TIDMEBOX TIDMBOXE
RNS Number : 6935L
Tritax EuroBox PLC
17 May 2022
17 May 2022
Tritax EuroBox plc
Asset management and rental growth unlocking value
Results for the six months ended 31 March 2022
Tritax EuroBox plc (the Company) reports its results for the six
months ended 31 March 2022.
31 March 2022 31 March 2021 Change
Rental income EUR27.6m EUR19.4m +42%
Operating profit EUR146.2m EUR47.1m +210%
EPRA cost ratio(1) 33.7% 31.3% +2.4pts
IFRS earnings per share(2) 13.35 cents 7.32 cents +82%
Adjusted earnings per
share(2) 1.82 cents 2.30 cents -21%
Dividend per share 2.50 cents 2.50 cents 0%
Total Return 12.4% 2.3% +10.1pts
31 March 2022 30 September Change
2021
Portfolio value(3) EUR1,689.1m EUR1,281.4m +32%
IFRS Net Asset Value per
share EUR 1.41 EUR1.31 +8%
EPRA Net Tangible Asset
per Share EUR1.49 EUR1.35 +10%
Loan to value ("LTV")(4) +14.6
ratio 27.9% 13.3% pts
Robert Orr, Chairman of Tritax EuroBox plc, commented:
"The strong financial performance we announce today is evidence
of the resilient foundations of our business. We continue to build
a portfolio of high-quality buildings in key European markets let
to institutional-grade occupiers on long-dated and inflation-linked
leases. This foundation underpins our ability to capture attractive
and sustainable levels of rental growth by our strategy.
Our strategy is focused on enhancing the strong income
generating characteristics of our portfolio through asset
management initiatives and increasing our exposure to higher
returning development projects. Our recent surrender and reletting
at Hammersbach, Germany, which delivered a 24% increase in rent,
highlights both the strength of the market and provides a powerful
indication of the significant embedded value within our portfolio.
In Bornem, Belgium, we have successfully let the 15,000 sqm
building that we recently developed, delivering significant
development profits and a 7% yield on cost at rental levels that
represent a 16% increase to previous rents secured on the site.
Both are great examples of how, by implementing our strategy, we
can continue to deliver for our shareholders by maximising the
value of our existing assets and developing attractive new
opportunities.
The macroeconomic environment has become less certain. However,
our portfolio is high-quality and resilient. Together with the
structural tailwinds from the strengthening European logistics
occupier market, mean that we expect our business to deliver
growing rental income and capital values for the remainder of this
financial year and beyond" .
Capital growth and asset management driving strong total
accounting returns
-- Strong total return of 12.4%, ahead of the annual target of
9%, reflecting portfolio quality.
-- Portfolio value growth of 32% to EUR1,689.1 million (30
September 2021: EUR1,281.4 million), driven by like-for-like
valuation increase of 8.1%, EUR234.5 million of acquisitions and
EUR59.7 million of development expenditure.
-- Like-for-like rental income movement (annualised at period
end) of -1.5%, reflecting a new vacancy in Strykow, Poland.
Excluding the vacancy, like-for-like rental income growth was
+0.9%.
-- Actively managing the balance sheet to provide financial
resilience and capacity for growth as well as reducing the cost of
debt;
o Issued first private placement of EUR200 million of senior
unsecured loan notes with a weighted average coupon of 1.368% and
maturity of nine years.
o Fitch senior unsecured credit rating upgraded to BBB from BBB-
providing support for further debt issuances.
o LTV of 27.9% (30 September 2021: 13.3%) or 39.5% including all
committed expenditure on developments, acquisitions since the end
of the reporting period and asset management.
Supportive market fundamentals
European logistics markets continue to see strong demand from a
broad range of occupiers while vacancy levels across the countries
we operate in are at or close to record low levels.
o Take-up in our core markets totalled 28.3 million sqm in the
year to Q1 2022, up 23% year-on-year(5) .
o European vacancy fell to 3.0% at Q1 2022 (Q1 2021: 3.9%).
Rental growth has become increasingly widespread across Europe(5)
.
o European logistics investment volumes reached a new high of
EUR38.1 billion with yields for high-quality investments reaching
record lows(5) .
Strong, resilient portfolio with significant embedded
inflation-linked rental growth potential
-- We have created a high-quality portfolio let to
institutional-grade occupiers on long-dated, inflation -linked
leases.
o Attractive, long-dated leases with weighted average unexpired
lease term of 8.5 years as at 31 March 2022 (30 September 2021: 9.3
years).
o 98% of assets are income producing(6) . Of these, 77% review
based on consumer price indices, 13% are fixed reviews, and the
remaining 10% do not review. The non-reviewing income represents
temporary rent guarantees or license fees.
o Estimated rental value growth of 5.4% in the period (0.9% six
months ending 30 September 2021).
Strong portfolio income profile complemented by opportunities to
add further value and enhance ESG performance
-- Development schemes under way in Barcelona and Strykow progressing well:
o Barcelona extension expected to complete in November 2022
adding a further EUR2.8 million to annual rent at a 7.1% yield on
cost.
o Strykow extension expected to complete in June 2022 adding a
further EUR0.65 million of annual rent.
-- Bornem development successfully leased achieving a profit on
cost of 70% and yield on cost of 7.0% and adding EUR0.7 million
rent.
-- Post period end, we successfully re-let our Hammersbach,
Germany asset to a new tenant increasing annual rent by 23.8% to
EUR3.1 million, 15.9% above the September 2021 estimated rental
value.
-- Ongoing ESG initiatives reflected in improved 2021 GRESB
score of 82/100 alongside 4 green stars (2020: 64/100, 2 green
stars).
-- Further opportunities to drive future income and capital growth from:
o Annual uplifts from the index-linked leases;
o Capturing 9.0% reversionary potential across the
portfolio;
o Leasing 125,249 sqm of available floorspace;
o Developing 77,700 sqm of new floorspace on vacant land;
and
o Brownfield redevelopment of 60,700 sqm.
Strategic deployment of capital through high-quality
acquisitions
-- Acquired seven assets in Germany, Italy, Sweden and the
Netherlands for total consideration of EUR435.1 million in the
period, at yields ranging between 3.5% and 4.7%, including both
income-producing assets and development projects which give the
opportunity for value creation during construction and leasing.
-- Deployed a further EUR97.8 million in two assets after the
period end, acquiring land for redevelopment in Malmo in Sweden in
April 2022 and speculatively forward funding the development of a
prime logistics asset in the Dusseldorf region of Germany,
completing in April 2022.
Presentation for analysts and investors
A Company presentation for analysts and investors will take
place via a live webcast at 10am (BST) today.
To view the live webcast, please register at:
https://stream.brrmedia.co.uk/broadcast/62716388860d1117d3862024
.
The presentation will also be accessible on-demand later in the
day from the Company website:
https://www.tritaxeurobox.co.uk/investors/results-centre/ .
Notes
(1) 30.9% including licence fee income and rental guarantees
(2) See note 7 of the interim financial statements for
reconciliation
(3) Valuation under IFRS (excluding rental guarantees)
(4) As per KPI definition
(5) Data from CBRE, commentary and analysis by Tritax
(6) Including licence fee income and rental guarantees
FOR FURTHER INFORMATION, PLEASE CONTACT:
Tritax EuroBox plc
+44 (0) 20 8051 5070
Nick Preston
Mehdi Bourassi
Jo Blackshaw (Investor Relations)
Kekst CNC (Media enquiries)
Neil Maitland/Tom Climie
07971 578 507 / 07760 160 248
tritax@kekstcnc.com
The Company's LEI is: 213800HK59N7H979QU33.
Notes:
Further information on Tritax EuroBox plc is available at
www.tritaxeurobox.co.uk
CHAIRMAN'S STATEMENT
This was a busy six months for the Company, as we carefully
deployed the EUR230 million equity raise in September 2021 and the
private placement funds drawn down in January 2022. We also
progressed the Company's asset management initiatives, as we
continue to grow income and embed sustainability across our
investment process.
Despite the challenging macroeconomic backdrop that has
continued to develop, market conditions remain favourable in our
sector. This is particularly true from the occupational
perspective, with material rental growth resulting from
strengthening demand and vacancy rates at record lows, leading to
competitive bidding amongst potential tenants. We are successfully
capturing rental growth which is translating into strengthening
earnings growth. The drivers of this demand, notably the growth in
e-commerce, the need to optimise and ensure resilience of supply
chains and the focus on sustainability, remain firmly in place.
Strategic progress
Our strategy is to implement activities that grow income and
value and enhance our high-quality and resilient portfolio. As at
31 March 2022, 98% of the portfolio is income [1] producing. The
portfolio comprises stabilised, inflation-linked, income-generating
assets leased to financially strong tenants. Our portfolio of
best-in-class, modern purpose-built assets is in key logistics
locations, concentrated in attractive markets in Western Europe.
This resilient portfolio gives us good protection against the
currently high inflation rates, with 90% of our income including
either a fixed rental uplift or an element of periodic indexation
(see the Manager's Report for more information).
We are thoughtfully adding assets to grow and enhance our
portfolio. During the period we completed seven acquisitions,
further diversifying the portfolio by tenant and adding to the
Company's holdings in core Western European markets. The
acquisitions included income-generating assets with clear
opportunities to grow rents, as well as development projects where
we can add value by controlling the leasing process, with a view to
capturing higher rental levels and negotiating more favourable
lease terms.
At a time of rapidly rising inflation and build costs, we
carefully contain risks through fixed-price construction contracts
with leading developers. Ultimately, higher land values and build
costs will be reflected in the rents charged by developers,
providing a further driver for rental increases. We also continued
to unlock the value embedded in the portfolio, in the form of the
growing reversionary potential of the portfolio and the unused land
plots available for development. We are progressing further
leasing, development and expansion projects which will come to
fruition in the short to medium term delivering this value.
A rigorous focus on ESG underpins our investment approach.
Investing the proceeds of the green bond issuance has further
reinforced the range of our ESG performance enhancement. We were
pleased that our efforts to date were reflected in a marked
increase in our GRESB score, which puts us well ahead of the
average for our peers and the overall average.
In response to the situation in Ukraine, we have offered vacant
space at our asset in Strykow, Poland, to support the work of the
humanitarian organisations who are on the ground there.
Financial performance, income growth and Total Return
The acquisitions in the current period and the prior year, along
with the rental increases generated by the leases, enabled us to
deliver growth in revenue and operating profits.
We declared two dividends totalling 2.50 cents per share for the
six months, in line with the same period last year. The total
dividend is 72.6% covered by Adjusted EPS, reflecting the
short-term dilution as we invested the proceeds of last September's
equity raise. We expect the total dividend for this financial year
to approach full coverage, depending on the timing of the remaining
acquisitions. Along with the returns we create through active asset
management and capital growth, the dividend contributed to a Total
Return for the six months of 12.4% against our annual target of
9%.
During the period, we further diversified our sources of debt
through our first private placement. The LTV at the period end was
27.9% (39.5% on a commitment basis). We expect the LTV to increase
towards our 45% target as we deploy into new acquisitions and
complete the existing developments.
The inclusion of the Company's shares into the FTSE 250 index
reflects our increasing scale and the effective implementation of
our strategy since the IPO. This has also improved the liquidity of
the Company's shares and broadened the shareholder register.
Governance
There was one change to the Board during the period, as we were
delighted to welcome Sarah Whitney as a Non-Executive Director and
Audit Committee member, with effect from 14 February 2022.
Following her appointment, we reviewed and refreshed the
composition of the Board's committees. As a result, Eva-Lotta
Sjostedt has joined the Nomination Committee and stepped down from
the Audit Committee; and Taco De Groot stepped down from the
Nomination Committee.
Outlook
While the situation in Ukraine, the ongoing pandemic and high
inflation mean we are operating in an uncertain economic and
geopolitical environment, we remain confident in the outlook for
our business. Discipline across our investment process ensures that
our assets are of exceptional quality and should remain attractive
to occupiers for years to come. Long-term structural drivers
continue to increase occupational demand and there remain
significant barriers to an increase in supply in the sought-after
locations where we invest. These conditions should generate
long-term rental growth, which we will capture through development
and asset management, contributing to further earnings growth,
alongside the growth from the CPI indexation in the leases.
