institutions. The Board of Directors believes that the credit risk
on short‑term deposits and current account cash balances is limited because
the counterparties are banks, who are committed lenders to the Group, with
high credit ratings assigned by international credit‑rating agencies.
Liquidity risk
Liquidity risk arises from the Group's management of working capital, the
finance charges, principal repayments on its borrowings and its commitments
under development arrangements. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due, as the
majority of the Group's assets are property investments and are therefore not
readily realisable. The Group's objective is to ensure it has sufficient
available funds for its operations and to fund its capital expenditure. This
is achieved by continuous monitoring of forecast and actual cash flows by
management, ensuring it has appropriate levels of cash and available drawings
to meet liabilities as they fall due.
The table below summarises the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments:
< 1 Year Between Between More than 5 years Total
1-2 years
2-5 years
£m £m £m £m £m
31 December 2024
Borrowings 67.9 486.6 937.9 783.7 2,276.1
Trade and other payables 112.5 - - 3.9 116.4
180.4 486.6 937.9 787.6 2,392.5
31 December 2023
Borrowings 54.8 54.6 1,033.8 832.1 1,975.2
Trade and other payables 106.9 - - 1.0 107.9
161.7 54.6 1,033.8 833.1 2,083.1
Included within the contracted payments is £282.3 million (2023: £343.2
million) of loan interest payable up to the point of maturity across the
facilities.
29. Capital management
The Board, with the assistance of the Investment Manager, monitors and reviews
the Group's capital so as to promote the long‑term success of the business,
facilitate expansion and to maintain sustainable returns for Shareholders. The
Group considers proceeds from share issuances, bank borrowings and retained
earnings as capital. The Group's policy on borrowings is as set out below:
The level of borrowing will be on a prudent basis for the asset class, and
will seek to achieve a low cost of funds, while maintaining flexibility in the
underlying security requirements, and the structure of both the portfolio and
the REIT Group.
The Directors intend that the Group will maintain a conservative level of
aggregate borrowings with a medium‑term target of 30% - 35% of the Group's
gross assets.
The Group has complied with all covenants on its borrowings up to the date of
this report (see note 26). All of the targets mentioned above sit comfortably
within the Group's covenant levels, which include loan to value ("LTV"),
interest cover ratio and loan to projected project cost ratio. The Group LTV
at the year end was 28.8% (2023: 31.6%) and there is substantial headroom
within existing covenants.
Debt is drawn at the asset and corporate level, subject to the assessment of
the optimal financing structure for the Group and having consideration to key
metrics including lender diversity, debt type and maturity profiles.
30. Equity reserves
Share capital
The share capital relates to amounts subscribed for share capital at its
nominal value:
Issued and fully paid at 1 pence each 31 December 31 December 31 December 31 December
2024 2024 2023 2023
Number £m Number £m
Balance at beginning of year - £0.01 Ordinary Shares 1,903,738,325 19.0 1,868,826,992 18.7
Extinguishment of share based payment - - 34,911,333 0.3
Share issued in relation to the acquisition of UKCM 576,939,134 5.8 - -
Balance at end of year 2,480,677,459 24.8 1,903,738,325 19.0
On 17 May 2024, the Company issued 576.9 million Ordinary Shares at 166.9p per
share (1p nominal value and a premium of 165.9p). These shares were issued as
consideration for acquiring 100% of the issued share capital of UK Commercial
Property REIT. Shareholders of UK Commercial Property REIT were entitled to
receive 0.444 shares for each UK Commercial Property REIT share they held.
Share premium
The share premium relates to amounts subscribed for share capital in excess of
its nominal value.
Merger Reserve
Movements in the current period relate to the shares issued in relation the
UKCM merger as described above (refer to note 17).
Capital reduction reserve
In 2015, 2018 and 2023, the Company by way of Special Resolution cancelled the
then value of its share premium account, by an Order of the High Court of
Justice, Chancery Division. As a result of these cancellations, £422.6
million, £932.4 million and £764.4 million respectively were transferred
from the share premium account into the capital reduction reserve account. The
capital reduction reserve account is classed as a distributable reserve.
Movements in the current year relate to dividends paid.
Retained earnings
Retained earnings relates to all net gains and losses not recognised
elsewhere.
31. Net asset value ("NAV") per share
Basic NAV per share is calculated by dividing net assets in the Group
Statement of Financial Position attributable to ordinary equity holders of the
Parent by the number of Ordinary Shares outstanding at the end of the year. As
there are dilutive instruments outstanding, both basic and diluted NAV per
share are shown below.
31 December 31 December
2024 2023
£m £m
Net assets per Group Statement of Financial Position 4,567.4 3,334.0
EPRA NTA 4,603.2 3,372.5
Ordinary Shares:
Issued share capital (number) 2,480,677,459 1,903,738,325
Net asset value per share 184.12p 175.13p
31 December 2024 31 December 2023
EPRA NTA EPRA NRV EPRA NDV EPRA NTA EPRA NRV EPRA NDV
£m £m £m £m £m £m
NAV attributable to shareholders 4,567.4 4,567.4 4,567.4 3,334.0 3,334.0 3,334.0
Revaluation of land options 18.0 18.0 18.0 26.5 26.5 26.5
Mark-to-market adjustments of derivatives 18.5 18.5 - 13.1 13.1 -
Intangibles (0.7) - - (1.1) - -
Fair value of debt - - 192.4 - - 141.4
Real estate transfer tax(1) - 444.6 - - 342.3 -
NAV 4,603.2 5,048.5 4,777.8 3,372.5 3,715.9 3,501.9
NAV per share 185.56p 203.51p 192.60p 177.15p 195.19p 183.95p
1 EPRA NTA and EPRA NDV reflect IFRS values which are net of RETT (real estate
transfer tax). RETT are added back when calculating EPRA NRV.
See notes to the EPRA NAV calculations for further details.
32. Operating leases
The future minimum lease payments under non‑cancellable operating leases
receivable by the Group are as follows:
Less than 1 year Between 1 and 2 years Between 2 and 3 years Between 3 and 4 years Between 4 and 5 years More than 5 years Total
£m £m £m £m £m £m £m
31 December 2024 295.3 284.1 274.8 247.4 232.8 1,952.1 3,286.5
31 December 2023 201.9 204.5 199.3 195.1 179.6 1,808.5 2,788.9
The majority of the Group's investment properties are leased to single
tenants, some of which have guarantees attached, under the terms of a
commercial property lease. Each has upward-only rent reviews that are linked
to either RPI/CPI, open market or with fixed uplifts. The weighted average
unexpired lease term is 10.3 years (2023: 11.4 years).
33. Transactions with related parties
For the year ended 31 December 2024, all Directors and some of the Members of
the Manager are considered key management personnel. The terms and conditions
of the Investment Management Agreement are described in the Management
Engagement Committee Report. Details of the amount paid for services provided
by Tritax Management LLP ("the Manager") are provided in note 11.
The total amount payable in the period relating to the Investment Management
Agreement was £24.6 million (31 December 2023: £22.0 million), with the
total amount outstanding at the period end was £6.6 million (31 December
2023: £5.6 million).
The Manager receives a net fee relating to asset management services provided
to three properties which are 4% owned by the Group, amounting to £0.05
million for the period ended 31 December 2024 (31 December 2023: £0.05
million).
The total expense recognised in the Group Statement of Comprehensive Income
relating to share-based payments under the Investment Management Agreement was
£5.0 million (2023: £4.5 million), of which £2.7 million (2023: £2.3
million) was outstanding at the year end.
Details of amounts paid to Directors for their services can be found within
the Directors' Remuneration Report.
