Tritax EuroBox – Calmer waters

After a period of interest rate volatility, real estate seems to have entered calmer waters, with some evidence of asset values stabilising, while occupier markets could support rental growth. Tritax EuroBox’s (EBOX’s) manager says that it is sailing in these waters too, as demonstrated by a portfolio valuation that has changed little and a 30% uplift in earnings that now fully covers its 8.6%-yielding dividend.

The company is on the way to achieving its aim of reducing its already low-cost debt to a more conservative LTV level of 40% through the disposals of mature assets from its portfolio (with proceeds now totalling €139m). The manager is confident that even after allowing for the sales, the 2024 dividend will be fully covered. This, it says, is because the portfolio has built-in annual uplifts on current leases and substantial reversion potential from the letting up of vacant/development space. With the macroeconomic environment appearing brighter and the likelihood of interest rate cuts later this year growing, the company’s 39.4% discount could be an attractive entry point.