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Q3 2020 Update: Strong Portfolio Performance and Continuing Strategic Progress

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Tritax Big Box is the UK’s only Real Estate Investment Trust giving pure exposure to Big Box logistics assets. We selectively acquire, own and manage the UK’s best logistics assets that are mission critical to our tenants.

We utilise our expertise, specialist sub-sector focus and knowledge to deliver out-performance with the objective of delivering attractive, sustainable and growing income together with capital protection and growth for our Shareholders.

Attractive income
Sustainable income
Growing income

Our Company has a number of important strengths, which we believe make us a compelling business, and well positioned for further success:

Pure Big Box – an attractive market with powerful long-term drivers

The fundamentals of the Big Box market are compelling. Demand from tenants is strong because Big Boxes offer them significant economies of scale and cost savings not available from smaller, older buildings. Equally they are vital for the swiftly evolving retail market and, in particular, for e-commerce, which is still at a relatively early stage of development and is growing rapidly in the UK.

At the same time, the supply of Big Boxes in the UK is highly constrained. Their scale makes planning permission difficult to obtain in locations where they are required. There are currently no new or very modern buildings of over 500,000 sq ft vacant or available and in the course of development. Meanwhile, developers are not planning to construct speculative buildings of this size.

This supply/demand imbalance benefits asset owners, producing attractive income and value growth.

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An outstanding portfolio

Since our IPO in December 2013, we have rapidly, but selectively, built one of the most attractive portfolios in the UK quoted real estate sector. Our portfolio is well diversified by size, geography and tenant. The portfolio metrics reflect the strength of our assets, which are typically modern and occupy prime logistics locations. Many of our tenants have made significant investment in respect of internal fit-out and sophisticated automation, which can, and typically does, eclipse the cost of the actual building. Such high levels of investment demonstrates long-term commitment to the asset.

Our portfolio is 100% let, or pre-let to tenants with excellent covenant strength and, at 14.1 years, the average lease length is one of the longest in the listed real estate sector, which gives us certainty of income and underpins our strategy to deliver low risk and growing income.
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Attractive dividend income

Our high-quality portfolio, combined with a low cost base, generates a high-quality, sustainable and growing income stream. This allows us to target a progressive dividend that can offer appealing risk-adjusted returns. For 2019, we delivered a dividend of 6.85 pence per share and for 2020 we have increased our target dividend for the year to 7.0 pence per share.

When viewed in the context of our modern assets, high-quality tenants and length of unexpired lease terms, we consider that our risk-adjusted income return is particularly appealing. Our dividend is underpinned growing property income from financially strong tenants and long-term leases, primarily delivered through upward only rent reviews and assisted by the implementation of asset management initiatives.
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A strong track record of delivery

We have exercised strong capital discipline, standing firm on our pricing policy and turning down numerous unsuitable opportunities. Nonetheless, since listing, we have been successful in achieving our investment aims, acquiring an average of approximately one asset every month. Our ability to complete transactions quickly is aided by our ready access to attractive finance.

The quality of our assets, the secure income they generate and our low cost base have enabled us to meet our objectives of an aggregate dividend of 6.85 pence per share in respect of 2019.
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A highly experienced management team

Tritax Management LLP is our Investment Manager. We benefit significantly from the Manager’s knowledge, expertise and relationships. These allow the Manager to source and negotiate deals off-market, at attractive pricing levels, which offer good value for Shareholders and meet vendors’ desire for quick and certain execution. This has given us a reputation as one of the industry’s most reliable purchasers and forward-thinking owners and managers, making us the obvious choice for potential vendors of Big Boxes.

As well as exercising capital discipline and adding initial value through purchasing at attractive prices, the Manager’s asset management skills can create value throughout an asset’s life cycle, working collaboratively with tenants and using the Manager’s knowledge of their businesses to identify and carry out value protecting and enhancing initiatives.
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