Strong relationships with our development partners and deep
penetration into our core, high growth markets give us access to
further investment opportunities at attractive pricing, and we will
continue to unlock value from our existing assets. The high-quality
of our portfolio and its concentration in stable Western European
economies also gives us confidence in our ability to deliver a
resilient and growing income stream. The Board is therefore
confident of making further progress in the second half of the
year.
MANAGER'S REPORT
A strong occupational market, combined with our large, prime
portfolio of modern, sustainable logistics assets in the best
markets in Europe provides a powerful platform. Using our
disciplined stock selection and skilful asset management we are
unlocking value through delivering rental growth and development
profits. This is despite macroeconomic headwinds which are
affecting capital markets.
Continued supportive market fundamentals
The European logistics market continues to see strong and
growing occupier demand generated from a wide range of different
business types, all driven by powerful structural trends. At the
same time, supply of suitable logistics assets in the right
locations is highly constrained and there are significant barriers
to developing new stock to meet this demand , both in the short and
long term.
The primary structural trends driving long-term occupier demand
are:
-- The continued growth of e-commerce, requiring companies to
have large and often highly automated logistics facilities, close
to major population centres and strong transport links. Across
Europe, 67% of people shopped online in 2021, up from 51% in 2016
[2] .
-- The need to optimise, reinforce and de-risk supply chains, by
adopting the latest supply chain planning tools, reviewing
manufacturing locations and transportation networks, and by holding
more critical stock closer to customers and end users, hence making
the supply chain more resilient.
-- The growing necessity for businesses to operate from
sustainable properties that will remain fit for purpose for years
to come. In addition to reducing their environmental impacts,
occupiers increasingly want a workspace that promotes employee
wellbeing, not least because this helps them to attract and retain
staff at a time of growing labour shortages.
The global events of recent years have accelerated and
intensified these trends. The Covid-19 pandemic continues to
disrupt supply chains, with countries globally following different
approaches to Covid-19 and local lockdowns, disrupting the
production and flow of goods. Geopolitical risk has been elevated
in recent years and Russia's invasion of Ukraine has increased
uncertainty for businesses. The Suez Canal blockage in 2021 also
highlighted the vulnerability of global supply chains to unexpected
events.
Occupiers are therefore looking to minimise the risk of future
disruption by increasing inventories, diversifying and/or
reshoring, and adding back-up storage space. They are also
accelerating long-term plans to ensure facilities can cope with
increased online business. Automation is an important part of this
process, which also improves resilience against Covid-19 and
potential future pandemics, in part by reducing the reliance on
close human interaction. Occupiers are also focused on digital
connectivity, reflecting the need for advanced tools and data to
give them end-to-end visibility of their supply chains and also
allowing these advanced building management systems to provide
efficient goods handling and energy reduction processes.
At the same time there are ever fewer suitable vacant buildings,
and little land on which to build new ones. There are even fewer
sites available that can accommodate the very largest logistics
facilities, and municipalities are often reluctant to zone land for
the construction of assets of this scale. As a consequence,
companies looking for large new logistics facilities have few
choices.
We invest in buildings which can accommodate and satisfy the
needs of the forward-looking occupier. These assets are well
located, of flexible design and layout, with high ESG credentials,
and hence appealing to a wide range of businesses, now and into the
future.
Real estate market fundamentals and investment markets
The fundamentals of the market and investor demand for logistics
real estate continue to reflect the trends described above.
Continued strong take-up
Take-up in the Company's core European markets [3] was at record
levels in the 12 months to Q1 2022 at 28.3 million sqm, up 23%
year-on-year [4] . The largest year-on-year increases were seen in
Belgium (+62%) and The Netherlands (+49%).
Tight market conditions and near record demand mean net
absorption (which is the change in occupied space during the
period) was also strong across most markets. Countries such as
Germany are becoming increasingly constrained by limited supply and
as a result, a high proportion of activity is for new buildings.
Companies are also using logistics providers to hedge against the
challenges in their global supply chains, which is unlikely to be a
viable long-term solution due to the increased cost.
Supply remained constrained
In the 12 months to Q1 2022 completions totalled 17.2 million
sqm, up from 14.9 million sqm in the 12 months to Q1 2021 2 . While
speculative development is picking up in certain markets across
Europe, supply is being absorbed as evidenced by European vacancy
rates declining further. Rising build costs and securing a reliable
supply of raw materials have become additional barriers to
development on top of a general lack of suitable zoned land in the
right locations. Rental growth continued and helped to partially
mitigate the impact of rising build costs.
Vacancy rates continued to decline
Average vacancy across Europe was at a record low at the end of
Q1 2022, at just 3.0% 2 (Q1 2021: 3.9%). Available space reduced
significantly in markets such as Sweden where vacancy moved down
from 3.8% in Q1 2021 to 1.1% at Q4 2021. Vacancy is below 5% in
seven of the eight core European countries shown below 2 :
Q1 2022 Vacancy Q1 2021 Vacancy
rate (%) rate (%)
Sweden 1.1% [5] 3.8%
Belgium 1.3% 1.0%
Germany 2.1% 2.3%
Italy 2.4% 2.6%
Netherlands 2.9% 4.1%
Poland 3.4% 6.5%
France 4.2% 5.8%
Spain 5.9% 7.5%
Europe (excluding
Sweden) 3.0% 3.9%
Imbalance of supply and demand has driven rental growth
The 12 months to Q1 2022 saw rental growth across almost all our
core countries. Prime rental growth has become increasingly
widespread with peripheral markets such as Sweden, Poland, Italy,
and Spain all seeing growth in the last 12 months [6] .
The table below shows prime rental growth in the year to Q1 2022
by market 2 :
12 months to Q1 2022 12 months to Q1
Rental growth (%) 2021 Rental growth
(%)
Poland 15.0% 0%
Sweden 12.2% 8.1%
Germany 10.3% 1.4%
Spain 7.1% 0%
Belgium 6.9% 11.5%
The Netherlands 6.3% 0%
Italy 1.8% 1.8%
France 0% 4.5%
Investment demand remained high
Robust income streams and the potential for income and capital
growth make logistics real estate appealing to investors. Across
our core European markets, total transaction volumes rose 53% to
reach a new high of EUR38.1 billion [7] . As a result of this
investment demand, prime logistics yields have continued to
compress across all core markets and averaged 3.6% at Q1 2022.
Yields ranged from 3.0% in Germany to around 4.4% in Poland 2 .
A strategy for value creation
The Company's strategy is designed to create value at the point
of asset acquisition and throughout the life cycle of an asset to
its ultimate disposal through:
- careful asset selection, following our four-pillar investment philosophy;
- proactive asset management, to drive value from the existing portfolio;
- a robust focus on ESG and sustainability;
- appropriate financing, including an active capital management programme; and
- selecting the appropriate time to sell and recycle capital into new opportunities.
The Company made good progress with its strategy during the
period, as set out below.
Further strengthening the portfolio
The Company's investment strategy favours acquiring assets where
we can maximise value creation, either in the short-term or over a
longer time horizon. For example, we may purchase assets at an
earlier stage in their development cycle (including buying land or
forward funding developments), buy assets with vacancy so we can
control the leasing, or develop unutilised land purchased with an
asset. This approach drives returns in the short-term and allows us
then to choose between either retaining the asset as a new
Foundation asset for the portfolio or sell once the value adding
project is complete. We also continue to seek attractive
opportunities to acquire Foundation and Growth Covenant assets.
The Company's integrated ESG strategy underpins its overall
investment approach. It focuses on owning and actively managing
healthy, modern and sustainable buildings, targeting net zero
carbon emissions for our direct operations, improving the
portfolio's energy efficiency, enhancing nature and wellbeing, and
creating social value.
Successful deployment into prime logistics assets
The table below provides detail of the acquisitions completed
during the period and post the period end continuing the Company's
deployment.
All acquisitions outlined are in prime logistics locations where
we expect to see growing occupational demand and limited new
supply, supporting rental growth. Where assets are currently
vacant, we would expect to lease these quickly. Eight of the nine
assets have been acquired off market from established developer
partners Dietz, LCP and MIGS at competitive prices compared to the
market level.
Date Location Acquisition Acquisition Rent now Strategic rationale
price and detail and forecast,
NIY ERV
Oct 2021 Gelsenkirchen, Acquired -- Asset comprising -- In place -- Strong rental
North Rhine for EUR32.2 three newly rents of growth potential
Westphalia, million at built units EUR76 psm, due to location
Germany. Located discounted totalling 16,632 rental guarantee -- Expect to
close to Essen yield of sqm at EUR69 let unit at
in the most populous 3.7% due -- One of the psm elevated rent
state in Germany to vacant three units due to constrained
unit is vacant with local supply
a rental guarantee
in place
Nov 2021 Bönen , EUR117.9 -- Agreed to -- Leased -- Strong rental
North Rhine million acquisition acquire land at EUR62 growth potential
Westphalia, price at and fund development psm due to premium
Germany. Located a discounted of a 66,065 logistics location
in densely populated yield of sqm building
economic heartland 3.5% to reflect -- Asset pre-let
of Germany development for 15 years
structure to a leading
global logistics
service provider
Nov 2021 Settimo Torinese, EUR24.4 million -- Speculative -- Subject -- Prime location
Turin, Piedmont, at a yield forward funding to 12-month -- Transaction
Italy. Positioned of 4.87% agreement for rental guarantee reflects an
adjacent to the to reflect a highly specified from completion accretive NIY
A4 'Turin-Trieste' development and sustainable (expected after purchase
motorway, east funding structure 28,291 sqm in Q4 2022), costs of low
of Turin logistics warehouse based on rental level
-- Asset will a rate of psm
be developed EUR 45 per -- Ability to
by Logistics sqm control leasing
Capital Partners in rising rental
to a BREEAM market
Very Good standard
Nov 2021 Rosersberg I, SEK 284 million -- Acquired -- EUR90 -- Expect to
Stockholm, Sweden. (EUR27.9 first plot psm rental lease the asset
Established Swedish million) of land at guarantee quickly and
logistics hub, Rosersberg level ahead of the
north of Stockholm, NIY of 4.2% to fund the underwritten
adjacent to Arlanda is discounted speculative rental levels
International from the development -- Strong strategic
Airport market yields of a 13,181 location
for stabilised sqm prime sustainable
assets to logistics asset
reflect the
leasing risk
Nov 2021 Piacenza, EUR49.7 million -- Acquired -- Average -- Stabilised
Emilia-Romagna, at a yield 47,800 sqm of EUR44 asset in strong
Italy . Major of 3.7% asset per sqm, location leased
logistics hub which is off low rents
, close to Piacenza below prevailing
to the south headline
of Milan rents of
EUR47 per
sqm
Jan 2022 Rosersberg II, SEK 402 million -- Acquired -- EUR90 -- Expect to
Stockholm, Sweden (EUR39.4 second plot psm rental lease the asset
. Immediately million) of land at guarantee quickly and
adjacent to site Rosersberg level ahead of the
acquired in November NIY of 4.0% to fund the underwritten
2021 is discounted speculative rental levels
from the development -- Strong strategic
market yields of a 17,832 location
for stabilised sqm prime sustainable
assets to logistics asset
reflect the
leasing risk
February Roosendaal, EUR144.3 -- Agreement -- Rent paid -- Long term
2022 North Brabant, million at to forward reflects lease to leading
Netherlands. a yield of fund 113,179 a low rate food retailer
Prime logistics 3.5% sqm development, of EUR45 -- Potential
location in Southern which will psm p.a. to capture further
Netherlands be developed relative expected rental
in three phases to the local increases, with
divided into market rental rent review
three units levels of allowing rent
-- All three over EUR50 to increase
units have psm to the prevailing
been pre-let open market
to Lidl Logistics level if the
BV, on a single tenant extends
lease expiring lease in 2027
in November
2027
March Dormagen, North EUR76.4 million -- Speculative -- 18-month -- Market rental
2022 Rhine Westphalia, forward funding rental guarantee levels in this
Germany. Located Reflects of a new 36,437 from the location, are
between a NIY of sqm logistics developer expected to
DĂĽsseldorf 3.3%, based asset at EUR69 exceed the rent
and Cologne on the rental psm agreed under
guarantee -- Market the guarantee
income rental value -- Value will
of circa be captured
EUR74 psm by the expected
leasing at a
rent above the
rent guarantee
April Malmö, SEK 223 million -- Speculative -- Aggregate -- Re-development
2022 SkĂĄne, Sweden (EUR21.4 brown field post development scheme provides
. Located between million) redevelopment rental value access to future
Malmö's scheme expected development
two major ring -- Acquired to be > SEK profits
roads, to the 95,000 sqm 46 million -- Attractive
south of the of development (EUR4.4 million) income yield
city centre land p.a. during the
-- Atria Group pre-development
will occupy phase
the existing -- Expected
site, paying future construction
a rent of SEK costs of c.