During the year the six Members of the Manager included Colin Godfrey, James
Dunlop, Henry Franklin, Petrina Austin, Bjorn Hobart and Frankie Whitehead.
During the year the Directors who served during the year received the
following dividends Aubrey Adams: £21,345 (2023: £17,340), Alastair Hughes:
£5,157 (2023: £3,358), Richard Laing: £5,329 (2023: £3,613), Karen
Whitworth £3,942 (2023: £2,218) Wu Gang £524 (2023: £188) and Elizabeth
Brown £1,534 (2023: £1,255) . See note 11 and Directors' Remuneration Report
for further details.
During the year the Members of the Manager received the following dividends:
Colin Godfrey: £225,247 (2022: £196,830), James Dunlop: £220,554 (2023:
£194.074), Henry Franklin: £163,645 (2023: £144,283), Petrina Austin:
£29,564 (2023: £25,334), Bjorn Hobart: £33,672 (2023: £29,188) and Frankie
Whitehead £17,174 (2023: £13,766).
In January 2025, the Company entered into a development management agreement
with Tritax Management. For full details please see the Management Engagement
Committee Report.
34. Reconciliation of liabilities to cash flows from financing
activities
Borrowings Derivative financial instruments Loan notes Total
£m £m £m £m
Balance on 1 January 2024 474.7 (11.1) 1,140.5 1,604.1
Cash flows from financing activities:
Bank borrowings advanced 340.0 - - 340.0
Bank borrowings repaid (178.0) - - (178.0)
Interest rate cap premium paid - (1.8) - (1.8)
Loan arrangement fees paid (1.0) - (0.2) (1.2)
Non-cash movements:
Book value of UKCM borrowings 174.5 - - 174.5
Amortisation of loan arrangement fees 1.4 - 1.5 2.9
Fair value movement - 5.4 - 5.4
Balance on 31 December 2024 811.6 (7.5) 1,141.8 1,945.9
In addition to the above cash flow movements in borrowings, interest was also
paid of £60.6 million (2023: £47.9 million); this is included in the
movement in accruals.
Borrowings Derivative financial instruments Loan notes Total
£m £m £m £m
Balance on 1 January 2023 474.8 (19.9) 1,139.1 1,594.0
Cash flows from financing activities:
Bank borrowings advanced 409.0 - - 409.0
Bank borrowings repaid (407.0) - - (407.0)
Interest rate cap premium paid - (2.4) - (2.4)
Loan arrangement fees paid (5.1) - - (5.1)
Non-cash movements:
Change in creditors for loan arrangement fees payable 0.1 - - 0.1
Amortisation of loan arrangement fees 2.9 - 1.4 4.3
Fair value movement - 11.2 - 11.2
Balance on 31 December 2023 474.7 (11.1) 1,140.5 1,604.1
35. Capital commitments
The Group had capital commitments of £101.2 million in relation to its
development activity, asset management initiatives and commitments under
development land, outstanding as at 31 December 2024 (31 December 2023:
£128.1 million). All commitments fall due within one year from the date of
this report.
36. Subsequent events
In January 2025, the Company announced it had purchased a 74-acre site at
Heathrow, London within the Slough Availability Zone, a key FLAP-D prime EMEA
data centre location (the "Manor Farm site"), for £70.0 million.
Simultaneously, the Company acquired a 50% share in a joint venture with a
leading European renewable and low carbon energy power generator. The JV
enables accelerated power delivery to the Manor Farm site using pre-existing
grid connection agreements.
In connection with these arrangements, the Company has entered into a
development management agreement with Tritax Management pursuant to which
Tritax Management has been appointed to provide development management and
technical services, including pursuing planning, overseeing construction,
pre-letting services, technical electricity expertise and overseeing the
technical aspects of the Company's role in the JV and all power related
elements.
Tritax Management is a related party of the Company pursuant to UKLR 11.5.3R.
The development management fee and profit share payments outlined above to
Tritax Management are deemed to be relevant related party transactions under
UKLR 11.5.4R.
In January 2025, the Company acquired a 627k sq ft asset in Haydock, a core
North West location, for £74.3 million.
In January and February 2025, the Company sold or exchanged to sell £86.8
million of non-strategic assets and £79.0 million of logistics investment
assets.
There were no other significant events occurring after the reporting period,
but before the financial statements were authorised for issue.
37. Asset acquisition
The Group acquired all the shares of UKCM in exchange for shares in the Group.
The shares issued in consideration for the acquisition qualify for merger
relief and as a result no share premium has been recognised and merger reserve
has been established. The target operations were solely the ownership of
investment properties complete with extant tenant operating leases along with
related cash, leverage, other associated assets and working capital balances.
The consideration paid in shares of the company has been allocated across the
net assets acquired by fair valuing the debt acquired, fair valuing working
capital acquired (given the short term nature of the amounts these values have
been taken to represent cost), fair valuing cash acquired (being the principal
amount) with the remaining consideration being allocated across the investment
properties acquired (refer to note 17 and 26).
16 May 2024
Assets and liabilities acquired: £m
Investment property fair value 1,216.9
Discount to cost on acquisition (67.8)
Investment property recognised at cost 1,149.1
Cash 26.7
Third party debt (169.6)
Other net assets (26.4)
Acquisition costs (16.9)
Consideration paid - shares 962.9
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Company Registration Number: 08215888
Note At At
31 December 31 December
2024 2023
£m £m
Fixed assets
Investment in subsidiaries 5 3,798.9 2,166.9
Interest rate derivatives 10 0.7 1.0
Total fixed assets 3,799.6 2,167.9
Current assets
Trade and other receivables 6 1,278.3 1,710.9
Cash held at bank 7 7.6 1.1
Total current assets 1,285.9 1,712.0
Total assets 5,085.5 3,879.9
Current liabilities
Trade and other payables 8 (23.9) (19.4)
Loans from Group companies (174.6) (87.4)
Total current liabilities (198.5) (106.8)
Non-current liabilities
Bank borrowings 9 (426.1) (263.1)
Loan notes 9 (1,141.8) (1,140.5)
Total non-current liabilities (1,567.9) (1,403.6)
Total liabilities (1,766.4) (1,510.4)
Total net assets 3,319.1 2,369.5
Equity
Share capital 11 24.8 19.0
Share premium reserve 49.2 49.1
Capital reduction reserve 1,289.0 1,463.9
Merger reserve 957.0 -
Retained earnings 999.1 837.5
Total equity 3,319.1 2,369.5
The Company has taken advantage of the exemption allowed under section 408 of
the Companies Act 2006 and has not presented its own profit and loss account
in these financial statements. The profit attributable to the Parent Company
for the year ended 31 December 2024 amounted to £161.6 million (31 December
2023: £160.8 million).
