Tritax Eurobox – Optimism returns

The rapid readjustment of valuations in the European logistics sector has encouraged investors seeking quality assets to return to the market, according to Tritax EuroBox’s (EBOX’s) manager who says that it is optimistic that values are stabilising. The company’s portfolio yield moved out 70bps in the six months to 31 March 2023, but the worst of the declines seem to be over, it adds.

Operationally, the manager says that it is in good shape to take advantage of a strong demand and supply dynamic, having recorded an uplift in annual rent of 5.8% in the six months to March 2023 (10.4% over 12 months). It has recently let a completed development in Germany above ERV and pre-let an extension to an existing building. The manager comments that additional development completions, extensions and inflation-linked uplifts are still to come.

Growth in income and operational savings have meant that the company has been able to fully cover its dividend for the past three quarters. Going forward, the manager expects earnings to continue to cover the dividend, which represents an 8.4% yield.