13 million EUR65 million
(EUR1.25 million) -- Significant
p.a. upside potential
-- Redevelopment - with value
of the site of the final
to commence scheme expected
in early 2024, to be over SEK
with completion 1.2 billion
targeted in (EUR115 million)
2025
Portfolio composition
At the period end the portfolio comprised 22 assets, situated in
the core European countries of Belgium, Germany, Italy, the
Netherlands, Poland, Spain and Sweden. These assets are key to our
tenant partners' logistics and distribution supply chain needs, and
demonstrate the following key characteristics:
-- modern , with 74% of the portfolio having been built in the
last five years, helping to ensure that the buildings meet the
latest operational and sustainability needs of occupiers;
-- large , with 74% of the portfolio by area being in excess of
50,000 sqm and an average size of 60,000 sqm;
-- sustainable , with 77% of the portfolio (standing assets) by
floor area covered by Green Building Certifications or Energy
Performance Certificates, and with an additional 16% still in
progress;
-- secure income , with around 79% of the Company's 32 tenant
partners being multi-billion Euro businesses, including some of the
world's best-known companies;
-- inflation resilient , with 77% of the Company's rent
including an element of indexation, 55% benefitting from uncapped
CPI linkage, and 22% benefiting from indexation which is
restricted.
-- growing income, with strongly rising market rental levels
increasing the reversionary potential of the portfolio to 9.9%,
opportunities are present to capture this market growth through
thoughtful asset management and the introduction of rent reviews
into leases; and
-- long leases , resulting in a WAULT at the period end of 8.5
years, well ahead of the Company's target minimum of five years.
The unexpired lease terms at the period end ranged up to 15.9
years.
Asset management: capturing embedded value
The strategic tilt towards acquiring Value Add assets is giving
us a growing number of opportunities to unlock value from the
portfolio. These include progressing the Company's development
projects and adding value to existing assets through proactive
asset management. By maintaining close relationships with the
Company's occupiers, we are able to incorporate projects that
support their growth plans into our asset management programme. We
also look to improve the assets' sustainability performance,
ensuring they remain fit for purpose for the long term.
Developments
Completed development
-- Bornem, Belgium. The Company has recently successfully
completed the speculative development scheme on the previously
vacant land plot in Bornem. This concluded with the successful
letting to an online grocery retailer on a new nine year lease,
with tenant break options at years three and six, at a blended net
effective rental level of EUR47.60 psm, representing an increase of
16.6% against the previous letting on site at a net effective rent
of EUR40.80 psm in July 2019. The development was completed at a
yield on cost of 7.0%, and the total profit of EUR7 million
represented an attractive profit on cost of 70%. As well as
demonstrating rental growth in the location, allowing scope for
future income growth, the project demonstrates the Company's
ability to unlock and deliver development profit from within the
portfolio.
Speculative development
At the end of the period, the Company had entered into four
forward funded speculative developments [8] , in line with the
evolution of our strategy as articulated in December 2020, which
are all proceeding to plan. Progress with these developments during
the period is set out below:
-- Rosersberg I, Stockholm, Sweden . As noted earlier, the
Company now owns two adjacent development sites at Rosersberg, to
the north of Stockholm. We received a building permit for the
13,000 sqm phase 1 facility in December 2021 and construction began
in February 2022, with practical completion expected in February
2023. Early discussions are already under way with potential
occupiers.
-- Rosersberg II, Stockholm, Sweden . The building permit for
the 18,000 sqm second phase is expected in May and construction is
expecting to begin in June 2022 with practical completion expected
in May 2023. Early discussions are already under way with potential
occupiers.
-- Settimo Torinese, Turin, Italy. Construction of this 28,000
sqm asset has begun and it remains on schedule for practical
completion in Q4 2022. The site is in a prominent location on a key
motorway across Northern Italy and we are now looking to progress
the leasing.
-- Oberhausen, Germany . The developer is continuing the process
of obtaining final permitting for this 23,000 sqm logistics asset,
once this final condition is cleared the Company will acquire the
site. Work on site is then expected to start in August 2022.
Pre-let developments - the company has two pre-let forward
funded developments under construction
-- Bönen, Germany . This brownfield, pre-let development is
under way with demolition and ground works now complete, with new
construction due to start imminently. While this is a pre-let asset
it will benefit from capital value growth as the yield re-rates as
the development is completed and transitions into a stabilised
asset.
-- Roosendaal, the Netherlands . This development is mid
construction with the first phase already complete and income
producing. The remaining two phases are under construction and on
schedule for completion in early 2023. In a similar way to Bönen,
this asset will benefit from a yield re-rating on completion.
Extension developments - the Company's portfolio has a number of
land plots available for development, adjacent to existing
buildings. Some of these are already being developed, whilst others
will be developed in the future.
Extensions currently under development
-- Barcelona, Spain. Construction of the 94,000 sqm extension to
the Barcelona asset let to Mango continues to progress to plan.
Practical completion remains on track for November 2022, at which
point the extension will be incorporated into the existing lease,
which runs until December 2046. The Company is financing the
construction at an attractive yield on cost of 8.8%, on an
estimated capital commitment of EUR31.5 million.
-- Strykow, Poland . Construction of a 16,000 sqm extension to
the 43,000 sqm building already let to Arvato is progressing well,
with final practical completion expected in June 2022. The
extension will be let for five years from practical completion, at
a headline rent of EUR645,985 per annum. The lease includes
standard green clauses and annual indexation.
Future potential extension developments
The Company has a number of land plots which have the potential
for future development. In all cases these plots are zoned for
logistics use, but the usual building permits will need to be
received.
-- Wunstorf. The existing building has the capacity to be
extended by 10,000 sqm. The Company is discussing options with the
current occupier, Havi.
-- Geiselwind. This asset is the global logistics centre for
Puma. There is an adjacent plot of land which has a predesigned
extension capacity of circa 42,000 sqm.
-- Rome. This Amazon distribution centre has the capacity for
two 5,000 sqm external extensions and also scope for further
mezzanine extensions internally.
-- Rumst. This European distribution hub for Cummins Inc has a
plot of land which could accommodate a 15,000 sqm development.
Strykow. As well as the soon to be completed extension for
Arvato, there is further unused land to construct another 8,500 sqm
extension to the existing building.
Increasing income from indexation and leasing
Indexation . The indexation provisions in the leases means the
portfolio delivers inherent year-on-year rental growth. Rental
uplifts are either fixed or indexed to local inflation, usually
annually, thereby offering regular compounding of income that
supports the Company's dividend policy. We also look for
opportunities to capture market rental growth, which we expect to
exceed indexation, through asset management initiatives.
82% of the Company's leases are exposed to uncapped indexation
capture, linked to local consumer price indices. As the Company
continues to grant new leases, we are insisting that all these
leases only include 100% uncapped CPI capture, hence increasing
this uncapped percentage as the Company's leasing programme
advances.
Leasing.
-- Nivelles, Belgium. In November 2021, the Company agreed a new
lease on the vacant unit 2 at Nivelles, Belgium. The new tenant
partner is Associated Retail SA (trading as "Match Supermarkets"),
a leading Belgian convenience supermarket group. The new lease has
been agreed for a nine-year term from 16 November 2021, at an
initial annual rent of EUR755,500 p.a., reflecting a headline rent
of EUR47.30 psm. This rental level, on a net effective basis, is 8%
above the level of the existing lease for unit 1 and the current
rental guarantee. The rent will be subject to annual uplifts in
line with the Belgian Healthcare Index. Securing this letting ahead
of the expiry of the rental guarantee further demonstrates the
strength of the Company's properties and locations. Adding a higher
rent and extending the income profile had led to a material
improvement in asset value. Following the completion of this new
lease, the property is now fully let.
-- Bornem, Belgium. In March 2022, the Company signed a lease to
an online grocery retailer on the recently developed 14,935 sqm
unit in Bornem, Belgium. The tenant will pay an annual rent of
EUR724,606 based on a warehouse a rent of EUR48 psm, some 6.7%
above the rental guarantee level of EUR45psm, and 16.6% above the
previous letting of the adjacent building based off a rent of a net
effective rental level of EUR40.80 psm. The lease is for a term of
9 years with break options in years 3 and 6. It incorporates the
Company's standard Green Lease clauses and also annual indexation
to the Belgian Health Index.
Hammersbach, Frankfurt, Germany. Since the period end the
Company has agreed a new letting on this 43,000 sqm building
purchased in 2019. The new lease has been granted for a seven year
term, with a five year tenant extension option to a leading German
third party logistics provider B+S GmbH Logistik, at a rent of
EUR3.06 million per annum reflecting a rate of EUR69 psm on the
warehouse space. This new letting followed the surrender of the
prior lease to ID Logistics, who were looking to vacate the
building following a change in business plan for the site. The
Company was able to negotiate the termination of that lease, at a
total rent of EUR2.47 million per annum reflecting EUR55.20 psm,
with the new lease delivering an increase in income to the Company
of 23.8%. In addition to this significant increase in rent, the
other terms of the lease are more favourable to the Company than
the previous lease, improving the indexation provision to 100% of
CPI capture annually. It also includes a market rent review should
the tenant exercise the extension option at year seven. This
provides a good example of how active management of the portfolio
is able to convert market rental value growth into income and hence
earnings growth for investors.
Improving ESG performance through asset management
Our ESG strategy is integrated into our approach to asset
management, Our focus is on asset management activities which
deliver impact towards our key goals of:
1. Sustainable Buildings
2. Energy & Carbon
3. Nature & Wellbeing
4. Social Value
The Asset PV Quickscan analysis which was undertaken by CBRE in
2019 continues to provide the baseline data to investigate and
implement solar renewable energy projects across our portfolio. We
now have solar energy projects implemented across nine assets:
1. Barcelona, Spain
2. Rome, Italy
3. Bornem, Belgium (2)
4. Rumst, Belgium
5. Peine, Germany
6. Breda, Netherlands
7. Nivelles, Belgium (2)
We are continuing to investigate the feasibility of further
solar projects in collaboration with our occupiers.
Enhancing and effectively managing biodiversity remains a key
priority working in collaboration with our occupiers. At Rome,
Italy we contributed EUR5,000 to the relocation of old bee families
(new area arrangement, construction of new fence, shelter equipment
for the care of hives) and purchased new bee families; the bees
were previously located on the north side of the building which was
not beneficial to them.
At Bornem, Belgium we contributed to the remodelling of the
occupier Alcon's external areas. This included increasing the
external green areas by 240 sqm, installing a new bicycle storage
facility and additional wellbeing facilities for visiting truck
drivers for a total contribution of EUR42,000. In return we
negotiated the removal of a tenant break option in the lease, hence
securing longer income for the Company.
Creating social value
In addition to the asset level community engagement which
happens across our portfolio we have continued our corporate
charity initiative with The Mission to Seafarers.
The Mission to Seafarers charity supports the 1.5 million men
and women working at sea globally. These men and women support the
global supply chain and logistics network used by our occupiers.
Tritax EuroBox plc begun a partnership with The Mission to
Seafarers in 2021 to support this critical work. Starting with an
initial donation of EUR15,000 to provide emergency relief during
the pandemic, the Company is working with the charity to develop a
long-term partnership to support social value in our sector's
supply chain. An additional funding of EUR22,000 was made in
October 2021 to purchase a bus in Myanmar to help transport workers
and crucial supplies.