These financial statements were approved by the Board of Directors on 27
February 2025 and signed on its behalf by:
Aubrey Adams
Chairman
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Undistributable reserves Distributable reserves
Note Share capital Share premium Merger reserve Capital reduction reserve Retained earnings Total
£m £m £m £m £m £m
1 January 2024 19.0 49.1 - 1,463.9 837.5 2,369.5
Profit for the year and total comprehensive income - - - - 161.6 161.6
19.0 49.1 - 1,463.9 999.1 2,531.1
Contributions and distributions
Share issue for UKCM acquisition 5.8 0.1 957.0 - - 962.9
Dividends paid 4 - - - (174.9) - (174.9)
31 December 2024 24.8 49.2 957.0 1,289.0 999.1 3,319.1
Undistributable reserves Distributable reserves
Note Share capital Share premium Merger reserve Capital reduction reserve Retained earnings Total
£m £m £m £m £m £m
1 January 2023 18.7 764.3 - 835.1 676.7 2,294.8
Profit for the year and total comprehensive income - - - - 160.8 160.8
18.7 764.3 - 835.1 837.5 2,455.6
Contributions and distributions
Shares issued in relation extinguishment of B and C liabilities 0.3 49.2 - - - 49.5
Transfer between reserves - (764.4) - 764.4 - -
Share-based payments - - - - 4.5 4.5
Transfer of share-based payments to liabilities to reflect settlement - - - - (4.5) (4.5)
Dividends paid 4 - - - (135.6) - (135.6)
31 December 2023 19.0 49.1 - 1,463.9 837.5 2,369.5
NOTES TO THE COMPANY ACCOUNTS
1. Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). Assets are
classified in accordance with the definitions of fixed and current assets in
the Companies Act 2006.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all
disclosure exemptions conferred by FRS 101. Therefore these financial
statements do not include:
· certain comparative information as otherwise required by adopted
IFRS;
· certain disclosures regarding the Company's capital;
· a statement of cash flows;
· the effect of future accounting standards not yet adopted;
· the disclosure of the remuneration of key management personnel;
and
· disclosure of related party transactions with other wholly owned
members of Tritax Big Box REIT plc.
In addition, and in accordance with FRS 101, further disclosure exemptions
have been adopted because equivalent disclosures are included in the Company's
consolidated financial statements. These financial statements do not include
certain disclosures in respect of:
· share-based payments;
· financial instruments;
· fair value measurement other than certain disclosures required as
a result of recording financial instruments at fair value.
Principal accounting policies
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
Basis of accounting
These financial statements have been presented as required by the Companies
Act 2006 and have been prepared under the historical cost convention and in
accordance with applicable Accounting Standards and policies in the United
Kingdom ("UK GAAP").
Currency
The Company financial statements are presented in Sterling which is also the
Company's functional currency and all values are rounded to the nearest 0.1
million (£m), except where otherwise indicated.
Other income
Other income represents dividend income which has been declared by its
subsidiaries and is recognised when it is received.
Dividends payable for Shareholders
Equity dividends are recognised when they become legally payable. Interim
equity dividends are recognised when paid. Final equity dividends are
recognised when approved by the Shareholders at an Annual General Meeting.
1.1 Financial assets
The Company classifies its financial assets into one of the categories
discussed below, depending on the purpose for which the asset was acquired.
The Company's accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises in‑the‑money derivatives and out‑of‑money
derivatives where the time value offsets the negative intrinsic value. They
are carried in the Company Statement of Financial Position at fair value with
changes in fair value recognised in the profit or loss in the finance income
or expense line. Other than derivative financial instruments which are not
designated as hedging instruments, the Company does not have any assets held
for trading nor does it voluntarily classify any financial assets as being at
fair value through profit or loss.
Amortised cost
These assets arise principally from the provision of goods and services to
clients (such as trade receivables), but also incorporate other types of
financial assets where the objective is to hold these assets in order to
collect contractual cash flows and contractual cash flows are solely payments
of principal and interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their acquisition or issue
and are subsequently carried at amortised cost being the effective interest
rate method, less provision for impairment.
Impairment provisions for current receivables are recognised based on the
simplified approach within IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. During this process the
probability of the non‑payment of the trade receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the trade
receivables. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is written off against the
associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward‑looking expected credit
loss model. The methodology used to determine the amount of provision is based
on whether there has been a significant increase in credit risk since initial
recognition of the financial asset, 12-month expected credit losses along with
gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised.
The Company's financial assets measured at amortised cost comprise trade and
other receivables and cash and cash equivalents in the Company Statement of
Financial Position.
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, and other short-term highly liquid investments with original maturities
of three months or less.
Investments in subsidiaries
The investments in subsidiary companies are included in the Company's
Statement of Financial Position at cost less provision for impairment.
Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements require management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities at the reporting date. However, uncertainty about these
assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in future
years. There were no significant accounting judgements, estimates or
assumptions in preparing these financial statements.
2. Standards issued and effective from 1 January 2024
There was no material effect from the adoption of other amendments to IFRS
effective in the year. They have no impact to the Company significantly as
they are either not relevant to the Company's activities or require accounting
which is consistent with the Company's current accounting policies.
3. Taxation
Year ended Year ended
31 December 31 December
2024 2023
£m £m
UK corporation tax - -
The UK corporation tax rate for the financial year is 25%. Accordingly, this
rate has been applied in the measurement of the Group's tax liability at 31
December 2024.
4. Dividends paid
For details of dividends paid by the Company during the year, refer to note 16
of the Group's financial statements.
5. Investment in subsidiaries
31 December 31 December
2024 2023
£m £m
As at 1 January 2,166.9 2,243.3
Increase in investments via share purchase 979.9 66.6
Debt for equity swap 661.2 -
Disposals (9.1) (143.0)
As at 31 December 3,798.9 2,166.9
The increase in investments were as a result of capitalisation of
inter-company loans to fund the acquisitions made in the periods.
The company had the following undertakings as at 31 December 2024:
Entity name Principal activity Country of Incorporation Ownership %
TBBR Holdings 1 Limited Investment holding company Jersey 100%*
TBBR Holdings 2 Limited Investment holding company Jersey 100%
Baljean Properties Limited Property investment Isle of Man 100%
Tritax Acquisition 2 Limited Investment holding company Jersey 100%
Tritax Acquisition 2 (SPV) Limited Investment holding company Jersey 100%
The Sherburn RDC Unit Trust Property investment Jersey 100%
G Avonmouth Unit Trust Property Investment Jersey 100%
Tritax Acquisition 4 Limited Property investment Jersey 100%
Tritax Acquisition 5 Limited Property investment Jersey 100%
Sonoma Ventures Limited Property investment BVI 100%
Tritax REIT Acquisition 9 Limited Investment holding company UK¹ 100%*
Tritax Acquisition 10 Limited Property investment Jersey 100%
Tritax Acquisition 11 Limited Property investment Jersey 100%
Tritax Acquisition 12 Limited Property investment Jersey 100%
Tritax Acquisition 13 Limited Property investment Jersey 100%
Tritax Acquisition 14 Limited Property investment Jersey 100%
Tritax Worksop Limited Property investment BVI 100%
Tritax REIT Acquisition 16 Limited Investment holding company UK¹ 100%*
Tritax Acquisition 16 Limited Property investment Jersey 100%
Tritax Acquisition 17 Limited Property investment Jersey 100%
