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Tritax Big Box REIT plc Annual Report 2024
QUALITY
EFFICIENCY
GROWTH
Annual Report 2024
Strategic report
1 Highlights
2 At a Glance
4 Chair’s Statement
6 Investment Case
8 Our Business in Action
10 Our Strategy
11 Our Business Model
12 Our Manager – Tritax Management LLP
14 Client Requirements and Proposition
16 Portfolio – Investment
18 Portfolio – Development
20 Markets and Trends
22 Manager’s Report
34 Financial Review
40 Manager’s Q&A
42 Key Performance Indicators
44 EPRA performance measures
46 ESG
48 Performance Against Our ESG Targets
51 ESG in Action
53 Task Force on Climate-related Financial
Disclosures (“TCFD”) Report
65 Streamlined Energy Carbon
Reporting (“SECR”)
67 Stakeholder Engagement and Section 172
70 Principal Risks and Uncertainties
76 Going Concern and Viability Statement
Governance
78 Chair’s Governance Overview
80 Board of Directors
82 Governance at a Glance
83 Key Representatives of the Manager
84 The Tritax Big Box Team
85 Key Activities in 2024
86 Application of Code
88 Board Leadership and Company Purpose
92 Stakeholder Engagement
94 Division of Responsibilities
98 Nomination Committee Report
102 Audit, Risk and Internal Control
104 Audit and Risk Committee Report
108 Management Engagement
Committee Report
111 Directors’ Remuneration Report
114 Directors’ Report
116 Directors’ Responsibilities
Financial statements
117 Independent Auditor’s Report
124 Group Statement of
Comprehensive Income
125 Group Statement of Financial Position
126 Group Statement of Changes in Equity
127 Group Cash Flow Statement
128 Notes to the Consolidated Accounts
150 Company Statement of Financial Position
151 Company Statement of Changes in Equity
152 Notes to the Company Accounts
159 Notes to the EPRA and Other Key
Performance Indicators (Unaudited)
164 Five-Year Summary
166 Glossary of Terms
170 Company Information
SPECIALISTS
IN UK LOGISTICS
REAL ESTATE
We are the UK’s largest listed investor in high-quality logistics real estate and
we also control the UK’s largest logistics-focused land platform for development.
We are ideally placed to capture the opportunities created by the long-term
structural growth in UK logistics, driven by changes in the way we live and work
and our clients’ focus on optimising supply chains, increasing efficiencies and
improving sustainability performance.
Our Manager
Our Manager, Tritax Management LLP, specialises in investing in mission-critical
supply chain real estate, which is aligned with the structural trends shaping the
economy. It has deep expertise in the sector, built up over more than 25 years,
and provides a full service to the Company. TheManager creates additional
value through its proactive and entrepreneurial approach enabling it to identify
and pursue new opportunities.
Financial Highlights
Operational Highlights
Operating profit
1
£265.3m + 37.3%
(2023: £193.2m)
Adjusted earnings per share (EPS)
2
A
8.91p +15.0%
(2 0 23: 7.75 p)
Adjusted earnings per share (EPS,
excluding additional DMA income)
3
A
8.05p +3.9%
(2 0 23: 7.75 p)
Dividend per share (DPS)
7.66p +4.9%
(2 0 23: 7. 3 0 p )
Total Accounting Return A
9.0% +6.8pts
(2023: 2.2%)
IFRS earnings per share
19.67p +428.8%
(2023: 3.72p)
Contracted annual rent
roll A
£313.5m +39.1%
(2023: £225.3m)
EPRA Net Tangible Assets (NTA) per
share A
185.56p +4.7%
(2 0 23: 17 7.15 p)
EPRA cost ratio
4
(including vacancy
costs) A
13.6% +0.5pts
(2023: 13.1%)
Portfolio value
5
£6.55bn +30.2%
(2023: £5.03bn)
Loan to value (LTV) A
28.8% -2.8pts
(2023: 31.6%)
IFRS net asset value per share
184.12p +5.1%
(2023: 175.13p)
A – Alternative Performance Measure
1. Operating profit before changes in fair value and other adjustments.
2. See Note 15 to the financial statements forreconciliation.
3. The anticipated run rate for development management income is
£3.0–5.0 million per annum over the medium term. We classify income
above this as “additional” development management income, which
canbe highly variable over time. We therefore present a calculation of
Adjusted EPS that excludes additional development management
income. £23.0 million of development management income is included
inthe 8.91 pence Adjusted EPS in 2024. In 2023, £nil of development
management income was included in the 7.75 pence Adjusted earnings
per share and 2024 Adjusted EPS becomes 8.05 pence when excluding
additional development managementincome.
4. This measure was added in for the first time in 2023 as it is believed to
bea key measure to enable meaningful measurement of the changes in a
company’s operating costs.
5. The portfolio value includes the Group’s investment assets and
development assets, land assets held at cost, the Group’s share of joint
venture assets and other propertyassets.
This report provides alternative performance measures (“APMs”) which are
not defined or specified under the requirements of International Financial
Reporting Standards. We believe these APMs provide readers with
important additional information on our business. Further explanation of
APMs and why we use them is set out in the notes to the EPRA and other
key performance indicators.
Estimated rental value (ERV) growth
5.4%
like-for-like ERV growth, supporting
valuation growth (2023: 6.9%).
Record logistics portfolio rentalreversion
27.9%
£79.2 million of portfolio rental reversion
and vacancy, of which 79% has the
potential to be captured by 2027.
Asset disposals
£306.2 million
£181.2 million of non-strategic assets
and£125.0 million of logistics assets
exchanged or sold at a blended 3.3%
premium to book value.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
1
Market and trends
Enduring positive structural drivers support the occupier market, which has constrained supply of modern best-in-class real estate
At a Glance
WE ARE EXPERTS
IN UK LOGISTICS
REAL ESTATE
We are experts in UK logistics real estate, providing millions of sq ft of high-quality,
sustainable logistics real estate space each year. We proactively manage our 100+
assets – from small to big boxes – using our sector specialism and deep market
insights to stay ahead of trends and meet our clients’ evolving needs. Our approach
is personal and hands on, focused on leaving positive long-term legacies.
Strategic priorities
Our clear strategic priorities frame how weareoptimisingperformance
> See page 10
Shifting consumer behaviour Evolving supply chain Drive for sustainability
How we create value
> See pages 20 to 21
Navigating our strategic framework
As outlined below, our purpose frames our commitment to being a sustainable business and how we deliver value for stakeholders
Our purpose
Creating critical infrastructure to accommodate the future
Business model
Our differentiated approach enables us to capture market opportunities and deliver performance for all ourstakeholders
Via our Strategy
with sustainability embedded
for the benefit of our multiple and diverse stakeholders
> See page 10
> See pages 68 to 69
> See pages 46 to 52
How we generate returns
Our competitive advantages
> See page 11
Our portfolio Our relationships Our proactive approach
Growing the value we create How we create value
High-quality assets Financial returns Societal impact
Developing logistics
real estate at a
target yield on cost
of 6–8% and data
centres at 8–10%
Adding and
realising value
Client and
sustainability
led
Direct
and active
management
Insight driven
development
and innovation
High-quality
assets attracting
world-leading
companies
Tritax Big Box REIT plc Annual Report 2024
2
Portfolio
Investment
Our investment portfolio, which we believe to be the highest
quality in the UK, underpins resilient and growing income which in
turn supports our progressive dividend.
Development
Our development portfolio provides brand new logistics real
estate assets at attractive return levels. Held capital efficiently
under long-dated options, the land we control provides the
potential to more than double our rental income.
Investment case
Tritax Big Box is dedicated to
investing in and developing
high-quality logistics assets in
the UK. We offer investors a
sustainable blend of long-term
growing income and
capital growth.
Key performance indicators (KPIs)
The KPIs we use to track our strategic progress are:
1. Adjusted earnings per share
2. Dividend per share
3. Total expense ratio
4. Total Accounting Return (TAR)
5. EPRA Net Tangible Assets (NTA) per share
6. Loan to value (LTV) ratio
7. Weighted average unexpired lease term (WAULT)
8. Global Real Estate Sustainability Benchmark (GRESB) score
#1
UK’s largest logistics portfolio and development platform
c.42 million sq ft
High-quality logistics space under management
> See pages 16 to 17
> See pages 42 to 43
> See pages 18 to 19
100+
Assets across the UK
c.37 million sq ft
Potential new space through development of land portfolio
> See pages 6 to 7
Growth
Quality Efficiency
Growing income
Progressive dividend
Capital appreciation
Active
management
& reversion
capture
Attractive
logistics
developments
Compelling
data centre
opportunities
Efficient
& agile
structure
Triple net
leases
Strong
balance
sheet
World
renowned
clients
Supportive
long-term
markets
Modern,
sustainable
assets
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
3
Chair’s Statement
A TRANSFORMATIONAL YEAR
In 2024, we made significant progress across all our strategic priorities. The acquisition
ofUK Commercial Property REIT Limited (UKCM) expanded our client offering and
strengthened our presence in key urban logistics markets. At the same time, we
accelerated contracted rent growth through capturing portfolio rental reversion,
activeasset management and strong leasing activity within our development pipeline.
We also successfully executed asset disposals at the top end of
ourguidance and ahead of book values, enabling us to recycle
capital into accretive growth opportunities. We enter 2025 with an
outstanding portfolio, exceptional clients, the UK’s largest logistics
development land platform and substantial opportunities for further
growth, including the expansion into data centres.
Maximising value and income growth from the
UKCM acquisition
Since we acquired UKCM in May 2024 we have completed the
integration process and are firmly on track to realise the benefits
weexpected. UKCM added £1.2 billion of assets to our portfolio,
including £740 million of logistics assets with strong income growth
potential, including an embedded 39% reversion, which we have
already begun to capture. The quality of the logistics assets within
the portfolio was reflected in 3.9% ERV growth and a 5.8% uplift in
asset values since June 2024. We have also made excellent progress
in divesting, ahead of their market value at the time of the acquisition,
nearly 40% of UKCM’s non-strategic assets, with £94.4 million of
disposals completed by the year end, a further £86.8 million
exchanged post year end and a further approximate £177.4 million
under offer. We are seeing encouraging levels of interest in the
remaining non-strategic assets and are confident of divesting them
within 24 months from the date of the acquisition as planned.
“ A transformational year
withsignificant strategic
progress and excellent
operational performance.”
Tritax Big Box REIT plc Annual Report 2024
4
Multi-year and inherent opportunities to drive
earnings and dividend growth
We operate in a highly attractive market, underpinned by strong
structural drivers of occupier demand. Businesses are increasingly
nearshoring to build shorter, more resilient supply chains; optimising
efficiencies and economies of scale to protect margins; and
leveraging automation to mitigate rising employment costs. The
Board believes improving sustainability performance, as reflected in
our very strong GRESB ratings, positively impacts the Company’s
performance, with our Clients preferring modern buildings that can
both reduce costs and provide attractive and safe working
environments for their employees.
At the same time, we have clear and significant opportunities to
drive earnings and dividend growth from prospects inherent within
our business, capitalising on our investment, asset management
and development expertise.
There are three distinct elements embedded within our business that
offer multi-year opportunities to drive earnings and dividend growth:
• capture the record rental reversion in the investment portfolio and
secure lettings for vacant space, which together have the potential
to increase rental income by 27.9% or £79.2 million of which 79%
has the potential to be captured by 2027;
• construct additional best-in-class logistics assets from our
development platform which can more than double our current
rental income over the longer term and, for 2025, targets a yield
on costs of towards the top end of our 6-8% range, and;
• deliver data centre development opportunities, including our first
at Manor Farm, Heathrow, which is expected to deliver exceptional
returns for shareholders and a potential 8-10% yield on cost.
“Power-first” approach delivering significant
opportunities in data centres
Post our year end, we announced the acquisition of a site at Manor
Farm, Heathrow. Subject to planning, this provides us with the
opportunity to develop one of Europe’s largest and highest-quality
data centres, subject to planning permissions, which we believe will be
attractive to the world’s largest data centre operators. Crucially the
Manager, having adopted a “power first” approach, has secured
contracted and accelerated power delivery of 147 MW to the site using
pre-existing grid connection agreements, 107 MW of which will be
provided in H2 2027 and 40 MW in 2029. The anticipated yield on cost
from Phase 1 is approximately 9.3%, complementing the returns within
our logistics development pipeline. Phase 2, leveraging the investment
in Phase 1, has the potential for an even higher yield on cost.
Ongoing investment by the Manager
initscapabilities
We have previously noted the Manager’s strong track record of
adding skills and experience to support our growth. In 2023 and
2024, it strengthened the asset management team to maximise
performance of our urban logistics assets and deepen relationships
with our expanded client base. Additionally, the Manager led the way
in establishing a dedicated power infrastructure and data centre
team, helping to future-proof our existing assets and development
pipeline, while also unlocking new opportunities in the data centre
market for us.
This is driven by the Manager’s entrepreneurial culture and
agileapproach which supports the exploration of new ideas and
opportunities by speculatively investing in specialist resource.
Thisisa key advantage of our externally managed structure, with
theManager absorbing the cost of identifying and incubating new
opportunities – such as data centres, where Tritax Big Box now
holds a first right of refusal. While recognising these qualities, the
Board continues to provide constructive challenge to the Manager
toensure the best interests of the Company’s shareholders.
Performance and dividends
The quality of our investment portfolio and continued growth
inincome through our asset management and development
programmes enabled us to deliver record headline earnings in 2024.
Excluding additional DMA income in the year, Adjusted EPS was
3.9% higher at 8.05 pence, supporting a covered total dividend of
7.66 pence per share, up 4.9% on 2023.
Carefully managing the balance sheet and deploying our resources
to implement our strategy remain a major focus. A reduced LTV
of28.8% benefitted from improving asset valuations and UKCM’s
lower gearing at the point of acquisition. We also continue to
havesignificant headroom in our debt facilities, allowing us to be
opportunistic in the market. Our development programme remains
highly flexible, with limited financial commitments, so we can adapt
quickly to any changes in market conditions.
Outlook: well positioned for growth with multiple
opportunities to deploy capital accretively
Client engagement across both our standing portfolio and
development schemes remains high. Clients are renewing on
existing space and market take-up volumes are healthy, with the
potential to increase in 2025. Corporates continue to evolve their
supply chains in response to the ongoing supportive structural
trends, albeit decision making is taking time.
New supply remains disciplined and speculative space under
construction is at similar levels to 12-months ago. As was the case in
2024, speculative completions will be front loaded which will impact
the quarter-by-quarter trajectory of vacancy. Overall, however, this
gives us confidence in the scope for further rental growth, particularly
in locations or building size bands where supply remains restricted.
Framed by these dynamics, our business has three clear multi-year
growth drivers.
First, our portfolio is highly reversionary, with market rental growth in
2024 enhancing this opportunity further. The capture of this reversion
over time helps drives net rental income and in turn earnings growth.
With 20.9% of the portfolio subject to lease events in 2025, we
expect to see a further increase in the rate of like for like rental
growth translate into higher net rental income.
Our second growth driver is our targeted and client-led development
activity, both speculative and build to suit, with the potential to add
£306 million of rental income over time. Despite a tighter market for
build to suit opportunities in 2024, we signed £11.1 million of pre-let
agreements. We aim to keep our level of capex and development
starts at a similar level to 2024. We expect to deliver an increase in
development yield on cost, potentially towards the upper end of our
6-8% guidance, based upon the mix of schemes in the pipeline,
stable construction costs and continuing attractive levels of market
rental growth.
And finally, exciting opportunities in data centres have the potential
to deliver exceptional returns for the Company. We look to progress
Manor Farm over the course of 2025, with the securing of planning
consent, the first major milestone.
2024 has been a transformational year with the successful
integration of the UKCM portfolio, the asset management
opportunities it creates and the disposal of associated non-core
assets. Supported by our strong balance sheet we enter 2025 well
positioned with three powerful growth drivers in our business:
capturing record rental reversion, advancing our highly attractive
logistics development pipeline, and leveraging opportunities to
develop data centres.
Aubrey Adams
Independent Chair, Tritax Big Box REIT plc
27 February 2025
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
5
Our investment case is built on quality, efficiency and growth
Investment Case
POSITIONED FOR
MULTI-YEAR GROWTH
Tritax Big Box is dedicated to investing in and developing
high-quality logistics assets in the UK. We aim to offer investors
asustainableblend of long-term income and capital growth.
Growth
Quality Efficiency
Growing income
Progressive dividend
Capital appreciation
Active
management
& reversion
capture
Attractive
logistics
developments
Compelling
data centre
opportunities
Efficient
& agile
structure
Triple net
leases
Strong
balance
sheet
World
renowned
clients
Supportive
long-term
markets
Modern,
sustainable
assets
Tritax Big Box REIT plc Annual Report 2024
6
Growth
Our platform has three clear growth
drivers, comprising the capture of
the record reversion within the
portfolio, an attractive and capital
efficient development platform and
the implementation of a “power-first”
data centre pipeline.
Quality
Our market-leading portfolio has
high-quality, modern assets, with
strong sustainability performance,
situated in mission-critical, well-
connected locations, let to renowned
and ambitious global companies.
This quality underpins the attractive
and resilient income characteristics
of our portfolio.
Efficiency
A combination of our efficient
external management structure
andtriple net leases ensures we
efficiently convert rental income
intoearnings for Shareholders.
Ourstructure also allows us to be
agile adapting to changes in our
market and capturing opportunities.
This is all underpinned by a strong
and efficient balance sheet.
“ Our investment case is founded on
our strategic choices, our expertise
and our focus on quality, efficiency
and growth, which have positioned
us well to deliver multi‑year growth.”
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
7
QUALITY EFFICIENCY
GROWTH
Our deep sector expertise, entrepreneurial mindset and established track record underpin
our collaboration with clients. Working together, we deliver and manage thoughtfully
designed real estate, tailored to their long-term ambitions, which supports long-term
income and capital growth for our shareholders.
Asset management: big box
Using Tesco’s lease expiry in December 2023 as a catalyst, we deployed
c.£10 million of capex to refurbish our 300,000 sq ft assetat Stakehill,
near Manchester. As well as showcasing our activemanagement
approach, the project highlights the flexibility andlongevity of our
logistics buildings, which tend to have low capex requirements to
modernise in order to capture current market demands.
Enhancements for our clients
• Modernised building, originally constructed in 1988, with
upgradedcladding and new solar PV scheme supporting
EPCrating enhancement to A+ from B.
• Location certainty through to 2039.
Benefits for the Company
Secured a new 15-year lease (with no break) to a leading UK brewer,
and a 38% uplift in rental income with five-yearly rent reviews linked
tothe higher of market rents or CPI. In addition to securing a strong
new client for the portfolio, the refurbishment secured an attractive
yield on cost.
Increase in passing rent
+38%
Asset management: urban logistics
Our strategic decision to complement our investment portfolio with a
greater element of urban logistics was first implemented through the
acquisition of Junction 6 Electric Avenue, Birmingham, a 384,000 sq ft
urban logistics estate. We have used the full suite of our capabilities to
improve our clients’ experience and to accelerate the capture of higher
rental income.
Enhancements for our clients
• Substantial improvement of the look and feel of the estate,
supporting staff attraction and retention.
• Advanced plans to convert the existing gatehouse into an
F&Boutlet, increasing the site’s attractiveness and adding
valuableamenity.
• Investment in improving EPC metrics, with 53% of the assets now
rated B, versus 14% at acquisition.
Benefits for the Company
The completed initiatives demonstrate our successful blueprint for
ourasset management which we are rolling out across other urban
logistics assets within the portfolio, particularly those acquired through
UKCM. Since acquisition, we have increased overall rental income
onthe estate by 46%. With passing rents on the estate of £8.11 psf
versus an ERV of £10.64, there is further potential rental income
to capture.
Increase in rental income
+46%
Our Business in Action
Petrina Austin
Partner, Head of Asset Management
Tom Stanton
Senior Asset Manager
Tritax Big Box REIT plc Annual Report 2024
8
Development: Kettering
The progress we made at our c.1 million sq ft asset at Kettering is an
excellent example of how we develop high-quality logistics buildings
tosupport our renowned, global clients as well as deliver growth and
attractive returns to our shareholders.
Enhancement for our clients
• Collaboration with the client meant we could accommodate a
rangeof its requirements, including a very large unit built to
BREEAM Excellent rating with net zero carbon status in
construction.
• Incorporated leading wellbeing facilities, including trim trail and
on-site gym, to aid staff attraction and retention.
Benefits for the Company
We secured a pre-let of c.1 million sq ft to a global leader in
e-commerce, highlighting the attractiveness of the location, its
flexibility as a site and the strength of our reputation working
withsophisticated clients. The letting is expected to deliver an
attractive yield on cost of c.7% and, together with the leases
withIronMountain and Greggs, means the Kettering scheme is
nowfully let.
Pre-let to global e-commerce leader
1 million sq ft
Capital recycling: UKCM assets
Following the completion of the UKCM acquisition in May 2024, our
intention was to integrate quickly the logistics portfolio and sell the
non-logistics (“non-strategic”) component of the portfolio, aiming to
fully exit from the £475 million position within a target of two years.
Benefits for the Company
Despite a challenging investment market backdrop, we have made
excellent progress so far, selling £181.2 million of non-strategic assets
at a 2.8% premium to their December 2023 valuation, and with a
further £177.4 million under offer.
In addition to securing a high-quality and highly reversionary urban
logistics portfolio, the disposal of UKCM non-strategic assets will
continue to fund higher-returning growth opportunities, such as our
development pipeline (offering a 6–8% yield on cost) or potential
datacentre opportunities (offering an 8–10% yield on cost).
Non-strategic asset disposals
£181.2 million
“
Working collaboratively with the Tritax Big Box team on a
challenging brief, we were not only able to meet tough timescales
but also exceed operational KPIs ahead of schedule with the use
of 80+ robots, a mezzanine floor and a high‑tech conveyor
system. This is a showcase site for us, and the blueprint for future
sites that will support our growth strategy in the UK.
”
Tom Parker, EMEA Property Director, DP World
Bjorn Hobart
Partner, Investment Director
Jonathan Wallis
Director, Head of Northampton Office
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
9
Our strategy
ALIGNED TO LONG-TERM
STRUCTURAL GROWTH
We have a clear and compelling strategy designed to capture the significant
opportunities our market creates, underpinned by a disciplined approach to
capital allocation and emphasis on delivering the performance benefits of
sustainability, which is intrinsic to each element of our strategy.
Developing logistics
real estate at a
target yield on cost
of 6–8% and data
centres at 8–10%
Adding and
realising value
Redeploying proceeds into higher-
returning opportunities
Client and
sustainability led
Direct
and active
management
Insight driven
development
and innovation
High-quality
assets attracting
world-leading
companies
Our Strategy
Underpinned by a disciplined approach to capital allocation
and leveraging the benefits of sustainability
Underpinning our strategy is a disciplined approach to capital,
whereweaim to maximise returns to Shareholders while
minimising risk. By evaluating the Group’s existing assets and
identifying ways to maximise and then realise value, we will
effectively recycle capital to support the Group’s objectives,
using debt appropriately and potentially raising additional
capital when it is inShareholders’interests.
The Group’s commitment to sustainability forms an intrinsic
andoverarching part of our strategy that informs of all
ofourdecision making. We believe a focus on sustainability
both preserves and creates value and supports overall
business performance.
> See pages 46 to 52
Tritax Big Box REIT plc Annual Report 2024
10
Our Business Model
BUILDING ON
OURADVANTAGE
We own, actively manage and develop logistics real estate in strategic locations across
the UK, let to clients that include some of the world’s largest companies. In doing so, we
look to deliver attractive total returns for Shareholders.
Our competitive advantages
Focused approach
Our Manager is focused solely on the
logistics and supply chain-related
market, giving it unrivalled knowledge
and understanding of the sector and
strong, long-standing relationships
with market participants. This gives us
privileged access to opportunities,
often off-market, enabling us to secure
better returns forShareholders.
Agile and
entrepreneurial culture
Our Manager’s culture is agile and
entrepreneurial, allowing us to
moverapidly to secure the best
opportunities and capitalise on
clientdemand for quality
logisticswarehouses.
Powerful insights and
acombined platform
The scale of our portfolio and our
closeness to our clients give us a
competitive edge, by providing highly
valuable insights into future demand
and occupierrequirements.
Combining an investment portfolio
anddevelopment platform in the same
Group gives us significant advantages
when leveraging these insights, so we
can reduce risk and enhance returns
for shareholders. For example, we
draw on client insights from our
proactive asset management work to
inform our development programme,
while our development operation
meets new space requirements for
existing clients.
Integrated approach
tosustainability
We believe our deep and applied
understanding of current and future
sustainability requirements is
increasingly akeycompetitive
advantage. Asourclients seek ways
toimprove their own sustainability
performance our ability to design
andconstruct best-in-class buildings
at the cutting edge of sustainability
performance both helps secure
newleases and ensures asset
longevity and relevance within
ourinvestment portfolio.
How we generate returns
We generate returns through the rent we receive from our clients
andfrom profits associated with our portfolio. We have a low and
transparent cost base, with an EPRA cost ratio in 2024 of 12.6%
(excluding vacancy costs), efficiently converting the rent we receive
into income forshareholders.
We invoice rents quarterly in advance and have an impressive record
of rent collection, ensuring the Group has strong and predictable cash
flows. TheManager’s fee, which is our largest single administrative
cost, is calculated as a percentage of the Group’s EPRA Net Tangible
Assets (see page 44), providing direct and transparent alignment
between shareholders’ interests and the Manager.
How we create value
Unrivalled portfolio
Our focused and high-quality investment portfolio and our extensive
development pipeline provide significant opportunity to create value.
Strong client relationships
We pride ourselves on deep and long-term relationships with our
clients, who choose us as a key partner in delivering their supply
chainsolutions. These relationships create value for our shareholders
and clients.
Hands on and proactive
We are a hands-on and proactive business which constantly
seeksopportunities to create value. By being close both to our
clientsand assets we can identify opportunities and risks and
respondaccordingly.
Growing the value we create
High-quality buildings for our clients
We own and create high-quality buildings that are critically important
tothe supply chain operations of our clients, often playing a central role
in supporting their business needs and growth ambitions.
Long-term income and capital growth for
our Shareholders
We aim to generate attractive long-term income and capital growth for
our Shareholders. In 2024, we declared dividends totalling 7.66 pence
per share and delivered a 3.9% increase in Adjusted EPS (excluding
additional DMA income).