Improved ESG ratings
In October 2021, GRESB awarded the Company a rating of 82/100
and four Green Stars out of a maximum of five. This was a
significant improvement on the Company's 2020 score of 64/100 and
positions the company significantly ahead of the average score of
64/100 for the peer group and the overall GRESB average of
73/100.
The score reflects our rigorous integration of ESG and our
progress with enhancing the Company's performance as a result,
notably the high proportion of green building certifications across
the portfolio and our success in collecting energy consumption data
from our occupiers. To enable this partnership approach, we have
continued with our strategy of implementing green leases and have
successfully concluded a further three green leases. This brings
the total green leases within the portfolio to seven representing
11% of net income.
FINANCIAL REVIEW
Portfolio valuation
The portfolio was independently valued by JLL as at 31 March
2022, in accordance with the RICS Valuation - Global Standards. The
portfolio's total value at the period end was EUR1,689.1 million
(30 September 2021: EUR1,281.4 million), representing a
like-for-like valuation increase of 8.1% during the period. The
rental value of the portfolio, being defined as the level of rent
which the portfolio would be expected to generate if all buildings
were leased at current market levels, as opposed to the in place
rent, has increased by 6.6% on a like-for-like basis over the six
month period, leading to an overall reversionary potential of
9.0%.
The like-for-like valuation increase reflects a combination of
factors, continuous yield compression for prime assets, the
benefits of our asset management programme, including the progress
made with the Barcelona, Bornem and Strykow developments, as well
as the ongoing rental growth from the indexation in the leases,
growing market rental values and our ability to acquire properties
at attractive pricing through our development partners.
Financial results
Rental income for the period was EUR27.6 million (2021: EUR19.4
million). This increase reflects the growth in the portfolio
between the two periods. On a like-for-like basis, the annualised
rental income has decrease by 1.5%. This is due to a new vacancy in
part of the asset in Strykow in Poland.
The Company's operating and administrative costs were EUR8.5
million (2021: EUR5.4 million), which primarily comprised:
-- the Management Fee payable to the Manager of EUR4.0 million (2021: EUR2.3 million)Íľ
-- the Company's running costs, including accounting, tax and auditÍľ and
-- the Directors' fees.
The EPRA cost ratio (inclusive of vacancy cost) was 33.7% (2021:
31.3%). This increase is the result of a combination of the high
valuation increase during the period and the effect of cash drag
from the equity raise undertaken in September 2021. The Manager and
the Board are going through an overall cost review, with an intent
to lower the cost ratio. Amongst other initiatives, the Board and
Manager are in advanced discussions regarding lowering the
Investment Management fee, which in turn should result in a reduced
cost base.
The total cost of debt for the period was EUR3.5 million (2021:
EUR4.0 million), reflecting a lower average cost of debt achieved
during the period. Interest cover was 7.58 times (2021: 4.64
times). The weighted average cost of debt in the period was 1.07%
(2021: 2.3%), with the reduction reflecting the low cost of new
debt facilities agreed in the last 12 months (see Debt Financing
below). The run rate cost of debt is 1.3%.
Profit before tax for the period was EUR138.2 million (2021:
EUR41.2 million).
The current income taxation charge for the period was 1.8% of
the Company's net property income.
The taxation charge is primarily incurred in the local
jurisdictions in which the Company invests. As an HMRC approved
investment trust, the Company is exempt from UK corporation tax on
its chargeable gains. The Company is also exempt from UK
corporation tax on dividend income received, whether from UK or
non-UK companies, provided the dividends fall within one of the
exempt classes under the Corporation Tax Act 2009.
The corporation tax rate in future periods will depend primarily
on the jurisdictions where the Company acquires assets, given the
differing tax rates across continental Europe. The Company does not
use any structures designed to artificially reduce its tax
liabilities and looks to pay the appropriate level of tax where it
is due.
The Company's EPS measures for the period reflect the short-term
dilutive impact of the September 2021 equity issue, as we invest
the proceeds in income-generating assets. We expect to see earnings
growth throughout the year, as the Company continues to deploy.
Basic EPS for the period was 13.35 cents (2021: 7.32 cents).
EPRA EPS, which primarily excludes the valuation movement, was 0.90
cents (2021: 1.59 cents).
Adjusted Earnings for the period were EUR14.7 million (2021: EUR
10.3 million), resulting in Adjusted EPS of 1.82 cents (2021: 2.30
cents). More information about the calculation of basic, EPRA and
adjusted EPS can be found in note 7 to the Interim financial
statements.
Dividends
Since the start of the period, the Company has declared the
following dividends:
-- 1.25 cents per share on 7 December 2021, in respect of the
period from 1 July to 30 September 2021 (paid 14 January 2022);
-- 1.25 cents per share on 10 February 2022, in respect of the
period from 1 October to 31 December 2021 (paid 14 March 2022);
and
-- 1.25 cents per share on 17 May 2022 in respect of the period
from 1 January to 31 March 2022. This dividend will be paid on or
around 24 June 2022, to shareholders on the register at 27 May
2022.
The total dividend for the p eriod was therefore 2.50 cents per
share or EUR20.17 million (2021: 2.50 cents per share or EUR12.98
million). This was 72.6% covered by Adjusted Earnings (2021:
79.1%), reflecting the short-term dilution from the equity issue
noted above. We expect the total dividend to approach full coverage
by year-end, depending on the timing of the remaining
acquisitions.
Cash flow
The Company benefits from stable, growing and long-term cash
flows. Cash from operations in the period was a net inflow of
EUR14.9 million (2021: net inflow of EUR17.9 million).
Net assets
The IFRS NAV per share at the period end was EUR1.41 (30
September 2021: EUR1.31) and the EPRA NTA per share was EUR1.49 (30
September 2021: EUR1.35). Information on EPRA's net asset valuation
metrics can be found in the EPRA Performance Measures section.
Debt financing
At the start of the period, the Company's debt facilities
comprised a EUR250 million Revolving Credit Facility (RCF) and
EUR500 million of senior unsecured green bonds maturing on 2 June
2026, with a coupon of 0.95%. The RCF is unsecured, providing
operational flexibility for the Company, and was undrawn during the
period (30 September 2021: EUR250 million) and matures in 2025.
On 2 December 2021, the Company announced that it had signed an
agreement with institutional investors for a debut private
placement of EUR200 million senior unsecured notes. The notes
comprise three tranches with a weighted average coupon of 1.368%
and a weighted average maturity of nine years. The funds were drawn
in January 2022.
The three tranches comprise:
-- EUR100 million at a fixed coupon of 1.216%, with 7-year maturityÍľ
-- EUR50 million at a fixed coupon of 1.449%, with 10-year maturityÍľ and
-- EUR50 million at a fixed coupon of 1.590%, with 12-year maturity.
The placement supports the Company's growth strategy, further
diversifies its funding at an attractive fixed cost and increases
the weighted average maturity of its debt.
At the period end, the Company had total debt drawn of EUR700
million. This resulted in an LTV ratio of 27.9% (30 September 2021:
13.3%). Taking into account the Company's capital commitments on
its development and asset management projects, the proforma LTV
increases to 39.5%. This compares with the medium-term target of
45% and the maximum permitted by the Company's investment policy of
50%.
On 10 March 2022, the Company announced that Fitch Ratings
Limited had upgraded its senior unsecured rating to BBB from BBB --
. Fitch also affirmed the Company's Long -- Term Issuer Default
Rating at BBB -- with stable outlook.
Post period end activity
On 26 April 2022 the Group completed the acquisition of the
Dormagen asset for an agreed property price of EUR76.4 million and
the acquisition of redevelopment land in Malmo for EUR21.4
million.
On 3 May 2022 the Group signed a new lease on the asset at
Hammersbach, Germany.
There were no other significant events occurring after the
reporting period, but before the financial statements were
authorised for issue.
Related party transactions
Transactions with related parties in the period included the
Management Fee paid to the Manager, the Directors' fees, and
certain acquisitions the Company made from two of its main
development and asset management partners, Dietz AG and Logistics
Capital Partners. More information can be found in note 17 to the
Interim financial statements.
In March 2021, the Group identified an area of non-compliance in
regards to its treatment of a related party (Dietz AG) under the
Listing Rules (as previously reported). There is no further update
to this matter, with shareholders approving 6 related party
transactions via Company general meetings since then.
Alternative Investment Fund Manager (AIFM)
The Company is an Alternative Investment Fund within the meaning
of the AIFMD and has appointed the Manager as its AIFM. The Manager
is authorised and regulated by the Financial Conduct Authority as a
full scope AIFM.
KEY PERFORMANCE INDICATORS
Set out below are the key performance indicators we use to track
our strategic progress.
KPI and definition Comments Performance
1. Dividend The dividend reflects our ability to 2.50 cents per share for the six
Dividends paid to shareholders and deliver a growing income stream from months ended 31 March 2022
declared in relation to the period. our portfolio and (six months ended 31 March 2021: 2.50
is a key element of our Total Return. cents per share)
Our policy is to pay an attractive and
progressive dividend, with the
intention to pay out
90-100% of our Adjusted Earnings each
year, with a minimum payout of 85% of
Adjusted Earnings.
2. Total Return (TR) TR measures the ultimate outcome of 12.4% for the six months ended 31
TR measures the change in the EPRA Net our strategy, which is to create value March 2022
Tangible Assets (EPRA NTA) over the for our shareholders (six months ended 31 March 2021:
period plus dividends through our portfolio and to deliver a 4.3%)(1)
paid. secure and growing income stream. The
Company's medium-term
TR target set at IPO is 9% per annum
by reference to the IPO issue price.
3. Basic Net Asset Value Basic Net Asset Value measures the net EUR1,141.16m
Net asset value in IFRS GAAP. value of the Company under IFRS. EUR1.41 per share as at 31 March 2022
(EUR1,053.4 million or EUR1.31 per
share as at 30 September 2021)
4. Adjusted earnings Adjusted EPS reflects our ability to EUR14.69m
Post-tax adjusted EPS attributable to generate earnings from our operating 1.82 cents per share for the six
shareholders, adjusted for other portfolio, which months ended 31 March 2022
earnings not supported ultimately underpins our dividend (six months ended 31 March 2021:
by cash flows or not related to the payments. EUR10.25 million or 2.30 cents per
operation of the portfolio. share)
See note 7 to the Interim financial
statements.
5. Loan to value ratio (LTV) The LTV measures the prudence of our 27.9% at 31 March 2022
The proportion of our gross asset financing strategy, balancing the (30 September 2021: 13.3%)
value (including cash) that is funded additional returns
by borrowings. and portfolio diversification that
come with using debt against the need
to successfully manage
risk. The Company will maintain a
conservative level of aggregate
borrowings, with a medium-term
target of 45% of gross asset value and
a maximum limit of 50% (in each case,
calculated at
the time of borrowing).
6. Weighted average unexpired lease The WAULT is a key measure of the 8.5 years at 31 March 2022
term (WAULT) quality of our portfolio. Long lease (30 September 2021: 9.3 years)
The average unexpired lease term of terms underpin the
the property portfolio, weighted by security of our income stream. The
annual passing rents. Company seeks to maintain a WAULT of
greater than five
years across the portfolio, in
accordance with typical lease lengths
in Continental Europe.
7. Dividend cover The dividend cover helps to indicate 72.6% for the six months to 31 March
Dividends paid and proposed to how sustainable a dividend is. 2022
shareholders in relation to the The level of cover reflects the (six months to 31 March 2021: 79.1%)
financial period, as a percentage short-term dilution from the September
of Adjusted Earnings. 2021 equity raise.
We expect the dividend to be fully
covered for the financial year as a
whole.
8. Interest cover Interest cover is a measure of a 7.58 times for the six months to 31
The ratio of net property income to company's ability to meet its interest March 2022
the interest incurred in the period. payments. (six months to 31 March 2021: 4.64
times)
9. Like-for-like rental growth This measures the Company's ability to -1.5% or EUR0.8 million for the six
Like-for-like rental growth compares grow its rental income over time. months to 31 March 2021
the growth of the rental income of the Rental growth will (six months to 31 March 2021 (2) :
portfolio that not be linear during the hold period, 0.7% or EUR0.24m)
has been consistently in operation and with different mechanisms in each
not under development during the two lease agreement.
full preceding
periods.