Tritax Acquisition 18 Limited Property investment Jersey 100%
Tritax Harlow Limited Property investment Guernsey 100%
Tritax Lymedale Limited Property investment Jersey 100%
Tritax Acquisition 21 Limited Property investment Jersey 100%
Tritax Acquisition 22 Limited Property investment Jersey 100%
Tritax Acquisition 23 Limited Property investment Jersey 100%
Tritax Acquisition 24 Limited Property investment Jersey 100%
Tritax Burton Upon Trent Limited Property investment BVI 100%
Tritax Acquisition 28 Limited Property investment Jersey 100%
Tritax Peterborough Limited Property investment Jersey 100%
Tritax Littlebrook 2 Limited Property investment Jersey 100%
Tritax Littlebrook 4 Limited Property investment Jersey 100%
Tritax Atherstone (UK) Limited Property investment UK¹ 100%
Tritax Stoke DC1&2 Limited Investment holding company Jersey 100%*
Tritax Stoke DC3 Limited Investment holding company Jersey 100%*
Tritax Holdings CL Debt Limited Investment holding company Jersey 100%*
Tritax Portbury Limited Property investment Jersey 100%
Tritax Newark Limited Property investment Jersey 100%
Tritax Carlisle Limited Investment holding company Jersey 100%*
Tritax Stoke Management Limited Management company UK¹ 100%
Tritax Holdings PGIM Debt Limited Investment holding company Jersey 100%*
Tritax Merlin 310 Trafford Park Limited Property investment Jersey 100%*
Tritax West Thurrock Limited Property investment Jersey 100%
Tritax Tamworth Limited Property investment Jersey 100%
Tritax Acquisition 35 Limited Property investment Jersey 100%
Tritax Acquisition 36 Limited Property investment Jersey 100%*
Tritax Acquisition 37 Limited Property investment Jersey 100%*
Tritax Acquisition 38 Limited Property investment Jersey 100%*
Tritax Acquisition 39 Limited Property investment Jersey 100%*
Tritax Acquisition 40 Limited Property investment Jersey 100%*
Tritax Acquisition 41 Limited Property investment Jersey 100%*
Tritax Littlebrook 1 Limited Property investment Jersey 100%
Tritax Littlebrook 3 Limited Property investment Jersey 100%
Tritax Atherstone Limited Investment holding company Jersey 100%*
Tritax Acquisition 42 Limited Property investment Jersey 100%*
Tritax Acquisition 43 Limited Property investment Jersey 100%*
Tritax Carlisle UK Limited Investment holding company UK¹ 100%
Tritax Edinburgh Way Harlow Limited Property investment Jersey 100%*
Tritax Acquisition 45 Limited Property investment Jersey 100%*
Tritax Acquisition 46 Limited Property investment Jersey 100%*
Tritax Acquisition 47 Limited Property investment Jersey 100%*
Tritax Acquisition 48 Limited Property investment Jersey 100%*
Tritax Acquisition 49 Limited Property investment Jersey 100%*
Tritax Littlebrook Management Limited Property investment UK¹ 100%*
TBBR Holdings 4 Limited Investment holding company Jersey 100%*
Tritax Acquisition 50 Limited Property investment Jersey 100%*
Tritax Acquisition Electric Avenue Limited Property investment Jersey 100%*
Tritax Acquisition 51 Limited Property investment Jersey 100%*
Tritax Powerbox (Chelmsford) Propco Ltd (formally known as TBBR Finance Financing company Jersey 100%*
(Jersey) Limited)
Tritax PowerBox Member Co 1 Limited(#) Investment holding company UK(1) 100%*
Tritax PowerBox Member Co 2 Limited(#) Investment holding company UK(1) 100%*
UK Commercial Property REIT Limited(#) Investment holding company Guernsey 100%*
UK Commercial Property Estates Holdings Limited(#) Property investment Guernsey 100%
UK Commercial Property Finance Holdings Limited(#) Property investment Guernsey 100%
UK Commercial Property Estates Limited(#) Investment holding company Guernsey 100%
UK Commercial Property Holdings Limited(#) Investment holding company Guernsey 100%
St Georges Leicester Unit Trust(#) Property investment Jersey 100%
Junction 27 Retail Unit Trust(#) Property investment Jersey 100%
Rotunda Kingston Property Unit Trust(#) Property investment Jersey 100%
Tritax Big Box Development Holdings Ltd (formally known as Tritax Symmetry Investment holding company Jersey 100%*
Holdings Limited)
Tritax Big Box Developments Holdco 1 Ltd (formally known as db Symmetry Group Investment holding company UK² 100%
Ltd)
db Symmetry Ltd Investment holding company UK² 100%
Tritax Symmetry Power Ltd Investment holding company UK² 100%
Tritax Symmetry Power Biggleswade Ltd Investment holding company UK² 100%
Tritax Big Box Developments (BVI) Ltd (formally known as Tritax Symmetry (BVI) Investment holding company British Virgin Islands 100%
Ltd)
Tritax Symmetry Holdings (Biggleswade) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Biggleswade) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Holdings (Blyth) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Blyth) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Holdings (Middlewich) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Middlewich) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Development (Blyth) UK Ltd Property development UK² 100%
Tritax Symmetry Development (Biggleswade) UK Ltd Property development UK² 100%
Tritax Park Ardley Ltd (formally known as Tritax Symmetry Ardley Ltd) Property investment Jersey 100%
Tritax Symmetry Bicester 2 Ltd Property investment Jersey 100%
Tritax Park Northampton West Ltd (formally known as Tritax Symmetry Property investment Jersey 100%
Northampton West Ltd)
Tritax Symmetry Rugby South Ltd Property investment Jersey 100%
Tritax Park St Helens Ltd (formally known as Tritax Symmetry St Helens Ltd) Property investment Jersey 100%
Tritax Park Wigan Ltd (formally known as Tritax Symmetry Wigan Ltd) Property investment Jersey 100%
Tritax Park Oxford Ltd (formally known as Tritax Symmetry Oxford Ltd) Property investment Jersey 100%
Tritax Park Northampton Ltd Property investment Jersey 100%
(formally known as Tritax Symmetry Northampton Ltd)
Tritax Symmetry Merseyside 1 Ltd Property investment Jersey 100%
Tritax Park South Elmsall Ltd (formally Tritax Symmetry South Elmsall Ltd) Property investment Jersey 100%
Tritax Symmetry (Goole) Ltd Property investment UK² 100%
Tritax Big Box Developments (Midlands) Ltd (formally Tritax Symmetry Investment holding company UK² 100%
(Midlands) Ltd)
Tritax Symmetry (Aston Clinton) Ltd Property investment UK² 100%
Tritax Park Leicester South Ltd (formally Tritax Symmetry Leicester South Ltd) Property investment Jersey 100%
Tritax Park Gloucester Ltd (formally Tritax Symmetry Gloucester Ltd) Property investment Jersey 100%
Tritax Symmetry (Speke) Ltd Property investment UK² 100%
Tritax Symmetry (Barwell) Ltd Property investment UK² 100%
Tritax Symmetry (Rugby) Ltd Property investment UK² 100%
Tritax Symmetry (Hinckley) Ltd Property investment UK² 100%
Tritax Symmetry (Darlington) Ltd Property investment UK² 100%
Tritax Symmetry (Blyth) Ltd Property investment UK² 100%
Tritax Symmetry (Bicester Reid) Ltd Property investment UK² 100%
Tritax Park Wigan UK Ltd (formallyTritax Symmetry (Wigan) Ltd) Property investment UK² 100%
Tritax Symmetry (Land) LLP (formally Tritax Symmetry (Land) LLP) Investment holding company UK² 100%
Tritax Symmetry (Kettering) LLP Property investment UK² 100%
Tritax Symmetry (Lutterworth) LLP Property investment UK² 100%
Tritax Big Box Developments (Northampton) LLP (formally Tritax Symmetry Investment holding company UK² 100%
(Northampton) LLP)
Symmetry Park Darlington Management Company Ltd Management company UK² 100%
Symmetry Park Aston Clinton Management Company Limited Management company UK² 100%
Tritax Symmetry Glasgow East Ltd Property investment Jersey 100%
Symmetry Park Biggleswade Management Company Limited Management company UK² 100%
Tritax Symmetry Biggleswade 2 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade 3 Ltd Property investment Jersey 100%
Tritax Symmetry Middlewich 1 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade 4 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade Land Ltd Property investment UK² 100%
Symmetry Park Merseyside Management Company Limited Management company UK(2) 100%
Symmetry Park Kettering Management UK(2) 100%
Company Limited Management company
Tritax Park Wigan Management Company Ltd (formally Symmetry Park Wigan Management company UK(2) 100%
Management
Company Limited)
Symmetry Park Rugby Management Management company UK(2) 100%
Company Limited
Tritax Symmetry Merseyside Land Ltd Property investment UK(2) 100%
Tritax Park Rugby West Ltd (formally Tritax Symmetry West Ltd) Property investment Jersey 100%
Tritax Symmetry Darlington 2 Ltd Property investment Jersey 100%
Intermodal Logistics Park North Ltd (formally Tritax Symmetry SRFI North Property investment Jersey 100%
Ltd())
Symmetry Park Biggleswade Management Company No 3 Ltd(#) Management company UK(2) 100%
Tritax Park Crewe Ltd(#) Property investment Jersey 100%
Tritax Symmetry Bicester 3 Ltd(#) Property investment Jersey 100%
Tritax Park Oxford Management Company Ltd (#) Management company UK(2) 100%
Tritax Symmetry Rugby South 2 Ltd(#) Property investment Jersey 100%
*These are direct subsidiaries of the Company.