Economic and social impact for society
andcommunities
Our buildings benefit local communities more generally. They have
strong sustainability credentials (see page 48), helping to minimise
their environmental impact, and they also support significant
employment in their local areas during construction and inoperation.
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Tritax Big Box REIT plc Annual Report 2024
11
Our Manager – Tritax Management LLP
Working at Tritax
At Tritax, people are valued for their different skills and perspectives
and are supported by a collaborative culture that encourages
innovation, ambition and personal development.
As part of the Tritax team, people benefit from:
• Purpose-driven work: We aim to create long-term value by
investing in a carefully curated, high-quality portfolio of sustainable
supply chain real assets that outperform their sector. Rigorous
sustainability analysis is integrated into every decision, and we
collaborate with our stakeholders to deliver real assets that create
long-term value for clients, investors and communities.
• Inclusive and supportive culture: As a relationship-driven
business, we know that people are key to our success. We value
diverse skills and views and encourage people to take on new
opportunities and learn new skills.
OUR MANAGER
We are managed by Tritax Management LLP (Tritax), a specialist
investor inmission-critical supply chain real estate.
• Professional growth opportunities: We’re invested in each
other’s success. We hold regular “lunch and learn” meetings to
share knowledge with each other. We also provide mentoring
andskills building, offering people training opportunities to meet
their individual needs.
• Commitment to local communities: We want to have a
positive social impact where we own or are developing assets,
and focus our social impact investment on education and skills
development. Through the Tritax Social Impact Foundation
everyone is encouraged to give their time to support fundraising
events like the LandAid SleepOut and XLP marathon walk, and
totake part in mentoring and volunteering opportunities.
Tritax manages both publicly listed and private market products that
aim to deliver sustainable income and capital growth for investors.
Across these funds and products, it oversees c.42 million sq ft of
high-quality logistics properties. These are strategically located
across the UK and Europe and align with the structural trends
shaping the future economy.
Gained over 25-plus years, Tritax has deep sector expertise. Its
in-house team comprises more than 60 people, whose skill-sets
span disciplines such as investment, asset management,
development, sustainability, power, finance, research and more.
The Manager’s headcount working on Tritax Big Box comprises people
both from Tritax Management LLP and Tritax Big Box Developments.
Tritax Big Box REIT plc Annual Report 2024
12
“ As a relationship‑driven business, we
knowthat people are key to our success.
Wevalue diverse skills and views and
encourage people to take on new
opportunities and learn new skills.”
…all delivered to Tritax Big Box
costeffectively.
Tritax continues to invest in its team and capabilities
Tritax is committed to fostering a collaborative and high-performing workplace. By combining purpose, innovation, and a people-first
culture,Tritax continues to attract top talent and deliver on its ambition to create long-term value for clients, investorsandcommunities.
Tritax Management has deep sector experience and an entrepreneurial culture…
Sector expertise
…supported by ongoing
investment in an
engaged team…
Net Promoter Score (NPS): A market
research metric that rates the likelihood
thatemployees recommend the Company
as a good place to work; in 2024 Tritax
achieved a score of 39 (10–30 is generally
recognised as a good score, with 50+
considered excellent).
* The annual employee engagement survey
(which began in 2021) is completed by
employees of Tritax Management LLP
onlyand does not include equity partners
orTritax Big Box Developments.
27 years
Average senior
leadership experience
Investment
Power
Logistics development Property management
Analytics
Sustainability
Asset management
Research
Data centres
Investor relations
Entrepreneurial mindset and broad range of skills
Effective management fee
2019 0.66%
Headcount dedicated to Tritax Big Box
2019 45
2024 77
Employee engagement score*
2021 75%
2024 80%
2024 0.58%
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13
Our first-class client focus
In line with our purpose, the Manager’s team works in partnership with
our clients to deliver the space they need to succeed and ensure our
buildings maximise their operational effectiveness. We undertake
extensive research to understand and help develop our clients’ supply
chain networks. This direct and relationship-based approach helps to
future-proof our buildings for our clients and to grow income and
capital values for Shareholders.
HOW WE ARE PERFORMING
“ Building performance, clean
energy and fleet transition are
top of mind for many clients,
asthey look to enhance the
sustainability of their operations.
”
Petrina Austin
Head of Asset Management, Tritax Big Box REIT plc
Client Requirements and Proposition
SPACES IN
HIGH-QUALITY
BUILDINGS
In line with our purpose, we work closely with our clients to deliver
the space they need to succeed. Modern and prime logistics
buildings occupy a critical position within our clients’ supply chain
and must meet a broader range of requirements.
Tritax Big Box REIT plc Annual Report 2024
14
How our assets meet client needs
Supply chain
The right size
With the UK’s largest
investment and land
portfolios, we can provide
clients with a range of
building sizes from urban/
last mile to large “mega”
boxes optimised to suit
their requirements. This
range of sizes enables us
to offer an end-to-end
solution across our
clients’ supply
chain networks.
Sustainable
Our clients are
increasingly looking to
occupy sustainable
assets. 80% of our
investment portfolio has
an EPC grade of B or
above and we continue to
invest in ESG initiatives,
such as on-site renewable
energy generation. Our
development activity
includes our commitment
to net zero carbon in
construction. Increasingly,
sustainability is a point of
competitive differentiation
which we are well placed
to takeadvantage of.
Modern
Our investment portfolio
has an average building
age of 10 years and our
development activity
creates a long-term
pipeline of state-of-the-
artbuildings, to meet
therequirements of
market-leading
occupiers and provide
acontinual process
ofportfolio renewal.
Well located
Our investment and land
assets are in strategically
important logistics
locations where our
clients want to be. These
assets benefit fromstrong
transport infrastructure
and suitablepower and
labour supplies.
Innovative
The scale and flexibility of
our buildings make them
suitable for a wide range
of clients to install
thelatest technology,
including highly
automated and robotic
stocking and retrieval
systems, which improve
efficiencies and
reduce costs.
Workplace
Providing a safe workspace
withan increasing component
ofofficeand collaborative
workingspaces and higher
levelsof amenities such as
cafés,restaurants and gyms.
Technology and
maintenance
Greater requirements for
highlevels of automation,
supported by power and digital
infrastructure, sensors and
smartbuilding technology,
increasing overall central
networkvisibility ofinventory.
Labour
Clients frequently note accesstoa
high-quality local labour market as
one of their greatest requirements.
Choice oflocation and ways to
enhance the overall employee
proposition are now being
factored into new
logisticsbuildings.
Carbon performance
Clients are now focused on
achieving their Paris-aligned
performance pathways,
increasing scrutiny of whole life
carbon emissions from supply
chains and logistics buildings.
Biodiversity and
wellbeing
Focus on increasing local
biodiversity and measures
thatimprove general
employeewellbeing, such
asgreen and active spaces
andwildlife habitats.
Operations
Clients are seeking highly efficient
buildings with high-quality floors
and greater loading requirements
combined with increased roof
height, appropriateaccess, yard
spaceand parking to help
support efficient operations.
Social impact
and partnerships
Clients must increasingly consider
their social impact, and how they
can utilise local supply chains
andsupport employee
andcommunity engagement.
Energy generation
and use
Access to significant amounts
ofaffordable, reliable and
increasingly decarbonised power
is a central requirement for clients
to support greater automation and
electrification ofvehicle fleets.
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Tritax Big Box REIT plc Annual Report 2024
15
Diversified by client and sector
Our portfolio is let to 128 clients across
102 logistics assets, providing a high
degreeof diversification by client and
sector. These clients include some of the
world’s largest companies and are
weighted towards defensive, non-cyclical
or high-growth sectors, helping to
reduce our risk.
OUR PORTFOLIO
Our portfolio comprises our standing investments and development land
(primarily held under long-dated options). These assets are in strategically
important logistics locations across the UK, with easy access to transport
infrastructure, a skilled workforce, and suitable power and data connectivity.
This makes them highly attractive to current and potential clients.
“ We have built what we believe
isthe UK’s best logistics real
estateportfolio, with high‑
quality, modern and sustainable
buildings, let on long leases to
strongclients.”
Portfolio – Investment
Investment portfolio
UKCM logistics assets
Tritax Big Box REIT plc Annual Report 2024
16
UKCM contracted rent (logistics) at acquisition
£34.5 million
UKCM embedded rental reversion (logistics) at acquisition
39% (£13.4 million)
UKCM logistics space under management added at acquisition
4.4m sq ft
A portfolio that reflects our strategy
The investment portfolio is weighted towards assets that deliver
resilient and growing income.
The majority of these are Foundation assets (i.e. those which provide
long-term and secure income from high-quality occupiers),
complemented by a smaller proportion of Value Add assets (i.e.
those which offerfurther upside potential through our active
approach tomanagement, such as renewing leases, adding
extensions andenhancing environmental performance).
Modern buildings...
...attractive blend of review types...
...with high EPC ratings...
...and frequency
Age (years)
<5 38%
5–10 14%
10–15 8%
15–25 27%
>25 13%
Fixed 9%
RPI/CPI 45%
Open market 31%
Hybrid (higher of inflation
oropen market) 13%
None 2%
Annually 15%
Five yearly 83%
None 2%
A 49%
B 31%
C 18%
D 2%
Our assets are primarily ‘big boxes’ but we are increasingly adding
smaller assets to the portfolio, including through our development
programme. This broadens our client offer and gives us scope
formore regular asset management.
UKCM contribution at acquisition
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Tritax Big Box REIT plc Annual Report 2024
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OUR DEVELOPMENT
PORTFOLIO
Through long-dated, capital efficient options, we control the UK’s largest land
portfolio for logistics development. The development portfolio comprises sites
across the UK which between them have the potential overthe long term to
deliver c.37.2 million sq ft of high-quality new logistics space, enabling us to
more than double our existing investment portfolio.
Insight driven development and
innovation
Development complements our
investment portfolio by enhancing overall
returns, as we target a yield on cost for
new logistics assets of 6–8%, while
carefully managing risk.
“ I almost felt as though the team
at Tritax held our hand through
the whole journey and really
involved us at every stage of
the build.”
Rif Lalani, Managing Director, Bentley Designs
Portfolio – Development
Strategic land and development portfolio
Tritax Big Box REIT plc Annual Report 2024
18
Manor Farm – Heathrow: Up to
147 MW data centre scheme in
acritical London location
Added to passing rent from 2024 development completions
£7.4 million
Potential rental income from 2024 development starts
£14.4 million
2024 average yield on cost for development lettings
7.1%
One of the UK’s largest data centre opportunities
147 MW
Prime London site adjacent to Heathrow airport
74 acres
Phase 1 expected yield on cost
9.3%
Developing a portfolio that reflects our strategy
and supports our clients
We work with renowned global brands and companies at the start
oftheir growth journey, using our first-hand understanding of the
supply chain so we can create the space they need to succeed,
nowand in the future.
We continued to make excellent progress with the development
programme in 2024. We reached practical completion on 1.7 million
sq ft of developments in the year, with the potential to add a total of
£16.2 million to passing rent. We have a further 1.8 million sq ft
under construction, which has the potential to add £17.0 million to
annual passing rents.
Development Management Agreements (DMAs)
deliver a high-return, capital light source of profit
Our development programme mainly creates investment assets, but
we sometimes develop assets for freehold sale via a Development
Management Agreement (DMA) to accelerate profit. Under a DMA,
we manage development for a fee and/or profit share without
owning the site or completed asset. DMAs provide high returns with
minimal capital investment.
In 2024, we pre-sold 0.4 million sq ft at Oxford and began building
for Siemens Healthineers. We also secured a 0.3 million sq ft DMA
with Greggs, set to start in 2025. DMA income reached £23.0 million
in 2024 (2023: £nil), with a £10.0 million target for 2025.
Leveraging our expertise via a decisive move into
power and data centres
Tritax Management LLP has secured fast-tracked power access
inkeyLondon areas. It acquired a site at Manor Farm, Heathrow
todevelop a 147 MW data centre, one of the UK’s largest. This
included a 50% stake in a joint venture with a leading European
renewable energy company to secure the necessary power capacity
and deploy the associated power infrastructure. With a 9.3% yield
and over 40% profit on costs, the project could see its 107 MW
Phase 1 completed by H2 2027, pending planning and pre-let.
TritaxBig Box also secured first refusal on future data centre
opportunities, including a 1 GW power pipeline.
Development pipeline of growth opportunities
Current development
pipeline Near-term development pipeline Future consent pipeline
Timing Development under
construction (including Let)
Potential starts
within the next
12 months
Potential starts
in the following
12–24months
Longer-term land held under option
Size 1.9 million sq ft 1.9 million sq ft 3.8 million sq ft 30.9 million sq ft
Rentpotential £21.8 million £21 million £33 million £248 million
Potential to deliver 2–3 million sq ft per annum of development starts over the next 10 years
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
19
Structural trends
Real estate impact
Tritax Big Box strategy
Focus on:
• Location, power and labour
• High-quality, mission-critical, modern logistics and data centre facilities
LONG-TERM
STRUCTURAL DRIVERS
CONTINUE TO SUPPORT
THE SECTOR
Markets and Trends
Shifting consumer
behaviour
Consumers want fast, flexible and ever
more convenient ways to make purchases.
This continues to drive strong growth in
e-commerce, with online-only and traditional
bricks and mortar (now omni-channel)
retailers building out their networks to
facilitate this.
Meanwhile, our increasingly digital world is
driving greater demand for access to, and
storage of, data.
Evolving supply chain
Companies continue to review their
operations and adjust their supply chain in
response. Additional resilience is now a
priority, alongside optimising for efficiency,
productivity and cost. Occupiers continue
to pursue a variety of solutions, including
holding more stock, diversifying their
supplier base, investing in UK facilities, and
improving supply chain visibility.
Drive for sustainability
Organisations are increasingly driven by
their decarbonisation and sustainability
objectives. Adaptation of their business
models is leading to an increased focus
onthe role of logistics buildings in reducing
carbon emissions, cutting energy use,
andincreasing employee and community
engagement. Modern logistics buildings
have enhanced sustainability performance,
better staff facilities and are often designed
with green space, biodiversity, and outdoor
amenities in mind.
E-commerce/
omni-channel
retail
• Consolidation/
automation
• Network
realignment
• High-quality,
modern buildings
Digitalisation
• Last-mile delivery
• Data centre
demand
• Increased power
requirements
Increased
resilience
• Higher stock
volumes
• Supply chain
visibility/
technology
Greater
efficiency
• Increased
automation
• Larger buildings
Decarbonisation
• Low carbon
buildings
performance
• Renewable energy
• Sustainable
transport
Employee
attraction
and
wellbeing
• Improved
amenities
• Skilled labour
• Healthy and
engaged
workforce
Tritax Big Box REIT plc Annual Report 2024
20
Long-term structural drivers support our sector
As detailed opposite, three structural trends are underpinning
demand for high-quality, mission-critical, modern logistics real estate
and data centre facilities. Specifically:
• shifting consumer behaviour;
• evolving supply chain; and
• drive for sustainability.
Combined, these drivers mean that not only is location and access
to skilled labour vital, but provision and resilience of power supply
isincreasingly in focus as energy needs increase.
Diverse demand continues to underpin market activity
Occupational demand remains healthy with 21.3 million sq ft of take
up in 2024 (2023: 22.1 million sq ft)
1
. We continue to see high levels
of engagement across both standing assets and new space
resulting in strong renewal rates alongside continuing demand
fornew buildings.
Leading companies continue to invest for the future driven by
growing revenues and improving margins. Supply chains are a
multi-year area of focus with the potential to contribute to both
improved financial performance (lowering the cost to serve,
facilitating new revenue streams etc.) and enhanced business
resilience. High-quality real estate that can support modern day,
technology led supply chain requirements is therefore seen by
manyas core to future operations. This is leading to sustained
anddiverse demand from companies across all sectors.
2024 saw new space account for 61% of demand, of which
newlydeveloped speculative space contributed 39% (2023: 25%)
1
.
Thishighlights the ongoing trend towards high-quality, technically
capable buildings that support improved productivity and
efficiencyfacilitated by increased use of automation and advancing
technologies. The East Midlands, the UK’s most important big box
logistics market, remained the most active, accounting for 34% of
take up across the UK
1
. 11.5 million sq ft was under offer at year end
(2023: 11.1 million sq ft)
1
and our own occupier hub continues to see
high levels of enquiries.
Manufacturers remained prominent, contributing 25% of demand
in2024
1
, as they continue to build resilience, diversify their supplier
base and improve supply chain visibility. Many still expect to hold
more stock onshore, with 29% of manufacturers suggesting, in our
occupier survey delivered in partnership with Savills, that they plan
to do so over the next three years.
Retailers accounted for 28% of take up
1
; most were omni-channel
businesses evolving their supply chains to meet shifting consumer
needs. Online-only retailers returned to the market through the
second half of the year, with our 1.0 million sq ft letting at Kettering
accounting for the majority of 2024 take up. We expect to see further
activity in 2025 from both online-only retailers and parcel carriers.
3PLs were less active in the market than in the previous year but
stillaccounted for 23% of demand in 2024
1
, underpinned by several
large lettings. Leading 3PLs were part of the shift towards higher
quality, often newer, space that can facilitate operational shifts such
as adopting more building level automation; consolidating into larger
units; decarbonising supply chains; and providing a better working
environment, including improved amenities to help attract and
retain staff.
Reduced supply contributed to well-balanced
marketfundamentals
New supply of logistics space declined markedly year on year
with14.7 million sq ft of completions (2023: 30.3 million sq ft).
Completions were heavily front-loaded with 9.5 million sq ft
deliveredin the first quarter
1
.
Space under construction at Q4 2024, however, picked up year
onyear to 26.0 million sq ft (2023: 21.4 million sq ft)
1
. Importantly,
theincrease is almost entirely from an uptick in “build to suit”
activity.The speculative pipeline stands at 12.8 million sq ft
(2023:12.3 million sq ft)
1
. Much of this is concentrated in a handful
ofgeographic locations with a significant proportion scheduled
tocomplete early in 2025.
Well-located supply is typically constrained by factors such as land
availability, planning and power. This makes our strategically located
land portfolio a particularly attractive attribute of our business. It is
held through capital efficient option agreements (which link our land
purchase price to prevailing open market value, less a prescribed
discount). This enables us to deliver on our 6-8% yield on cost
development guidance.
Vacancy increased from 5.1% at Q4 2023 to 5.6% at Q4 2024
butwas flat across the second half of the year
1
. Overall, market
fundamentals remain well balanced but nuanced, as local market
dynamics are diverse with significant differences at both a regional
and sub-market level.
Strong rental growth in 2024
2024 has seen strong rental growth at both a headline and portfolio
level. Prime headline logistics rents increased across all regions by
between 25p and 50p (ex-Inner London where they held flat)
1
.
Headline prime rents reported by CBRE reflect the top tier of rent
forbuildings of the highest quality and specifications in the best
locations. MSCI ERV data, which better reflects portfolio-wide
performance and a broader mix of buildings, shows UK distribution
warehouse ERVs grew by 5.3% in 2024 (2023: 7.1%).
Logistics real estate capital market activity increasing
Big box logistics transaction activity totalled £3.1 billion in 2024, with
a further £4.9 billion of multi-let and urban deals
2
. Significant pools
ofglobal capital continue to look to access the market. Two of the
largest deals completed late in the year were, for example, by new
entrants to the UK logistics sector.
Prime market pricing for logistics buildings in the East Midlands
remains at 5.25%
1
. Deal activity has continued to evidence market
pricing with a significant pool of prospective purchasers for
high-quality, prime product.
Investor interest in the sector remains high with prospective
purchasers underwriting further rental growth on top of repriced
yields. As a result, logistics pricing continues to look attractive despite
ongoing uncertainty in global capital markets. The composition of
returns also continues to appeal to investors with ongoing rental
growth underpinning the scope for further income growth. Moreover,
many buildings continue to have reversionary potential given the
healthy market rental growth that leases often fail to capture fully.
Record level of data centre demand
London remains the largest data centre market in Europe with 1,141MW
in operation across an estimated 135 data centres
3
. 2024 take up in
London totalled 116MW which exceeded new supply (65MW) for the
third consecutive year
1
. Strong demand and low availability have
resulted in rental rates increasing. Providers are, however, having to
develop data centres in areas further afield to meet growing demand
given the severe land and power constraints that exist in London.
With the same planning designation as logistics buildings, data
centres have become an additional source of demand, further
constraining the supply of land for logistics real estate. Furthermore,
in September 2024, UK data centres were designated as Critical
National Infrastructure: strengthening industry resilience, regulatory
support and reinforcing the UK as an attractive destination for data
centre users.
1. CBRE.
2. DTRE, “Big Box Logistics Occupier and capital markets report”, January 2025.
3. Cushman & Wakefield, “EMEA Data Centre H2 2024 Update”, February 2025.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
21
Manager’s Report
DELIVERING
OURSTRATEGIC
PRIORITIES
“ Our strategy has three clear
interlinked components that
aim to deliver sustainable
income, capital growth and
robust performance through
theeconomic cycle.”
Colin Godfrey
Chief Executive Officer, Tritax Big Box REIT plc
Consistent and successful strategy
Our strategy has three clear interlinked components that aim to deliver
sustainable income and capital growth, robust performance through the
economic cycle and an attractive and progressive dividend, while
ensuring we meet our wider responsibilities and carefully manage risk.
The components of the strategy are:
2
High-quality assets attracting
world-leading clients
– delivering long-term, resilient and growing income.
Direct and active management
– protecting, adding and realising value.
Insight driven development
andinnovation
– creating value, future-proofing and capturing
occupier demand.
1
3
Sustainability is intrinsic to each of these elements and is a key enabler
of business performance. Information on how we implemented the
strategy during the period, including our sustainability initiatives, is set
out in the following sections.
Our total portfolio comprises:
• The investment portfolio. These are logistics assets with a lease
oragreement for lease in place. We believe our investment portfolio
is the strongest in the UK in terms of asset quality, client financial
covenant strength and lease length.
• The development portfolio. This comprises land, options over land
and buildings under construction, generating best-in-class logistics
assets for the investment portfolio (see Insight-driven development
and innovation section below).
• Non-strategic assets. These are modern, high-quality
non-logistics assets acquired with UKCM, which we are divesting
toprovide funding for higher-returning logistics opportunities,
particularly our logistics development programme.
Tritax Big Box REIT plc Annual Report 2024
22
1. High-quality assets attracting world-leading clients
Our priorities for 2024
We set the following priorities for 2024 in relation to the investment portfolio:
Priority Progress
Evaluate the overall composition of the portfolio, identifying
assets for potential disposals and informing our asset
management and investment activities.
We continued to optimise the portfolio, identifying further assets to divest so
we can recycle the capital into higher-returning opportunities. The UKCM
non-strategic assets were a particular focus, as we fully assessed each and
determined which were ready for sale and which would benefit from asset
management to maximise their value. See the Direct and active management
section for more information on our successful disposal programme in 2024.
Evaluate the balance between larger and smaller assets,
with a view to selectively increasing our weighting to urban
logistics.
While the portfolio remains focused on big boxes, we increased our weighting to
urban logistics primarily through the UKCM acquisition. We also added further
smaller units to the investment portfolio through development completions.
Continue to closely monitor client financial performance. We continue to monitor our clients’ performance as a standard part of our asset
management process. See Direct and active management for more information.
1. No comparative available as UKCM acquired during 2024. Portfolio value only relates to investment portfolio only and excludes development related assets.
Investment portfolio and non-strategic assets
1
– key figures
Total portfolio value
– investment portfolio
£5.77bn 14.7%
(2023: £5.03bn)
Total portfolio value
– non-strategic assets
£0.39bn
Number of investment assets
– investment portfolio
102 30.8%
(2023: 78)
Number of investment assets
– non-strategic assets
14
Gross lettable area
– investment portfolio
41.8m sq ft 17.4%
(2023: 35.6m sq ft)
Gross lettable area
– non-strategic assets
1.5m sq ft
Portfolio estimated rental value
– investment portfolio
£362.9m 31.0%
(2 0 23: £ 277. 0 m )
Portfolio estimated rental value
– non-strategic assets
£32.5m
Like-for-like ERV growth
– investment portfolio
5.4% -1.5pts
(2023: 6.9%)
Portfolio vacancy
– investment portfolio
5.8% 3.3pts
(2023: 2.5%)
Portfolio vacancy
– non-strategic assets
4.3%
Total portfolio vacancy
5.7% 3.2pts
(2023: 2.5%)
WAULT
– investment portfolio
10.6yrs -0.8yrs
(2023: 11.4y rs)
WAULT
– non-strategic assets
7.3yrs
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
23
Manager’s Report continued
Resilient portfolio with embedded opportunities
for valuecreation
The investment portfolio is split between:
• foundation assets, which provide attractive, lower-risk and
resilientlong-term income; and
• value-add assets, which offer opportunities for capital or
incomegrowth through asset management.
Assets can move between these categories, as our asset
management turns value-add assets into foundation, or as
foundation assets become value-add, for example as a lease
nears expiry.
At 31 December 2024, our total portfolio comprised:
Investment portfolio % of GAV
Foundation assets 57.9%
Value-add assets 30.2%
Total investment portfolio 88.1%
Development portfolio 5.8%
Non-strategic assets 6.1%
Total portfolio 100.0%
At the year end, the total portfolio value was £6.55 billion
(31December 2023: £5.03 billion), with the increase primarily due
tothe addition of the UKCM assets. The total portfolio capital value
increase was 2.8% higher, with asset values steadily improving,
generated from further development gains, the benefits of our
activeasset management and 5.4% like-for-like ERV growth over
theyear. When including the net gain made on the acquisition of
UKCM, the capital value increase is 3.7% over the year.
As discussed in the direct and active management section, at the
date of this report we have exchanged or completed contracts to
divest £181.2 million of non-strategic assets. Post completion of
these disposals, the non-strategic assets will reduce to a pro-forma
4.0% of total GAV.
A broad and well-located client offering
While big boxes make up most of our investment portfolio, over
recent years our investment strategy and development programme
have increased the range of building sizes we can offer our clients.
This allows us to meet our client needs for ‘first-mile’ mission-critical
logistics assets through to ‘last-mile’ urban delivery units. UKCM has
further broadened the portfolio, adding 4.2 million sq ft of logistics
space, primarily in “last-mile” urban locations across 19 estates.