(1) The Company decided to change its primary metric from EPRA
NRV to EPRA NTA. The prior year comparative has been restated.
(2) This compares the annualised passing rent at the Balance
Sheet date against the annualised passing rent at the previous
interim date.
EPRA PERFORMANCE MEASURES
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 the new EPRA NAV measures,
please see the Notes to the EPRA and Other Key Performance
Indicators.
Performance measures and definition Comments Performance
1. EPRA Net Reinstatement Value ("EPRA A key measure to highlight the value EUR1,278.8m
NRV") of net assets on a long-term basis. EUR1.59 per share as at 31 March 2022
Basic NAV adjusted for mark-to-market The metric reflects (30 September 2021: EUR1,147.4 million
valuation of derivatives, deferred tax what would be needed to recreate the or EUR1.42 per share)
and transaction current portfolio of the company.
costs (real estate transfer tax and
purchaser's costs).
2. EPRA Net Tangible Assets ("EPRA Assumes that entities buy and sell EUR1,201.55m
NTA") assets, thereby crystallising certain EUR1.49 per share as at 31 March 2022
Basic NAV adjusted to remove the fair levels of unavoidable (30 September 2021: EUR1,086.5 million
values of financial instruments and deferred tax. or EUR1.35 per share)
deferred taxes.
This excludes transaction costs.
3. EPRA Net Disposal Value ("EPRA Represents the shareholders' value EUR1,141.17m
NDV") under a disposal scenario, where EUR1.41 per share as at 31 March 2022
Equivalent to IFRS NAV, as this deferred tax, financial (30 September 2021: EUR1,053.5 million
includes the fair values of financial instruments and certain other or EUR1.31 per share)
instruments and deferred adjustments are calculated to the full
taxes. extent of their liability,
net of any resulting tax.
4. EPRA Earnings A key measure of the Company's EUR7.26m
Earnings from operational activities. underlying results and an indication 0.90 cents per share
of the extent to which for the six months to 31 March 2022
current dividend payments are (six months to 31 March 2021: EUR7.09
supported by earnings. million or 1.59 cents per share)
5. EPRA Net Initial Yield ("NIY") This measure should make it easier for 3.6% as at 31 March 2022
Annualised rental income based on the investors to judge for themselves how (30 September 2021: 3.7%)
cash rents passing at the balance the valuations
sheet date, less non-recoverable of portfolios compare.
property operating expenses, divided
by the market value of the property,
increased with (estimated)
purchasers' costs.
6. EPRA 'Topped-up' NIY This measure should make it easier for 3.6% as at 31 March 2022
This measure incorporates an investors to judge for themselves how (30 September 2021: 3.8%)
adjustment to the EPRA NIY in respect the valuations
of the expiration of rent-free of portfolios compare.
periods (or other unexpired lease
incentives such as discounted rent
periods and step rents).
7. EPRA Vacancy Rate The vacancy relates to Strykow, 2.2% as at 31 March 2022
Estimated Market Rental Value ("ERV") reflecting the tilt in our investment (30 September 2021: 3 . 3%)
of vacant space divided by ERV of the strategy towards Value
whole portfolio. Add opportunities, including those
where we control the leasing.
8. EPRA Cost Ratio A key measure to enable meaningful 33.7%(1) for the six months to 31
Administrative and operating costs measurement of the changes in a March 2022
(including and excluding costs of company's operating costs. (six months to 31 March 2021: 31.3%(1)
direct vacancy) divided We expect the EPRA cost ratio to )
by gross rental income. decrease over time, as the portfolio 32.8%(2) for the six months to 31
grows and the Company March 2022
benefits from economies of scale. (six months to 31 March 2021: 29.9%(2)
)
(1) Inclusive of vacant property costs.
(2) Exclusive of vacant property costs.
PRINCIPAL RISKS AND EMERGING UNCERTAINTIES
The Audit Committee, which assists the Board with its
responsibilities for managing risk, considers that the principal
risks and uncertainties as presented in our 2021 Annual Report,
were largely unchanged during the period. However, a few risks have
increased in probability, such as the effect of inflation or
political uncertainties.
Property risks
1. The default of one or more of our tenants would reduce
revenue and may affect the Company's ability to pay dividends
and/or lead to a breach of our banking covenants.
2. The performance and valuation of the portfolio are affected
by the market, which is inherently subjective and uncertain. A
change in property valuations may lead to a breach of the Company's
banking covenants.
3. The Company's due diligence may not identify all risks and
liabilities in respect of a property acquired. An adverse change in
the future valuation of that asset may lead to a decrease in the
Company's Net Asset Value and affect our ability to meet our target
returns.
4. The Company's ability to grow the portfolio may be restricted
by the availability of suitable assets at acceptable prices in
targeted countries in Continental Europe.
5. The Company may have concentration of risk, in particular
exposure to country risk, if there are significant economic or
political changes in countries where the Company has invested or
the Eurozone, which could have an adverse impact on the income
derived from said countries and on the valuation of those assets.
This could lead to weaker performance of the portfolio.
6. Development activities involve a higher degree of risk than
investment in standing investments, such as general construction
risks, cost overruns or developer/contractor default. This could
reduce the value of our portfolio if any of the risks associated
materialised.
Operational risks
1. The Company's performance will, to a large extent, depend on
the Manager's abilities to source adequate assets, and to actively
manage these assets.
2. Termination of the Investment Management Agreement would
severely affect our ability to manage the Company's operations and
may have a negative impact on the Company's share price.
3. Failure to secure insurance for assets at suitable pricing
levels may have a negative impact on shareholder returns, or create
significant financial risk if assets are uninsured.
Financial risks
1. Our use of floating rate debt will expose the Company to
underlying interest rate movements. Any adverse movement in Euribor
could affect the Company's profitability and ability to pay
dividends.
2. A lack of debt funding at appropriate rates may restrict our
ability to grow, by making us unable to pursue suitable investment
opportunities. This may impair the Company's ability to reach the
relevant targeted returns.
3. Failure to operate within our debt covenants could lead to a
default and debt funding being recalled. This may result in the
Company selling assets to repay loan commitments.
4. Risk of Foreign Exchange movements may impact performance of the Group. In particular, income received/capex paid in foreign currency may result in lower performance in Euro.
5. Rising inflation and interest rates could lead to a higher
cost of debt for the Company. This could impact if and when the
Company borrows money and could impact overall performance.
Taxation risks
1. If the Company fails to maintain approval as an Investment
Trust its income and gains will be subject to UK corporation tax
and it will be unable to designate dividends as interest
distributions.
2. A change in local taxation status or tax legislation in any
of the countries the Company invests in may lead to increased tax
charges for the Company, resulting in lower profits and returns to
Shareholders.
Political risks
1. There is continuing uncertainty relating to the world economy
which could have a negative effect on the performance of the
Company over both the short and longer term.
2. Geo-political uncertainty can lead to severe disruptions and
weakened economic growth, leading to reduced demand for logistics
warehouses.
ESG risks
1. The company could be negatively impacted by climate change
and biodiversity loss, affecting the Company's long-term ability to
operate in the market.
2. Failure to retain the right labour skills and mitigating
modern slavery in the Company's supply chain are a big social risk
and could lead to higher vacancies and an impact on the reputation
of the company.
3. There is a need for the Company to be transparent and agile
in managing the evolving governance risks, such as diversity and
human capital management which could lead to a loss of competitive
advantage.
Cyber risks
1. Cyber-attacks are becoming increasingly sophisticated, and
this could have a negative impact on the financial outlook,
operations and reputation of the company.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
We confirm that to the best of our knowledge:
--the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK;
--the interim management report includes a fair review of the
information required by:
-DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
-DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Approved by the Board on 16 May 2022 and signed on its behalf
by:
Robert Orr Director
INDEPENT REVIEW REPORT TO TRITAX EUROBOX PLC
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2022 which comprises the condensed group
statement of comprehensive income, condensed consolidated statement
of financial position, condensed group statement of changes in
equity, condensed group cash flow statement and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
March 2022 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the
UK and the Disclosure Guidance and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the latest annual financial statements
of the group were prepared in accordance with International
Financial Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union and in accordance
with international accounting standards in conformity with the
requirements of the Companies Act 2006 and the next annual
financial statements will be prepared in accordance with UK-adopted
international accounting standards. The directors are responsible
for preparing the condensed set of financial statements included in
the half-yearly financial report in accordance with IAS 34 as
adopted for use in the UK.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
David Neale
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
16 May 2022
Condensed Group Statement of Comprehensive Income for the six
months ended 31 March 2022
Six months ended Six months ended
31 March 31 March
2022 2021
(unaudited) (unaudited)
Note EURm EURm
Rental income 4 27.60 19.35
Service charge income 4 5.09 3.67
Other income 4 0.23 0.19
Gross property income 4 32.92 23.21
Direct property costs (6.07) (4.51)
Net property income 26.85 18.70
Fair value gain on investment properties 9 127.82 26.38
Gain on disposal of investment property - 7.38
Administrative and other expenses (8.51) (5.40)
Operating profit 146.16 47.06
Finance expense 5 (10.41) (5.90)
Effect of foreign exchange differences 1.29 0.08
Changes in fair value of interest rate derivatives 13 1.12 (0.01)
Profit before taxation 138.16 41.23
Taxation 6 (28.95) (8.60)
Profit for the period 109.21 32.63
Other comprehensive income
Foreign currency translation differences- foreign operations (1.49) -
Total comprehensive income for the year attributable to the Shareholders 107.72 32.63
Earnings Per Share (EPS) (expressed in cents per share)
EPS - basic and diluted 7 13.35 7.32
Condensed Consolidated Statement of Financial Position as at 31
March 2022
31 March 30 September
2022 2021
(unaudited) (audited)
Note EURm EURm
Non-current assets
Investment properties 9 1,689.09 1,281.38
Derivative financial instruments 13 1.17 0.05
Trade and other receivables 10 1.17 1.17
Deferred tax assets 0.31 0.24
Total non-current assets 1,691.74 1,282.84
Current assets
Trade and other receivables 10 32.72 17.24
Cash and cash equivalents 228.83 329.73
Total current assets 261.55 346.97
Total assets 1,953.29 1,629.81
Current liabilities
Trade and other payables (19.92) (21.92)
Income tax liability (0.68) (0.22)
Total current liabilities (20.60) (22.14)
Non-current liabilities
Trade and other payables (1.35) (1.40)
Loans and borrowings 11 (690.94) (492.17)
Deferred tax liabilities (61.86) (33.30)
Other liabilities 12 (35.00) (25.19)
Tenant deposit (2.37) (2.11)
Total non-current liabilities (791.52) (554.17)
Total liabilities (812.12) (576.31)
Net assets 1,141.17 1,053.50
Equity
Share capital 15 8.07 8.07
Share premium reserve 597.58 597.46
Translation reserve (1.43) 0.06
Retained earnings 536.95 447.91
Total equity 1,141.17 1,053.50
Net Asset Value (NAV) per share (expressed
in Euro per share)
Basic NAV 16 1.41 1.31
EPRA NTA 16 1.49 1.35
Condensed Group Statement of Changes in Equity for the six
months ended 31 March 2022
Share Share Translation Retained
capital premium Reserve earnings Total
(Unaudited) Note EURm EURm EURm EURm EURm
At 1 October 2021 8.07 597.46 0.06 447.91 1,053.50
Net profit for the year - - - 109.21 109.21
Other comprehensive income - - (1.49) (1.49)
Total comprehensive income - - (1.49) 109.21 107.72
Contributions and distributions:
New share capital subscribed - 0.14 - - 0.14
Associated share issue costs - (0.02) - - (0.02)
Dividends paid 8 - - - (20.17) (20.17)
Total contributions and
distributions - 0.12 - (20.17) (20.05)
At 31 March 2022 8.07 597.58 (1.43) 536.95 1,141.17
Share Share Translation Retained
capital premium Reserve earnings Total
(Audited) Note EURm EURm EURm EURm EURm
At 1 October 2020 4.23 131.24 - 368.44 503.91
Net profit for the year - - - 104.77 104.77
Other comprehensive income - - 0.06 - 0.06
Total comprehensive income - - 0.06 104.77 104.83
Contributions and distributions:
New share capital subscribed 3.84 476.14 - 479.98
Associated share issue costs - (9.92) - - (9.92)
Dividends paid - - - (25.30) (25.30)
Total contributions and
distributions 3.84 466.22 - (25.30) 444.76
At 30 September 2021 8.07 597.46 0.06 447.91 1,053.50
Share Share Translation Retained
capital premium Reserve earnings Total
(Unaudited) Note EURm EURm EURm EURm EURm
At 1 October 2020 4.23 131.24 - 368.44 503.91
Net profit for the year - - - 32.63 32.63
Total comprehensive income - - - 32.63 32.63
Contributions and distributions:
New share capital subscribed 1.92 228.08 - - 230.00
Associated share issue costs - (4.94) - - (4.94)
Dividends paid 8 - - - (9.93) (9.93)
Total contributions and
distributions 1.92 223.14 - (9.93) 215.13
At 31 March 2021 6.15 354.38 - 391.14 751.67
Condensed Group Cash Flow Statement for the six months ended 31
March 2022
Six months
ended
Six months
ended 31 March
31 March 2021
2022 (unaudited) (unaudited)
Note EURm EURm
Cash flows from operating activities
Profit for the period 109.21 32.63
Gain on disposal - (7.38)
Changes in fair value of investment
properties (127.82) (26.38)
Changes in fair value of interest rate
derivatives (1.12) 0.01
Tax expense 28.95 8.60
Net finance expense 10.41 5.90
Accretion of tenant lease incentive 4 (1.62) 0.19
Amortisation of capital contribution
and lease commission 4 0.19 0.14
(Increase)/decrease in trade and other
receivables (1.72) 1.49
Increase/(decrease) in trade and other
payables (6.24) 2.69
Increase in other liabilities 4.70 -
Cash generated from operations 14.94 17.89
Tax paid (0.02) (0.34)
Net cash flow generated by operating
activities 14.92 17.55
Investing activities
Purchase of investment properties (234.50) (32.12)
Disposal of investment properties - 64.35
Improvements to investment properties
and development expenditure (59.72) (1.68)
Rental guarantees received 1.76 0.95
Net cash flow generated by/(used in)
investing activities (292.46) 31.50
Financing activities
Net proceeds from issue of Ordinary
Share capital 0.12 225.06
Loans received 11 197.62 179.63
Loans repaid 11 - (264.00)
Finance expense paid (1.20) (4.12)
Dividends paid to equity holders 8 (20.17) (9.93)
Net cash flow generated from financing
activities 176.37 126.64
Net movement in cash and cash equivalents
for the period (101.17) 175.69
Cash and cash equivalents at start
of the period 329.73 24.44
Unrealised foreign exchange (losses)/gains 0.27 (0.08)
Cash and cash equivalents at end of
the period 228.83 200.05
Notes to the Condensed Consolidated Financial Statements for the
six months ended 31 March 2022
1. Basis of preparation
These condensed financial statements for the six months ended 31
March 2022 have been prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Services
Authority, IAS 34 'Interim Financial Reporting', and with
international financial reporting standards as adopted for use in
the UK. The previous years annual financial statements were
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and in
accordance with IFRSs adopted pursuant to Regulation (EC)
No1606/2002 as it applies in the European Union. The Group
transitioned to UK-adopted international accounting standards for
the financial period beginning 1 October 2021. This change
constitutes a change in accounting framework however, there is no
impact or changes in accounting policies from the transition. These
condensed financial statements are unaudited and do not constitute
statutory accounts for the purposes of the Companies Act 2006. They
were approved for issue on 16 May 2022.
The comparative financial information presented herein for the
period to 30 September 2021 for the Condensed Consolidated
Statement of Financial Position or 31 March 2021 for other primary
statements does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. A copy of the statutory
accounts for that period has been delivered to the Registrar of
Companies. The auditor's report on those accounts for the period
from 1 October 2020 to 30 September 2021 was not qualified, did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying the report, and did
not contain statements under section 498(2) or (3) of the Companies
Act 2006.
1.1. Going concern
The Directors have prepared cash flow forecasts for the Group
for a period of 12 months from 31 March 2022. These forecasts
include the Directors' assessment of plausible downside scenarios
on the Group.
The Group's property portfolio is let to 33 tenants across over
22 properties in 7 European countries. The Group's largest tenant
represents 11% of contracted rent at 31 March 2022 and the top 5
tenants together represent 44%.
The Directors have considered the risk that tenants either
request deferrals or become insolvent and hence no rent is paid.
The Directors have assessed each tenant's risk based on experience,
knowledge of the tenant and discussions to date on rent deferrals.
Following this assessment the Directors have modelled a severe but
plausible downside scenario, where they combined the default of two
key tenants and the failure to let voids, with a significant
increase in Euribor. The forecast shows that the Group will
continue to have sufficient cash resources to meet its liabilities
as they fall due, and will continue to meet its debt covenants,
which are set out in further detail below.
The Group's cash balance at 31 March 2022 was EUR228.83 million.
It also had undrawn amounts under its unsecured revolving credit
facility of a further EUR250.0 million at the date of approval of
these financial statements. Of the Group's total facilities (the
RCF, Green Bond and US private placement), EUR250 million in mature
in 2025 ,EUR500 million in 2026, EUR100 million in 2029, EUR50
million in 2032 and EUR50 million in 2034. The loans include
financial covenants for loan-to-value ("LTV"), interest cover ratio
("ICR") and gearing. These covenants have been complied with
throughout the period and up to the date of approval of these
financial statements.
The LTV covenant is measured quarterly based on the property
valuation as used in the consolidated financial statements. Based
on the valuation as at 31 March 2022 of EUR1,689.09million, the
Group retained headroom against a covenant limit, reporting 28%
against the limit of 65%.
The gearing covenant is measured quarterly based on consolidated
total net borrowings to consolidated shareholders' funds. Based on
the most recent reporting the Group retained headroom against the
covenant limit, reporting 41% against the limit of 150%.
The ICR covenant is measured as the ratio of the Group's
consolidated earnings before income and tax, subject to certain
adjustments, to consolidated net finance costs in respect of any
measurement period, by reference to accounting income. Based on the
most recent reporting the Group retained headroom against the
covenant limit, reporting 335% against the limit of 150%.
As a result of the above considerations the Directors have
prepared these financial statements on a going concern basis.
Consequently, the directors are confident that the Group and the
Company will have sufficient funds to continue to meet their
liabilities as they fall due for at least 12 months from the date
of approval of the financial statements and therefore have prepared
the financial statements on a going concern basis.
2. 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.
2.1. 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:
Business combinations
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. The Group accounts for an acquisition as a
business combination where 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.
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 relating to pre-acquisition
property valuation gains arises.
In the current period all acquisitions were accounted for as
asset acquisitions as none of the acquisitions included the
acquisition of an integrated set of activities.
Segment reporting
The Directors are of the opinion that the Group is engaged in a
single segment business, being the investment in European Big Box
assets. The Directors consider that these properties have similar
economic characteristics and as a result these individual
properties have been reported as a single operating segment.
2.2. Estimates
Fair valuation of investment property
The fair value of investment property is determined, by an
independent property valuation expert, 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, applying the principles of both IAS 40 and IFRS 13.
The valuations have been prepared in accordance with the Royal
Institution of Chartered Surveyors ("RICS") Valuation - Global
Standards January 2022 ("the Red Book"). Factors reflected include
current market conditions, annual rentals, lease lengths and
location. The significant methods and assumptions used by valuers
in estimating the fair value of investment property are set out in
note 9.
3. Summary of significant accounting policies
There has been a change in the accounting policy for investment
property under construction which has been shown below. The
remaining accounting policies adopted in this report are consistent
with those applied in the Group's consolidated financial statements
for the period ended 30 September 2021 and are expected to be
applied consistently during the year ending 30 September 2022.
Investment property and investment property under cons
truction
Investment properties under construction are financed by the
Group where the Group enters into contracts for the development of
a pre--let or a speculative property under a funding agreement. All
such contracts specify a fixed amount of consideration. The
speculative development risk is mitigated by having rental
guarantees in place to mitigate this risk. Investment properties
under construction are initially recognised at cost (including any
associated costs), which reflect the Group's investment in the
assets. Subsequent expenditure incurred are capitalised at cost and
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.
3.1. Standards in issue and effective from 1 October 2021
Amendments to IFRS 3 "Business Combinations", definition of a
business
The amendment provides a revised framework for evaluating a
business and introduces an optional "concentration test" and
impacts the assessment and judgements used in determining whether
future property transactions represent an asset acquisition or
business combination. As a result of the amendment it is expected
that future transactions are more likely to be treated as an asset
acquisition.
Amendments to References to the Conceptual Framework in IFRS
Standards were endorsed by the European Commission for use in the
European Union. The Amendments update some of the references and
quotations in IFRS Standards and Interpretations so that they refer
to the revised Conceptual Framework or specify the version of the
Conceptual Framework to which they refer.
There was no material effect from the adoption of other
amendments to IFRS effective in the year. They have no impact to
the Group significantly as they are either not relevant to the
Group's activities or require accounting which is consistent with
the Group's current accounting policies.
3.2. New standards issued but not yet effective
Amendments to IAS 1 on Classification of liabilities as Current
or Non-Current are effective for the financial years commencing on
or after 1 January 2023 and are to be applied retrospectively. It
is not expected that the amendments may have an impact on the
presentation and classification of liabilities in the Group
Statement of Financial Position based on rights that are in
existence at the end of the reporting period.
Definition of Accounting Estimates (Amendments to IAS 8) is
effective for annual periods beginning on or after 1 January 2023
to help entities to distinguish between accounting policies and
accounting estimates. The amendments are for changes in accounting
policies and changes in accounting estimates that occur on or after
the start of that period. It is not expected that the amendments
may have an impact on the consolidated financial statements of the
Group.
There are no other 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.
4. Gross property income
Six months Six months
ended ended
31 March 31 March
2022 2021
(unaudited) (unaudited)
EURm EURm
Rental income 26.47 19.68
Spreading of tenant incentives 1.32 (0.19)
Amortisation of capital contribution
and lease commission (0.19) (0.14)
Gross rental income 27.60 19.35
Service charges recoverable 5.09 3.67
Other income 0.23 0.19
Gross property income 32.92 23.21
The Group derives property income from the following
countries:
Gross property income The Sweden
Belgium Germany Spain Italy Poland Netherlands Total
(unaudited) EURm EURm EURm EURm EURm EURm EURm EURm
Period ended 31 March 2022 3.63 14.13 5.33 4.28 3.09 1.46 1.00 32.92
Period ended 31 March 2021 2.81 7.33 4.28 3.56 4.31 0.92 - 23.21
The future minimum lease payments under non-cancellable
operating leases receivable by the Group are as follows:
Between 1 More than 5
Less than 1 year and 2 years Between 2 and Between 3 and Between 4 and years
(Unaudited) EURm EURm 3 years EURm 4 years EURm 5 years EURm EURm Total EURm
31 March 2022 59.74 66.47 60.74 57.63 54.59 322.32 621.49
31 March 2021 37.01 36.54 35.81 30.62 28.63 179.79 348.40
The Group's investment properties are leased mainly to single
tenants, some of which have guarantees attached, under the terms of
a commercial property lease. The majority have rent indexation that
are linked to either RPI/CPI or fixed uplifts.
There are three tenants representing more than 10% of rental
income during the period (EUR5.08 million, EUR3.13 million and
EUR2.89 million). As at 31 March 2021 three tenants represented
more than 10% of passing rent.