(#)These are new investments of the Company in the year.
The registered addresses for subsidiaries across the Group are consistent
based on their country of incorporation and are as follows:
Jersey entities: 26 New Street, St Helier, Jersey JE2 3RA
Guernsey entities:, Floor 2, Trafalgar Court, Les Banques, St Peter Port,
Guernsey GY1 2JA
Isle of Man entities: 33‑37 Athol Street, Douglas, Isle of Man IM1 1LB
British Virgin Islands entities: Jayla Place, Wickhams Cay 1, Road Town,
Tortola, BVI VG1110
UK¹ entities: 72 Broadwick Street, London, W1F 9QZ
UK² entities: Unit B, Grange Park Court, Roman Way, Northampton, England NN4
5EA
The Company also has interests in the following joint arrangements as at 31
December 2024:
Entity name Principal activity Country of incorporation Ownership %
Symmetry Park Doncaster Management Company Limited Management company UK² 50%
Symmetry Park Bicester Management Company Limited Management company UK² 33%
All of the companies registered offshore are managed onshore and are UK
residents for UK corporation tax purposes, save for the Sherburn Unit Trust, G
Avonmouth Trust, St Georges Leicester Unit Trust, Junction 27 Retail Unit
Trust and Rotunda Kingston Property Unit Trust.
6. Trade and other receivables
31 December 31 December
2024 2023
£m £m
Amounts receivable from Group companies 1,276.9 1,709.7
Prepayments 0.1 0.1
Other receivables 1.3 1.1
Total trade and other receivables 1,278.3 1,710.9
All amounts that fall due for repayment within one year and are presented
within current assets as required by the Companies Act. The loans to Group
companies are repayable on demand with no fixed repayment date although it is
noted that a significant proportion of the amounts may not be sought for
repayment within one year depending on activity in the Group companies.
Interest is charged between 0%-10% (2023: 0%-10%).
7. Cash held at bank
31 December 31 December
2024 2023
£m £m
Cash held at bank 7.6 1.1
8. Trade and other payables
31 December 31 December
2024 2023
£m £m
Trade and other payables 14.9 12.9
Accruals 9.0 6.5
Total trade and other payables 23.9 19.4
9. Borrowings
Bank borrowings drawn
31 December 31 December
2024 2023
£m £m
Bank borrowings drawn: due in more than one year 431.0 269.0
Less: unamortised costs on bank borrowings (4.9) (5.9)
Total bank borrowings drawn 426.1 263.1
Loan notes
Bonds 31 December 31 December
2024 2023
£m £m
2.625% Bonds 2026 249.8 249.7
3.125% Bonds 2031 248.3 248.0
2.860% USPP 2028 250.0 250.0
2.980% USPP 2030 150.0 150.0
1.500% Green Bonds 2033 247.4 247.1
Less: unamortised costs on loan notes (3.7) (4.3)
Non-current liabilities: net borrowings 1,141.8 1,140.5
Maturity of loan notes 31 December 31 December
2024 2023
£m £m
Repayable between one and two years - -
Repayable between two and five years 249.8 249.7
Repayable in over five years 895.7 895.1
Total Borrowings 1,145.5 1,144.8
10. Interest rate derivatives
31 December 31 December
2024 2023
£m £m
Non-current assets: interest rate derivatives 0.7 1.0
The interest rate derivatives are valued by the relevant counterparty banks on
a quarterly basis in accordance with IFRS 9. Any movement in the
mark-to-market values of the derivatives are taken to the Group Statement of
Comprehensive Income.
31 December 31 December
2024 2023
£m £m
Interest rate derivative valuation brought forward 1.0 -
Premium paid 0.9 1.2
Changes in fair value of interest rate derivatives (1.2) (0.2)
Total interest rate derivatives 0.7 1.0
An interest rate cap is used to mitigate the interest rate risk that arises as
a result of entering into a variable rate linked loan to cap the rate to which
SONIA can rise and is coterminous with the initial term of the loan.
The interest rate derivative is marked to market by the relevant counterparty
banks on a quarterly basis in accordance with IFRS 9. Any movement in the mark
to market values of the derivatives are taken to the Statement of
Comprehensive Income.
11. Equity reserves
Refer to note 30 of the Group's financial statements.
12. Related party transactions
The Company has taken advantage of the exemption not to disclose transactions
with other members of the Group as the Company's own financial statements are
presented together with its consolidated financial statements.
For all other related party transactions make reference to note 33 of the
Group's financial statements.
13. Directors' remuneration
Refer to note 11 of the Group's financial statements.
14. Subsequent events
Refer to note 36 of the Group's financial statements.
NOTES TO THE EPRA AND OTHER KEY PERFORMANCE INDICATORS (UNAUDITED)
Please note that the below measures may not be comparable with similarly
titled measures presented by other companies and should not be viewed in
isolation, but as supplementary information.
1. Adjusted earnings - income statement
The Adjusted earning reflects our ability to generate earnings from our
portfolio, which ultimately underpins dividend payments.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Gross rental income 281.1 222.2
Service charge income 13.1 6.2
Service charge expense (15.6) (6.3)
Direct property expenses (2.6) -
Fixed rental uplift adjustments (8.9) (6.2)
Net rental income 267.1 215.9
Other operating income 23.0 -
Amortisation of other property assets 0.6 -
Dividend Income 0.2 -
Administrative expenses (33.7) (28.9)
Adjusted operating profit before interest and tax 257.2 187.0
Net finance costs (63.5) (44.9)
Amortisation of loan arrangement fees 4.1
Unwinding of discount on fixed rate debt and deferred consideration 4.2 4.4
Adjusted earnings before tax 202.0 146.5
Tax on adjusted profit (0.3) (0.6)
Adjusted earnings after tax 201.7 145.9
Adjustment to remove additional DMA income (19.3) -
Adjusted earnings (exc. additional DMA income) 182.4 145.9
Weighted average number of Ordinary Shares 2,264,719,368 1,881,930,698
Adjusted earnings per share 8.91p 7.75p
Adjusted earnings per share (exc. additional DMA income) 8.05p 7.75p
2. EPRA Earnings per share
A key measure of a company's underlying operating results and an indication of
the extent to which current dividend payments are supported by earnings.