At the year end, the investment portfolio contained the following
mixof building sizes:
Investment portfolio
Contracted rent
31 December 2024
Contracted rent
31 December 2023
<100k sq ft 11.0% 1.7%
100–250k sq ft 10.7% 9.7%
250–500k sq ft 28.9% 31.5%
>500k sq ft 49.4% 57.1%
1. High-quality assets attracting world-leading clients continued
Secure client base underpins
incomegeneration
The Group’s diversified client base includes some of the
world’s most-important companies, with 64.5% being part
ofgroups included in major stock market indices, such as
theDAX 30, FTSE All Share, SBF 120, NYSE and S&P 500.
The number of logistics clients increased from 61 to 128
during the year, as the UKCM acquisition further diversified
our client base. The occupiers of the acquired assets include
major corporations, such as existing Group clients Ocado,
Iron Mountain and GXO, as well as a range of smaller
businesses. This offers us greater scope to engage with
clients and meet their evolving needs through new
developments or any vacancy that may arise over time.
The table below lists the Group’s top 10 clients across the
investment portfolio:
Client % of contracted annual rent
Amazon 15.5%
Morrisons 4.4%
Iron Mountain 4.4%
The Co-Operative Group 4.0%
Tesco 3.3%
B&Q 3.1%
Argos 2.9%
Ocado 2.7%
Marks & Spencer 2.6%
Bosch 2.0%
The investment portfolio is well diversified geographically, with a
good balance of exposure to key logistics locations in the South
East, the Midlands and the North of England:
Investment portfolio locations by
marketvalue
31 December
2024
31 December
2023
South East 35.9% 34.2%
South West 3.0% 2.7%
East Midlands 14.3% 13.7%
West Midlands 22.3% 21.0%
North East 16.0% 18.5%
North West 6.8% 8.5%
Scotland 1.7% 1.3%
Tritax Big Box REIT plc Annual Report 2024
24
Upward-only rent reviews provide attractive
income growth
Most of our logistics leases benefit from upward-only rent reviews.
Of total contracted rents for logistics assets:
• 15.1% are reviewed annually; and
• 83.3% are reviewed in five-yearly cycles, with the timings
staggered, so there are reviews taking place each year.
The table below shows the rent review types across the total
portfolio at the year end:
Rent review type
% of rent roll at
31 December 2024
% of rent roll at
31 December 2023
Fixed uplifts 9.4% 8.7%
RPI/CPI linked 45.0% 49.0%
Open market 31.1% 29.9%
Hybrid (higher of inflation
oropenmarket) 12.9% 12.4%
Not reviewed 1.6% —
Logistics leases with inflation-linked reviews specify minimum and
maximum rental growth, which average 1.6% and 3.6% respectively.
In tandem with fixed rent reviews, this provides certainty on the
minimum rental increases the portfolio will generate each year.
We supplement this through open market and hybrid rent reviews,
which can capture uncapped market rental growth, and other forms
of active management to increase rental income. Approximately
82.0% of contracted rent from the UKCM logistics assets is subject
to either hybrid or open market review, which is another attractive
feature of its portfolio. This has increased our weighting to these
types of rent reviews to 44.1% across the portfolio.
Due to the balance of open market and inflation-linked rent reviews,
and the growing rental reversion in the portfolio (see below), we
remain positive about continuing to deliver attractive, long-term
income growth from our investment assets. Information on rent
reviews in the period can be found in the Direct and active
management section below.
Increasing ERVs and record rental reversion
provide significant opportunity to grow
rental income
At each valuation date, the valuer independently assesses the
estimated rental value (ERV) of each asset in the investment
portfolio. This is the rent the property would be expected to
securethrough an open-market letting at that date.
At 31 December 2024, the investment portfolio ERV was
£362.9million (31 December 2023: £277.0 million), which is
£79.2million or 27.9% (31 December 2023: 23.0%) above the
contracted rent. The increase in the ERV reflects the addition of
theUKCM logistics assets and the like-for-like ERV growth in the
investment portfolio of 5.4% during the year. We have opportunities
to capture this reversionary potential through open-market rent
reviews, lease renewals, new leases or lease regears.
In addition to capturing reversion, we can grow income through
filling vacancy in the investment portfolio, which stood at 5.8% at
theyear end (31 December 2023: 2.5%). The increase is part driven
by the consolidation of the UKCM assets which has a naturally
higher vacancy level and three speculatively developed buildings
that reached practical completion in November / December 2024.
As our business has evolved, including both a higher amount of
shorter leased urban logistics and an element of speculative
development, we expect to maintain a level of available to let
buildings to capture demand in the market.
To assist in understanding our portfolio reversion, and the likely
timing and quantum of its capture, we have provided additional
disclosure in the tables below. These outline the split between
review type and frequency over the next three years.
Vacancy and outstanding reviews
Contracted
rent (£m)
% of
passing rent ERV (£m)
Vacancy — n/a 20.3
Outstanding reviews from prior
periods* 6.7 2.4% 8.7
Total 6.7 2.4% 29.0
* Rent for overdue reviews is accrued and recognised within rental income at
a level that is reasonably expected to be achieved on settlement.
Rent reviews and expiries*
2025
2026
2027
Review type Frequency
Rent
(£m)
% of
passing
ERV
(£m)
Rent
(£m)
% of
passing
ERV
(£m)
Rent
(£m)
% of
passing
ERV
(£m)
Indexation Annual 32.5 10.4 38.4 32.5 10.4 38.4 32.5 10.4 38.4
5-yearly 8.2 2.6 9.6 26.7 8.5 33.2 17.6 5.6 22.6
OMR/hybrid Annual — — — — — — — — —
5-yearly 9.7 3.1 12.6 24.2 7.7 32.3 17.7 5.6 20.9
Fixed Annual 10.4 3.3 10.4 7.2 2.3 6.7 7.0 2.2 6.4
5-yearly — — — 8.5 2.7 9.2 6.5 2.1 8.5
Total rent reviews 60.8 19.4 71.0 99.1 31.6 119.8 81.3 25.9 96.8
Lease expiries 10.7 3.4 15.1 9.7 3.1 13.6 15.5 5.0 18.5
Total lease events
inyear 71.5 22.8 86.1 108.8 34.7 133.4 96.8 30.9 115.3
* Includes both non-strategic and logistics assets.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
25
1. High-quality assets attracting world-leading clients continued
Manager’s Report continued
Long leases enhance income security
At the year end, the investment portfolio’s WAULT was 10.6 years
(2023: 11.4 years), with the foundation assets having a WAULT of
13.6 years (2023: 15.0 years).
Of total investment portfolio rents:
• 23.4% is generated by leases with 15 or more years to run; and
• 25.2% comes from leases expiring in the next five years, providing
near-term opportunities to capture the growing reversion within
the portfolio.
UKCM’s logistics portfolio had a WAULT of 6.7 years on acquisition,
creating opportunities to capture the reversionary potential of these
assets over the coming years.
Full repairing and insuring (“triple net”)
leases result in high conversion of gross to net
rental income
Most of our logistics asset leases are full repairing and insuring (FRI),
equivalent to “triple net” leases in the United States. This means
ourclients are responsible for property maintenance during the
lease term and for dilapidations at the end of the lease. This
minimises ourirrecoverable property costs, which resulted in 98.2%
conversion of gross to net rental income for the year. Rotating the
UKCM non-strategic assets into FRI leases on new logistics assets
should deliver further direct property cost savings over the medium
term, in addition to the immediate cost savings from the combination
(see the Financial Review for more information).
Portfolio quality reinforced by strong
sustainability characteristics
EPC ratings are a key benchmark for both investors and occupiers
and we are continuing to work with our clients and consultants to
improve the EPC ratings of our buildings where possible. We are
also constructing all our new developments to a minimum standard
of EPC A and BREEAM Excellent.
At 31 December 2024, 98% of the investment portfolio had an EPC
rating of C or above (31 December 2023: 97%). The movement
reflected our continued progress with improving EPC ratings
throughasset management, and the addition of the UKCM
logisticsassets. At the year end, all assets certified or expected
tobe certified by BREEAM (50%) had a rating of Very Good or
above(31 December 2023: 51%).
Butternut Box, Blyth
Our priorities for 2025
In 2025, our priorities for the investment portfolio are to
continue to:
• optimise our portfolio and recycle capital into
higher-returning opportunities; and
• allocate capital to income-generating assets that meet
ourreturn criteria and enhance our portfolio, for example
byfurther diversifying our assets geographically or
broadening our client offering.
Tritax Big Box REIT plc Annual Report 2024
26
2. Direct and active management
Our priorities for 2024
We set the following priorities for 2024 in relation to active management:
Priority Progress
Seek to dispose of £100–200 million of assets, subject to
market conditions and opportunities within the investment
market, in line with our ongoing approach to capital rotation.
The UKCM acquisition has provided us with non-strategic assets, which we
are successfully divesting, with £181.2 million of disposals, representing 38%
of non-strategic assets, exchanged or completed so far. We also continue to
optimise our investment portfolio and recycle capital, with £125.0 million of
logistics disposals. Total disposals were therefore £306.2 million
1
.
Implement our asset management plans, with a particular
focus on recently acquired urban logistics assets with
significant reversionary potential.
We have made excellent progress with our asset management plans, including
capturing rental reversion in our existing urban logistics assets and UKCM
assets, through lease events and rent reviews. In total, our asset management
activities added £11.6 million to contracted rents during the year.
Enhance our sustainability performance, including a
programme to determine viable projects and costs for
works to achieve net zero carbon.
We have continued to achieve market-leading sustainability performance. Our
work in the year included commissioning a platform to enable us to analyse
projects to improve EPC ratings and update asset by asset decarbonisation
pathways. See enhancing sustainability through integration, engagement and
active management for more information.
1. £306.2 million when including transactions which had exchanged but not yet completed as at the date of publication.
Completed disposals
(gross proceeds)
£140.4m - 57.1%
(2 0 23: £ 327.0 m)
Completed disposals
(area)
0.6m sq ft -80.0%
(2023: 3.0m sq ft)
Completed disposals
(contracted rent)
£7.6m -46.1%
(2023: £14.1m)
Acquisitions
(consideration)
£1,262.9m
(2023: £108.0m)
Acquisitions
6.4m sq ft
(2023: 0.5m sq ft)
Portfolio subject to rent review
in year
26.7% 7.7p ts
(2023: 19.0%)
Proportion of portfolio reviewed
24.4% 1.9pts
(2023: 22.5%)
Contracted rent uplifts
– reviews and lease events
£11.9m 142.9%
(2023: £4.9m)
Contracted rent uplifts
– reviews and lease events
12.5% 2.9pts
(2023: 9.6%)
EPRA like-for-like rental growth
3.9% 0.3pts
(2023: 3.6%)
Change in contracted rent from
lease expiries/new lettings
-£0.3m
(2023: £0.0m)
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
27
2. Direct and active management continued
Manager’s Report continued
Realising value and recycling capital
through disposals
Capital recycling is a key part of our business model. We have
deliberately constructed the portfolio to ensure it contains highly
attractive assets with good liquidity, enabling us to sell when we
choose, reinvest the proceeds into higher-returning opportunities
– such as our development pipeline – and thereby improve the
quality and returns prospects for the overall portfolio.
We constantly review the portfolio, to identify assets where:
1. we have completed our asset management plans and
maximised value;
2. the asset’s investment characteristics no longer fit our desired
portfolio profile; or
3. the asset’s future performance may be below others’ in the
portfolio or have more risk attached to it.
We identify assets for disposal by analysing the associated risk and
return profile. Risk criteria we consider include age, location,
covenant strength, geographic and client concentration, rental
income profile, energy and carbon performance and the opportunity
for rental growth. We analyse the potential return expectations
based on our asset management plans, view of rental growth, capex
requirements and any marketing void and client incentive, in addition
to considering further sustainability performance enhancements.
We also look closely at the capital market conditions, to establish
whether we are acting at the correct point in the market cycle.
Wecontinually profile the most active buyers to establish their
desired income profile, coupled with their transactional experience
and credibility, to ensure we engage with purchasers with high
execution abilities.
When we completed the UKCM combination in May 2024, our plan
was to divest the non-strategic assets within 24 months. We have
made excellent progress since then, exchanging or completing
contracts to dispose of seven assets for a total of £181.2 million to
date (representing 38% of the non-strategic assets), with a further
approximate £177.4 million under offer and high levels of interest in
the balance of these assets. We therefore remain confident of being
able to exit the position within our planned timeframe.
These disposals reflect a blended NIY of 6.2%, a 2.8% premium to
the assets’ 31 December 2023 book value.
While the UKCM non-strategic assets are the main focus of our
disposal programme, we remain highly disciplined in reviewing the
logistics investment portfolio and identifying assets for divestment,
as well as being opportunistic when we receive attractive proposals.
In 2024, we exchanged on the sale of a 755k sq ft asset at Doncaster
(let to Next) and sold a 388k sq ft asset at Crewe (let to AO.com) for
total consideration of £125.0 million. This represented a blended NIY of
5.0% and a 4.1% premium to their book value at 31 December 2023.
Overall, the disposal activity noted above, which totals £306.2 million
of assets exchanged or completed, has been conducted at a
blended 3.3% average premium to book values.
Acquiring investments with asset management
potential and a broader client offering
We continue to look for investments that can generate accretive total
returns, support our income growth and broaden our client offering.
This forms part of our ongoing portfolio optimisation and complements
our development activity by typically offering lower risk and more
immediate income.
In January 2024, we completed the acquisition of a 479k sq ft cold
store building in Castlewood, a key East Midlands location. The
property is let to Co-Op on a lease with 7.7 years remaining on
purchase and 2.7 years to the next rent review at which point the
rent is reviewed to the equivalent of 2.5% per annum compounded
for the previous five year term. The purchase price of £46.0 million
equates to a NIY of 5.75% and a reversionary yield of 7.3%.
Post period, in January 2025, we acquired a 627k sq ft cold-store
building in Haydock, a core North West location, for £74.3 million.
The property is let to Sainsbury’s as its principal North West hub.
Under the lease there is c.13 years unexpired term with a client
break in c.8 years. The rent is reviewed on an uncapped basis to RPI
every five years. The purchase price reflects a 6.0% NIY which,
based on current and expected RPI growth rates, should create a
running yield of 7.0% in 2028.
Growing and lengthening income through rent
reviews and lease events
Through our active management approach we are making good
progress in leveraging the rental reversion opportunity, growing
income by £11.6 million through 70 initiatives, such as lettings, lease
re-gears and rent reviews.
In 2024, 26.7% (19.0% in 2023) of the investment portfolio was due
for a rent review (excluding the UKCM logistics assets). We
completed 33 reviews in the year, including three open-market or
hybrid reviews that were outstanding from 2023, with the table
below showing the strong rental uplifts from the open-market
reviews concluded.
EPRA like-for-like rental growth in 2024 was 3.9% (2023: 3.6%).
2024 settled rent reviews and lease events
Number
% of
contracted
rent
Growth in
passing rent
Absolute rent
uplift (£m)
Index linked 14 18.1% 7.7% 4.1
Open market/hybrid 15 4.0% 34.6% 4.1
Fixed 4 2.3% 2.9% 0.2
Total rent reviews 33 24.4% 11.7% 8.4
Lease events
(comprising lease
renewals and
extensions) 25 7.7% 15.1% 3.5
Total for all rent
reviews and
leaseevents 58 32.1% 12.5% 11.9
Tritax Big Box REIT plc Annual Report 2024
28
Significant lease events during the year included agreeing:
• a new 15-year agreement for lease with a leading UK brewer
atthe Stakehill asset formerly occupied by Tesco, where we
achieved vacant possession upon lease expiry in December 2023.
The agreement for lease was signed with a rental increase of
38.1% against the passing rent at the point Tesco vacated,
resulting in asignificant rise in the asset’s valuation. Our
refurbishment prior to the letting included a solar PV scheme,
which helped increase the EPC from B to A+ and provides
additional income to us through a power purchase agreement;
• a five-year lease extension at L’Oreal, Trafford Park, Manchester,
at a new record rent for Trafford Park of £8.50 psf. The rental
upliftwas c.£400k pa or 22.1%; and
• a reversionary lease renewal for a 15-year term with Next on the
Doncaster asset, creating significant value add prior to the asset’s
disposal (see above).
Across our urban logistics assets we completed 32 lease events
across new lettings, rent reviews and lease renewals. Significant
uplifts through rent reviews and asset management were achieved
at Ventura Park Radlett, Newton’s Court Dartford, and Emerald Park
Bristol delivering between 35% and 75% increases in rent. Our
improvements to the multi-let estates include a pilot project at J6
Birmingham, to enhance signage, amenities such as food and
beverage outlets, landscaping incorporating outside seating areas,
and increased security provisions. We have identified the potential
on some estates, such as Rugby and Kettering, to add multi-use
games areas and running circuits.
We are particularly focused on capturing the reversionary potential
of the logistics assets acquired from UKCM, having developed a
comprehensive asset management plan as part of our due diligence,
identifying short, medium and long-term initiatives and their potential
impact on income and capital values. We have continued to refine
our business plans for each asset and made good progress with
implementing them. By the year end, we had completed 18 asset
management initiatives, adding approximately £3.1 million to
contracted rents of the acquired UKCM logistics assets.
Enhancing ESG performance through integration,
engagement and active management
By working in partnership with our clients on sustainability initiatives,
we can increase rental income and capital values, while helping
them to progress their own ESG targets. We have therefore
integrated sustainability considerations throughout the investment
lifecycle, as well as our management of the Group’s supply chain
and engagement with our clients.
Our overall objective is to achieve market-leading ESG performance,
with a focus on practical action. Data is integral to maximising our
effectiveness, ensuring we are tracking our performance and
continuing to add value to our buildings through proactive asset
management and innovation.
Our ESG strategy has four themes, as set out below. Our
achievements in 2024 in relation to actively managing our
portfolio included:
• Sustainable buildings: We have continued to refine our
integration of ESG criteria into the investment process, including
engaging with our advisers to understand how ESG factors are
influencing transactions in the market. We utilised our updated
ESG due diligence template to support the acquisition of UKCM
and to integrate its assets into our ESG programme.
• Climate and carbon: We engaged Mace Consulting to build a
bespoke interactive technology platform for us, which is allowing
us to refine our net zero pathway into a timetabled and costed
programme at both portfolio and asset levels. We have begun
entering our asset-level plans and will be able to model and
interrogate the impact of initiatives on the EPC rating and net zero
carbon pathway for that asset, as well as the associated cost. We
can then analyse the best point to begin works, such as a lease
extension proposal or a potential void, integrate the initiatives into
the business plan for the asset and use the information to support
client negotiations and inform our portfolio management strategy
and disposal decisions.
The decarbonisation platform can also incorporate analysis of
power resilience on an asset-by-asset basis. This will enable us
toconsider if assets may be constrained if clients require more
power in future, for example due to increased use of electric
vehicles or automation. The platform enables us to model the
impact of adding solar generation capacity or the potential for
additional supply via the Grid.
In addition, we undertook a climate risk assessment of the entire
expanded portfolio, to understand the impact of climate change to
the real estate we own to enable us to identify risk and consider
appropriate mitigation strategies. We disclose further details
relating to climate risk, including Task Force on Climate-Related
Disclosures (TCFD), subsequently in our Annual Report.
Royal Mail, Leeds
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
29
2. Direct and active management continued
Manager’s Report continued
Enhancing ESG performance through integration,
engagement and active management continued
• Natural capital: We continue to identify and implement
biodiversity improvements across our standing assets, as well
asgenerating wellbeing benefits through initiatives such as
landscaping and exercise facilities at our urban logistics assets.
• People and communities: We have put in place a new five-year
social impact strategy for the Group, with a focus on improving
educational outcomes and opportunities for young people.
Weareseeking to reach 250,000 young people over five years,
bycontinuing to support the Schoolreaders charity and working
with organisations such as The King’s Trust and the charity
Education and Employers. The strategy is overseen by the
TritaxSocial Impact Foundation, which was established in 2023
tobe a centre of excellence and governance and to help us
deliverand measure impact.
Our strong ESG performance continues to be reflected in the
Group’s external ratings. GRESB awarded us four Green Stars (out
of a maximum of five) for the fourth consecutive year and an overall
score of 85/100. Tritax Big Box Developments, the development arm
of the Group, was awarded five Green Stars and scored 99/100,
ranking it first in its peer group. It also achieved Global Sector
Leader and Global Listed Sector Leader status in the Industrial
category, and Regional Sector Leader and Regional Listed Sector
Leader status in the Industrial and Europe categories. The Group
retained its EPRA sBPR Gold Level certification, which recognises
best practice in corporate ESG disclosures, and further improved its
Sustainalytics score from 7.6 to 6.4 (Negligible Risk), as well as
receiving the Region and Industry Top Rated badges.
Resourcing our asset management team
for success
During 2024, the number of leases under management increased
fromaround 90 to approximately 300. The Manager has continued its
investment in its dedicated Big Box team, adding asset management
expertise from other parts of the Manager, from UKCM’s former
manager and through direct recruitment. The asset management
teamhas been further complemented with additional property
management, development and ESG resource. The Manager’s
investment supports our hands-on approach to asset management,
including building strong relationships with clients, understanding their
supply chain and business plans, and identifying opportunities through
regular engagement.
To ensure each client has a single point of contact for all the assets
itoccupies, we have split the asset management team by skillset,
resulting in dedicated teams for single-let big boxes, urban logistics,
newly developed assets and the remaining non-strategic assets.
This also enables swifter execution of initiatives common to a type
ofasset, such as estate improvement works on our urban logistics
parks, which can enable financial savings through efficiencies and
economies of scale.
Continuing to digitalise our processes
In addition to the decarbonisation platform described above,
wecontinue to invest in digitalisation to support our asset
management programme. Initiatives in 2024 included:
• a new client engagement platform, to ensure our asset managers
have easy access to key information on all our clients, are well
informed ahead of meetings and asset inspections, and can
shape bespoke asset management proposals. Information on the
platform will include clients’ financial accounts, supply chain
information, ESG targets, and records of our client interactions;
• an app-based inspection report system, so our on-site
intelligencegathering is quickly and efficiently shared with
thewider team; and
• further developments to our asset business plan modelling
systemand enhanced reporting. The modelling system holds
millions of data points incorporating legal, financial, development,
specification, operational and ESG information. This enables
ourreporting to be more holistic and consider the portfolio-level
impact of an individual asset initiative.
Monitoring client performance
We closely monitor all clients’ financial performance and covenant
strength each month. The analysis includes an INCANS score, which
is driven by the clients’ financial results, aged debt, late filings and
other indicators. We also track performance over time, so we can
work with clients to proactively address any potential issues. The
new client engagement platform enables our team to instantly see
the latest financial score for each client.
Our priorities for 2025
Our asset management priorities for the year ahead are to
continue to:
• rotate out of non-strategic UKCM assets in line with our
ambition to completely exit from this position within two
years of the acquisition completion in May 2024;
• capture the significant rental reversion within the investment
portfolio, with a focus on delivery of open market reviews
scheduled in the year, and ensure we maximise the
potential of the recently acquired UKCM assets; and
• develop our client insights to identify further opportunities
to create incremental value through our active and
hands-on approach to management.
Tritax Big Box REIT plc Annual Report 2024
30
3. Insight driven development and innovation
1. £23 million of associated development management income.
Our priorities for 2024
We set the following priorities for 2024 in relation to development:
Priority Progress
Commence construction on approximately 2–3 million sq ft
of new developments, subject to changes in the
macroeconomic backdrop, in a range of building sizes
andwith an average targeted yield on cost of c.7.0%.
Given increased macroeconomic and political uncertainty in 2024, we
beganconstruction on 1.9 million sq ft of developments. This included a
0.4million sq ft unit in Oxford we have pre-sold to Siemens Healthineers
undera DMA contract, enabling accelerated delivery of the rest of the site
byopening up theinfrastructure and utilities.
Secure a blend of pre-lets and lettings of speculatively
constructed assets.
Despite the aforementioned uncertainty, we continued to make excellent
progress. 79% of 2024 starts were either pre-let or pre-sold by the year end,
including one of the largest pre-lets across the market during 2024. We
secured £11.3 million of contracted rent on 2024 development starts, with
afurther £3.2 million under offer.
Progress planning consents and ensure sufficient
consentedland is in a credible delivery state to support
ourlong-term development activity, and aim to replenish
land once developed.
We secured 1.2 million sq ft of new planning consents, with an additional
11.1million sq ft awaiting determination. In aggregate, we have 5.3 million sq ft
of land with planning consent.
Continue to develop our low-carbon baseline specification
and work towards embodied and whole-life carbon
performance targets.
Our low-carbon baseline specification is used on each project and we
continue to update it to reflect the evolving market. We are also progressing
towards our embodied carbon target and undertake whole-life performance
analysis where we know who will occupy the asset being developed and
howthey will use it.
Development completions
1.7m sq ft -22.7%
(2023: 2.2m sq ft)
Development completions let
0.8m sq ft - 57. 9%
(2023: 1.9m sq ft)
Development completions let
(£m added to passing rent)
£7.4m -45.6%
(2023: £13.6m)
Development starts
1.9m sq ft 11.8%
(2023: 1.7m sq ft)
Of which DMA starts
1
: 0.4 million sq ft
Development starts ERV
£14.4m -7.7%
(2023: £15.6m)
Development lettings
1.0m sq ft 11.1%
(2023: 0.9m sq ft)
Development lettings
£11.1m 42.3%
(2 0 23: £7.8m)
Average yield on cost for
development lettings
7.1% 0.4pts
(2023: 6.7%)
Planning consents secured
1.2m sq ft 33.3%
(2023: 0.9m sq ft)
Total planning consented land
atthe year end
5.3m sq ft -15.9%
(2023: 6.3m sq ft)
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
31
3. Insight driven development and innovation continued
Manager’s Report continued
A carefully considered and low-risk approach
todevelopment
Development complements our investment portfolio by enhancing
overall returns, as we target a yield on cost for new logistics assets
of 6–8%, while carefully managing risk. We expect our 2025
development starts to achieve the top end of our 6–8% yield on
cost range.
We control the UK’s largest land portfolio for logistics development.
It has the potential to deliver approximately 37.2 million sq ft of new
space through developments, which could more than double our
contracted rent roll. The pipeline is diversified geographically in
prime locations and is highly flexible, enabling us to match our
clients’ requirements from urban or last mile assets to mega boxes.
Once built and let these developments become investment
assets for us.
We hold most of the land portfolio through long-dated options.
