TRITAX EUROBOX PLC Strong platform optimising performance
Annual Report 2022
Specialists in European
logistics real estate
Tritax EuroBox plc invests in and manages a well-diversified portfolio of Continental European logistics real estate assets. These assets fulfil key roles in logistics and distribution supply chains, with a focus on the most established logistics markets near to the major population centres across core Continental European countries.
Occupier demand for logistics assets in these countries continues to be driven by long-termstructural trends, primarily the growth of e-commerce,the need to optimise, automate and de-risksupply chains and the growing necessity for businesses to operate from sustainable properties.
Our properties are highly sustainable, offer robust and inflation-linked income and have opportunities for capital growth through active asset management. These attributes underpin our ability to generate attractive returns for Shareholders.
Our purpose
Our purpose is to open up new futures in sustainable commercial real estate, creating compelling opportunities for our stakeholders and giving the world's most ambitious companies the space to succeed.
Our Manager
The Company's Manager, Tritax Management LLP, specialises in investing in mission-critical supply chain real assets, aligned with the structural trends shaping the future economy, including digitisation, automation, urbanisation and green energy. It has deep expertise in the sector, built up over more than 25 years.
The Manager has assembled a full-service European logistics asset management capability for the Company, including specialist on-the-ground asset and property managers, with strong market standings in the Continental European logistics sector.
Strategic report | Governance | Financial statements | |||
1 | Our Strategic Framework | 60 | Chairman's Governance Overview | 97 | Independent Auditor's Report |
2 | Highlights 2022 | 62 | Board of Directors | 104 | Group Statement of Comprehensive Income |
4 | Chairman's Statement | 64 | Key Representatives of the Manager | 105 | Group Statement of Financial Position |
6 | Our Portfolio | 66 | Key Activities of the Board | 106 | Group Statement of Changes in Equity |
10 | Our Investment Proposition | 67 | Application of Code | 107 | Group Cash Flow Statement |
12 | CEO's Q&A | 69 | Board Leadership and Company Purpose | 108 | Notes to the Consolidated Accounts |
14 | Our Market | 72 | Stakeholder Engagement | 128 | Company Balance Sheet |
18 | Our Business Model | 74 | Division of Responsibilities | 129 | Company Statement of Changes in Equity |
20 | Our Objectives and Strategy | 78 | Nomination Committee Report | 130 | Notes to the Company Accounts |
21 | Stakeholder Engagement and Section 172 | 82 | Audit, Risk and Internal Control | 134 | Notes to the EPRA and Other Key |
24 | Key Performance Indicators | 84 | Audit & Risk Committee Report | Performance Indicators (Unaudited) | |
26 | EPRA Performance Measures | 88 | Management Engagement Committee | 137 | Glossary of Terms |
28 | ESG Overview | Report | 140 | Company Information | |
30 | ESG Progress Summary | 91 | Directors' Remuneration Report | ||
36 | Manager's Report | 94 | Directors' Report | ||
42 | Financial Review | 96 | Statement of Directors' Responsibilities |
- Principal Risks and Uncertainties
- Task Force on Climate-Related Financial Disclosures
- Going Concern and Viability Statement
Our Strategic Framework
Strong platform - optimising performance
STRATEGIC REPORT
Our business model
Our business model supports our purpose through our focus on investing in the most modern, best located and most sustainable logistics properties. These meet the needs of growing and ambitious companies, both now and in the future.
Source high-quality | Buy and sell for value |
investments | |
Develop on a | Proactively |
risk-controlled basis | and responsibly |
manage assets |
eRead more about our business model on pages 18 and 19
Our strategy
Our strategy is to create value at the point of acquisition and throughout the lifecycle of the asset, through careful asset selection, proactive asset management and a dedicated focus on ESG underpinned by appropriate financing. The objective of this strategy is to produce robust income streams and attractive returns over the long term.
Investment strategy | Asset management |
strategy | |
ESG strategy | Financing strategy |
eRead more about our strategy on page 20
The value we create
By following our business model and successfully implementing our strategy, we create value for all our stakeholders.