Year ended Year ended Year ended
31 December 31 December 31 December
2024 2023 (restated) 2023 (reported)
£m £m £m
Total comprehensive income (attributable to shareholders) 445.5 70.0 70.0
Adjustments to remove:
Changes in fair value of investment properties (243.7) 38.1 38.1
Changes in fair value of interest rate derivatives 5.3 11.2 11.2
Changes in fair value of financial asset (0.9) 0.1 0.1
Share of profits from joint ventures (0.1) (0.4) (0.4)
(Gain)/Loss on disposal of investment properties (8.4) 1.6 1.6
Finance income received on interest rate derivatives(1) - - (10.2)
Amortisation of other property assets 0.6 - -
Impairment of intangible and other property assets 4.0 2.7 2.7
Profits to calculate EPRA Earnings per share 202.3 123.3 113.1
Weighted average number of Ordinary Shares 2,264,719,368 1,881,930,698 1,881,930,698
EPRA Earnings per share - basic and diluted 8.93p 6.55p 6.01p
(1) There is no longer a requirement for Interest on derivatives to be taken
out of EPRA EPS, per the latest EPRA best practice guidance and there for this
has been excluded in 2024.
3. EPRA NAV per share
A net asset value per share calculated in accordance with EPRA's methodology
31 December 2024
Note EPRA NTA EPRA NRV EPRA NDV
£m £m £m
NAV attributable to shareholders 4,567.4 4,567.4 4,567.4
Revaluation of land options 18.0 18.0 18.0
Mark-to-market adjustments of derivatives 18.5 18.5 -
Intangibles (0.7) - -
Fair value of debt - - 192.4
Real estate transfer tax(1) - 444.6 -
At 31 December 2024 31 4,603.2 5,048.5 4,777.8
NAV per share 185.56p 203.51p 192.60p
31 December 2023
Note EPRA NTA EPRA NRV EPRA NDV
£m £m £m
NAV attributable to shareholders 3,334.0 3,334.0 3,334.0
Revaluation of land options 26.5 26.5 26.5
Mark-to-market adjustments of derivatives 13.1 13.1 -
Intangibles (1.1) - -
Fair value of debt - - 141.4
Real estate transfer tax(1) - 342.3 -
At 31 December 2023 31 3,372.5 3,715.9 3,501.9
NAV per share 177.15p 195.19p 183.95p
(1). EPRA NTA and EPRA NDV reflect IFRS values which are net of RETT. RETT are
added back when calculating EPRA NRV.
4. EPRA Net Initial Yield ("NIY") and EPRA "Topped Up" NIY
A measure to make it easier for investors to judge for themselves how the
valuations of two portfolios compare.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Investment property - wholly owned 6,369.8 4,843.7
Investment property - share of joint ventures 4.4 4.2
Less: development properties (321.1) (262.7)
Completed property portfolio 6,053.1 4,585.2
Allowance for estimated purchasers' costs 408.6 309.5
Gross up completed property portfolio valuation (B) 6,461.7 4,894.7
Annualised passing rental income 313.5 225.3
Less: contracted rental income in respect of development properties (16.7) (4.6)
Property outgoings (4.4) (0.2)
Less: contracted rent under rent-free period (17.3) (17.5)
Annualised net rents (A) 275.1 203.0
Contractual increases for fixed uplifts 22.6 22.1
Topped up annualised net rents (C) 297.7 225.1
EPRA Net Initial Yield (A/B) 4.26% 4.15%
EPRA Topped Up Net Initial Yield (C/B) 4.61% 4.60%
5. EPRA Vacancy rate
Estimated market rental value (ERV) of vacant space divided by the ERV of the
whole portfolio.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Annualised estimated rental value of vacant premises 21.5 6.7
Portfolio estimated rental value(1) 377.9 268.2
EPRA Vacancy rate 5.7% 2.5%
(1) Excludes land held for development.
6. EPRA Cost Ratio
A key measure to enable meaningful measurement of the changes in a company's
operating costs.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Property operating costs 4.4 0.2
Administration expenses 9.1 6.9
Management fees 24.6 22.0
Total costs including vacant property costs (A) 38.1 29.1
Vacant property cost (2.8) (0.1)
Total costs excluding vacant property costs (B) 35.3 29.0
Gross rental income - per IFRS 281.1 222.2
Gross rental income (C) 281.1 222.2
Total EPRA cost ratio (including vacant property costs) 13.6% 13.1%
Total EPRA cost ratio (excluding vacant property costs) 12.6% 13.1%
7. EPRA like-for-like rental income
Like-for-like net rental growth compares the growth of the net rental income
of the portfolio that has been consistently in operation, and not under
development, during the two full preceding periods that are described.
Year ended Year ended Change Change %
31 December 31 December
2024 2023
£m £m £m
Like-for-like rental income 192.0 185.0
Other rental income 0.4 0.2
Like-for-like gross rental income 192.4 185.2 7.2 3.9%
Like-for-like irrecoverable property expenditure (0.2) (0.1)
Like-for-like net rental income 192.2 185.1 7.1 3.8%
Reconciliation to Net rental income per Statement of Comprehensive Income:
Development properties 15.1 4.9
Properties sent back to development 0.5 4.7
Properties acquired 49.3 1.6
Properties disposed 2.4 9.6
Spreading of tenant incentives and guaranteed uplifts 21.4 16.2
Irrecoverable property expenditure (4.9) -
Total per Statement of Comprehensive Income 276.0 222.1 53.9 24.3%
8. EPRA property-related capital expenditure
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Acquisition(1) 1,184.3 109.2
Development(2) 243.6 208.1
Transfers to Investment Property (21.9) (16.8)
Investment properties:
Tenant incentives(3) 22.4 21.0
Capitalised interest 6.0 4.6
Total Capex 1,434.4 326.1
Assets acquired as part of UKCM through share for share consideration (1,149.1) -
Conversion from accrual to cash basis (50.5) (17.2)
Total Capex on a cash basis 234.8 308.9
(1) See note 17
(2) See note 17 and note 18
(3) Fixed rental uplift and tenant lease incentives after adjusting for
amortisation on rental uplift and tenant lease incentives.
9. Total Accounting Return ("TAR")
Net total return, being the percentage change in EPRA NTA over the relevant
period plus dividends paid.
Year ended Year ended
31 December 31 December
2024 2023
Opening EPRA NTA 177.15p 180.37p
Closing EPRA NTA 185.56p 177.15p
Change in EPRA NTA 8.41p (3.22p)
Dividends paid 7.53p 7.23p
Total growth in EPRA NTA plus dividends paid 15.94p 4.01p
Total return 9.0% 2.2%
10. Total Expense Ratio
The ratio of total administration and property operating costs expressed as a
percentage of average net asset value throughout the period.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Total operating costs 33.7 28.9
Average net assets over the period 4,059.0 3,371.5
Total Expense Ratio 0.83% 0.86%
11. Loan to value ratio
The proportion of our gross asset value that is funded by net borrowings
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Gross debt drawn 1,963.9 1,626.7
Less: cash (80.6) (36.4)
Net debt 1,883.3 1,590.3
Gross property value 6,548.6 5,030.4
Loan to value ratio 28.8% 31.6%
12. EPRA loan to value ratio
The proportion of our gross asset value that is funded by net borrowings and
working capital.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Gross debt drawn (1) 1,993.9 1,626.7
Working capital 58.4 87.1
Less: cash (80.6) (36.4)
Net debt 1,971.7 1,677.4
Gross property value 6,548.6 5,030.4
Loan to value ratio 30.1% 33.3%
The financial information contained in this results announcement has been
prepared on the basis of the accounting policies set out in the statutory
financial statements for the year ended 31 December 2024 which are consistent
with policies those adopted in the year ended 31 December 2023. Whilst the
financial information included in this announcement has been computed in
accordance with UK adopted international accounting standards, this
announcement does not itself contain sufficient disclosures to comply with
IFRS. The financial information does not constitute the Group's statutory
financial statements for the years ended 31 December 2024 or 31 December 2023,
but is derived from those financial statements. Financial statements for the
year ended 31 December 2023 have been delivered to the Registrar of Companies
and those for the year ended 31 December 2024 will be delivered following the
Company's Annual General Meeting. The auditors' reports on both the 31
December 2024 and 31 December 2023 financial statements were unqualified; did
not draw attention to any matters by way of emphasis; and did not contain
statements under section 498 (2) or (3) of the Companies Act 2006.