These are capital efficient and reduce risk, as we typically only buy
the land once we have received planning consent. This provides
control over the quantum and timing of our purchases. The options
include a typical 15–20% discount to prevailing land prices and
additionally wecan offset much of the site’s planning and
infrastructure costs against the purchase price. This means we
typically secure an attractive development profit on drawdown and
are insulated from the impact of changing land values over the
longer term.
Another significant benefit of holding land under long-dated
optionsis the flexibility it gives us to adjust our development activity
upwards or downwards to match prevailing market conditions.
Thishelps us to ensure the delivery of new space is optimised to
drive performance.
Given the current position in the market cycle, we are seeing
opportunities to acquire sites with planning consent already in
placeand vendors who are motivated to sell. We will consider
theseopportunities where they will support delivery of our
development objectives and offer attractive returns.
Our Investment Policy limits land and development exposure to 15%
of GAV, including a maximum exposure to speculative development
of 5% of GAV. At the year end we remained well within these limits:
• land and development exposure was 5.8% of GAV; and
• speculative exposure (based on aggregated costs) was 3.4%.
Continued development progress in 2024
We continued to make excellent progress with the development
programme in 2024. The level of construction starts, lettings and
planning consents achieved is outlined above.
In addition, we reached practical completion on 1.7 million sq ft
ofdevelopments in the year, with the potential to add a total of
£16.2million to passing rent. Of this new space, approximately
47%was pre-let or let during construction and 53% was unlet at
theyearend. The unlet space comprised three speculatively
developed assets which commenced construction in 2023 and
reached practical completion in November and December 2024.
Thelocationis strong and we are seeing good levels of interest
frompotential occupiers.
A controlled level of speculative development is an important part
ofour development programme, as it enables us to meet the needs
of clients with short-term requirements for new space. We take a
very calculated and measured approach to speculative development
and only proceed in locations where we have a clear indication of
occupier demand. Since our acquisition of our development
platform, we have let 69% of speculative space prior to completion.
We allow for up to 12 months’ void period when appraising
speculative development opportunities.
We place a very high priority on health and safety, and in 2024, we
implemented several new measures for assessment, reporting, and
review. We continue to make health and safety performance a key
consideration in selecting contractors for our construction projects.
The UK’s largest land portfolio for
logisticsdevelopment
We categorise our development portfolio as follows, based on the
timing of opportunities:
1. Current development pipeline – assets under construction,
which are either pre-let, let during construction or speculative
developments. The Group owns these sites.
2. Near-term development pipeline – sites with planning
consent received or submitted, and where we aim to begin
construction in the next three years. The Group will own some
ofthese sites, with others held under option and either pending
planning consent or where we have achieved outline planning
but have yet to acquire the land.
3. Future development pipeline – longer-term land
opportunities, which are principally held under option, and
whichare typically progressing through the planning process.
1. Current development pipeline – assets under construction
At 31 December 2024, the Group had the following assets in the current development pipeline. The total estimated cost to complete is
£101.2million and the assets have the potential to add £21.8 million to annual passing rents.
Costs to completion
H1 2025
£m
H2 2025
£m
H1 2026
£m
Total
£m
Total sq ft
m
Contractual
rent/ERV
£m
Current speculative 24.0 0.5 0.3 24.8 0.7 5.7
Current let, pre-let or pre-sold 24.6 44.8 7.0 76.4 1.2 16.1
Total 48.6 45.3 7.3 101.2 1.9 21.8
Tritax Big Box REIT plc Annual Report 2024
32
2. Near-term development pipeline – construction
expected to commence in the next 12 to 36 months
At the year end, the near-term development pipeline consisted of
land capable of accommodating 5.7 million sq ft of logistics space
and delivering £53.7 million of annual rent. Of this:
• 4.3 million sq ft relates to land with planning consent; and
• 0.3 million sq ft relates to sites where we have submitted a
planning application.
As at 31 December 2024, the Group was awaiting decisions on
planning applications totalling 11.1 million sq ft.
The table below presents the near-term development pipeline at
theyear end. Movements in the figures are driven by construction
starting (which will move space to the current development pipeline),
or changes in our view on the likely timing of starts, resulting in
movements between the two categories below. The ERVs in the table
are based on current market rents and therefore assume no further
rental growth before the schemes become income producing.
Total sq ft
m
Current
book value
£m
Estimated
cost to
completion
(uncommitted)
£m
ERV
£m
Potential starts in
the next 12 months 1.9 49.4 207.3 20.9
Potential starts in
the following 24
months 3.8 67.5 418.3 32.8
5.7 116.9 625.6 53.7
3. Future development pipeline
The future development pipeline is predominantly controlled under
longer-term option agreements. Most option agreements contain
anextension clause, allowing us to extend the option expiry date
where necessary.
The future development pipeline has sites at various stages of the
planning process, with multiple sites being currently promoted
through local plans. We have continued to replenish the pipeline by
securing options over new sites.
At 31 December 2024, the future development pipeline comprised
1,539 net acres with the potential to support up to 30.9 million sq ft
of development and generate around £247.7 million of contracted
rent, assuming no future market rental growth.
Development Management Agreements
While our development programme primarily creates assets for the
investment portfolio, we occasionally work with a client to develop
an asset for freehold sale to them, where this may help us to gain
planning, open up a site and accelerate our profit capture. We
undertake these freehold sales through a Development Management
Agreement (DMA), under which we manage the development of an
asset in return for a fee and/or profit share. The Group does not own
the site during construction or the completed investment and DMAs
are therefore excluded from our asset portfolio. DMAs deliver a
high-return, capital light but variable source of profit, which we can
recycle into other development or investment activity.
Included with the DMA categorisation are pre-sales, where we sell
land, or a project, prior to commencement of construction. In 2024,
we pre-sold 0.4 million sq ft at Oxford and commenced construction
of a unit for Siemens Healthineers. We also exchanged contracts with
Greggs for a 0.3 million sq ft DMA which will commence construction
in early 2025, following receipt of planning consent in November 2024.
The Group recorded £23.0 million of DMA income in 2024 (2023: £nil)
and our guidance for 2025 is £10.0 million. The treatment and
impact of DMA income is further discussed in the Financial Review.
Leveraging our expertise into power
anddata centres
Adopting a “power first” approach, Tritax Management has secured
accelerated access to significant quantities of power in key locations
around London. Shortly after theperiod end, we announced that we
had acquired a site at Manor Farm, Heathrow, along with a 50%
stake in a joint venture with a European leader in renewable energy
to develop a 147 MW data centre. This has the potential to deliver
one of the UK’s largest data centres in a prime London location and
deliver exceptional returns for the Company’s shareholders including
a 9.3% yield on cost and a profit on cost of over 40%.
Critically, by undertaking a power first strategy, we can deliver the
107 MW Phase 1 at Manor Farm significantly quicker than by
applying for power today. As such, subject to planning and securing
a pre-let, Phase 1 could be completed and income producing as
early as H2 2027. In addition, Tritax Big Box has secured a right of
first refusal over future data centre opportunities identified by Tritax
Management, including a potential 1 GW of power pipeline.
Enhancing ESG through our development activities
ESG is a core element of our approach to development. Our progress
in the year included:
• Sustainable buildings: We have introduced a low-carbon baseline
development specification, which we use for each project and
regularly update to reflect market evolution. We have also progressed
our approach to delivering our embodied carbon target of 400kg
CO
2
e per m
2
, including engaging with industry-leading suppliers to
understand how key construction materials are transitioning to lower
carbon emissions and beginning trials of different specifications of
lower-carbon concrete. The embodied carbon target for each project
is incorporated into the main building contract, with financial
penalties for non-performance. The weighted average embodied
carbon intensity performance for 2024 was 287kg CO
2
e per m
2
.
Our overall carbon performance assessment for each product
includes analysis of the use of low-carbon and recycled materials.
During 2024, the average recycled content of steel frames used in
our development projects was 34%.
• Natural capital: New biodiversity net gain (BNG) regulations for
developments came into force at the start of 2024. The regulations
apply a mandatory 10% biodiversity uplift for new development
projects, with developers having the option of providing
biodiversity uplifts either on-site or off-site. BNG analysis already
forms part of our development process for each site, and we are
examining ways to effectively deliver this across the portfolio.
Our priorities for 2025
Our priorities for the year ahead for the development
programme are to:
• commence construction on new developments consistent
with our level of activity in 2024, subject to changes in the
macroeconomic backdrop, with an average targeted yield
on cost towards the upper end of our 6–8% guidance range;
• secure a blend of pre-lets and lettings of speculatively
constructed assets;
• progress planning applications and ensure sufficient
consented land is in a credible delivery state to support our
long-term development activity; and
• aim to replenish land once developed, including considering
acquiring land with existing planning consents.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
33
Financial Review
AN EXCEPTIONAL
YEAR FOR THE
COMPANY
Our priorities for 2024
We set the following priorities for 2024 in relation to our financial
performance and balance sheet:
Priority Progress
Maintain the Group’s strong
balance sheet and liquidity and
keep the LTV within guidance
of 30% to 35%.
Our LTV reduced to 28.8%
at the year end (31
December 2023: 31.6%),
largely reflecting UKCM’s
low LTV of 14.2% on
acquisition.
Target further growth in income
and Adjusted earnings and
therefore enhance the dividend
on a sustainable basis.
We increased net rental
income and adjusted
earnings per share
excluding additional DMA
income by 24.3% and
3.9% respectively,
supporting an 4.9%
increase in the total
dividend in respect of 2024.
Continue to monitor the
inherent shorter-term risks
brought by the macroeconomic
environment, with a view to
providing the business with
financial flexibility around the
financing of its strategy.
We monitored the financial
markets during the year
and concluded that our
current debt facilities
remained appropriate and
that our asset disposal
programme gave us
sufficient flexibility to
finance our strategy.
“ There are three distinct
elements embedded within our
business that offer multi-year
opportunities to drive earnings
and dividend growth.”
Frankie Whitehead
Chief Financial Officer, Tritax Big Box REIT plc
Tritax Big Box REIT plc Annual Report 2024
34
Overview
The combination with UKCM completed on 16 May 2024,
resultinginan approximate 7.5-month impact to the Statement
ofComprehensive Income and full consolidation of all assets and
liabilities within the Statement of Financial Position.
The Group delivered strong financial performance in 2024. Net rental
income increased by 24.3%, reflecting the contribution of UKCM,
development completions and rent reviews, less the impact of asset
disposals in the prior year. The Group also recognised £23.0 million
of DMA income in the year (2023: £nil).
Adjusted EPS grew by 15.0% to 8.91 pence (2023: 7.75 pence),
which was a record performance for the Group. This resulted from
the income growth described above, noting the increase in shares
inissue as a result of the UKCM combination (see below). Adjusted
EPS excluding additional DMA income grew by 3.9% to 8.05 pence
(2023: 7.75 pence) (see note 15 for the calculation).
The key constituents of Adjusted EPS growth in the year are shown
in the table below:
Pence
Adjusted EPS in 2023 7.75
Net revenue:
– Investment asset rental growth 0.31
– Development completions 0.36
– Acquisitions 0.30
– UKCM Merger Impact
1
0.45
– Net disposals (0.35)
Administrative expenses (0.21)
Net finance costs (0.82)
Other 0.08
DMA 0.18
Adjusted EPS in 2024 (exc. additional DMA) 8.05
Additional DMA 0.86
Adjusted EPS in 2024 8.91
The total dividend for the year is 7.66 pence per share (2023: 7.30 pence),
an increase of 4.9% and in line with the Group’s dividend policy.
The EPRA NTA per share at 31 December 2024 increased by
4.7%to 185.56 pence (31 December 2023: 177.15 pence), with
growth driven by the £243.7 million change in fair value of
investmentproperties.
The business remains soundly financed, as UKCM’s comparatively
low gearing and our portfolio valuation growth helped to reduce
theGroup’s LTV to 28.8% (31 December 2023: 31.6%). We were
pleased that Moody’s Ratings upgraded the Company’s credit
ratingoutlook to Baa1 (positive) from Baa1 (stable) and reaffirmed
itslong-term corporate credit rating during the year.
Acquisition of UKCM
The all-share acquisition of UKCM was completed by a Scheme
ofArrangement on 16 May 2024 through the issue of 576.9 million
new shares, at a price of 166.9 pence per share. This reflected
consideration paid of £962.9 million, at an exchange ratio of 0.444
new ordinary shares in the Company for every UKCM share held,
based on an NTA for NTA approach. The fair value of the net assets
acquired was £1,047.6 million, as set out below.
The difference between the total consideration paid of £962.9 million
and the fair value of the net assets acquired of £1,030.7 million, net
of acquisition costs, was a net gain on acquisition of £67.8 million.
The transaction has been accounted for as an asset acquisition,
resulting in these assets and liabilities initially being accounted for in
the balance sheet at fair value.
The consideration paid in shares of the company has been allocated
across the net assets acquired by fair valuing the debt acquired, fair
valuing working capital acquired (given the short term nature of the
amounts these values have been taken to represent cost), fair
valuing cash acquired (being the principal amount) with the
remaining consideration being allocated across the investment
properties acquired (refer to note 17 and 26).
The property assets were subsequently revalued at 30 June 2024, in
line with the Group’s accounting policy, and the gain was therefore
recognised within changes in fair value of investment property during
the period. Please also see note 37 to the financial statements.
Acquisition of UKCM
£m
Assets and liabilities acquired:
Investment propertyfair value 1,216.9
Discount to cost on acquisition (67.8)
Investment propertyrecognised at cost 1,149.1
Cash 26.7
Third party debt (169.6)
Othernet assets (26.4)
Acquisition costs (16.9)
Consideration paid – shares 962.9
Presentation of financial information
The financial information is prepared under IFRS. The Group’s
subsidiaries are consolidated at 100% and its interests in joint
ventures are equity accounted for.
The Board continues to see Adjusted EPS
2
as the most relevant
measure when assessing dividend distributions. Adjusted EPS is
based on EPRA’s Best Practices Recommendations and, in addition,
excludes items considered to be exceptional, not in the ordinary
course of business or not supported by recurring cash flows.
1. Includes the dilution effect from the share issued in relation to the
acquisition of UKCM.
2. Excluding additional development management agreement income.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
35
Operating profit
Operating profit before changes in fair value and other adjustments
was £265.3 million (2023: £193.2 million).
Share-based payment charge and contingent consideration
Following the Group’s acquisition of Tritax Big Box Developments
(“TBBD” and formerly known as Tritax Symmetry) in 2019, senior
members of the TBBD team became B and C shareholders in Tritax
Big Box Developments Holdings Limited. The Group extinguished
these shares in August 2023, and as a result no share-based
payment or contingent consideration charges have been expensed
in 2024 (2023: £2.9 million and £0.4 million respectively). In 2023,
werecognised an early extinguishment charge in the Statement of
Comprehensive Income of £21.1 million.
Financing costs
Net financing costs for the year were £63.5 million (2023: £44.9 million),
excluding the loss in the fair value of interest rate derivatives of
£5.3million (2023: £11.2 million loss). The weighted average cost
ofdebt at the year end was 3.05% (31 December 2023: 2.93%),
with93% of the Group’s drawn debt being either fixed rate or
covered by interest rate caps (see hedging policy below)
(31December 2023: 96%).
The movement in net financing costs reflects the higher average
cost of debt and the increase in average drawn debt throughout the
year to £1,921.9 million (2023: £1,629.2 million), which included the
notional drawn amounts of the debt facilities acquired with UKCM
totalling £200.0 million (see below). We capitalised £6.0 million of
interest expense (2023: £4.6 million), reflecting the capital deployed
into active development projects in the period.
The interest cover ratio, calculated as operating profit before
changes in fair value and other adjustments divided by net finance
expenses, was 4.4x
1
(2023: 4.3x). The net debt to EBITDA ratio was
7.3x
2
(31 December 2023: 8.2x).
Tax
The Group has continued to comply with its obligations as a UK REIT
and is exempt from corporation tax on its property rental business.
A tax charge of £0.3 million arose in the year (2023: £0.6 million)
onprofits not in relation to property rental business.
Profit and earnings
Profit before tax was £445.8 million (2023: £70.6 million), with the
increase primarily reflecting higher operating profit before changes
infair value and other adjustments, alongside stronger valuations
forthe Group’s investment property. Basic EPS was 19.67 pence
(2023: 3.72 pence). Basic EPRA EPS, which excludes the impact
ofproperty valuation movements but for FY23 included the
one-offearly extinguishment charge, was 8.93 pence
(2023:6.55pence, restated).
Adjusted EPS for the year was 8.91 pence (2023: 7.75 pence)
withthe supporting calculation located in note 15 to the accounts.
The metric we see as closest to recurring earnings is Adjusted EPS
excluding DMA income above the anticipated run-rate, which was
8.05 pence for 2024 (2023: 7.75 pence).
Dividends
We aim to deliver an attractive and progressive dividend. The Board’s
policy is for the first three quarterly dividends to each represent 25%
of the previous full-year dividend, with the fourth-quarter dividend
determining any progression. The aim is to achieve an overall pay-out
ratio in excess of 90% of Adjusted earnings (excluding additional DMA).
1. Calculated on a pro-forma basis inclusive of a full 12 months contribution from UKCM.
2. Calculated on a pro-forma basis inclusive of a full 12 months contribution from UKCM, adding back the fair value gain recognised on the acquisition of UKCM.
Financial Review continued
Financial results
Net rental income
Net rental income grew by 24.3% to £276.0 million (2023:
£222.1million). Contracted annual rent at the year end was
£313.5million (31December 2023: £225.3 million), with the
movement reconciled below. The annual passing rent at the
yearend was £296.8 million (31December 2023: £217.0 million).
EPRA like-for-like rental growth was 3.9%.
Contracted annual rent
£m
As at 31 December 2023 225.3
Development lettings 11.2
Rental reviews and asset management 15.4
Lease expiry (3.8)
UKCM acquisition 70.3
Other asset acquisitions 2.8
Disposals (7.7)
As at 31 December 2024 313.5
Other operating income – Development Management
Agreement (DMA) income
As described in the Insight driven development and innovation section,
the Group earns DMA income from managing developments for third
parties or pre-selling developments to owner-occupiers. This is an
attractive and profitable activity as the third party typically funds the
development, resulting in a high return on capital for us. We include
DMA income within Adjusted earnings as it is supported by cash flows.
However, DMA income is more variable than property rental income
and its timing can affect our earnings from period to period. In 2023,
the Group recognised no DMA income due to a timing delay on a
project. This project subsequently contributed to the £23.0 million
ofDMA income we recorded in 2024 and we currently expect DMA
income of at least £10.0 million in 2025.
Over the medium-term, we expect the run rate for DMA income to
be £3.0-5.0 million per year. To aid comparability across periods and
to give us a recurring earnings figure to base our dividend on, we
also calculate Adjusted earnings excluding DMA income above this
run rate (see profit and earnings below). The additional DMA income
is then available to be recycled into further opportunities across our
development pipeline and/or other investment opportunities.
Administrative and other expenses
Administrative and other expenses, which include all the operational
costs of running the Group, were £33.7 million (2023: £28.9 million).
The Investment Management fee for the year was £24.6 million
(2023: £22.0 million), reflecting the increased capital base following
the UKCM acquisition.
The EPRA Cost Ratio (including vacancy cost) increased to 13.6%
due to increased vacancy levels (2023: 13.1%). The EPRA Cost Ratio
(excluding vacancy cost) reduced to 12.6% (2023: 13.1%).
We have delivered administrative cost synergies through the
acquisition of UKCM, driven by a proportionately lower investment
management fee and savings across other corporate overheads.
These savings contributed to 2024 earnings growth and we expect
to generate further savings from operational and financial synergies
in the medium term as we fully exit from the UKCM non-strategic
assets and recycle capital into higher returning opportunities.
Tritax Big Box REIT plc Annual Report 2024
36
The Board has declared the following interim dividends in
respect of 2024:
Declared
Amount
per share
In respect of
three months to
Paid/to be
paid
2 May 2024 1.825p 31 March 2024 7 June 2024
7 August 2024 1.825p 30 June 2024 6 September 2024
10 October
2024 1.825p 30 September 2024 27 November 2024
28 February
2025 2.185p 31 December 2024 28 March 2025
Total dividend
for 2024 7.660p
The total dividend of 7.66 pence was 4.9% up on the 7.30 pence
paid in respect of 2023. The pay-out ratio was 95% of Adjusted EPS.
The cash cost of the dividends in relation to the year was £174.9 million
(2023: £135.6 million), with the increase reflecting the new shares
issued to acquire UKCM (see equity issuance below), which were
eligible to receive all of the interim dividends paid in respect of this
financial year.
Portfolio valuation
For assets that are leased, pre-leased or under construction, the
Group has appointed CBRE and JLL to independently value a
selectgroup of assets. These assets are recognised in the Group
Statement of Financial Position at fair value. Colliers independently
values all owned and optioned land. Land options and any other
property assets are recognised at cost, less amortisation or
impairment charges under IFRS.
The share of joint ventures comprises 50% interests in two sites at
Middlewich and Northampton, relating to land and land options.
These two sites are equity accounted for and appear as a single line
item in the Statement of Comprehensive Income and Statement of
Financial Position.
The total portfolio value at 31 December 2024 was £6.55 billion
(31December 2023: £5.03 billion), including the Group’s share of
joint ventures:
31 December
2024
£m
31 December
2023
£m
Investment properties 5,929.4 4,843.7
Other property assets 1.7 2.3
Land options (at cost) 148.8 157.4
Share of joint ventures 24.4 24.7
Financial assets 3.2 2.22
Assets held for sale 440.4 —
Portfolio value 6,547.9 5,030.4
The gain recognised on revaluation of the Group’s investment
properties was £243.7 million (2023: £38.1 million), which includes the
gain recognised on acquisition of UKCM. The investment portfolio
equivalent yield at the year end was 5.7% (31 December 2023: 5.6%).
The growth in portfolio value over the year is due to the UKCM portfolio
acquisition (contributing £1.2 billion at the time of purchase) and was
supplemented by gains recognised from asset management along with
further growth in ERVs, which were 5.4% higher over the year.
Capital expenditure
Capital expenditure into developments was £221.7 million in 2024
(2023: £191.3 million). The acquisition of the UKCM portfolio added
£1,149.1 million and was funded via a share for share exchange.
Excluding the UKCM portfolio, total capex was £285.3 million in the
year, with its deployment focused on development. The Group
acquired one standing asset for £47.7 million in 2024.
Embedded value within land options
Under IFRS, land options are recognised at cost and subject
toimpairment review. As at 31 December 2024, the Group’s
investment in land options totalled £148.8 million (31 December 2023:
£157.4million). We continue to progress strategic land through the
planning process. During the year we transferred £21.9 million of
land held under option to assets under construction.
As the land under option approaches the point of receiving planning
consent, any associated risk should reduce and the fair value should
increase. When calculating EPRA NTA, the Group therefore makes a
fair value mark-to-market adjustment for land options. At the year
end, the fair value of land options was £18.0 million greater than
costs expended to date (31 December 2023: £26.5 million greater).
Net assets
The EPRA NTA per share at 31 December 2024 was 185.56 pence
(31 December 2023: 177.15 pence). The table below reconciles the
movement during the year:
Pence
As at 31 December 2023 177.15
Operating profit 8.16
Investment assets 4.78
Development assets 2.64
Land options (0.34)
UKCM acquisition 0.35
Dividends paid (7.05)
Other (0.13)
As at 31 December 2024 185.56
The Total Accounting Return for 2024, which is the change in EPRA
NTA plus dividends paid, was 9.0% (2023: 2.2%).
Debt capital
At 31 December 2024, the Group had the following borrowings:
Lender Maturity
Loan
commitment
£m
Amount drawn
at 31 December
2024
£m
Loan notes
2.625% Bonds 2026 Dec 2026 250.0 250.0
2.86% Loan notes 2028 Feb 2028 250.0 250.0
2.98% Loan notes 2030 Feb 2030 150.0 150.0
3.125% Bonds 2031 Dec 2031 250.0 250.0
1.5% Green Bonds 2033 Nov 2033 250.0 250.0
Bank borrowings
RCF (syndicate of
sevenbanks) Oct 2029 500.0 257.0
RCF (syndicate of
sixbanks) Jun 2026 300.0 99.0
Helaba Jul 2028 50.9 50.9
PGIM Real Estate
Finance Mar 2027 90.0 90.0
Canada Life Apr 2029 72.0 72.0
Barclays RCF July 2026 75.0 0.0
Barclays term loan July 2026 75.0 75.0
Barings Real Estate
Advisers Apr 2027 100.0 100.0
Barings Real Estate
Advisers Feb 2031 100.0 100.0
Total 2,512.9 1,993.9
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
37
Priorities for 2025
Our financial priorities for the year ahead are to:
• maintain the Group’s strong balance sheet and liquidity, and
keepthe LTV below 35%;
• continue to rotate capital into higher-returning opportunities;
• deliver further growth in income, Adjusted earnings and dividends.
Going concern
We continue to have a healthy liquidity position, with strong levels
ofrent collection, a favourable debt maturity profile and debt costs
which are substantially fixed or hedged.
The Directors have reviewed our current and projected financial
position over a five-year period, making reasonable assumptions
about our future operational performance. Various forms of sensitivity
analysis have been performed, in particular regarding thefinancial
performance of our clients and expectations over lease renewals,
along with assumptions over future liquidity and particularly around
debt refinancing events. As at 31 December 2024, our property
values would have to fall by more than 50% before our loan
covenants are breached at the corporate level.
At the year end, we had £519.0 million of undrawn commitments
under our senior debt facilities and £80.6 million of cash, of which
£101.2 million (see note 35) was committed under various
development and purchase contracts. The Group had also exchanged
to dispose of a big box investment asset for £78.4 million at the year
end date. Our loan to value ratio stood at 28.8%, with the debt
portfolio having an average maturity term of approximately 4.5 years.
As at the date of approval of this report, we had substantial
headroom within our financial loan covenants. Our financial
covenants have been complied with for all loans throughout the
period and up to the date of approval of these financial statements.
As a result, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in
operational existence for the foreseeable future, which is considered
to be to 28 February 2026.
Financial Review continued
Financial results continued
There were no changes to the Group’s existing banking arrangements
during the year, other than exercising a one-year extension option on
the £500.0 million RCF, which now expires in October 2029.