5. Finance expense
Six months Six months
ended ended
31 March 31 March
2022 2021
(unaudited) (unaudited)
EURm EURm
Interest payable on loans and bank borrowings 2.96 3.07
Commitment fees payable on bank borrowings 0.58 0.96
Loss on remeasurement of put option 5.11 1.44
Bank fees 0.61 0.10
Amortisation of loan arrangement fees 1.15 0.33
Total finance expense 10.41 5.90
The total interest payable on financial liabilities carried at
amortised cost comprises interest and commitment fees payable on
bank borrowings of EUR3.54 million (31 March 2021: EUR4.03
million), of which nil was capitalised in both periods. The total
amortisation of loan arrangement fees for 31 March 2022 was EUR1.15
million (31 March 2021: EUR0.33 million), of which EUR2.4 million
(31 March 2021: EUR0.37 million) was capitalised into the loan in
the period (see note 11).
6. Taxation
Tax charge in the Group Statement of Comprehensive Income
Six months Six months
ended ended
31 March 31 March
2022 2021
(unaudited) (unaudited)
EURm EURm
Current taxation:
UK taxation - -
Overseas taxation(1) 0.47 3.43
Deferred taxation:
UK taxation - -
Overseas taxation 28.48 5.17
Total tax change 28.95 8.60
(1) Includes the capital gains tax on disposal of investment
properties for EUR3.04 million in the prior period.
The UK corporation tax charge of EURnil reflects the Company's
intention to declare sufficient "qualifying interest distributions"
to fully offset its "qualifying interest income" in the period, in
accordance with its status as an Investment Trust Company
("ITC").
7. Earnings per share
Earnings per share ("EPS") amounts are calculated by dividing
profit for the period attributable to ordinary equity holders of
the Group by the weighted average number of Ordinary Shares in
issue during the period. As at 31 March 2022 there are no dilutive
or potentially dilutive equity arrangement in existence.
The calculation of EPS is based on the following:
Weighted
Net profit average
attributable number of
to Ordinary Ordinary Earnings
Shareholders Shares(1) per share
For the period ended 31 March 2022 (unaudited) EURm '000 Cent
Basic EPS 107.72 806,755 13.35
Adjustments to remove:
Deferred tax charge (note 6) 28.48
Changes in fair value of investment
properties (note 9) (127.82)
Changes in fair value of interest rate
derivatives (note 13) (1.12)
EPRA EPS 7.26 806,755 0.90
Adjustments to include/(exclude):
Rental income recognised in respect
of fixed uplifts (1.32)
Amortisation of capital contribution
and lease commission 0.19
Rental guarantee receipts excluded from
property income-settled via cash (2) 2.45
Rental guarantee receipts excluded from
property income-settled via contracted
liability settlement (2) -
Amortisation of loan arrangement fees 1.15
Unrealised foreign exchange currency
loss 0.27
Loss on remeasurement of put option 4.69
Adjusted EPS 14.69 806,755 1.82
1 Based on the weighted average number of Ordinary Shares in
issue throughout the period.
2 This is offset against the cost of investment properties.
The calculation of EPS is based on the following:
Weighted
Net profit average
attributable number of
to Ordinary Ordinary Earnings
Shareholders Shares(1) per share
For the period ended 31 March 2021 (unaudited) EURm '000 Cent
Basic EPS 32.63 446,013 7.32
Adjustments to remove:
Deferred tax charge (note 6) 5.17
Current tax charge on disposal (note
6) 3.04
Changes in fair value of investment
properties (note 9) (26.38)
Changes in fair value of interest rate
derivatives (note 13) 0.01
Gain on disposal of investment properties (7.38)
EPRA EPS 7.09 446,013 1.59
Adjustments to include/(exclude):
Rental income recognised in respect
of fixed uplifts (0.34)
Amortisation of capital contribution
and lease commission 0.14
Rental income deferred(3) 0.53
Rental guarantee receipts excluded from
property income-settled via cash (2) 0.86
Rental guarantee receipts excluded from
property income-settled via contracted
liability settlement (2) 0.28
Amortisation of loan arrangement fees 0.33
Unrealised foreign exchange currency
loss (0.08)
Loss on remeasurement of put option 1.44
Adjusted EPS 10.25 446,013 2.30
(1) Based on the weighted average number of Ordinary Shares
in issue throughout the period.
(2) This is offset against the cost of investment properties.
(3) Covid-19 rent deferred from the 2019/20 financial year collected
during the period.
Adjusted Earnings is a performance measure used by the Board to
assess the level of the Group's dividend payments. The Directors
may also exclude from the EPRA metric additional items (gains and
losses) which are considered by them to be non-recurring, unusual
or significant by virtue of size and nature. The metric mainly
adjusts EPRA earnings for:
i. Exclusion of 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;
ii. Inclusion of licence fees which relates to cash received
from developers during development periods, in order to access the
land; and
iii. Inclusion of rental guarantee adjustments relate to
acquired assets with properties which have had an income guarantee
attached to them as part of the acquisition of the asset. The
rental guarantee is released (through a cash movement or contracted
liability settlement) as adjusted earnings over the period of the
lease which it is intended to cover or lease break - however, this
release does not go through rental income in the Group Statement of
Comprehensive Income, and as such an adjustment is made to
recognise the receipt.
8. Dividends paid
Six months Six months
ended ended
31 March 31 March
2022 2021
(unaudited) (unaudited)
EURm EURm
Final dividend in respect of period
ended 30 September 2021 at 1.25
cent per Ordinary Share (30 September
2020: 1.10 cent) 10.08 4.65
First interim dividend in respect
of year ended 30 September 2022
at 1.25 cent per Ordinary Share
(30 September 2021: 1.25 cent) 10.09 5.28
Total dividends paid 20.17 9.93
Total dividends paid per share 2.50 cent 2.35 cent
for the period
Total dividends unpaid but declared 1.25 cent 1.25 cent
per share for the period
Total dividends declared per share 2.50 cent 2.50 cent
for the period
On 17 May 2022, the Directors of the Company declared a second
interim dividend in respect of the year ended 30 September 2022 of
1.25 cent per Ordinary Share, which will be payable on or around 24
June 2022 to Shareholders on the register on 27 May 2022.
Out of EUR20.17 million dividends declared for the period,
EUR4.84 million is designated as interest distribution.
9. Investment properties
The Group's investment property has been valued at fair value by
Jones Lang LaSalle Limited ("JLL"), an accredited independent
valuer with a recognised and relevant professional qualification
and with recent experience in the locations and categories of the
investment properties being valued. 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 which are consistent with
the principles set out in IFRS 13. In forming its opinion, JLL
makes a series of assumptions, which are typically market related,
such as yields and expected rental values and are based on the
Valuer's professional judgement and the current tenancy of the
properties.
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 period have been treated
as asset purchases rather than business combinations.
During the period, the following investment properties was
acquired:
Location Date acquired
Settimo, Italy(--) 25 November 2021
Piacenza, Italy(--) 29 November 2021
Rosersberg, Sweden 30 November 2021
Gelsenkirchen, Germany 14 December 2021 Bönen, Germany 14
December 2021 Rosersberg II, Sweden 14 January 2022
Roosendaal, Netherlands 11 March 2022
(--) Acquired based on asset deal.
Investment properties
Investment properties completed Investment properties Total
(Unaudited) EURm under construction EURm EURm
As at 1 October 2021 1,257.35 24.03 1,281.38
Acquisition of properties(1) 143.71 90.79 234.50
Development expenditure 0.39 59.33 59.72
Transfer from investment
properties to investment
properties under construction (1.30) - (1.30)
Transfer from investment
properties under construction to
investment properties - 1.30 1.30
License fees and rental
guarantees recognised (0.79) (14.97) (15.76)
Fixed rental uplift and tenant
lease incentives 2 1.87 - 1.87
Amortisation on rental uplift and
tenant lease incentives 2 (0.44) - (0.44)
Change in fair value during the
period 3 87.21 40.61 127.82
As at 31 March 2022 1,488.00 201.09 1,689.09
Investment
Investment properties Investment
properties under properties
completed construction Total
(Audited) EURm EURm EURm
As at 1 October 2020 837.90 - 837.90
Acquisition of properties(1) 372.56 - 372.56
Improvements to investment properties 1.10 - 1.10
Development expenditure - 19.81 19.81
Transfer from investment properties
to investment properties under construction (8.10) 8.10 -
Transfer from investment properties
under construction to investment properties 10.19 (10.19) -
License fees and rental guarantees
recognised (2.49) - (2.49)
Fixed rental uplift and tenant lease
incentives 2 3.82 - 3.82
Amortisation on rental uplift and tenant
lease incentives 2 (0.81) - (0.81)
Disposal of properties (56.97) - (56.97)
Change in fair value during the period
3 100.15 6.31 106.46
As at 30 September 2021 1,257.35 24.03 1,281.38
(1) Included acquisition costs of EUR4.71 million (30 September
2021: EUR3.69 million).
(2) 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 amount as at 31 March 2022 was
EUR9.25 million (30 September 2021: EUR7.67 million). The
difference between this and cash receipts changes the carrying
value of the property against which revaluations are measured (also
see note 6).
(3) Included in the fair value change in the period were
unrealised gains of EUR129.41million (30 September 2021: EUR107.34
million) and unrealised losses of EUR1.56 million (30 September
2021: EUR0.88 million).
30 September
31 March 2022 2021
EURm EURm
Investment properties in Balance Sheet 1,689.09 1,281.38
Rental guarantee held in separate receivable 15.29 1.20
Total external valuation of investment
properties 1,704.38 1,282.58
As at 31 March 2022, the Group had the following capital
commitments in relation to its development assets for EUR173.0
million (30 September 2021: EUR32.4 million):
-- Mango extension EUR7.9 million
-- Strykow EUR5.4 million
-- Settimo Torinese EUR14.6 million
-- Rosersberg EUR18.9 million
-- Bönen EUR44.7 million
-- Rosersberg II EUR27.3 million
-- Roosendaal EUR54.2 million
These costs are not provided for in the Statement of Financial
Position. Capital commitments represent costs to bring the asset to
completion under the developer's funding agreements which include
the developer's margin.
Valuation and real estate risks
There is risk to the fair value of real estate assets that are
part of the portfolio of the Group, comprising variation in the
yields that the market attributes to the real estate investments
and the market income that may be earned.
Real estate investments can be impacted adversely by external
factors such as the general economic climate, supply and demand
dynamics in the market, competition and increase in operating
costs.
Besides asset specific characteristics, general market
circumstances affect the value and income from investment
properties such as the cost of regulatory requirements related to
investment properties, interest rate levels and the availability of
financing.
The Manager of the Group has implemented a portfolio strategy
with the aim to mitigate the above stated real estate risk. By
diversifying in regions, risk categories and tenants, it is
expected to lower the risk profile of the portfolio.
As of the date of this Interim Report, the only investments of
the Group that have been identified consist of the current
portfolio as specified in the management report. While the Group is
negotiating to acquire further properties, there is no guarantee
that these properties will form part of the portfolio of the
Group.
With respect to new investments, management will be targeting
specific investment categories based on the Group's investment
objective and restrictions. Because such investments may be made
over a substantial period of time, the Group faces the risk of
interest rate fluctuations in case of leveraging these investments
and adverse changes in the real estate markets.
Fair value hierarchy
The Group considers that all of its investment properties and
investment properties under construction 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."
MV 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
Investment properties completed: income approach
The income method (or income approach) quantifies the net
present value of future benefits associated with the ownership of
the asset by totalling the current tenancy of the property,
followed by the demand market rent on lease expiry, capitalised at
an appropriate yield.
Investment properties under construction: residual approach
The residual approach for properties under construction takes
the expected valuation of the finished property using the income
approach and deducts forecast costs to complete the development and
an allowance for developer's profit.
Unobservable input: estimated rental value ("ERV")
ERV is dependent upon a number of variables in relation to the
Group's property. These include: size, building specification and
location. At 31 March 2022 the range was between EUR40.86--EUR93.32
per square metre, per annum.
Unobservable input: yield
Yield is dependent on the tenant, lease length and the other
variables listed above for ERV. At 31 March 2022, the average yield
was 3.49% and the range was between 2.9%-4.8%.
Yield and ERV are not necessarily independent variables. It is
possible a change in one assumption may result in an offsetting
change to the other but equally the change in both assumptions may
increase the impact on valuation.