Glossary of Terms
"Adjusted Earnings" Post-tax earnings attributable to shareholders, adjusted
to include licence fees receivable on forward funded development assets,
finance income on interest rate derivatives and adjusts for other earnings not
supported by cash flows. "Adjusted Earnings per share" or "Adjusted EPS" on a
per share basis.
"B and C Shares" The B and C Shares in Tritax Big Box Developments Holdings
Limited that were issued to the Tritax Big Box Development Management
shareholders.
"Big Box" A "Big Box" property or asset refers to a specific subsegment of the
logistics sector of the real estate market, relating to very large logistics
warehouses (each with typically over 500,000 sq ft of floor area) with the
primary function of holding and distributing finished goods, either downstream
in the supply chain or direct to consumers, and typically having the following
characteristics: generally a modern constructed building with eaves height
exceeding 12 metres; let on long leases with institutional-grade clients; with
regular, upward-only rental reviews; having a prime geographical position to
allow both efficient stocking (generally with close links to sea ports or rail
freight hubs) and efficient downstream distribution; and increasingly with
sophisticated automation systems or a highly bespoke fit out.
"Board" The Directors of the Company.
"BREEAM" The Building Research Establishment Environmental Assessment Method
certification of an asset's environmental, social and economic sustainability
performance, using globally recognised standards.
"Company" Tritax Big Box REIT plc (company number 08215888).
"Contracted annual rent roll" Annualised rent, adjusting for the inclusion of
rent free period
"CPI" Consumer Price Index, a measure that examines the weighted average of
prices of a basket of consumer goods and services, such as transportation,
food and medical care as calculated on a monthly basis by the Office of
National Statistics.
"Current Development Pipeline" Assets that are in the course of construction
or assets for which we have made a construction commitment.
"CVA" A company voluntary liquidation, a legally binding agreement between a
business and its creditors which sets out a debt repayment plan and enables a
viable business to avoid insolvency.
"db Symmetry" db Symmetry Group Ltd and db symmetry BVI Limited, together with
their subsidiary undertakings and joint venture interests, which were acquired
by the Group in February 2019.
"Directors" The Directors of the Company as of the date of this report being
Aubrey Adams, Elizabeth Brown, Alastair Hughes, Richard Laing, Karen
Whitworth, Wu Gang and Kirsty Wilman.
"Dividend pay-out ratio" Dividend per share divided by Adjusted Earnings per
share.
"Development Management Agreement" or "DMA" An agreement between the Group and
a developer setting out the terms in respect of the development of an asset.
In particular, the development of the Tritax Big Box Developments Portfolio is
the subject of a DMA between Tritax Big Box Developments Holdings and Tritax
Big Box Developments ManCo.
"Development portfolio" or "Development assets" The Group's Development
portfolio comprises its property assets which are not Investment assets,
including land, options over land as well as any assets under construction on
a speculative basis.
"EPC rating" A review of a property's energy efficiency.
"EPRA" European Public Real Estate Association.
"EPRA Earnings" Earnings from operational activities (which excludes the
licence fees receivable on our Forward Funded Development assets).
"EPRA NAV" or "EPRA Net Asset Value" The Basic Net Asset Value adjusted to
meet EPRA Best Practices Recommendations Guidelines (2016) requirements by
excluding the impact of any fair value adjustments to debt and related
derivatives and other adjustments and reflecting the diluted number of
Ordinary Shares in issue.
"EPRA Triple Net Asset Value (NNNAV)" EPRA NAV adjusted to include the fair
values of financial instruments, debt and deferred taxes.
"EPRA Net Tangible Asset (NTA)" The Basic Net Asset Value adjusted to meet
EPRA Best Practices Recommendations Guidelines (2019) requirements by
excluding intangibles and the impact of any fair value adjustments to related
derivatives. This includes the revaluation of land options.
"EPRA Net Reinstatement Value (NRV)" IFRS NAV adjusted to exclude the impact
of any fair value adjustments to related derivatives. This includes the
revaluation of land options and the Real estate transfer tax (RETT).
"EPRA Net Disposal Value (NDV)" IFRS NAV adjusted to include the fair values
of debt and the revaluation of land options.
"EPRA Net Initial Yield (NIY)" Annualised rental income based on the cash
rents passing at the balance sheet date, less non-recoverable property
operating expenses, divided by the market value of the property, increased
with (estimated) purchaser's costs.
"EPRA 'Topped-Up' NIY" This measure incorporates an adjustment to the EPRA NIY
in respect of the expiration of rent-free periods (or other unexpired lease
incentives, such as discounted rent periods and step rents).
"EPRA Vacancy" Estimated market rental value (ERV) of vacant space divided by
the ERV of the whole portfolio.
"EPRA Cost Ratio" Administrative and operating costs (including and excluding
costs of direct vacancy) divided by gross rental income.
"Estimated cost to completion" Costs still to be expended on a development or
redevelopment to practical completion, including attributable interest.
"Estimated rental value" or "ERV" The estimated annual market rental value of
lettable space as determined biannually by the Group's valuers. This will
normally be different from the rent being paid.
"FCA" The United Kingdom Financial Conduct Authority (or any successor entity
or entities).
"Forward Funded Development" Where the Company invests in an asset which is
either ready for, or in the course of, construction, pre-let to an acceptable
counterparty. In such circumstances, the Company seeks to negotiate the
receipt of immediate income from the asset, such that the developer is paying
the Company a return on its investment during the construction phase and prior
to the client commencing rental payments under the terms of the lease. Expert
developers are appointed to run the development process.
"Foundation asset" Foundation assets provide the core, low-risk income that
underpins our business. They are usually let on long leases to clients with
excellent covenant strength. These buildings are commonly new or modern and in
prime locations, and the leases have regular upward only rent reviews, often
either fixed or linked to Inflation Indices.
"FRI Lease" Full Repairing and Insuring Lease. During the lease term, the
client is responsible for all repairs and decoration to the property, inside
and out, and the building insurance premium is recoverable from the client.
"Future Development Pipeline" The Group's land portfolio for future
development typically controlled under option agreements which do not form
part of the Current or Near Term development pipelines.
"Gearing" Net borrowings divided by total shareholders' equity excluding
intangible assets and deferred tax provision.
"GIA" Under the RICS Code of Measuring Practice (6th Edition) the Gross
Internal Area (GIA) is the basis of measurement for valuation of industrial
buildings (including ancillary offices) and warehouses. The area of a building
measured to the internal face of the perimeter walls at each floor level
(including the thickness of any internal walls). All references to building
sizes in this document are to the GIA.
"GAV" The Group's gross asset value.
"Global Real Estate Sustainability Benchmark (GRESB) Assessment" GRESB
assesses the ESG performance of real estate and infrastructure portfolios and
assets worldwide, providing standardised and validated data to the capital
markets.
"Gross rental income" Contracted rental income recognised in the period, in
the income statement, including surrender premiums and interest receivable on
finance leases. Lease incentives, initial costs and any contracted future
rental increases are amortised on a straight-line basis over the lease term.
"Group" or "REIT Group" The Company and all of its subsidiary undertakings.