The Group acquired the following facilities through the
UKCMtransaction:
• a £150.0 million revolving credit facility with Barclays Bank,
whichwas due to mature in January 2026 and carried a margin
of1.90% above SONIA;
• a £100.0 million term loan with Barings Real Estate Advisers,
atafixed interest rate of 3.03% per annum. The loan matures
inApril2027 and was fully drawn at the year end; and
• a second £100.0 million term loan with Barings Real Estate
Advisers, at a fixed rate of 2.72% per annum. The loan matures in
February 2031 and was also fully drawn at 31 December 2024.
In July 2024, we refinanced the £150.0 million Barclays RCF via entry
into a new £150.0 million two-year facility, split between a £75.0 million
term loan and a £75.0 million RCF. The revised facility is provided
onan unsecured basis, so all previous security was released, and
the margin was reduced and brought into line with theCompany’s
corporate RCF pricing. The facility has two separate one-year
extension options available, which subject to lender consent,
couldextend the maturity of the facility to 2028.
We also amended the security pool for the loans with Barings.
Theseare now secured on logistics assets that we intend to hold
forthe long term, allowing us to freely dispose of the non-strategic
assets previously used as security.
Interest rates and hedging
Of the Group’s drawn debt as at 31 December 2024, 80% was at fixed
interest rates (2023: 80%). For the majority of its variable rate debt,
theGroup uses interest rate caps which run coterminous with the
respective loan and protect the Group from significant increases in
interest rates. As a result, the Group had either fixed or capped rates
on93% of its drawn debt at the year end (31 December 2023: 96%).
The weighted average cost of borrowing at 31 December 2024 was
3.05% (31December 2023: 2.93%).
Debt maturity
At the year end, the Group’s debt had an average maturity of
4.5years (31 December 2023: 5.2 years). Following the refinancing
of the Barclays RCF in July 2024, the Group has no debt maturing
prior to mid-2026.
Loan to value (LTV)
The Group has a conservative leverage policy. At the year end,
theLTV was 28.8% (31 December 2023: 31.6%), with the
reductionlargely reflecting the benefit of UKCM’s low LTV of
14.2%on acquisition.
Net debt and operating cash flow
Net debt at the year end was £1,883.3 million (31 December 2023:
£1,590.3 million), comprising £1,963.9 million of gross debt less
£80.6 million of cash (31 December 2023: £1,626.7 million gross
debt, £36.4 million cash).
Net operating cash flow was £195.4 million for the year
(2023:£185.4 million).
Equity issuance
In relation to the all-share combination with UKCM, the Company
issued 576,939,134 new ordinary shares to UKCM’s shareholders.
These shares were admitted to trading on 17 May 2024. Following
this, the Company had 2,480,677,459 ordinary shares in issue at
31December 2024, an increase of 30.3% in the year.
We consolidate guidance provided throughout this report for
the financial year 2025 into the table below:
Aspect Guidance
Portfolio rental
reversion capture
Potential opportunity to capture 79% by
2027
Logistics – FY25
development capex
£200-250 million
Logistics – FY25
development yield
on cost
Targeting 7-8% for FY25 logistics
development starts
Data centre – FY25
development capex
Up to £100 million
Data centre – FY25
development yield
on cost
Targeting 9.3% for Manor Farm Phase 1
DMA income £10.0 million in 2025. Expected run rate of
£3.0-5.0 million per year thereafter, although
we will guide accordingly
Disposals FY25 Targeting £350-450 million, with £166 million
already exchanged/completed in FY25
LTV Below 35%
Tritax Big Box REIT plc Annual Report 2024
38
Credit rating
The Group has a Baa1 (positive) long-term credit rating from
Moody’s Investor Services, which was upgraded from Baa1 (stable)
during the financial year, reflecting the growing scale of the business
along with strong credit ratios.
Alternative Investment Fund Manager (AIFM)
The Manager is authorised and regulated by the Financial Conduct
Authority as a full-scope AIFM. The Manager is therefore authorised
to provide services to the Group and the Group benefits from the
rigorous reporting and ongoing compliance applicable to AIFMs
in the UK.
As part of this regulatory process, Langham Hall UK Depositary LLP
(Langham Hall) is responsible for cash monitoring, asset verification
and oversight of the Company and the Manager. In performing its
function, Langham Hall conducts a quarterly review during which it
monitors and verifies all new acquisitions, share issues, loan facilities
and other key events, together with shareholder distributions, the
quarterly management accounts, bank reconciliations and the
Company’s general controls and processes. Langham Hall provides
a written report of its findings to the Company and to the Manager,
and to date it has not identified any issues. The Company therefore
benefits from a continuous real-time audit check on its processes
and controls.
Post balance sheet activity
In January 2025, the Company announced it had purchased a
74-acre site at Heathrow, London within the Slough Availability Zone,
a key FLAP-D prime EMEA data centre location (the “Manor Farm
site”), for £70.0 million.
Simultaneously, the Company acquired a 50% share in a joint
venture with a leading European renewable and low carbon energy
power generator. The JV enables accelerated power delivery to the
Manor Farm site using pre-existing grid connection agreements.
In connection with these arrangements, the Company has entered
into a development management agreement with Tritax
Management pursuant to which Tritax Management has been
appointed to provide development management and technical
services, including pursuing planning, overseeing construction,
pre-letting services, technical electricity expertise and overseeing
the technical aspects of the Company’s role in the JV and all power
related elements.
In January 2025, the Company acquired a 627k sq ft asset in
Haydock, a core North West location, for £74.3 million.
In January and February 2025, the Company sold or exchanged to
sell £86.8 million of non-strategic assets and £79.0 million of logistics
investment assets.
Frankie Whitehead
Chief Financial Officer, Tritax Big Box REIT plc
27 February 2025
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
39
Manager’s Q&A
STAKEHOLDER
QUESTIONS
Colin Godfrey
Chief Executive Officer, Tritax Big Box REIT plc
What are you most excited about
regarding the Company’s growth
opportunity?
The future of TBBR is exciting due to three main growth levers:
capturing rental reversion, developing new logistics assets, and
investing in data centres.
First, rental reversion involves capturing the difference between
current market rents and existing lease rents, driving earnings’
growth with minimal capital. The assets acquired through UKCM
are particularly reversionary, with rents approximately 40% below
market levels.
Second, the development pipeline enables TBBR to construct
new, best-in-class logistics assets at attractive yields. This year’s
construction starts target a 7–8% yield on cost, compared to
prime logistics yields of 5.25%. The scale and flexibility of the
development pipeline is unique to TBBR.
Finally, our ‘power-first’ data centre strategy, which we recently
announced, focuses on securing power critical to data centre
operators, identifying land sites, and progressing planning. Data
centres are particularly exciting given the exceptional returns on
offer and the strong structural demand drivers. Manor Farm in
London is the first opportunity, potentially one of the largest data
centres in the UK, and is expected to deliver a 9.3% yield on
cost for Phase 1.
Aubrey Adams
Independent Chair, Tritax Big Box REIT plc
How did the Board get comfortable with
the Manor Farm data centre opportunity?
The Board’s role is to scrutinise the Manager’s performance and
ensure it operates in shareholders’ best interests. Over the past
four years, a separate team within the Manager explored
opportunities in power, including gigafactories and hydrogen
plants. The Manager has significantly invested in power
knowledge, capabilities, and team. This knowledge has
converged with real estate investors’ growing interest in
data centres.
Under the Investment Management Agreement, the Manager was not
obligated to offer data centres to Tritax Big Box and could seek
alternative funding. However, both the Executive Committee and the
Board believed it was in shareholders’ interests to evaluate these
opportunities due to the compelling returns. Recognising the related
party nature of these investments, the Board took extensive steps to
scrutinise and conduct due diligence on all aspects of the transaction,
taking independent advice from CBRE, PwC, Ashurst, and Burges
Salmon, and a “fair and reasonable” opinion from Jefferies. This
confirmed that shareholders were accessing a compelling investment
opportunity in an off-market transaction at below-market pricing,
which has the potential to deliver exceptional returns to shareholders.
Frankie Whitehead
Chief Financial Officer, Tritax Big Box REIT plc
How do you plan to fund the
Company’s growth programme?
Firstly, our balance sheet is in great shape. We have low leverage
through various and largely fixed or hedged debt capital market
instruments and no significant near-term maturities.
In addition, we have a range of additional funding sources we can
access at the appropriate time and subject to wider capital market
conditions, to fund our growth. This includes accretively rotating
capital through asset disposals, as we have successfully
demonstrated over several years, potentially partnering with third-
party capital providers through joint ventures and, if and when the
Board deem it in Shareholders’ interest raising incremental equity.
“ What makes the future of the
Company so exciting is the
breadth and extent of the
growthopportunities we have
asa business.”
Tritax Big Box REIT plc Annual Report 2024
40
Petrina Austin
Head of Asset Management, Tritax Big Box REIT plc
What is currently at the front of
clients’ minds?
No two clients are alike, and we spend extensive time
understanding their specific needs. A common theme is how
real estate can improve employee wellbeing, engagement,
andretention. With labour becoming scarce, amenities like
restaurants, cafés, games rooms, and outside spaces help
clients stand out in the competition for the recruitment of talent.
In addition, recent National Insurance changes and increasing
employment costs are leading clients to automate their
warehouses to reduce costs. This enhances our business as
large, modern real estate maximises automation benefits. We
also discuss energy efficiency with clients, helping reduce costs
and carbon emissions. All our larger buildings have proposals to
increase solar PV coverage, and we are also assessing and
installing solar PV schemes across more of our smaller units.
This provides cheaper, lower-carbon power for clients and
generates attractive returns, enhancing asset value.
Bjorn Hobart
Investment Director, Tritax Big Box REIT plc
How are the Company’s capital
recycling ambitions progressing?
Overall, we disposed of £306 million of assets this year,
withthese transactions agreed above their book values.
Thisincluded £181 million of non-strategic UKCM assets,
achievedinjust eight months, reaching the upper end of our
£150–200 million guidance. These milestones are part of our
ongoing portfolio optimisation and capital recycling strategy.
We will continue to rotate out of non-strategic assets or those
with completed asset management programmes, deploying
capital into higher-returning opportunities where our expertise
adds value. The progress in 2023 and 2024 highlights the
quality of our real estate and the attractiveness of logistics
to investors.
Charlie Withers
Development Director, Tritax Big Box REIT plc
How is speculative development
affecting vacancy at the moment?
Since 2022, increased speculative development has put
upwardpressure on market vacancy rates, but take-up levels
are healthy, and these rates trended downwards in Q4 2024.
Though there are regional variances, prime locations with strong
transport links still attract clients; with secondary sites typically
facing longer void periods. New supply has slowed over the
past 12 months, while demand has remained stable,
contributing to ongoing confidence in prospects for
development going forwards.
We develop modern, sustainable assets in mission-critical
locations for which we see enduring levels of demand. The
structure of land options within our development portfolio
provides flexibility in construction starts and supports our
confidence in delivering assets at a 6–8% yield on cost.
Henry Stratton
Head of Research, Tritax Big Box REIT plc
What’s happening in
occupational markets?
At 21.3m sq ft, take-up in 2024 was consistent with the prior
year. Leading companies across all sectors continue to perform
well and are investing in the evolution of their logistics networks.
This is resulting in diverse demand across manufacturing,
retail and 3PLs.
Development completions have reduced from the pandemic era
and speculative space under construction is flat year on year.
This has resulted in 5-6% vacancy, which has driven further
rental growth.
With the structural drivers of occupational demand remaining
strong – evolving consumer behaviours, supply chain resilience,
efficiency gains and sustainability – the outlook is positive.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
41
1. Adjusted earnings
per share
2023 7.75p
2024 8.91p
2021 8.23p
2020 7.17p
2022 7.79p
The Adjusted EPS reflects
our ability to generate
earnings from our portfolio,
which ultimately underpins
our dividend payments.
8.91p
per share for the year to
31December 2024
(2 0 23: 7.75 p)
3. Total Expense Ratio
2023 0.86%
2024 0.83%
2021 0.79%
2020 0.86%
2022 0.76%
This is a key measure of our
operational performance.
Keepingcosts low supports
ourambition to maximise
returns forShareholders.
0.83%
at 31 December 2024
(31December 2023: 0.86%)
Key Performance Indicators
2. Dividend per share
2023 7.30 p
2024 7.66p
2021 6.70p
2020 6.40p
2022 7.00p
MEASURING OUR
PERFORMANCE
Our objective is to deliver attractive, low-risk returns to Shareholders, by
executing the Group’s Investment Policy and operational strategy. Set out below
are the key performance indicators we use to track our progress. For a more
detailed explanation of performance, please refer to the Manager’s Report.
The dividend reflects our ability
to deliver a low-risk but growing
income stream from our
portfolio and is a key element
of our TAR.
Relevance to strategy
7.66p
per share for the year to
31December2024
(2 0 23: 7. 3 0 p )
4. Total Accounting Return
(TAR)
2021 30.5%
2020
(15.9)%
TAR calculates the change in
the EPRA Net Tangible Assets
(EPRA NTA) over the period
plus dividends paid. It measures
the ultimate outcome of our
strategy, which is to deliver
value to our shareholders
through our portfolio and to
deliver asecure and growing
income stream.
9.0%
for the year to
31December2024
(2023: 2.2%)
2024 9.0%
2023 2.2%
19.9%
2022
Tritax Big Box REIT plc Annual Report 2024
42
Relevance to strategy
7. Weighted average
unexpired lease
term(WAULT)
2023 11.4 years
2024 10.3 years
2021 13.0 years
2020 13.8 years
2022 12.6 years
The WAULT is a key measure of
the quality of our portfolio. Long
lease terms underpin the
security of our income stream.
10.3 years
at 31 December 2024
(31December 2023: 11.4 years)
8. Global Real Estate
Sustainability Benchmark
(GRESB) score
2023 85/100
2024 85/100
2021 81/100
2020 72/100
2022 83/100
The GRESB score reflects the
sustainability of our assets
andhow well we are managing
ESG risks and opportunities.
Sustainable assets protect
usagainst climate change
andhelp our clients to
operateefficiently.
2. GRESB changed its scoring
methodology in 2024 and the
result is not directly comparable
to previous years.
85/100
2
and fourGreen Starrating
in2024
99/100
and fiveGreenStar rating
for developments in2024
and the GRESB 2024 Regional
Listed Sector Leader and
Regional Sector Leader for
Europe, and Global Listed
Sector Leader and Global
Sector Leader, all for the
Industrial sector.
5. EPRA NTA per share
1
2023 177.15p
2024 185.56p
2021 220.60p
2020 175.61p
2022 180.37p
The EPRA NTA reflects our
ability to grow the portfolio and
to add value to it throughout
the lifecycle of our assets.
1. EPRA NTA is calculated in
accordance with the Best
Practices Recommendations of
the European Public Real Estate
Association (EPRA). We use
these alternative metrics as they
provide a transparent and
consistent basis to enable
comparison between European
property companies.
185.56p
at 31 December 2024
(31December 2023: 177.15p)
6. Loan to value ratio (LTV)
2023 31.6%
2024 28.8%
2021 23.5%
2020 30.0%
2022 31.2%
The LTV measures the
prudence of our financing
strategy, balancing the potential
amplification of returns and
portfolio diversification that
come with using debt against
the need to successfully
manage risk.
28.8%
at 31 December 2024
(31December 2023: 31.6%)
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
43
£202.3m/
8.93p per share
(2023 restated: £123.3m/
6.55p per share)
£4.6bn/
185.56p per share
as at 31 December 2024
(31 December 2023:
£3.4bn/177.15p per share)
£5.0bn/
203.51p per share
as at 31 December 2024
(31 December 2023:
£3.7bn/195.19p per share)
£4.8bn/
192.60p per share
as at 31 December 2024
(31 December 2023:
£3,501.9m/183.95p per share)
EPRA performance measures
1. EPRA Earnings
(diluted)
See note 15.
2. EPRA Net
Tangible Assets
See note 31.
3. EPRA Net
Reinstatement
Value (NRV)
4. EPRA Net Disposal
Value(NDV)
2023 £113.1m 2023 £3.4bn 2023 £3.7bn 2023 £3.5bn
2024 £202.3m/8.93p 2024 £4.6bn/185.56p 2024 £5.0bn/203.51p 2024 £4.8bn/192.60p
2021 £131.2m 2021 £4.2bn/222.60p 2021 £4.5bn/242.84p 2021 £4.1bn/219.27p
2020 2020 £3.0bn 2020 £3.3bn 2020 £2.9bn
2022 £144.8m 2022 £3.4bn/ 2022 £3.8bn 2022 £3.6bn
MEASURING OUR
PERFORMANCE
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 all EPRA performance measures,
please see the Notes to the EPRA and other key performance indicators.
A key measure of a
company’s underlying
operating results and an
indication of the extent to
which current dividend
payments are supported
by earnings.
Assumes that entities buy and
sell assets, thereby crystallising
certain levels of unavoidable
deferred tax.
Assumes that entities never sell
assets and aims to represent
the value required to rebuild
the entity.
Represents the shareholders’
value under a disposal
scenario, where deferred tax,
financial instruments and
certain other adjustments are
calculated to the full extent of
their liability, net of any
resulting tax.
Purpose
/6.01p /17 7.15p /195.19p /183.95p
/7.66p /180.37p /201.17p /192.18p
/7.47p
£105.5m/6.17p
/175.61p /193.41p /166.36p
Tritax Big Box REIT plc Annual Report 2024
44
2023 4.15%
2024 4.26%
2021 3.56%
2020 4.18%
2022 4.19%
2023 4.60%
2024 4.61%
2021 3.75%
2020 4.38%
2022 4.39%
2023
2024 5.7%
2021 0.0%
2020 0.0%
2022
2023* 13.1%
2024 13.6%
2021* 13.9%
2020* 14.2%
2022* 15.7%
2023 33.3%
2024 30.1%
2022 32.9%
This measure should
make it easier for
investors to judge for
themselves how the
valuations of two
portfolios compare.
This measure should
make it easier for
investors to judge for
themselves how the
valuations of two
portfolios compare.
A “pure” (%) measure
ofinvestment property
space that is vacant,
based on ERV.
A key measure to
enable meaningful
measurement of the
changes in a
company’s
operating costs.
* No vacancy costs to
include.
A key shareholder-
gearing metric to
determine the
percentage of debt
comparing to the
appraised value of
the properties.
Purpose
5. EPRA Net Initial
Yield (NIY)
6. EPRA
“topped-up” NIY
7. EPRA
Vacancy
8. EPRA Cost Ratio 9. EPRA LTV
4.26%
as at 31 December 2024
(31 December 2023:
4.15%)
4.61%
as at 31 December 2024
(31 December 2023:
4.60%)
5.7%
as at 31 December 2024
(31 December 2023:
2.5%)
13.6%
including vacancy costs
(2023: 13.1%)
12.6%
excluding vacancy costs
(2023: 13.1%)
30.1%
(31 December 2023:
33.3%)
2.5%
2.1%
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
45
ESG
DRIVING
PERFORMANCE
THROUGH ESG
INTEGRATION
ESG integration
We aim to create value through integration of our ESG targets and
strategy across the investment lifecycle from portfolio management
to development management to asset management.
What ESG means to us
ESG performance is now shaping asset liquidity and value across
the market. Our focus is on delivering the best sustainable buildings
for our occupiers which we believe will deliver improved financial
outcomes, reduced risks and enhanced long-term value.
Our stakeholders
Our ESG strategy addresses the priorities of our key stakeholders
including our Shareholders, our occupiers, our communities and
oursupply chain. We recently completed a double materiality
assessment to better understand these stakeholder priorities.
Our approach
We are data and evidence led, driven by a granular understanding
ofour assets.
Our four pillar focus
ESG integration
1
Sustainable buildings
To deliver sustainable buildings
through portfolio, development,
and asset management.
2
Climate and carbon
To achieve net zero carbon and
manage physical climate risks.
4
People and
communities
To create value and positiveimpact
for people and communities.
3
Natural capital
To enhance nature and biodiversity
across our assets under
management and development.
Tritax Big Box REIT plc Annual Report 2024
46
A year of transition
The acquisition of the UKCM portfolio of assets was a significant
milestone for the Company and led to a full review of asset-level
ESGperformance post transaction.
In addition, the Company appointed Mace consulting to help us
develop decarbonisation plans for every single logistics asset in the
portfolio and appointed CBRE to undertake a physical climate risk
review of the entire portfolio. These two workstreams will help
ensure that each asset in the portfolio is physically resilient and is
able to decarbonise in line with the Company’s decarbonisation
targets, and investors’, occupiers’, and policy makers’ expectations.
Our 2024 progress and updated 2025 ESG targets are set out from
pages 48 to 50, and our current performance against ESG
benchmarks and rating agencies is outlined below.
EPC B or above
(investmentportfolio)
80%
(2023: 80%)
Solar PV capacity installed
24.3 MWp
(2023: 17.4 MWp)
Weighted average portfolio
energyintensity
11.6
kWh/sq ft
(2023: 15.9 kWh/sq ft)
BREEAM VG or above (investment
portfolio)
50%
(2023: 51%)
Solar PV pipeline
25.2 MWp
(2023: 20.0 MWp)
Weighted average portfolio
carbonintensity
2.4
kg CO
2
e/sq ft
(2023: 3.0 kg CO
2
e/sq ft)
EPC target for new developments
A
(2023: A)
Weighted average upfront
embodied carbon (building-only)
286.8
kg CO
2
e/m
2
(2023: 364.6 kg CO
2
e/m
2
)
Number of young people
positivelyimpacted
23,390
(2023: 500)
BREEAM target for new
developments
Excellent
(2023: Excellent)
Assets leased to occupiers with
NZC targets (investment portfolio)
77.5%
Pilot TNFD project
Ongoing
2024 in numbers
Market-leading benchmark performance
We continue to improve our scoring against the leading sustainability and ESG benchmarks, demonstrating our underlying performance.
Sustainalytics MSCI* ISS GRESB EPRA CDP
6.4
(Negligible risk)
AA rating Prime status (C) 85/100
(standing)
and 99/100
(developments)
sBPR
Gold award
B rating
Awarded the Global
Top 50 Badge for our
improved score.
As of 2024, Tritax Big
Box REIT plc retained
its MSCI rating of AA.
Retained our Prime
status.
Recognised as Global
Sector Leader for our
new developments
submission.
Retained the award
for the fourth straight
year.
Retained our B rating
for the CDP Climate
Change
questionnaire.
* The use by Tritax Big Box REIT plc of any MSCI ESG Research LLC or its affiliates’ (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or
index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Tritax Big Box REIT plc by MSCI. MSCI services and
data are the property of MSCI or its information providers, and are provided “as-is” and without warranty. MSCI names and logos are trademarks or service
marks of MSCI.
Sustainable buildings Climate and carbon People and communities Natural capital
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
47
Performance Against Our ESG Targets
PERFORMANCE
AGAINSTOURTARGETS
The tables below set out progress made against our ESG targets and KPIs, along
withanew set of 2025 ESG targets which reflect the Company’s progressive
ambitionsand priorities.
2024 targets
Pillar 2024 targets 2024 KPIs Performance against 2024 targets
Sustainable buildings
100% of all asset due
diligenceuses Tritax ESG
duediligenceframework
% utilisation of enhanced ESG
due diligence framework
• 100%
Produce and implement
low-carbon baseline development
specification on all new projects
Production and % utilisation of
low-carbon specification
• Low carbon specification utilised – 100%.
% circularity certified materials
• Summary of low-carbon and recycled materials produced by Ridge &
Partners for each development project as part of the embodied carbon
performance assessment.
• The 2024 average recycled content of steel frames used in our new
development projects equals 34%.
• We have engaged with Tata Steel to understand the key construction
materials transition to lower carbon emissions.
Upfront embodied carbon:
400kgCO
2
e/m
2
• The embodied carbon target for each development project is incorporated
into the main building contract with financial penalties for non performance.
• 2024: 286.8 kgCO
2
e/m
2
(building-only*
1
), 412 kgCO
2
e/m
2
(whole site).
• The methodology underpinning the embodied carbon calculation was
updated to include the building only, which aligns with the UK Net Zero
Carbon Building Standard.
% projects undertaking a whole
life performance analysis
• 100%
Climate and carbon
Produce and disclose updated
netzero carbon pathways
• Scope 1 and Scope 2 – 2025
• Scope 3 (construction) – 2030
• Scope 3 (remainder of material
emissions) – 2040
Annual review of pathway
andemissions
• During 2024, we commissioned Mace consulting to develop a
decarbonisation platform which hosts all relevant asset-level ESG data and
allows us to take our analysis and understanding of our decarbonisation
roadmap to the next level of detail.
• Updated asset-level preliminary decarbonisation pathways. Further technical
due diligence ongoing.
1.5°C Paris decarbonisation
pathway alignment
• Our development platform has been developed to help facilitate
thisalignment.
Alignment with Science
BasedTargets initiative (“SBTi”)
(or equivalent)
• Our decarbonisation platform has been developed utilising the
science-based CRREM framework as a baseline equivalent to SBTi.
Integrate physical climate risk
mitigation across asset lifecycle
% climate risk incorporation into
each asset management plan
• Updated climate risk assessment for the portfolio – 100%.
Portfolio TCFD alignment
• Full TCFD alignment to be achieved with disclosure of 2024 occupier-related
emissions in June 2025 (see TCFD section on pages 53 and 54).
Reducing emissions
againsttargets
Reduction in weighted average
energy (kWh/sq ft ) and carbon
emissions (kgCO
2
e/sq ft) intensity
• 2024: This will be disclosed in the 2025 half year results.
• 2023*
2
: 11.6 kWh/sq ft, 2.4 kgCO
2
e/sq ft.
• 2022*
2
: 15.9 kWh/sq ft, 3.0 kgCO
2
e/sq ft.
*
1
We have updated our upfront embodied carbon calculation methodology to only include the building, in alignment
with the UK Net Zero Carbon Building Standard. We have also included the whole site data for transparency.
*
2
Data is collected annually in arrears and is principally occupier emissions.
Tritax Big Box REIT plc Annual Report 2024
48
Pillar 2024 targets 2024 KPIs Performance against 2024 targets
Natural
capital
Year-on-year annual increase in
biodiversity for standing assets
% increase in biodiversity
against 2022 baseline
• Discussions ongoing with landscape contractors for individual asset business
plans (5 biodiversity projects completed in 2024 – see natural capital case
study on page 52).
Year-on-year increased provision
of wellbeing enhancements to
developments and standing assets
% increase in provision against
2022 baseline
• Ongoing provisions within plans for new developments and major
refurbishment projects.
People and communities
Publish community
investmentstructure
Set-up and operation of
community investment structure
• Established the Tritax Social Impact Foundation.