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 estimation uncertainty and is inherently subjective in
nature.
As a result the following sensitivity analysis has been prepared
for investment properties :
+0.25% yield -0.50% ERV +0.50% ERV
-0.25%yield EURm EURm EURm EURm
(Decrease)/increase in the fair value of
investment properties as at 31 March 2022 140.45 (94.09) (26.34) 56.03
(Decrease)/increase in the fair value of
investment properties as at 30 September 2021 82.16 (72.68) (27.57) 26.28
* Including rental guarantee
The JLL valuation includes deductions for transaction costs that
would be incurred by a hypothetical purchaser at the valuation
date. These costs include Real Estate Transfer Tax (RETT)
equivalent to stamp duty except for properties in Italy, Poland and
Belgium. In the former, this is due to Italy being an Investment
Management Company (SGR), in Poland, RETT is not applicable and in
Belgium, the local valuation practice is to exclude such costs
given the prevalence of corporate rather than asset transactions in
these markets.
10. Trade and other receivables
31 March 30 September
2022 2021
(unaudited) (audited)
Non-current trade and other
receivables EURm EURm
Cash in public institutions 1.17 1.17
The cash in public institutions is a deposit of EUR1.17 million
given by the tenant for the property in Barcelona, Spain.
31 March 30 September
2021
2022 (audited)
(unaudited) EURm
Current trade and other receivables EURm
Trade receivables 2.86 1.45
Prepayments, accrued income and other
receivables 24.68 12.28
VAT receivable* 5.18 3.51
32.72 17.24
* VAT receivable relates mainly to VAT reclaim due on the
purchase of the property in Italy EUR2 million (30 September 2021:
EUR2 million).
11. Loans and borrowings
On 1 December 2021 the Group had secured EUR200 million US
private placement debt which is split into 3 tranches below:
EUR100 million with 7 year maturity and a coupon of 1.216%,
EUR50 million with a 10 year maturity and a coupon of 1.449%, and
EUR50 million with 12 year maturity and a coupon of 1.590%. The
debt was drawn down on 15 January 2022.
On 22 December 2021 EUR58.82 million of the Revolving Credit
Facility (RCF) transferred from HSBC UK Bank to Banco Santander. On
4 January 2022 the termination date of this part of the facility
was extended from October 2023 to October 2025.
As at 31 March 2022, 74% (2020: nil) of the Group's debt
facility commitments are fixed term with 26% floating term (2020:
100%). The LTV across all drawn debt was 28% against a target of
45% (with a limit of 65% in the RCF). The Group has been in
compliance with all of the financial covenants of the Group's bank
facilities as applicable throughout the period covered by these
financial statements.
The Group had available headroom of EUR250 million under its
bank borrowings (30 September 2021: EUR250 million).
Any associated fees in arranging the loan and borrowings that
are unamortised as at the period end are offset against amounts
drawn on the facilities as shown in the table below:
31 March
30 September
2022 2021
(unaudited) (audited)
EURm EURm
0.95% Green Bonds 2026 500.00 500.00
1.216% USPP 2029 100.00 -
1.449% USPP 2032 50.00 -
1.590% USPP 2034 50.00 -
Less: unamortised costs on loan notes (9.06) (7.83)
Non-current liabilities: loan notes 690.94 492.17
Maturity of loans and borrowings 31 March 2022 (unaudited)
Total debt
Drawn Undrawn available
EURm EURm EURm
Repayable between one and two years - - -
Repayable between two and three years - - -
Repayable between three and four years - 250.00 -
Repayable between four and five years 500.00 - 750.00
Repayable in over five years 200.00 - 200.00
700.00 250.00 950.00
Maturity of loans and borrowings 30 September 2021 (audited)
Drawn Undrawn Total debt
EURm EURm available
EURm
Repayable between one and two years - - -
Repayable between two and three years - 58.82 58.82
Repayable between three and four years - - -
Repayable between four and five years 500.00 191.18 691.18
Repayable in over five years - - -
500.00 250.00 750.00
Set out below is a comparison by class of the carrying amounts
and the fair value of the Group's financial instruments that are
carried in the financial statements:
Book Value Fair Value Book Value Fair Value
31 March 31 March 30 September 30 September
2022 2022 2021 2021
EURm EURm EURm EURm
0.950% Green Bonds 2026 500.00 471.70 500.00 506.60
1.216% USPP 2029 100.00 98.08 - -
1.449% USPP 2032 50.00 48.75 - -
1.590% USPP 2034 50.00 48.59 - -
Loan notes 700.00 667.12 500.00 506.60
12. Other liabilities
The Group's properties in Germany are held in subsidiaries in
which the Group holds 94.9% or 89.9% of the shares. As part of the
purchase agreements, the Group issued put options to the minority
shareholders. The options are exercisable ten years after
acquisition and would require the Group to acquire all shares held
by the minority shareholder at the then market value. Prior to the
option date the Group has guaranteed a fixed dividend to the
minority shareholder. If this is not met by the subsidiary, then
the Company is required to settle this obligation.
13. Derivative financial instruments
To mitigate the interest rate risk that arises as a result of
entering into variable rate loans, a number of interest rate caps
have been taken out in respect of the Group's variable rate debt to
cap the rate to which three month Euribor can rise. Each cap runs
coterminous to the initial term of the respective loans.
As at the period end the Group had notional value of interest
rate caps of EUR300 million to act as a hedge against the EUR250
million revolving credit facility.
The weighted average capped rate, excluding any margin payable,
for the Group as at the period end was 0.67%. There was no premium
payable towards securing the interest rate caps in both
periods.
31 March 30 September
2022 2021
(unaudited) (audited)
EURm EURm
Interest rate derivatives valuation brought
forward 0.05 0.09
Fair value movement 1.12 (0.04)
Non-current assets: interest rate derivatives
carried forward 1.17 0.05
The interest rate derivatives are 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 Group profit or loss.
As at the period end date the total proportion of debt hedged
via interest rate derivatives equated to 0% (30 September 2021:
0%).
Fair value hierarchy
The fair value of the 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 period end. This valuation
technique falls within Level 2 of the fair value hierarchy, as
defined by IFRS 13. The valuation was provided by the counterparty
to the derivatives. 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.
14. 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 which
is to finance the acquisition and development of the Group's
investment property portfolio and hedge against the risk of
interest rates rising. The book value of the Group's financial
instruments that are carried in the financial statements
approximates their fair value at the end of the period.
Risk management
The Group is exposed to market risk (including interest rate
risk) and credit 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 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 Cash Flow Statement and net assets based on the nominal
borrowings at the end of the period. Given that no RCF was drawn as
at the 31 March 2022, a 50 basis point decrease/increase in
interest rates would have no impact on the net assets.
The Group currently operates in eight countries. The current
distribution of total assets is as follows:
Total assets Belgium Germany Spain Italy Poland UK The Netherlands Sweden Total
31 March 2022 (unaudited) 174.90 840.22 230.27 233.98 65.56 167.27 161.62 79.47 1,953.29
30 September 2021
(audited) 142.09 671.60 200.52 147.43 61.22 295.92 62.25 48.78 1,629.81
Credit risk
Credit risk is the risk that a counterparty will not meet its
obligations under a financial instrument or customer 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 or
acquiring a let property. The Group holds collateral by way of bank
deposits totalling EUR1.17 million (see note 10).
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 less the collateral
held.
15. Share capital
The share capital relates to amounts subscribed for share
capital at its nominal value:
Ordinary Shares 31 March 31 March 30 September 30 September
2022 2022 2021 2021
Number EURm Number EURm
Issued and fully paid at 1 cent each
Balance at beginning of period - EUR0.01 Ordinary Shares 806,693,378 8.07 422,727,273 4.23
Shares issued in the period 110,606 - 383,966,105 3.84
Balance at end of period 806,803,984 8.07 806,693,378 8.07
The Group has one class of Ordinary Shares which carry no right
to fixed income.
16. 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 period. As there are no dilutive
instruments outstanding basic NAV per share is shown below:
30 September
2021
31 March
2022 (unaudited) (audited)
EURm EURm
Net assets per Group Statement of Financial
Position 1,141.17 1,053.50
Ordinary Shares:
Issued share capital (number) 806,803,984 806,693,378
NAV per share (expressed in Euro per share)
Basic NAV per share 1.41 1.31
The Group considers EPRA NTA to be the most relevant EPRA NAV
measure for the Group, replacing our previously reported EPRA NAV
and EPRA NAV per share metrics. We are now reporting EPRA NTA as
our primary NAV measure alongside Basic NAV.
31 March 2022 30 September 2021
EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV
EURm EURm EURm EURm EURm EURm
NAV attributable
to shareholders 1,141.17 1,141.17 1,141.17 1,053.50 1,053.50 1,053.50
Mark-to-market adjustments
of derivatives (1.17) (1.17) - (0.05) (0.05) -
Deferred tax adjustment 61.55 61.55 - 33.06 33.06 -
Transaction costs(1) 77.30 - 60.84 - -
NAV 1,278.85 1,201.55 1,141.17 1,147.35 1,086.51 1,053.50
NAV per share in
Euro 1.59 1.49 1.41 1.42 1.35 1.31
(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.
17. Transactions with related parties
For the period ended 31 March 2022, 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. The fee
payable to the Manager for the period to 31 March 2022 was EUR3.95
million (31 March 2021: EUR2.34 million).
The total amount outstanding at the period end relating to the
Investment Management Agreement was EUR1.95 million (30 September
2021: EUR1.51 million).
The total amounts paid to Directors for their services for the
period to 31 March 2022 was EUR0.1 million (31 March 2021: EUR0.1
million).
The Members of the Manager that are considered as key management
personnel are Nick Preston James Dunlop, Henry Franklin and Phil
Redding. They are also Members of SG Commercial. The other Members
of the Manager, namely, Colin Godfrey, Petrina Austin, Bjorn
Hobart, Frankie Whitehead, James Watson, Alasdair Evans and
Aberdeen Asset Management plc are also Members of SG Commercial
LLP. No fees were payable to SG Commercial in the period ended 31
March 2022 (31 March 2021 : EURnil) in respect of agency services.
The agency fees payable to SG Commercial LLP represents 0% (31
March 2021: 0%) of the agency fees payable by the Group during the
period. There were no fees outstanding as at 31 March 2022 and 30
September 2021.
During the period the Directors received the following
dividends: Robert Orr: EUR1,350 (31 March 2021: EUR470), Keith
Mansfield: EUR7,250 (31 March 2021: EUR6,815), Taco De Groot:
EUR1,050 (31 March 2021: EUR588) and Eva-Lotta Sjostedt: EUR173 (31
March 2021: EUR135).
During the period the Members of the Manager received the
following dividends: Colin Godfrey: EUR7,206 (31 March 2021:
EUR3,951), James Dunlop: EUR7,206 (31 March 2021: EUR3,951), Henry
Franklin: EUR4,850 (31 March 2021: EUR2,689), Petrina Austin EUR886
(31 March 2021: EUR632) Nick Preston EUR3,433 (31 March 2021:
EUR2,293) and Phil Redding EUR239 (31 March 2021 EUR0).
18. Subsequent events
On 26 April 2022 the Group completed the acquisition of the
Dormagen asset for an agreed property price of EUR76.4 million and
the acquisition of redevelopment land in Malmo for EUR21.4
million.
On 3 May 2022 the Group signed a new lease on the asset at
Hammersbach, Germany.
There were no other significant events occurring after the
reporting period, but before the financial statements were
authorised for issue.
[1] Including licence fee income and rental guarantees
[2] Source: Eurostat
[3] The Company's core markets include Belgium, France, Germany,
Italy, Poland, The Netherlands, Spain, and Sweden. Sweden is not
included in aggregate European market numbers as not all data
points were available at the time of publication.
[4] Source: Data from CBRE, commentary and analysis by
Tritax
[5] Source: CBRE, data as at Q4 2021
[6] Source: Data from CBRE, commentary and analysis by
Tritax
[7] Source: CBRE, includes CEE investment volumes
1 Fixed price construction contract without a pre-let in
place
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