"Growth Covenant asset" Growth Covenant assets are fundamentally sound assets
in good locations, let to clients we perceive to be undervalued at the point
of purchase and who have the potential to improve their financial strength,
such as young e-retailers or other companies with growth prospects. These
assets offer value enhancement through yield compression.
"IMA" The Investment Management Agreement between the Manager and the Company.
"Investment portfolio" or "Investment assets" The Group's Investment Portfolio
comprises let or pre-let (in the case of Forward Funded Developments) assets
which are income generating, as well as any speculative development assets
which have reached practical completion but remain unlet.
"Investment property" Completed land and buildings held for rental income
return and/or capital appreciation.
"Land asset" Opportunities identified in land which the Manager believes will
enable the Company to secure, typically, pre-let Forward Funded Developments
in locations which might otherwise attract lower yields than the Company would
want to pay, delivering enhanced returns but controlling risk.
"Listing Rules" The listing rules made by the Financial Conduct Authority
under section 73A of FSMA.
"Loan Notes" The loan notes issued by the Company on 4 December 2018.
"Loan to Value (LTV)" The proportion of our gross asset value that is funded
by net borrowings.
"London Stock Exchange" London Stock Exchange plc.
"Manager" Tritax Management LLP (partnership number 0C326500).
"Minimum Energy Efficiency Standards (MEES)" The legal standard for minimum
energy efficiency which applies to rented commercial buildings as regulated by
the Energy Efficiency (Private Rented Property) (England and Wales)
Regulations 2015.
"Near-term Development Pipeline" Sites which have either received planning
consent or sites where planning applications have been submitted prior to the
year end.
"Net Initial Yield (NIY)" The annual rent from a property divided by the
combined total of its acquisition price and expenses.
"Net rental income" Gross rental income less ground rents paid, net service
charge expenses and property operating expenses.
"Net zero carbon" Highly energy efficient and powered from on-site and/or
off-site renewable energy sources, with any remaining carbon balance offset.
"Non-PID Dividend" A dividend received by a shareholder of the principal
company that is not a PID.
"Ordinary Shares" Ordinary Shares of £0.01 each in the capital of the
Company.
"Passing rent" The annual rental income currently receivable on a property as
at the balance sheet date (which may be more or less than the ERV).. Excludes
service charge income (which is netted off against service charge expenses).
"PID" or "Property income distribution" A dividend received by a shareholder
of the principal company in respect of profits and gains of the Property
Rental Business of the UK resident members of the REIT group or in respect of
the profits or gains of a non-UK resident member of the REIT group insofar as
they derive from their UK Property Rental Business.
"Portfolio" The overall portfolio of the Company including both the Investment
and Development portfolios.
"Portfolio Value" The value of the Portfolio which, as well as the Group's
standing assets, includes capital commitments on Forward Funded Developments,
Land Assets held at cost, the Group's share of joint venture assets and other
property assets.
"Pre-let" A lease signed with a client prior to commencement of a development.
"REIT" A qualifying entity which has elected to be treated as a Real Estate
Investment Trust for tax purposes. In the UK, such entities must be listed on
a recognised stock exchange, must be predominantly engaged in property
investment activities and must meet certain ongoing qualifications.
"Rent roll" See "Passing rent".
"RPI" Retail price index, an inflationary indicator that measures the change
in the cost of a fixed basket of retail goods as calculated on a monthly basis
by the Office of National Statistics.
"SDLT" Stamp Duty Land Tax - the tax imposed by the UK Government on the
purchase of land and properties with values over a certain threshold.
"Shareholders" The holders of Ordinary Shares.
"SONIA" Sterling Overnight Index Average
"Speculative development" Where a development has commenced prior to a lease
agreement being signed in relation to that development.
"sq ft" Square foot or square feet, as the context may require.
"Tritax Big Box Developments shareholders" The holders of B and C Shares in
Tritax Big Box Developments.
"Tritax Big Box Developments ManCo" Tritax Big Box Developments Limited, a
private limited company incorporated in England and Wales (registered number
11685402) which has an exclusive development management agreement with Tritax
Big Box Developments to manage the development of the Tritax Big Box
Developments Portfolio.
"Topped up net initial yield" Net initial yield adjusted to include notional
rent in respect of let properties which are subject to a rent-free period at
the valuation date thereby providing the Group with income during the
rent-free period. This is in accordance with EPRA's Best Practices
Recommendations.
"Total Expense Ratio" or "TER" The ratio of total administration and property
operating costs expressed as a percentage of average net asset value
throughout the period.
"Total Accounting Return" Net total return, being the percentage change in
EPRA NTA over the relevant period plus dividends paid.
"Total Shareholder Return" A measure of the return based upon share price
movement over the period and assuming reinvestment of dividends.
"Triple Net Lease" - A triple net lease (NNN lease) is a commercial lease
agreement in which the tenant is responsible for paying property taxes,
insurance, and maintenance costs in addition to rent and utilities. This type
of lease shifts most property expenses from the landlord to the tenant.
"Tritax Big Box Developments" Tritax Big Box Development Holdings Limited, a
limited company incorporated in Jersey (registered number 127784).
"Tritax Big Box Developments Portfolio" The portfolio of assets held through
Tritax Big Box Developments following the acquisition of db Symmetry in
February 2019, including land, options over land and a number of assets under
development.
"True Equivalent Yield (TEY)" The internal rate of return from an Investment
property, based on the value of the property assuming the current passing rent
reverts to ERV on the basis of quarterly in advance rent receipts and assuming
the property becomes fully occupied over time.
"UK AIFMD Rules" The laws, rules and regulations implementing AIFMD in the UK,
including without limitation, the Alternative Investment Fund Managers
Regulations 2013 and the Investment Funds sourcebook of the FCA.
"Value Add asset" These assets are typically let to clients with good
covenants and offer the chance to grow the assets' capital value or rental
income, through lease engineering or physical improvements to the property. We
do this using our asset management capabilities and understanding of client
requirements. These are usually highly re-lettable. It also includes assets
developed on a speculative basis which have reached practical completion but
remain unlet at the period end.
"WAULT" or "Weighted Average Unexpired Lease Term" The income for each
property applied to the remaining certain term for an individual property or
the lease and expressed as a portfolio average in years.
"Waystone" or "Waystone Asset Services" A trading name of Waystone
Administration Solutions (company number 2605568).
"Yield on cost" The expected gross yield based on the estimated current market
rental value (ERV) of the developments when fully let or actual rental value
for completed developments or those pre-let, as appropriate, divided by the
estimated or actual total costs of the development.
1 Source: CBRE
2 Source: DTRE, "Big Box Logistics Occupier and capital markets report",
January 2025
3 Source: Cushman & Wakefield, "EMEA Data Centre H2 2024 Update",
February 2025
4 This reflects shorter-dated leases, typically in smaller assets, where no
rent review is undertaken with the lease period.
5 Rent for overdue reviews is accrued and recognised within rental income at
a level that is reasonably expected to be achieved on settlement.
6 Includes both non-strategic and logistics assets
7 £306.2 million when including transactions which had exchanged but not
yet completed as at the date of publication.
8 £23.0 million of associated development management income.
9 The methodology underpinning the embodied carbon calculation was updated
to include the building only, which aligns with the Pilot UK Net Zero Carbon
Building Standard. We will review our embodied carbon target accordingly and
in line with market best practice.
10 Includes the dilution effect from the share issued in relation to the
acquisition of UKCM.
( 11 ) Excluding additional development management agreement income.
12 Calculated taking out the effect of the unwinding of the fair value gain
on UKCM borrowings on acquisition.
13 Calculated on a pro-forma basis inclusive of a full 12 months
contribution from UKCM, adding back the fair value gain recognised on the
acquisition of UKCM.
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