• Established the Company’s 5-year social impact strategy.
• We have partnered with The King’s Trust and Education and Employers,
alongwith Schoolreaders, to reach 250,000 young people over 5 years.
Ouraim isto educate, up-skill and open the minds of young people to
newopportunities.
Further integrate ESG criteria
intosupply chain procurement
processes – upstream
anddownstream
% utilisation of due diligence
framework for suppliers
• The Manager tendered for insurance brokerage on behalf oftheCompany,
with ESG criteria forming an important part of the selectionprocess.
Continue support for key
fundcharity
Level of financial and
non-financial contributions (£)
• During 2024, the Company funded a total of £236,660 including:
• Schoolreaders – £36,000 which supported 600 children with literacy.
• The Kings Trust – £90,000 to upskill and educate 240 young people per year.
• Education and Employers – £50,000 over the last 5 months, educating young
people about the logistics real estate industry.
• Community Benefit Trust (CBT) (set up for each individual development
project and funds the equivalent of 10p / sq ft of developed buildings to local
community causes) – £56,043 to communities and people surrounding our
new developments.
• Peterborough Starlets (Girls Football U15 team) – £4,617 with goals and kit
fortheir football matches.
2024 Performance against sustainability-linked loan KPIs
The table below outlines the Company’s 2024 performance against each of the four sustainability-related KPIs included within its
sustainability-linked loan.
KPI no. KPI description Baseline 2024 Performance
1 The proportion of Relevant Standing Assets with
EPCCertificates rated ‘B’ or better.
78.0% 84.0%
2 The proportion of New Developments in respect of which
Practical Completion has occurred rated “Very Good”
or“Excellent” in the relevant BREEAM Reports.
100% rated at least “Very Good” 100% rated (or expected to achieve) atleast
“Very Good”
1
3 The average upfront embodied carbon intensity
forNewDevelopments in respect of which
PracticalCompletionhas occurred.
452 kgCO
2
e/m
2
412 kgCO
2
e/m
2
4 The minimum biodiversity net gain for New Developments
inrespect of which Practical Completion has occurred.
0% N/A – no development projects completed
during the year were in scope of the
mandatory biodiversity net gain policy
introduced in England in 2024.
1. Where the final BREEAM certificates have not been received for developments completed during the year, we have received a letter of comfort from our
BREEAM assessor confirming that the units are on track to achieve BREEAM Very Good or above.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
49
2025 targets
New
Pillar 2025 targets 2025 KPIs KPI Baseline as at 1 January 2025
Sustainable buildings
Produce and implement low-carbon baseline
development specification on all new projects
100% of new development projects
completed with EPC A rating
• 100%
100% of Projects expected to achieve
BREEAM Excellent upon completion
• 100%
Upfront embodied carbon:
400kgCO
2
e/m
2
• 2024: 286.8 (building-only*
1
), 412 (whole site)
• 2023: 364.6 (building-only*
1
), 462.2 (whole site)
Improve EPC Ratings across the portfolio % of assets rated EPC ‘B’ or above
• 2024: 80% (Investment Portfolio)
• 2023: 80%
• 2022: 78%
Climate and carbon
Increase solar PV capacity MWp of solar PV capacity
• 2024: 24.3 MWp
• 2023: 17.4MWp
• 2022: 14.6 MWp
Updated net zero carbon roadmap for every asset
100% production of completed net zero
pathways for standing assets
• Preliminary asset level pathways produced.
Operational implementation of new
Tritax decarbonisation Platform
• Initial technical development of platform completed.
Reducing emissions against targets Reduction in weighted average energy
(kWh/sq ft) and carbon emissions
(kgCO
2
e/sq ft) intensity
• 2023*
2
: 11.6 kWh/sq ft, 2.4 kgCO
2
e/sq ft
• 2022*
2
: 15.9 kWh/sq ft, 3.0 kgCO
2
e/sq ft
Review alignment with SBTi in line with our
netzero carbon emissions targets:
• Scope 1 and Scope 2 – 2025
• Scope 3 (construction) – 2030
• Scope 3 (remainder of material emissions)
– 2040
Alignment with Science Based Targets
initiative (“SBTi”) (or equivalent)
• Our decarbonisation platform has been developed
utilising the science-based CRREM framework as
abaseline equivalent to SBTi.
Scope 1 and Scope 2 net zero carbon
emissions target review and assessment
• See SECR Table on page 65
Integrate physical climate risk mitigation across
asset lifecycle
Portfolio TCFD alignment
• Full TCFD alignment to be achieved with disclosure
of2024 occupier-related emissions in June 2025
(seeTCFD section on pages 53 and 54)
Natural
capital
Annual increase in biodiversity for standing assets Delivery of 13 asset level
biodiversityprojects
• 2024: Projects Delivered 5. Forecasting 13 projects in
scope for 2025
Gain a better understanding on the scope
ofworks required on standing and new
developments for nature improvements
Completion of a pilot TNFD assessment
• Assessment has been instructed
People and communities
Deliver Community investment via the
CommunityBenefit Fund (CBT) – 10p per sq ft
ofdevelopments completed
Deployment of funds via the CBT
• 2024: £56,043
Ongoing delivery of 5-year social impact plan Number of young people helped per
annum (target 50k)
• Since programme commencement from June 2024
– 23,390 young people helped
Continue to engage with stakeholders across
theportfolio
% of occupier energy and carbon
emissions data coverage
• 2024: 87% energy coverage, 90% carbon
emissionscoverage
Engagement with occupiers via
satisfaction survey
• Annual occupier engagement survey completed
in2024
Completion of client
engagementplatform
• Initial technical development of platform underway
% of occupiers with net zero targets
• 2024: 77.5% (Investment portfolio)
*
1
We have updated our upfront embodied carbon calculation methodology to only include the building, in alignment with the UK Net Zero Carbon Building
Standard. We have also included the whole site data for transparency.
*
2
Data is collected annually in arrears and is principally occupier emissions.
Performance Against Our ESG Targets continued
Tritax Big Box REIT plc Annual Report 2024
50
ESG isn’t just integrated, it is ingrained into our investment lifecycle.
ESGperformance is now impacting the liquidity and value of assets
across the market.
We minimise downside risk and maximise upside opportunity at every
stage of our investment lifecycle given the integration of ESG across our
investment lifecycle from the championing of ESG by our Board to
portfolio, development and asset management across our operations.
We analyse ESG factors during the due diligence and asset selection
process using a template consisting of our key ESG criteria. For our
development programme, we have a low-carbon baseline specification
and an embodied carbon target to promote low-carbon construction.
Ourasset management programme is key to delivering our
decarbonisation targets in collaboration with occupiers.
2024 progress
The Company has been analysing and aiming to reduce the carbon
emissions associated with its standing assets and development portfolio
for several years now, as per the timeline outlined below. Phase 1 of
ourdecarbonisation platform implementation involved undertaking a
desktop-based review of each asset in the portfolio and developing initial
asset-level decarbonisation plans and was completed in December 2024.
2025 priorities
Our priority in 2025 will be to ensure that all asset business plans
incorporate a set of decarbonisation measures which enable us to
reduceoperational carbon emissions while delivering on our asset
management strategy.
ESG in Action
ESG IN ACTION
Our priority is the delivery of ESG performance through integration into our operational
activities. We showcase here some good examples of ‘ESG in Action’.
Investment lifecycle integration
Net zero carbon
GRAPHIC TO BE SUPPLIED
Portfolio management Development management Asset management
NET ZERO ROADMAP
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
51
Newark development
In June 2024, we commenced works to deliver a new 397,000 sq ft
distribution centre in Newark. The building, which is expected to complete
inQ2 2025, is targeting EPC A and BREEAM Excellent.
The building has solar panels with a total output of 557.6 kWp, and the roof
loading capacity has been designed to allow future occupiers to install solar
panels on 100% of the useable roof space.
Additional features include roof lights to maximise natural lighting, EV charging,
rainwater and greywater harvesting systems, and LED lighting and air source
heats pumps to further reduce operational carbon emissions.
The upfront embodied carbon based on the design stage is expected to
produce 318kgCO
2
eq/m
2
, which is 20.5% less than the Company’s target
fornew developments. The embodied carbon performance was positively
impacted by the use of low-carbon steel. During 2024, we have engaged
withthe steel manufacturing sector to understand how we integrate more
low-carbon steel into the programme.
King’s Trust/The King’s Trust/Education and
Employers/Schoolreaders
Working with our charity partners, we aim to empower young people, giving
them the tools to shape their futures through education and opportunity.
Through our partnerships we reach young people from the most
disadvantaged areas in the UK by improving their literacy skills, challenging
career stereotypes within logistics and empowering students with knowledge
and building their aspirations.
Stakehill refurbishment
Our Stakehill refurbishment is a prime example of how we are working
proactively to decarbonise our investment portfolio. The building, originally
constructed in 1988, underwent a comprehensive nine month refurbishment
programme to replace the entire cladding to the elevations and roof, whilst
retaining the existing structure and floor slabs.
We installed roof lights for natural daylight alongside 3,022 PV panels with
agenerating output of 1.3 MWp saving an expected 151 tonnes of CO
2
per
annum. We also installed LED lighting, a VRF system and an air source heat
pump further improving the energy efficiency of the unit.
As a result, the EPC improved from a B to an A+ and the upfront
embodiedcarbon achieved was 146 kgCO
2
e/m
2
, 64% less than our
targetfornew developments.
Biodiversity initiatives on standing assets
We have implemented biodiversity initiatives across several of our assets,
including improvements to wildflower and meadow areas, the inclusion of bug
hotels and additional bat boxes in Bicester, Aston Clinton and Kettering.
In addition, as part of our upgrade works at Junction 6, we have incorporated
bug hotels within the signage designs along with wider improvements to the
site due to be completed in 2025. This will form a blueprint to be rolled out
across the Company’s portfolio of urban logistics assets.
Sustainable buildings
People and communities Natural capital
Climate and carbon
1
4
2
3
ESG in Action continued
Tritax Big Box REIT plc Annual Report 2024
52
Task Force on Climate-related Financial Disclosures (“TCFD”) Report
STATEMENT OF THE EXTENT
OF CONSISTENCY WITH THE
TCFD FRAMEWORK
We have prepared our annual climate-related financial disclosure consistent with the
TaskForce on Climate-related Financial Disclosures (“TCFD”) recommendations and
recommended disclosures.
The Financial Conduct Authority “FCA” has made TCFD reporting
mandatory for asset managers of a certain size, including the
Company’s Manager, under its Policy Statement “PS” 21/24.
Using Part 4 Section D of the TCFD annex titled “Asset Managers”
as guidance, the Company has disclosed in alignment with 10 of the
TCFD recommendations and partially in alignment with one
recommendation while progressing towards future alignment.
TCFD consistency table
Thematic area Recommended disclosure Consistency note Signposting beyond TCFD report
Governance
Describe the Board’s oversight of climate-related risks
andopportunities.
Consistent Corporate Governance Report
on pages 78 to 166
Describe management’s role in assessing and managing
climate-related risks and opportunities.
Consistent Corporate Governance Report
on pages 78 to 116
Strategy
Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and longterm.
Consistent
Describe the impact of climate-related risks and opportunities on
the organisation’s business, strategy and financial planning.
Consistent
Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
orlower scenario.
Consistent
Risk
management
Describe the organisation’s processes for identifying and assessing
climate-related risks.
Consistent
Describe the organisation’s processes for managing climate-related
risks.
Consistent Risk Management section
Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall
risk management.
Consistent Physical and transition risks are
included as part of the Company’s
Principal Risks and Uncertainties
section on pages 70 to 75
Metrics and
targets
Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
andrisk management process.
Consistent
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas (“GHG”) emissions and the related risks.
Partially consistent – Data
collection for our most
significant Scope 3
emission source is
currently in progress and
will be included in our
standalone TCFD Product
Report in 2025.
Scope 1, Scope 2 and material
Scope 3 emissions are disclosed in
the SECR disclosure on pages 64
to 66 in addition to the Metrics and
Targets table
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
againsttargets.
Consistent The broader ESG targets, including
net zero carbon targets, are
disclosed in the ESG section on
page 46
All climate-related financial disclosures can be found below,
following the TCFD’s four pillars. Where disclosures do not currently
fully align with the TCFD recommendations, we provide a rationale
for why and outline the steps being taken to make consistent
disclosures in the future in the relevant sections below.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
53
GOVERNANCE OF
CLIMATE-RELATED RISKS
AND OPPORTUNITIES
Figure 1 Governance of ESG-related risks and opportunities
Key
TBBR = Tritax Big Box REIT plc/the Company
TMLLP = Tritax Management LLP/the Manager
TBBDHL = Tritax Big Box Development Holdings Limited (formerly known as Tritax Symmetry Holdings Limited)
TBBR Board
Sets the ESG strategy of the Company and has oversight of climate-related strategy and
performance against key goals and targets.
Frequency of meetings: approximately every two months
TMLLP
Investment Committee
Ensures capital expenditure is in line with
climate-related strategy and targets.
Frequency of meetings: monthly
TMLLP Risk Committee
Conducts horizon scanning of emerging
climate-related risks.
Frequency of meetings: quarterly
TMLLP ESG Committee
Jointly responsible for preparing the ESG
strategy, implementation and priorities
including climate-related strategy.
Frequency of meetings: quarterly
TBBDHL Board
Ensures development programme delivers
against company’s ESG strategy and targets,
including climate targets.
Frequency of meetings: quarterly
TMLLP Green Finance Sub-Committee
Approves the allocation of the Green Bond funds.
Frequency of meetings: annually
TMLLP Executive Committee
Jointly responsible for preparing the ESG
strategy, implementation and priorities
including climate-related strategy.
Frequency of meetings: monthly
TBBR Audit and Risk Committee
Monitors climate-related risks and opportunities and other emerging
climate risks.
Frequency of meetings: seven times per year
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
Tritax Big Box REIT plc Annual Report 2024
54
GOVERNANCE
Board oversight of climate-related risks
andopportunities
The Board of Directors of Tritax Big Box REIT plc is ultimately
responsible for overseeing the Company’s ESG strategy, including
the identification and management of climate-related risks and
opportunities. Climate change continues to be a material topic and
aprincipal risk for the Company and will continue to be monitored
infuture years. As part of the Company’s double materiality
assessment, which it completed this year, climate change was
identified as a material topic for the Company and its stakeholders.
The Manager’s ESG Committee is responsible for monitoring trends,
developments, risks and opportunities in relation to climate-related
issues and any material changes are ultimately reported up to the
Board through the Manager’s ESG Director. The Board receives
regular updates from the Manager’s ESG Director regarding the
Company’s ESG performance, including initiatives related to climate
change. These updates were provided quarterly in 2024 and
covered several key climate-related metrics. Specifically, the metrics
include annual tracking of energy and carbon intensity, building
certifications across the portfolio, evaluation of ESG performance
against industry ratings and benchmarks, and the integration of
physical climate risk mitigation throughout the asset lifecycle. In
addition to these updates, the Board is provided with other relevant
briefings, such as market updates, regulatory developments, and
feedback from investors and analysts. Progress reports on initiatives
are also presented, detailing advancements in the ESG programme,
including climate transition planning, renewable energy
opportunities, and carbon risk analysis.
The Manager’s ESG Director, Legal Counsel, Company Secretariat,
and Risk and Compliance Officer monitor climate-related transition
risks relating to legislation and regulation and update the Manager’s
Executive, ESG and Operations Committees and the Company’s
Audit and Risk Committee at least bi-annually on climate-related
risks and opportunities facing the Company. This forms part of the
Audit and Risk Committee’s ongoing work on risk.
The Board undertakes a review of its ESG strategy once a year and
the ESG Director conducts regular ESG reviews with Karen
Whitworth, the Senior Independent Director. Karen is the Board’s
“ESG Champion” and regularly meets with the ESG Director to
discuss ESG issues including climate-related risks and opportunities
facing the Company.
The Company’s Board actively considers climate-related issues
when reviewing and guiding strategy, risk management policies,
annual budgets, and business plans. The Board recognises the
importance of maintaining the necessary skills and competencies
toeffectively oversee our climate and sustainability initiatives.
Greenwashing training has been delivered to all of the Manager’s
and Tritax Big Box Development’s employees to enhance knowledge
on ESG matters and help to mitigate potential sustainability-related
regulatory and reporting risks. The Company is committed to
continuously identifying opportunities to enhance the competency
ofthe Board and Committees.
Management’s role in assessing and managing
climate-related risks and opportunities
The Manager has an ESG Committee which is jointly responsible
with the Manager’s Executive Committee for the delivery of the
ESGstrategy, including climate change and its associated risks
andopportunities. The ESG Committee is chaired by the Head of
Asset Management and Partner, Petrina Austin, who is ultimately
responsible for climate change reporting and monitoring amongst
the management team. The ESG Director is an integral member
ofthe Committee with onward reporting to the Company’s Board
and to the Manager’s Executive, ESG and Operations Committees.
The ESG Committee also oversees the activities of three
Sub-Committees which focus on different topics related to ESG
– Property, Green Finance, and Social, Charity and Wellbeing.
The ESG Director is responsible for the assessment and management
of climate-related risks and opportunities on a day-to-day basis,
where appropriate engaging internal stakeholders (e.g. asset and
property managers) or external parties (e.g.occupiers and investors)
to support this effort. Monitoring ofclimatechange issues is
supplemented by executive briefings fromspecialist consultants
andthrough the Company’s membership of the Logistics Real
Estate Sustainability Group, the UK Green Building Council
(“UKGBC”), and participation in ESG-related investor
working groups.
Climate-related risks and opportunities are embedded into the
Manager’s investment processes through technical due diligence
assessments undertaken on each asset, which inform the
investment decisions of the Company. Any specific risks and
opportunities relating to climate change, such as flooding or solar
capabilities, are reported to the Investment Committee. The
portfolio-level physical and transition risk assessments have also
been updated this year to ensure their accuracy and relevance to
thecurrent operations of our portfolio. During the reporting period,
athird-party adviser was appointed to conduct a carbon risk
analysis of all portfolio assets. This analysis aims to identify costed
decarbonisation measures for each asset in the portfolio. The
findings will be incorporated into our capital expenditure plans in
duecourse and help us prioritise our decarbonisation efforts.
Tritax Big Box Development Limited undertakes project-specific
andongoing risk assessments which incorporate climate-related
risks and opportunities into the planning for new developments
andsites. The risks feed into the development risk register which is
reported and reviewed by the Tritax Big Box Development Holdings
Limited (“TBBDHL”) Board which is a subsidiary of the Company.
The Manager’s employees receive variable compensation which
islinked to the Manager’s overall performance and the individual’s
ownperformance. Employees and their line managers are
encouraged to incorporate an ESG-related KPI relevant to their
rolesand responsibilities as part of the Manager’s annual
performance management cycle.
STRATEGIC REPORT
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55
STRATEGY
Our analysis considers the potential impact of climate change on
ouroperations and financial performance across short, medium,
and long-term horizons. To date, the Company has not been
exposed to any financially material climate-related risks, such
asextreme weather events or regulatory changes related to
carbonemissions.
Our analysis considers climate risks and opportunities across three
time horizons; short term (up to 1 year), medium term (2-5 years)
andlong term (6-15 years). Descriptions of how time horizons are
aligned to the Company’s strategy and which data has supported
our assessment of these climate-related risks and opportunities
areset out in Table 1 below.
The transition risks were identified and tested against scenarios from
the Network for Greening the Financial System (“NGFS”), whilst
physical climate risks were assessed against the Intergovernmental
Panel on Climate Change (“IPCC”) Representative Concentration
Pathway (“RCP”) scenarios for atmospheric greenhouse gas (“GHG”)
emissions from the IPCC fifth round of assessment reporting (IPCC,
AR5, 2014). These scenarios were selected because transition risks
are generally expected to be most severe under a lower level of
temperature rise, whereby the world transitions to a low carbon
economy whereas physical risks are projected to be most severe
under a high carbon world where temperature increase is higher
andmore extreme weather events are expected occur.
Details of the scenarios used are set out below.
Table 1 Business ‘time’ horizons
Time horizons Explanation for the choice of time frame
Climate data used to inform assessment of risk on our strategy
andfinancialplanning
Short term
– up to 1 year
Aligned with going concern Current climate datasets are used to assess level of risk exposure to the
Company in the immediate future
Medium term
– from 2 to
5years
Aligned with viability period used for the Company’s
medium-term business plans and individual asset
performance analysis
Climate projections for transition risks for the 2030s are used to understand the
impact transition risks which may need to be addressed as part of our strategy
Climate projections for physical risks for the 2025-2029 time horizon have been
used to understand the impacts of acute (extreme weather event) physical risks
Long-term
– from 6 to
15years
Aligned with the usual hold period, WAULT and
average lease term on new buildings
Climate projections for the 2040s to 2050s are used to inform the potential
impact of longer-term risks and opportunities to the Company, enabling us
toconsider where actions may be required to mitigate and adapt to a changing
climate
Table 2 Climate scenarios considered
Physical risk scenarios Transition risk scenarios
Three scenarios were selected to assess the Company’s resilience to a range of possible futures.
RCP8.5
A high-emissions scenario with no policy changes,
increasing GHG concentrations, and a temperature
increase of around 4°C
NGFS
“Current
Policies”
scenario
Assumes a > 3°C temperature rise. Current climate
policies will remain in place. Technological progress
occurs, but slower than in more ambitious scenarios
RCP4.5
An intermediate emissions scenario with relatively
ambitious emissions reduction, likely overshooting
theParis Agreement temperature target
NGFS
“Delayed
Transition”
scenario
Assumes global annual emissions do not decrease
until2030. Stringent policies are then needed to limit
warming to below 2°C. This scenario assumes new
climate policies are not introduced until 2030 and the
level of action differs across countries and regions
basedon currently implemented policies
RCP2.6
A moderate scenario with emissions peaking early
inthe21st century and declining after, assuming a
warming of less than 2°C
NGFS
“Below 2C”
scenario
Limits global warming to < 2°C through aggressive
action against climate change, assuming early
introduction of climate policies and moderate
technological change
Physical risks
This year, we conducted an updated physical risk assessment
forthe entire portfolio, revealing that our portfolio is resilient to
allphysical climate risks identified in the short to medium term
(i.e.,there are no assets in the portfolio that are deemed to be at
high risk of physical climate risks). We evaluated physical climate
risks across the Company to pinpoint areas of elevated risk
exposure and assessed whether our current mitigation efforts
areadequate for both present and future risks. This assessment
analysed climate data based on three scenarios, including a 2°C
orlower scenario (RCP2.6), in line with the Company’s
decarbonisation ambitions.
Regardless of regional differences in the hazard exposure, the
overall impacts from physical climate risks are considered to be
thesame owing to the high level of adaptive capacity built into the
design and ongoing maintenance of assets within the portfolio.
The table below describes the impact of physical climate-related
risks on the business.
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
Tritax Big Box REIT plc Annual Report 2024
56
Table 3 Physical climate risks
Type of risk
Impact level across climate
timehorizons
Potential financialimpact Planning, management andstrategy
Short
term
Medium
term
Long
term
Acute physical risk
River and
surface water
flooding
RCP 2.6, RCP 4.5 and RCP 8.5 Cost of repairing assets, increased maintenance
and building costs
Increased insurance premiums due to extreme
weather events
Loss of value of buildings
Our current portfolio is considered to be resilient
to flood risk in the short, medium, and long term
Incorporation of flood mitigation measures into
design of planned developments including flood
risk assessments for all new acquisitions and
new developments
Asset management has proactive plans in place
to deal with events if they arise
Asset managers carry out annual monitoring
processes at all assets to check for signs of
damage from extreme weather events
Drought RCP 2.6, RCP 4.5 and RCP 8.5 Our assets are not particularly water intensive
orimpacted byfire weather events
Assets that are exposed to possible drought
stress have appropriate measures in place to
minimise water consumption
Sustainable construction commitments also
include reducing potable water consumption
inalignment with BREEAM New Construction
requirements
Installing water efficient fittings and leak
detection and monitoring systems to check
andproactively manage water consumption
Extreme heat RCP 2.6, RCP 4.5 and RCP 8.5 Our assets are considered to have a low
sensitivity to heat stress, with mechanical
ventilation included in all office areas and
naturalventilation in warehouse areas
There is likely to be limited need to upgrade
cooling equipment across the portfolio and
energy efficiency measures are assessed as
partof the transition risk assessment
The financial impacts on the business from
heatrisk are low
The Manager’s New Construction Sustainability
Brief sets out design measures to maximise
adaptation to extreme heat, including optimising
the buildings for thermal regulation, investing in
natural cooling and passive ventilation systems
and prioritising the use of low-energy LED lighting
Storms RCP 2.6, RCP 4.5 and RCP 8.5 Cost of repairing assets, increased maintenance
and building costs
Increased insurance premiums due to extreme
weather events
Loss of value of buildings
See physical risk management approach for new
developments outlined on page 75
Sea level rise RCP 2.6, RCP 4.5 and RCP 8.5 Sea level projections do not increase significantly
in the first half of the 21st century
The entire portfolio is projected to have a
lowexposure to sea level rise in the short-,
medium- and long-term horizons
The associated financial impact to the business
from rising sea levels is considered to be small
See flood risk mitigation strategies outlined
above
Low Moderate High
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Transition risks
This year, we have also reviewed our transition risk assessment to
ensure it remains relevant to the evolving nature of the portfolio and
evolving transition risks. The assessment incorporates the mitigation
strategies and plans currently implemented by the Company. We
use the same methodology as outlined in the Principal Risks and
Uncertainties section (see pages 70 to 75) to assess the impact and
likelihood of various climate risks and opportunities, resulting in an
inherent risk rating. We then apply a preparedness factor, based on
current mitigation efforts, to calculate a residual risk rating. Since all
assets are located in the UK, the Company assumed that the climate
scenarios used in the transition risk assessment would be applicable
to the entire portfolio and operations.
All identified climate-related risks and opportunities are deemed to
be covered by appropriate management and/or mitigation strategies.