Customers
The space to succeed
Society
Jobs, tax revenues and online shopping
Environment
Reduced impact through sustainable investment
Shareholders
Attractive dividends and Total Returns
Lenders
Interest payments backed by secure cash flows
eRead more about our stakeholders on pages 21 to 23
Annual Report 2022 Tritax EuroBox plc | 1 |
STRATEGIC REPORT
Highlights 2022
Increasing contractual visibility on income growth
Financial
Rental income (€m) | Adjusted Earnings Per Share ("Adjusted EPS")1 | Basic IFRS EPS (cents) | ||||||||||||||||||||
€57.9m | 4.24 cents | 7.28 cents | ||||||||||||||||||||
+31.9% | -8.0% | -62.8% | ||||||||||||||||||||
2022 | 2022 | 2022 | ||||||||||||||||||||
57.9 | 4.24 | 7.28 | ||||||||||||||||||||
2021 | 43.9 | 2021 | 4.61 | 2021 | 19.59 | |||||||||||||||||
2020 | 36.0 | 2020 | 4.16 | 2020 | 10.60 | |||||||||||||||||
Dividend per share (cents) | Portfolio value (€m)2 | EPRA Net Tangible Assets per share (€) | ||||||||||||||||||||
5.00 cents | €1,765.6m | €1.38 | ||||||||||||||||||||
No change | +37.8% | +2.2% | ||||||||||||||||||||
2022 | ||||||||||||||||||||||
5.00 | 2022 | 1,765.6 | 2022 | 1.38 | ||||||||||||||||||
2021 | 5.00 | 2021 | 1,281.4 | 2021 | 1.35 | |||||||||||||||||
2020 | 4.40 | 2020 | 837.9 | 2020 | 1.22 | |||||||||||||||||
IFRS NAV per share (€) | Loan to value ("LTV") ratio (%)3 | Total Return (%) | ||||||||||||||||||||
€1.32 | 35.2% | 6.0% | ||||||||||||||||||||
+0.8% | +21.9 pts | -8.3 pts | ||||||||||||||||||||
2022 | 2022 | 2022 | ||||||||||||||||||||
1.32 | 35.2 | 6.0 | ||||||||||||||||||||
2021 | 1.31 | 2021 | 13.3 | 2021 | 14.3 | |||||||||||||||||
2020 | 1.19 | 2020 | 41.1 | 2020 | 11.0 | |||||||||||||||||
Increase in rental income and cost efficiencies supporting future earnings growth and dividend cover
- 31.9% increase in rental income to €57.9 million, reflecting 4.0% like-for-like rental growth, asset management activity and acquisitions
- Adjusted EPRA Cost Ratio of 29.5%; financial year 2023 ratio expected to be c. 25%, driven by expected future income growth and estimated €2.1 million annual savings from reduced management fee
- Adjusted EPS of 4.24 cents, down 8.0%, primarily due to timing of deployment of prior year equity raise
- Dividend per share of 5.00 cents, covered in the quarter ended 30 September 2022 and expected to be fully covered for the financial year 2023
Resilient investment portfolio let to strong customers on long-term inflation linked leases
- Portfolio value of €1,765.6 million, up 37.8% (FY2021: €1,281.4 million), primarily driven by acquisitions in the period
- 5.6% like-for-like capital growth reflecting H1 2022 increase of 8.1% offset by 2.3% decrease in H2 2022
- 9.5% (€7.1 million) portfolio reversion driven by like-for-like estimated rental value growth of 8.2%
- 97% of occupational leases subject to annual increases of which 82.6% linked to inflation
- 99.7% occupancy and significant income visibility with 8.0 years WAULT
2 Tritax EuroBox plcAnnual Report 2022
- Read more about our strategy on page 20
- Read more about our investment proposition on pages 10 and 11 e Read more about our ESG on pages 28 to 35
- See note 12 to the financial statements for reconciliation.
- Valuation under IFRS (excluding rental guarantees).
- As per KPI definition.
- Including rental guarantee and licence fee.
- Adjusted for vacancy.
- Including licence fee income and rental guarantees, excluding exceptional lease surrender in Hammersbach.
STRATEGIC REPORT
Operational
Contracted annual rent4 (€m) | Like-for-like rental growth5 (%) | Rent collection (%) | ||||||||||||||||||||
€74.3m | 4.0% | 100% | ||||||||||||||||||||
+39.1% | +1.6 pts | No change | ||||||||||||||||||||
2022 | 2022 | 2022 | ||||||||||||||||||||
74.3 | 4.0 | 100 | ||||||||||||||||||||
2021 | 53.4 | 2021 | 2.4 | 2021 | 100 | |||||||||||||||||
2020 | 40.7 | 2020 | 0.5 | 2020 | 100 | |||||||||||||||||
Weighted Average Unexpired Lease Term | EPRA vacancy rate (%) | Adjusted EPRA Cost Ratio6 (%) | ||||||||||||||||||||
8.0 years | 0.3% | 29.5% | ||||||||||||||||||||
-1.3 years | -3.0 pts | +1.0 pts | ||||||||||||||||||||
2022 | 2022 | 2022 | ||||||||||||||||||||
8.0 | 0.3 | 29.5 | ||||||||||||||||||||
2021 | 9.3 | 2021 | 3.3 | 2021 | 28.5 | |||||||||||||||||
2020 | 9.1 | 2020 | 5.4 | 2020 | 27.8 | |||||||||||||||||
Maximum average cost of debt (%) | Like-for-like valuation growth (%) | Like-for-like estimated rental value growth (%) | ||||||||||||||||||||
1.46% | 5.6% | 8.2% | ||||||||||||||||||||
-0.44 pts | -6.3 pts | +4.2 pts | ||||||||||||||||||||
2022 | 2022 | 2022 | ||||||||||||||||||||
1.46 | 5.6 | 8.2 | ||||||||||||||||||||
2021 | 1.90 | 2021 | 11.9 | 2021 | 4.0 | |||||||||||||||||
2020 | 2.30 | 2020 | 5.4 | 2020 | 3.2 | |||||||||||||||||
Operational activity reinforcing portfolio resilience and ESG performance
-
Acquired nine high-quality, sustainable assets at a net initial yield
of 3.7%, adding €20.2 million p.a. to the annual rent and benefiting from 11.2% reversion (€2.2 million) - Development schemes totalling 31,200 sqm fully let producing €1.4 million of annual rental income
- Four new leases signed totalling €5.1 million of annual rent, an increase of €0.8 million (+18%) above previous rent or guarantees
- Awarded five Green Stars and "Leader in Sustainability for European Industrial Distribution Warehouse Listed Sector" by GRESB, the global ESG benchmark for real estate
Robust balance sheet with low and capped cost of debt - earliest maturity in Q4 2025
- Issued placement of €200 million, at an average coupon of 1.37% and average maturity of nine years
- 100% of debt with fixed rates or caps, with a maximum average cost of debt of 1.46%
- 4.5 years' weighted maturity with earliest refinancing in Q4 2025
- €239 million of available liquidity from undrawn debt facilities at year end
- Significant covenant headroom with LTV of 35% and interest cover of 3.9x compared to covenant levels of 65% and 1.5x respectively
Annual Report 2022 Tritax EuroBox plc | 3 |
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Tritax EuroBox plc published this content on 11 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 January 2023 16:26:08 UTC.