Low Moderate High
Table 4 Transition risks
Type of risk
Risk rating
Potential financialimpact Planning, management andstrategy
Short
term
Medium
term
Long
term
Policy and legal
Reporting
compliance
and emerging
regulation
Below 2˚C Non-compliance can lead to fines, increased
operational costs, damage to the Company’s
reputation, and restricted access to funding, all
ofwhich can harm financial performance and
negatively impact the Company’s market
valuation
Continued integration of accurate ESG
datapoints into operational business
Budget allocated to sustainability compliance
and reporting
Annual updates on upcoming regulations
Third-party support to ensure compliance with
ESG regulatory reporting
Delayed Transition
Current Policies
Asset
compliance
Below 2˚C Non-compliance can lead to financial penalties,
decreased property values, higher operational
costs for necessary upgrades, and a potential
decline in occupier demand. These factors can
negatively impact cash flows and overall portfolio
performance
EPC performance and progress against targets
are continually monitored
Improvement plans have been scheduled for
assets with an EPC rating below B and some
initial cost estimates have been provided
Our ESG due diligence framework outlines
theexpected environmental performance for
acquired assets, while the asset management
business plans include strategies to enhance
thatperformance. New developments incorporate
measures to mitigate physical and transition risks
of assets, and target EPC A
Delayed Transition
Current Policies
Introduction of
emissions
caps, carbon
pricing and
offsets
Below 2˚C Increased operational costs may arise from
compliance expenses and the costs associated
with carbon offsets. Additionally, these factors
could affect the upstream value chain by driving
up raw material costs, potentially leading to
higher capital expenditures in the development
portfolio
Embodied carbon target for new developments
of 400 kg CO
2
e per m
2
Deployment of on-site renewable energy across
development and investment portfolios
See Stakehill refurbishment and Newark
development case studies
In 2025, the Company plans to trial additional
low-carbon alternative materials within specific
development projects
Delayed Transition
Current Policies
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
STRATEGY continued
Tritax Big Box REIT plc Annual Report 2024
58
Opportunities
Several climate-related opportunities have also been identified that
may be material to the Company’s business, which are outlined in
Table 5 below. The Company has reviewed these opportunities
under different emissions scenarios, in line with the transition risk
assessment methodology.
Table 5 Climate-related opportunities
Climate transition
opportunity
Opportunity rating
Potential financialimpact Planning, management andstrategy
Short
term
Medium
term
Long
term
Energy source
Growth of clean
energy and
infrastructure
Below 2˚C By incorporating renewable energy into assets,
the Company can meet occupiers’ demand for
low-carbon and energy-efficient assets,
protect asset values by making them more
resilient, and comply with evolving
environmental regulations. Additionally, there is
potential for generating extra revenue by selling
renewable energy to occupiers and the grid
Deployment of on-site renewable energy on
new developments, and standing assets in
partnership with occupiers
Engagement with occupiers to understand
their low-carbon infrastructure requirements
Delayed Transition
Current Policies
Technology
Cost of
investment in
technology
fordata
improvement
Below 2˚C Increased capital expenditure to improve
datacoverage and quality and accuracy across
the portfolio
The Company has an asset management
platform where ESG data is captured
In the process of developing a dedicated
decarbonisation platform focused on assessing
risks and opportunities, which will be integrated
into asset management planning
Delayed Transition
Current Policies
Market
Sustainable
finance and
increased cost
of capital
Below 2˚C Companies perceived as non-compliant with
ESG standards may face higher borrowing costs
and reduced access to capital, thereby hindering
growth and investment opportunities
The Company signed a sustainability-linked
loanin 2023, which includes four KPIs related
tosustainability
The ESG due diligence framework sets out
targeted environmental performance of
assetsbeing acquired, and asset management
plans incorporate measures to improve
environmental performance
Delayed Transition
Current Policies
Occupier
behaviour
Below 2˚C Changes in occupier preferences towards more
sustainable and energy-efficient spaces could
lead to decreased demand for less efficient
properties, resulting in lower rental income and
potential vacancies, ultimately affecting overall
property values
The Company collaborates with occupiers on
environmental initiatives. This engagement
involves researching occupier needs when
developing new assets and analysing trends
inthe logistics sector
Developed a target to improve all EPC ratings
toa minimum of a B and have completed EPC
improvement plans for assets which are under a
B rating
Delayed Transition
Current Policies
Low Moderate High
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Market
Occupier/market
demand
Below 2˚C Low-carbon, high-quality spaces are
increasingly in demand, meaning occupiers
may be willing to pay a premium for these
buildings. Future-ready warehouses with
on-site renewable energy and access to
sufficient power for robotics, automation and
EV charging may command rental premiums
and higher asset values in future
Deployment of on-site renewable energy in
partnership with occupier
Engagement with occupiers to understand
their low-carbon infrastructure requirements
Delayed Transition
Current Policies
Sustainable
investment and
finance
Below 2˚C By aligning with these sustainable investment
trends, the Company can access a broader
pool of capital, attract responsible investors,
and potentially reduce financing costs through
Green Bonds and sustainability-linked loans.
The availability of new sources of investment,
such as green debt, green finance, and Green
Bonds, enhances the diversification of financial
assets, including infrastructure investments
Issuance and full allocation of proceeds related
to the Company’s Green Bond
The Company signed a sustainability-linked
loan in 2023, which includes four KPIs related
to sustainability
The Company has a robust ESG reporting
process in place which facilitates a strong
response to any investor and lender requests
Delayed Transition
Current Policies
Acquisition cost/
strategy
Below 2˚C Many buildings will likely still be in use by 2050,
necessitating retrofitting, which requires
investment. Acquiring underinvested assets
provides the opportunity to leverage expertise
and capital to enhance these buildings. This
includes the potential to acquire lower-quality
assets from less active investors, allowing the
Company to make substantial improvements
that increase both income and value
The ESG due diligence framework sets out
targeted environmental performance of assets
being acquired, and asset management plans
incorporate measures to improve
environmental performance
A carbon analysis has been conducted to help
determine the capital expenditure requirements
needed for decarbonising the portfolio
Delayed Transition
Current Policies
During this reporting period, the Company has undertaken various
initiatives to enhance resilience, including:
• commissioned Mace consulting to develop asset-level, costed
decarbonisation plans for every asset in the portfolio;
• increased the total installed solar PV capacity of the Company
to24.3 MWp of on-site solar PV, which will help the buildings’
occupiers to reduce the carbon intensity of their operations and
thereby help the Company reduce its Scope 3 emissions; and
• updated its physical climate risk assessment across the portfolio
to ensure current and future physical risks are known and
appropriately managed.
Due to the nature of our business, the Company’s own operational
carbon emissions are small compared to those generated by our
occupiers. This is primarily due to the fact that our occupiers are
responsible for the majority of the operational consumption associated
with the assets they lease and operate. However, we actively engage
with them to collect data on their energy consumption, support their
decarbonisation efforts and encourage responsible energy use across
our properties.
Physical climate risks have been assessed as either low or moderate
risk across all three scenarios. Transition risk is evaluated as low to
moderate, but it increases in the “Below 2°C” scenario due to
heightened exposure to policy and market transition risks. This
includes the potential introduction of emissions caps, carbon pricing,
and offsets. However, this scenario also presents the greatest
opportunity for a number of opportunities, including growth in clean
energy and infrastructure.
As a result, we consider the Company to be moderately resilient
tothe climate risks across climate scenarios assessed. However,
weare committed to continuously monitoring and assessing the
significance of these risks to inform our ongoing climate strategy.
Low Moderate High
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
STRATEGY continued
Opportunities continued
Table 5 Climate-related opportunities continued
Tritax Big Box REIT plc Annual Report 2024
60
RISK MANAGEMENT
Identifying and assessing climate-related risk
Climate-related physical and transition risks have been identified
asa principal risk to the Company, as set out in the Principal Risks
and Uncertainties section (see pages 70 to 75). The Company
recognises that failure to adequately identify and mitigate such risks
may financially impact its assets and operations as outlined in the
Strategy section above. As a result, we have undertaken appropriate
research and analysis to mitigate these risks.
We have outlined our method for assessing physical and transition
risks related to climate change below. This approach aims to identify
and evaluate the materiality of these climate-related risks and
opportunities, following our current risk management process.
Physical risk process
The portfolio climate risk assessment follows a systematic
methodology aimed at understanding the potential physical climate
risks that may be material to the Company. The process began with
the collection of current climate data for all units, including flood risk
information sourced from the Environment Agency “EA” and drought
risk assessed using the Water Resources Institute “WRI” Water Risk
Atlas. We utilise additional data from the Met Office and Climate X
to evaluate the risks associated with other climate hazards, such as
storm events and extreme temperatures.
Using unit-level information, we performed a portfolio risk analysis
through the Climate X platform, enabling the generation of physical
risk scores for each asset and for each assessed hazard, including
flooding, storms, drought, amongst others. To ensure accuracy,
wecompleted a data validation exercise to compare our risk scores
with local climate sources, such as the EA flood maps, for pertinent
climate hazards. The assessment analysed climate data across
three scenarios, allowing us to comprehend how potential risks
mayvary under different future emission pathways.
Following the data collection and analysis, CBRE reviewed the
climate data from the Climate X platform to screen all units for
elevated risks across the Company’s portfolio. The assessment
offlood risk used a slightly different approach, leveraging the EA
datasets. In instances where the EA recorded a low flood risk
butthe Climate X data indicated an elevated present-day risk,
avalidation exercise was performed to examine key unit
characteristics, such as proximity to rivers, historical flood events,
and site conditions. If the Climate X dataset showed no change in
risk over time and the EA indicated a low risk, the risk levels were
downgraded accordingly. For units where the EA reported medium
or high risks, a review of planning documentation was conducted
toidentify any existing flood risk assessments. Units with medium
orhigh flood risks or changing risk levels as per Climate X
underwent a vulnerability assessment.
In the vulnerability assessment phase, we engaged with property
managers for units identified with elevated risks to determine
whether on-site mitigation measures were in place or if any studies
had been conducted to assess these risks. We gathered information
about asset resilience, including existing mitigation measures
implemented at various sites to address relevant climate hazards
such as overheating, flooding, drought, high winds, storms, and
extreme cold weather. The outcomes of this assessment facilitated
the categorisation of residual risk scores.
Transition risk process
The Company has previously conducted a transition risk
assessment to evaluate how well the portfolio aligns with the
decarbonisation pathways outlined by the Carbon Risk Real Estate
Monitor (“CRREM”) tool. This assessment helped identify assets
that are at risk of becoming stranded or are not financially viable
for future energy efficiency standards. In 2024, we have started
phase one of a decarbonisation project which seeks to update the
Company’s asset-level carbon risk analysis and develop costed
decarbonisation plans for all assets within the portfolio. See the
ESGsection (pages 46 to 52) for more information.
In 2024, the Company also completed an updated transition
risk assessment to identify the transition risks which will have a
significant impact on the Company, considering the time, horizon,
probability and impact to provide a risk rating in addition to using
external research to support our justification of risks. To enhance
this, current and planned future mitigation strategies are included
toevaluate preparedness to produce a net risk rating. Using
the TCFD recommend guidance we have identified risks across
the four risk categories: policy & legal, technology, market, and
reputation. Risk ratings were determined using specific thresholds
and incorporated three scenarios recommended by the Network
for Greening the Financial System “NGFS”. This approach enables
an assessment of the Company’s resilience to transition risks under
various scenarios. To ensure the transition risk assessment remains
relevant, the Company plans to review the analysis on a regular
basis and will update disclosures as appropriate.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
61
New developments
Approach
Our risk management approach for new developments represents a single process for identifying, assessing and managing risk across all new
construction. The outcomes of the climate-related assessments undertaken for new developments enable Tritax Big Box Developments to
manage any potential physical or transition risks which are identified.
Process Identifying and assessing risk Managing risk
Transition risk
Lifecycle assessments to evaluate upfront carbon,
in alignment with the RICS Whole Life Carbon
Guidance
The One Click LCA assessment software is used
to undertake these assessments, which considers
factors such as material use, transportation and
construction-related emissions
Reduce upfront embodied carbon over time and
install on-site solar PV which will lower operational
GHG emissions
Physical risk
Flood risk assessment and drainage strategy Assesses site risk against all sources of flooding
and includes calculations to account to climate
change uplift
The outcomes of the study are intended to either
indicate that the site chosen is at low risk from all
foreseeable sources of flooding, or to identify
measures to incorporate into the scheme to
reduce the risk. The drainage strategy is also
informed by the climate change enhanced run-off
calculations, to ensure the design allows for
additional, more intense storm events
Adaption to climate change study Assesses physical climate risks which have the
potential to impact the asset
Concludes with a series of risk management
measures, which are subsequently incorporated
into the design of the scheme
Thermal comfort analysis Evaluates against a future climate weather file, to
determine whether an asset will maintain thermal
comfort in climate change conditions
Confirms whether the design will maintain thermal
comfort in the future, and if there are potential
risks, the analysis identifies how measures could
be incorporated in the future to ensure thermal
comfort is maintained
Managing our climate-related risks
Our process for managing climate-related risks is set out below.
Climate-related risks are reviewed annually. This approach allows us
to focus mitigation efforts on the highest-risk assets and ensure
transitioning to a net zero business and asset resilience is prioritised
in business planning for the coming year.
Managing our
climate risks
Assign risk
Communicate
risk
Manage risk
Mitigate risk
Monitor risk
Annual portfolio-level
climate risk analysis
Considering any changes to asset
vulnerability, transition risks or new climate
data.
Relevant members of the
manager are assigned
ownership and management
of risks identified
To maintain operating effectiveness
of internal control systems.
Formal
reporting process
Used to communicate
asset-level climate risks to
asset managers.
Asset management plans
Measures to mitigate identified risks
are incorporated into existing asset
management plans.
Annual monitoring
For example, property managers
complete site walkovers to identify
asset vulnerability from potential
climate hazards that could result in
material risks to the Company.
Mitigation measures
Implementation of mitigation measures is
completed to reduce the level of risk to an
acceptable level.
Figure 6 Our iterative approach to managing climate risk
Identify risk
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
RISK MANAGEMENT continued
Tritax Big Box REIT plc Annual Report 2024
62
Managing our climate-related risks continued
We integrate ESG factors at every stage of the investment lifecycle
by using a template that defines key ESG criteria. Our development
programme follows a baseline specification which sets an upfront
embodied carbon target to encourage low-carbon construction
practices. You can find details about our embodied carbon target
and performance on page 64.
To effectively mitigate ESG risks, the Company conducts thorough
due diligence assessments, implements strong internal procedures,
and maintains comprehensive insurance coverage. Additionally, as
previously mentioned, we have conducted both asset-level and
portfolio-level transition and physical risk assessments to identify
and manage potential risks effectively.
Integrating climate risks into the organisation’s
overall risk management
The Board recognises the importance of managing climate-related
risks, which are included in our risk register (see page 75).
The Audit and Risk Committee evaluates these risks bi-annually
using reports from the Manager’s Executive Committee. The
Manager’s Risk Committee performs quarterly horizon scanning
toidentify emerging risks. The Investment Committee evaluates
climate-related risks and conducts thorough ESG due diligence
foracquisitions. Assets are assessed for physical climate change
risks, as part of the annual insurance renewal process. Significant
risks areconsidered for the Company by the Partner responsible
forasset and propertymanagement.
For further details on the ownership of the climate risk identification
and management process, please refer to page 55.
Figure 7 Integration of climate risk into our risk management process
Once acquired, as part of the annual
insurance renewal, the physical
climate risks of the assets are
assessed. The Partner responsible
forasset and property management
ensures that material risks are
considered by the Company.
Board oversight
• The Board recognises the importance
ofidentifying and monitoring climate-
relatedrisks.
• These risks are reported to the Board by
theESG Director.
Entity risk management
• The Audit and Risk Committee has
embedded climate reporting into its risk
management by determining physical and
transitions risks as a key risk of theCompany.
• Climate-related risks are embedded into
theCompany’s wider risk management
framework which contributes towards
investment decisions made by the
InvestmentCommittee.
Climate risk identification
• The Manager reviews and updates the
Company’s risk matrix on a bi-annual basis and
reports up to the Audit and Risk Committee
which includes principal and emerging risks.
• The Manager’s Risk Committee conducts
periodic horizon scanning for new risks which
may impact theCompany.
• In addition, all acquisitions undergo a due
diligence assessment to inform members of
the Investment Committee about climate-
related risks.
The Board
Audit and Risk
Committee
Investment
Committee
Climate
risk
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
63
The Company employs a holistic set of metrics to assess climate-related risks and opportunities, in line with the recommendations of the TCFD. To
effectively address these risks and seize opportunities, we strive to incorporate metrics aligned with the key findings of our climate risk assessment.
These metrics and associated annual targets are outlined in Table 8 below. Both current and past years’ performance are reported where possible.
Our targets and metrics are reviewed on an annual basis to ensure they maintain in line with our strategy and ambition.
Table 8 Climate-related metrics and targets
Metric category Metric 2022 2023 2024 Year-on-year target
GHG
emissions
(tCO
2
e)
Absolute Scope 1 GHG emissions 0.03 0 0 Net zero by 2025 (Scope 1
and 2 emissions)
Net zero by 2025 (Scope 1
and 2 emissions)
Absolute Scope 2 GHG emissions
(location-based)
33.86 40.58 408.46
Scope 3, Category 2 – Capital goods:
Absolute construction-related GHG
emissions
48,751 81,959 69,389 Net zero by 2030 (Scope 3,
construction-related emissions)
Scope 3, Category 13 – Downstream
leased assets: absolute occupier
operational GHG emissions (occupier
Scope 1 and 2)
94,534.50 71,749 To be
reported in
2025
Net zero by 2040 (Scope 3,
occupier operational emissions)
Transition
risks
% EPCs of investment portfolio B-rated
or above (by floor area)
78% 80% 80% Increase the % of EPC B or
above year on year
Weighted upfront carbon intensity
(kgCO
2
e/m
2
) – whole site
453 462 412
400 kg CO
2
e/m
2
for upfront
embodied carbon
Weighted upfront carbon intensity
(kgCO
2
e/m
2
) – building only
nr 364.6 286.8
Physical risks
% of assets in the portfolio screened
for physical climate hazards
100% 100% 100%
% of assets in the portfolio which are
recorded as having a high exposure to
climate hazard
1
(by floor area)
10.9% 12.5% 14.2% All priority assets to have
climate resilience plans in place
% of assets in the portfolio that are
resilient to future climate change
2
(by
floor area)
100% 100% 100%
Climate-
related
opportunities
On-site renewable energy generation
projects – capacity installed (MWp)
14 MWp 17.4 MWp 24.3 MWp Increase on-site solar PV
capacity installed across the
portfolio where technically
and economically feasible
% of new buildings developed to net
zero standards
100% 100% 100% All new developments to be
constructed to net zero carbon,
as defined by the UK GBC
See the SECR section on pages 65 to 66 for more information on year-on-year changes in carbon emissions.
This year, we have also increased the solar PV installed capacity of our portfolio to a total of 24.3 MWp of installed capacity. The increase
inour solar PV capacity has been driven by our development programme, the acquisition of the UKCM portfolio, and both landlord- and
occupier-led projects on standing assets. This includes the installation of 1.3 MWp of solar PV as part of our Stakehill refurbishment project
(see case study on page 52). The solar PV pipeline of future projects is currently estimated at 25.2 MWp.
Following the acquisition of UKCM, the proportion of EPC B or above assets across our investment portfolio has remained at 80%. Going
forward, the implementation of emissions reduction and energy efficiency measures identified through our bespoke decarbonisation platform
should contribute to the reduction of operational emissions over time and further improvements in EPC ratings across the portfolio.
Finally, we have continued to develop new assets to net zero carbon in construction in line with the UK GBC’s framework. As shown by the
decrease in upfront embodied carbon intensity achieved during the year, the evolved blueprint brings us closer to consistently meeting our
400 kg CO
2
e/m
2
target.
METRICS AND TARGETS
1. Based on current physical climate risk exposure.
2. Note this value is based on the total number of assets that recorded with high exposure to physical climate hazards in the screening assessment.
Task Force on Climate-related Financial Disclosures (“TCFD”) Report continued
Tritax Big Box REIT plc Annual Report 2024
64
Streamlined Energy Carbon Reporting (“SECR”)
Energy consumption and GHG emissions breakdown
GHG emissions source Description 2024 2023
1
2
Landlord-consumed energy (kWh)
Existing portfolio 233,155 195,957
3
UKCM portfolio 1,739,393
nr
Occupier-consumed energy (kWh)
Energy consumption
3
4
Existing portfolio nr
359,992,850
UKCM portfolio nr Portfolio not owned
The Manager’s and Tritax Big Box Developments’ energy
consumption (kWh) 203,447 162,851
GHG emissions source
Description
2024
2023
1
Scope 1
Direct emissions – landlord-consumed gas and fuel (tCO
e)
0
0
2
Scope 2 (location-based)
Indirect emissions – landlord-consumed electricity (tCO
e)
408.46
40.58
2
Scope 2 (market-based)
Indirect emissions – landlord-consumed electricity (tCO
e)
0
0
2
6
Total Scope 1 and 2 emissions
408.46
40.58
Scope 1 and 2 emissions intensity (kgCO
/m
) 0.099
0.011
2
Scope 3 Indirect emissions associated with energy consumption of
(purchased goods and services)
the Manager and Tritax Big Box Developments (tCO
e)
42.13
33.72
2
Indirect emissions associated with upfront embodied
carbon of development projects and major refurbishments
Scope 3 (capital goods)
(tCO
e)
69,389
81,959
2
Scope 3 Indirect emissions associated with energy consumption of
(downstreamleasedasset)
occupiers (tCO
e)
4
nr
4
71,749
2
2
1. There is a restatement on the landlord energy consumption data and the corresponding Scope 2 GHG emissions for 2023 with the possession of actual data after the
end of last reporting year. Previous total energy consumed was stated at 169,190 kWh, and the associated Scope 2 (location-based) emissions were stated at 35.03 tCO
2
e.
2. 5% and 0.5% of the landlord energy consumption data were estimated in 2023 and 2024 respectively.
3. The reported consumption data for the UKCM portfolio only covers the period from the acquisition date, 16 May 2024, to the end of the year.
4. Data in the process of being obtained for disclosure in 2025.
5. Data covering 87% of occupiers’ energy consumption and associated GHG emissions by total floor area in 2023.
6. Total Scope 1 and 2 emissions are reported using location-based method.
Energy performance and energy efficiency measures
A 19% increase in landlord energy consumption across the existing
We have also set a 2040 net zero target for our operational GHG
portfolio in 2024 was observed, primarily due to having owned our
emissions. Since over 99% of the energy consumption of our assets is
Junction 6 asset for a full financial year. Energy consumption for other
controlled by our occupiers, we are collaborating with them to identify
assets within the investment portfolio remained stable in 2024
ways to reduce their energy consumption and the associated GHG
because, beyond vacancies, most of the energy consumption within
emissions. This includes developing asset-specific asset management
our operational control is consistent by nature, such as external
business plans based on actual operational utility data to ensure
lighting. All electricity procured is sourced from renewables and
compliance with Minimum Energy Efficiency Standards (“MEES”)
backed by Renewable Energy Guarantees of Origin “REGO”
regulations in the short term and alignment with our net zero goal in
certificates. Given the energy efficiency of the Company’s assets, as
the long term. Examples of intervention measures include the
evidenced by the EPC ratings, there is limited opportunity for further
installation of solar photovoltaic panels, the deployment of electric
improvement in associated landlord energy consumption. For the
vehicle charging infrastructure, and the electrification of heating and
UKCM portfolio, we are currently reviewing existing provisions to
other fuel consumption processes, where feasible. We are also
identify energy-saving opportunities. A more detailed update on any
continuing to incorporate expectations for environmental performance
new initiatives implemented across the UKCM portfolio will be
through the introduction of “green” clauses in new leases.
provided in the next reporting year.
Tritax Big Box REIT plc Annual Report 2024
65
STRATEGIC REPORT
Methodology
The GHG emissions data was compiled in accordance with the
SECR guidance for the period covering January to December 2024.
The Company calculates and reports its GHG emissions in line with
the latest versions of guidelines published by the GHG Protocol,
including the Corporate Accounting and Reporting Standard, the
Scope 2 Guidance, and, where applicable, the Technical Guidance
for Calculating Scope 3 Emissions.
The Company’s reporting boundary for GHG emissions data is
defined using the principle of operational control. This means that
only assets where the Company has the authority, via its managing
agents, to introduce and implement its operating policies and
procedures are included within the reporting scope. During the
reporting year, the Company completed the acquisition of UKCM.
Consequently, all newly acquired properties under the Company’s
operational control will also fall within the reporting scope from the
date at which they were acquired.
With most energy being procured and consumed by its occupiers,
Scope 1 (direct emissions) and Scope 2 (indirect emissions from
direct energy consumption) GHG emissions of the Company
account for less than 1% of its total GHG emissions. These
emissions are associated with landlord-consumed energy for
common parts areas, external areas, and voids.
The Company also has no transport-related emissions arising from
activities for which it is responsible for purchasing fuel. Selected
material Scope 3 (indirect value chain emissions) GHG emissions
data are provided in this report on a voluntary basis. This includes
the operational emissions of the Company’s Manager and Tritax Big
Box Developments, the upfront embodied carbon of development
projects and major refurbishments completed in the reporting year,
and the indirect GHG emissions from the energy consumption of
downstream leased assets (i.e., occupier-consumed energy).
All reported energy use and associated GHG emissions data
relates to the Company’s operations in the UK. Scope 1, Scope 2
(location-based), and Scope 3 GHG emissions for managed assets
were calculated using the UK Government GHG Conversion
Factors for Company Reporting for the respective reporting periods.
Scope 2 (market-based) GHG emissions were calculated using the
European Residual Mixes factors and the zero emissions factor for
the REGO backed electricity supplies. Upfront embodied carbon
of development projects was calculated with One Click LCA
®
in
alignment with the BS EN 15978 standard.
Savills (UK) Limited has been appointed to prepare this SECR report
and perform Scope 1 and 2 GHG emissions data quality checks.
External verification or assurance by a third-party auditor is not
currently undertaken.
Streamlined Energy Carbon Reporting (“SECR”) continued
Tritax Big Box REIT plc Annual Report 2024
66
Stakeholder Engagement and Section 172
ENGAGING WITH
OURSTAKEHOLDERS
By considering the Company’s purpose and vision, together
withitsstrategic priorities, we aim to balance stakeholders’
differentperspectives.
Section 172 statement
The Independent Non-Executive Directors have had regard for the
matters set out in Section 172(1) (a)–(f) of the Companies Act 2006
when performing their dutyunder Section 172. The Independent
Non-Executive Directors consider that they have acted in good faith
in the way that would be most likely to promote the success of the
Company for the benefit of its members as a whole, and in doing so
have considered (amongst other matters):
(a) the likely consequences of any decision in the long term;
(b) the interests of the Manager and its employees, as the Company
doesnot have any employees;
(c) the need to foster the Company’s business relationships
withsuppliers, clients and others;
(d) the impact of the Company’s operations on the community
andenvironment;
(e) the Company’s reputation for high standards of
businessconduct;and
(f) the need to act fairly as between members of the Company.
The table below indicates where the relevant information isinthis
Annual Report that demonstrates how we act in accordancewith the
requirements of Section 172.
Further information on how we have engaged with our key
stakeholders and considered their interests during the last
reportingperiod can be found on pages 68 and 69.
Section 172 matter Further information incorporated into this statement byreference
Long term
> Market Review pages 20 and 21
> Our Business Model page 11
> Manager’s Report pages 22 to 33
> Key Board Decisions pages 92 and 93
Investors
> Strategic Report pages 1 to 76
> Key Board Decisions pages 92 and 93
> Governance Report pages 78 to 116
Employees
> For information on the Manager’s employees please refer to page 69
Community
and environment
> Strategic Report pages 1 to 76
> Manager’s Report pages 22 to 33
> Key Board Decisions pages 92 and 93
Suppliers
> Strategic Report pages 1 to 76
> Manager’s Report pages 22 to 33
> Key Board Decisions pages 92 and 93
High business conduct
> Our Business Model page 11
> Stakeholder Engagement pages 68 and 69
> Strategic Report pages 1 to 76
> Formoreinformation on the impact ofkey decisions of the Board
on our stakeholders please refer to“Keydecisions ofthe Board”
onpages 92 and 93
Our stakeholders
The
Manager
and its
employees
Our
Shareholders
Our
suppliers
Our clients Our
lenders
Government,
regulators
andlocal
councils
Our
communities
> Read more on pages 68 and 69, and 92 and 93
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
67
Our clients
What they care about
Quality assets in key locations, including buildings with strong ESG
ratings that enable their business to succeed, and a knowledgeable
and committed property owner that supports their strategy, with
many focused on fulfilling their rapidly growing e-commerce sales.
Our clients want efficient supply chain logistics and attractively
priced labour pools.
How we engage
• Regular face-to-face meetings both virtual and on-site.
• Independent client supply chain reviews, aimed at better
understanding their business needs in order to provide suitable
recommendations to drive efficiency.
• Asset inspections.
• Charitable engagement which in turn helps bring environmental
and social benefits to the communities in which weoperate.
• Continued membership of UKWA, UKGBC and Better Building
Partnership Working Groups, and membership of Cold Chain
Federation and Logistics UK, each promoting market leadership in
zero carbon, engagement and biodiversity.
• Review of published data, such as annual accounts,
tradingupdates and analysts’ reports to identify mutually
beneficial opportunities.
Topics
• ESG initiatives.
• Treasury management.
• Supporting e-commerce initiatives.
• Operational efficiencies and resilience.
Outcomes
• Strengthening of business relationships.
• Development of a dedicated Occupier Hub.
• Asset management and ESG initiatives.
• Launched the Tritax Social Impact Foundation in May 2024 to
work with clients (as well as other stakeholders) to create local
and national partnerships to deliver social impact.
Further information
> Manager’s Report pages 22 to 33
> ESG section pages 46 to 52
Stakeholder Engagement and Section 172 continued
Our Shareholders
What they care about
Delivering sustainable, profitable growth over the longer term.
Ourinvestors take a keen interest in strong corporate governance,
as well as a transparent reporting framework and ESG.
How we engage
• Meetings held between Shareholders and key personnel
from the Board such as the Chair, the Senior Independent
Director, and the Manager.
• Virtual meetings with the Board and the Manager to aid
understanding and decision making.
• Annual General Meeting.
• Regular market updates on strategy and performance, including
full-year and half-year results presentations, which include the
opportunity for Shareholders and analysts to submit questions
tothe Manager.
• Investor site visits and investor seminars.
• Quarterly update reports to the Board from Investor Relations.
Topics
• Strategic plans and long-term value and returns.
• Governance.
• Environmental and social performance.
Outcomes
• Engagement with key representatives from the Board and the
Manager to ensure our purpose and strategy remain in line
withexpectations.
• Focus on recycling assets into higher-returning development
andinvestment opportunities.
• Expansion into data centres (announced in January 2025).
Further information
> Business Model on page 11
> Board Leadership and Company Purpose on pages 88 to 91
Tritax Big Box REIT plc Annual Report 2024
68
Our suppliers
What they care about
Our suppliers care about having collaborative and transparent
working relationships with us, including responsive communication
and being able to deliver to their KPIs in service-level agreements
ata competitive fee.
How we engage
• Invited key suppliers to attend Board and Committee meetings.
• Informal, one-to-one virtual meetings.
• Review of supplier performance by the Management
EngagementCommittee.
• Externally facilitated adviser reports.
• Provided Directors’ training on areas of expertise of key suppliers.
Topics
• Service levels and annual performance.
• Fee structure.
• Relationship management.
• Processes and procedures.
Outcomes
• Continued good, and, in some cases, exceptional, levels
ofservice.
• Enhanced the Company’s governance procedures.
• Further developed relationships with key suppliers
totheCompany.
• Various re-tender processes conducted ensuring continued
goodservice and value for money.
Further information
> Key Decisions of the Board on pages 92 and 93
> Management Engagement Committee Report on pages 108 to 110
The Manager and its employees
What they care about
The long-term success of the Company is of key importance to
theManager. In order to achieve this, as well as establishing and
maintaining lasting relationships, the Manager takes a keen interest
in the wellbeing and satisfaction of its employees. Being able to
attract and retain high-calibre talent and then support those
individuals in their professional development is a high priority for
theManager. The Board and the Manager maintain a positive and
transparent relationship to ensure alignment of values and
businessobjectives.
How we engage
• Reporting to the Board at least quarterly.
• External Board evaluations.
• Informal meetings.
• Professional and executive development programmes.
• Employee surveys, social events, and ESG initiatives within
thecharity and voluntary sectors.
Topics
• Employee satisfaction and resourcing.
• Remote working, staff health and wellbeing, development
andprogression.
• Business updates.
Outcomes
• Relocation to a new office space in February 2024 to enhance
collaborative working, to further develop our modern ways of
working, and to further build on the Manager’s company culture.
• Facilitated a number of employee social and charitable events
during the year such as a Sleepout, a quiz and a charity walk,
which supported employee well-being and raised money for our
partnercharities.
• Organised work sporting events, such as a regular running club,
team netball and football matches as well as discounted gym
membership to encourage and support a healthy lifestyle.
Further information
> Division of Responsibilities on pages 94 to 97
> Management Engagement Committee Report on pages 108 to 110
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
69
Principal Risks and Uncertainties
MANAGING RISK
The Board has overall responsibility for risk management and internal
controls, with the Audit and Risk Committee reviewing the
effectiveness of the risk management process on its behalf.
We aim to operate in a low-risk environment, focusing on a single
subsector of the UK real estate market to deliver attractive, growing
and secure income for Shareholders, together with the opportunity
for capital appreciation.
Negligible Slight Moderate Severe
Rare Low Medium High
Impact
Probability
1
3
7
5
9
6
2
4
8
Risk matrix – December 2024 net risk
Property risk
1. Client default
2. Portfolio strategy and
industrycompetition
3. Performance of the UK retail
sector and the continued growth
of online retail
4. Execution of development
business plan
Financial risk
5. Debt financing – LTV, availability
and cost of debt
Corporate risk
6. We rely on the continuance
oftheManager
Taxation risk
7. UK REIT status
Other risk
8. Macro economic uncertainty
9. Physical and transition risks
from climate change
The Board recognises that effective risk management is important
to our success. Risk management ensures a defined approach
todecision making that decreases uncertainty surrounding
anticipated outcomes, balanced against the objective of creating
value for Shareholders.
Approach to managing risk
Our risk management process is designed to identify, evaluate,
manage and mitigate (rather than eliminate) the significant risks
we face. The process can therefore only provide reasonable,
andnot absolute, assurance. As an investment company, we
outsource key services to the Manager, the Administrator and
other service providers, and rely on their systems and controls.
At least twice a year, the Board undertakes a formal risk review,
with the assistance of the Audit and Risk Committee, to assess
theeffectiveness of our risk management and internal control
systems. During these reviews, the Board has not identified or
been advised of any failings or weaknesses which it has
determined to be material.
Risk appetite
The Group’s risk appetite is reviewed annually and approved by
the Board in order to guide the business. The risk appetite
definestolerances and targets for our approach to risk, with our
risk appetite likely to vary over time due to broader economic
orproperty cycles. In addition, we have a specific Investment
Policy, which we adhere to and for which the Board has overall
responsibility. For example, we have a limit within our Investment
Policy, which allows our exposure to land and unlet development
to be up to 15% of gross asset value, of which up to 5% can be
invested in speculative development.
Tritax Big Box REIT plc Annual Report 2024
70
TBBR
Board
TBBR Audit
and Risk Committee
TMLLP
Executive Committee
TMLLP Risk Committee
Reporting and escalation
Direction and oversight
Principal risks and uncertainties
Further details of our principal risks and uncertainties are set out
below. They have the potential to materially affect our business.
Some risks are currently unknown, while others that we currently
regard as immaterial and have therefore not been included here,
may turn out to be material in the future. The principal risks are the
same as detailed in the 2023 Annual Report.
Emerging risks
As well as the Principal risks, the Directors have identified a
number of emerging risks which are considered as part of the
formal risk review. On a biannual basis the Directors, along with
the Manager, undertake a horizon scanning exercise to identify
possible emerging risks. Emerging risks encompass those that
arerapidly evolving, for which the probability or severity are not yet
fully understood. As a result, any appropriate mitigations are also
still evolving. However, these emerging risks are not considered to
pose a material threat to the Company in the short term, although
this could change depending on how these risks evolve over time.
Senior members of the Manager are responsible for day-to-day
matters and have a breadth of experience across all corporate
areas; they consider emerging risks and any appropriate mitigation
measures required. These emerging risks are then raised as part
of the bi-annual risk assessment where it is considered whether
these emerging risks have the potential to have a materially
adverse effect on the Company. Given the significance of the
UKCM corporate transaction during the year, the Board did
consider whether this transaction and the integration of the UKCM
portfolio influenced the principal risks as set out below. In short,
the Board did not perceive this transaction to present any
additional principal risks to the business, but any impact on
existing principal risks has been fully taken into account. The
emerging risks that could impact the Company’s performance
cover a range of subjects which include, but are not restricted to,
technological advancement/AI, cyber risk, supply chain disruption
and ongoing macro-economic uncertainty. The Board is
conscious of recent geopolitical events such as the change in the
UK government and subsequent budget changes, along with the
ongoing conflict in the Middle East and between Russia and
Ukraine. Added to these is the new US government with the threat
of trade tariffs, a new relationship with China and security
considerations for NATO which are all events that have the
potential to cause uncertainty in a short space of time. The Board
continue to monitor interest rates and the general financial markets
closely given the direct impact on the business.
“ We have a well positioned
balance sheet with significant
levelsof liquidity, alongside
attractive and accretive ways
todeploy capital.”
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
71
Principal Risks and Uncertainties continued
Property Risks
1. Client default
The risk around one or more of our clients defaulting
Gross risk Mitigation Net probability Net impact
Moderate –
High
Our investment policy limits the exposure to any one client
to 20% of gross assets or, where clients are members of
the FTSE, up to 30% each for two such clients. This
prevents significant exposure to a single client. To mitigate
geographical shifts in client’s focus, we invest in assets in a
range of locations, with easy access to large ports and key
motorway junctions. Before investing, we undertake
thorough due diligence, particularly over the financial
strength of the underlying covenant and any group financial
covenants. We select assets with strong property
fundamentals (good location, modern design, sound fabric),
which should be attractive to other clients if the current
client fails. We continually monitor and keep the strength of
our client covenants under review. In addition, we focus on
assets that are strategically important to the client’s
business. Our maximum exposure to any one client
(calculated by contracted rental income) was 15.5% as at
31 December 2024.
High Moderate – The default of one or more of
our clients would immediately reduce
revenue from the relevant asset(s). If the
client cannot remedy the default, we have
to evict the client or the client becomes
insolvent, there may be a continuing
reduction in revenues until we are able to
find a suitable replacement client, which
may affect our ability to pay dividends to
Shareholders.
2. Portfolio strategy and industry competition
The ability of the Company to execute on its strategy and deliver performance
Gross risk Mitigation Net probability Net impact
Slight –
High
The Group is focused on a single sector of the commercial
property market, the property portfolio is 94.3% let, with
long unexpired weighted average lease terms and an
institutional-grade client base. Occupier demand is
structurally supported by a range of sectors. All our leases
contain upward-only rent reviews, which are either fixed,
RPI/CPI linked or at open market value. These factors help
support our asset values and overall portfolio performance.
We undertake ongoing reviews of asset performance
alongwith a review over the balance of our portfolio,
splitbetween Foundation, Value Add and Land as well as
considerations over covenant, location and building type.
Our asset performance is regularly appraised and where
we feel the assets are mature in terms of performance,
theyare ear-marked for potential disposal. Our development
portfolio is executed in a low-risk manner utilising capital
efficient option agreements and only deploying significant
capital once we have secured a pre-let or where a depth
ofoccupier demand supports the case for speculative
development.
Medium Slight – An adverse change in the
performance of our property portfolio may
lead to lower returns for Shareholders or a
breach of our banking covenants. Market
conditions may lead to a reduction in the
revenues we earn from our property assets,
which may affect our ability to pay
dividends to Shareholders. A severe fall in
values may result in a fall in our NAV as well
as a need to sell assets to repay our loan
commitments. In a high inflationary
environment, certain caps within rent
review clauses may prevent us from
capturing the full benefit of higher inflation.
Competitors in the sector may be better
placed to secure property acquisitions, as
they may have greater financial resources,
thereby partly restricting the ability to grow
our NAV, deliver value to shareholders,
further diversify the portfolio and add
additional liquidity to our shares. Stubborn
interest rates have prevented resurgent
investment confidence such that
investment yields have held flat in 2024.
Tritax Big Box REIT plc Annual Report 2024
72
3. Performance of the sectors clients operate in
Gross risk Mitigation Net probability Net impact
Severe –
Medium
The diversity of our institutional-grade client base means
the impact of default of any one of our clients is low-
moderate. In addition to our due diligence on clients before
an acquisition or letting, we regularly review the
performance of the sub-sectors, the position of our clients
against their competitors and, in particular, the financial
performance of our clients. We have also increasingly been
diversifying our client exposure to various sub-sectors, for
instance within the retail sector i.e. online, food, homeware,
fashion, other. The breadth of client sector exposure has
been enhanced following the UKCM transaction. The risk
around traditional retail is mitigated by the increase in online
retail sales and supply chain concerns which has driven
occupational demand through Covid-19 and beyond. Our
portfolio is modern and of a high-quality nature and
therefore is attractive to those with an online presence.
Medium Moderate – Our focus on UK logistics
means we directly rely on a number of
sub-sectors to lease our assets and pay
rent. Insolvencies and CVAs among these
occupiers could affect our revenues and
property valuations. Poor performance and
low profitability could affect our ability to
collect rental income and the overall level of
demand for space. This could in turn
impact future rental growth. A broad range
of sectors to some degree diversifies risk.
4. Execution of development business plan
There may be a higher degree of risk within our development portfolio.
Gross risk Mitigation Net probability Net impact
Moderate
– High
The Company has a significant development pipeline, it
represents 5.8% of our gross assets as of 31 December
2024. Our development strategy is low risk, and we target
only investing significant capital into a development project
once planning has been obtained, a pre-let agreement has
been secured or where a depth of occupier demand
supports the case for speculative development. Our
appetite for speculative development is low and we have a
limit of 5% of GAV exposed to speculative developments
within our Investment Policy. The risk of cost overruns is
mitigated by our experienced development team which
includes a thorough procurement and tender process on all
contracts, including agreeing fixed priced contracts. We
undertake thorough covenant analysis and ongoing reviews
of our contractors and secure guarantees in relation to build
contracts where possible.
Low Slight – Our development activities are
likely to involve a higher degree of risk than
is associated with standing assets. This
could include general construction risks,
delays in the development or the
development not being completed, cost
overruns or developer/contractor default. If
any of the risks associated with our
developments materialise, this could affect
the value of these assets or result in a delay
to lease commencement and therefore
rental income. The occupational market
remains stable and while UK vacancy rates
have increased over 2024, they have
stabilised at around 5.6% and rental growth
remains healthy.
Financial Risks
5. Debt financing strategy – availability and cost of debt
Gross risk Mitigation Net probability Net impact
Medium –
Moderate
The Group has diversified sources of long-term unsecured
borrowings in the form of £500 million in Public Bonds,
£400 million in Unsecured Private Loan Notes and
£250million in Green Bonds. We also have £950 million
ofbank finance available split across three revolving credit
facilities and a term loan, and £412.9 million of secured debt
across five separate facilities. This helps keep lending terms
competitive. This access to multiple debt markets should
enable the Group to raise future liquidity in a more efficient
and effective manner via an unsecured platform whilst at
competitive rates. The Board keeps liquidity and gearing
levels under review, as well as monitoring the bank
covenants and any associated headroom within covenant
levels. The Group has undrawn headroom of over
£500million within our current debt commitments, at
31December 2024. The Group aims to minimise the level
ofunhedged debt with Sonia exposure, by using hedging
instruments with a view to keeping variable rate debt
approximately 90%+ hedged.
Medium Moderate – Without sufficient debt
funding, we may be unable to pursue
suitable investment/development
opportunities in line with our investment
objectives. If we cannot source debt
funding at appropriate rates, either to
increase the level of debt or re-finance
existing debt, this may impair our ability to
maintain our targeted dividend level and
deliver attractive returns to shareholders.
Interest rates on the majority of our debt
facilities are fixed or subject to interest rate
hedging providing protection against
significant increases in interest rates. We
do, however, have modest levels of
exposure to variable rate debt. Our next
loan expiry is mid-2026, the rate of which is
lower than prevailing rates and this is likely
to mean that any new debt entered into is
more expensive than our average cost of
borrowing.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
73
Principal Risks and Uncertainties continued
Corporate Risk
6. We rely on the continuance of the External Manager
Gross risk Mitigation Net probability Net impact
Slight –
High
Unless there is a default, either party may terminate the
Investment Management Agreement by giving not less than
24 months’ written notice. The Management Engagement
Committee regularly reviews and monitors the Manager’s
performance. In addition, the Board meets regularly with
the Manager, to ensure that a positive working relationship
is maintained and from time to time with the Manager’s
ultimate parent abrdn. Following the acquisition of 60% of
the Manager by abrdn, this enhances the resources
available to the Manager. In May 2022, Shareholders
approved the extension of the Agreement with a new 5 year
term. A 24 month written notice cannot be served by either
party, unless there is a default, prior to May 2025.
Medium Moderate – We continue to rely on the
Manager’s services and its reputation in
theproperty market. As a result, the
Company’s performance will, to a large
extent, be underpinned by the Manager’s
abilities in the property market and its
ability to asset manage and develop the
Company’s property portfolio. Termination
of the Investment Management Agreement
would severely affect the Company’s ability
to effectively manage its operations and
may have a negative impact on the share
price of the Company.
Taxation Risk
7. UK REIT status
We are a UK REIT and have a tax-efficient corporate structure, which is advantageous for UK Shareholders. Any change to our tax status
orinUK tax legislation could affect our ability to achieve our investment objectives and provide favourable returns to Shareholders.
Gross risk Mitigation Net probability Net impact
Severe –
High
The Board is ultimately responsible for ensuring we adhere
to the UK REIT regime. It monitors the REIT compliance
reports provided by:
• the Manager on potential transactions;
• the Administrator on asset levels; and
• our Registrar and broker on shareholdings.
The Board has also engaged third-party tax advisers to
help monitor REIT compliance requirements. None of the
compliance tests are close to exceeding the relevant
thresholds.
Low Moderate – If the Company fails to remain
a REIT for UK tax purposes, our property
profits and gains will be subject to UK
corporation tax.
Other Risk
8. Macro-economic uncertainty
Gross risk Mitigation Net probability Net impact
Severe –
High
A severe economic downturn could be caused by
geopolitical events, civil unrest, terrorism or a pandemic.
The Group mitigates the impact of macro-economic issues
by investing in high-quality investment assets that operate
in a sector that has strong structural drivers and a supply
demand imbalance in favour of owners. The Group
monitors its client’s financial health regularly and where
appropriate and possible, enters into long leases. The
Manager continues to monitor the business continuity
planof its suppliers to ensure the impact to the Group
andits service providers is minimised. The Manager
continues to monitor the impact that the prevailing
economic environment is having on the Group’s clients
inorder to protect the Group’s cash flow regarding rent
collection, impact on dividends and banking covenants.
Covid-19 and supply chain concerns accelerated
behavioural patterns such as online shopping, which
haveresulted in healthy levels of occupational demand.
These factors are supportive of our business model.
Low Moderate – a severe downturn in the
economy could impact a number of the
Group’s clients, contractors, and service
providers, which could mean a loss of rental
income and disruption to operations.
Following Covid-19, there has been severe
pressure on supply chains which led to high
levels of inflation and whilst inflation has
moderated, interest rates have reduced
more slowly and this has meant that
occupier confidence has remained
subdued, resulting in slower occupier
decision making.
Tritax Big Box REIT plc Annual Report 2024
74
9. Physical and transition risks from climate change
Gross risk Mitigation Net probability Net impact
Moderate
– Medium
The Manager operates with a dedicated sustainability
teamas well as an ESG Committee who take operational
responsibility for the Company’s ESG matters. The
Manager regularly reports to the Board, including
monitoring against the Company’s stated ESG targets and
providing updates on future initiatives. ESG is embedded
within our investment and development processes such
that climate-related risks are assessed when purchasing
assets and minimum standards of BREEAM Excellent, EPC
A and net zero carbon in construction are targeted for
development. We also actively participate and engage in
several Real Estate and Sustainability organisations (such
as GRESB, the Better Buildings Partnership, the UK Green
Building Council and the British Property Federation) to
ensure we are aware of future initiatives and challenges.
Wemeasure and report annually on our key ESG metrics
todemonstrate how we are managing our ESG risks.
In 2024, TBBR updated its physical and transition climate
risk assessments to understand the potential impacts of
climate change on standing assets, using scenario analysis.
We continue to integrate the outcomes of the assessments
into our investment processes, including pre-acquisition
due diligence, design specifications, and asset
management plans.
We are rated by ESG Rating Agencies that demonstrate
ourability to manage ESG risks, for example:
• Our Sustainalytics rating remained as Negligible Risk in
2024 in reflection of our management processes, as
wellas being awarded the Global Top 50 Badge.
• We were awarded 4 Green Stars by GRESB and the
Global Sector Leader for Development.
• We were awarded an EPRA sBPR Gold for
sustainabilityreporting for the fourth consecutive year.
• We achieved a CDP B rating for the second year running.
The buildings we develop are designed for increased
resilience against the impact of extreme weather.
In respect of risks resulting from climate change, all our
properties are insured. Our leases are ‘Full Repairing
andInsuring’ (triple net) and so in the event that a property
is unoccupiable due to damage from extreme weather,
rentremains payable under the terms of the lease;
correspondingly our clients can insure against loss of
traderesulting from such events.
Medium Slight – Environmental sustainability is a
challenge that is currently affecting people
and businesses. Changes in social attitudes,
laws, regulations, taxation, and particularly
client and investor preferences associated
with this has the potential to cause
significant reputational damage and
financial impact on our business, should
the Company not comply with laws and
regulations, meet its ESG targets, or not
meet stakeholder expectations in
addressing these challenges. ESG
requirements are likely to increase over
time, including in relation to a transition to
alow-carbon economy, and therefore the
impact of a failure to comply has the
potential to be even greater in the future,
including through impacts on the value
andliquidity of real estate assets.
Climate change has become increasingly
relevant to real estate, particularly physical
damage caused by wind, fire and flood.
TheGroup’s properties are generally
modern and designed to withstand
demanding weather but extreme events
can exceed construction design parameters
and damage from such events can impact
on operational continuity for our clients.
TCFD risk management response is included
in the Annual Report. See pages 61 and 63
of the 2024 report for reference.
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
75
Going Concern and Viability Statement
The Strategic Report describes the Group’s financial position, cash
flows, liquidity position and borrowing facilities. The Group’s cash
balance as at 31 December 2024 was £80.6 million. It also had a
further £519million of undrawn commitments under its senior debt
facilities, of which £101.2 million (see note 35) was committed under
various construction contracts and a committed asset purchase at
the year end.
The Group currently has substantial headroom against its borrowing
covenants, with a Group LTV of 28.8% as at 31 December 2024.
Asignificant part of the Group’s borrowings are on an unsecured
basis, providing the Group with a deeper pool of liquidity and with
more flexibility over its arrangements.
In July 2024, the Group refinanced the £150.0 million Barclays RCF
via entry into a new £150.0 million two-year facility, split between a
£75.0 million term loan and a £75.0 million RCF. The revised facility
isprovided on an unsecured basis, so all previous security was
released, and the margin was reduced and brought into line with
theCompany’s corporate RCF pricing. The facility has two separate
one-year extension options available, which subject to lender
consent, could extend the maturity of the facility to 2028.
This assisted the Group in positioning its weighted average maturity
across its borrowings of 4.5 years as at 31 December 2024
(2023:5.2 years). As a result and following rigorous stress testing
offinancial forecasts in relation to future viability, the Directors
believe that the Group is well placed to manage its current and
future financial commitments.
The Group benefits from a secure income stream of leases with an
average unexpired term of 10.3 years, containing upward-only rent
reviews, which are not overly reliant on any one client and present
awell-diversified risk. The portfolio was 94.3% let (2023: 97.5%) at
the year end.
The Directors have performed an assessment of the going concern
in relation to the Company and Group for a period of at least
12months from the date of approval of the Company and Group’s
financial statement. The Board is, therefore, of the opinion that the
going concern basis adopted in the preparation of the Annual
Report is appropriate.
Assessment of viability
The period over which the Directors consider it feasible and
appropriate to report on the Group’s viability is the five-year period
to 28 February 2030. This period has been selected because it is
theperiod that is used for the Group’s medium-term business
plansand individual asset performance analysis.
The assumptions underpinning these forecast cash flows and
covenant compliance forecasts were sensitised to explore the
resilience of the Group to the potential impact of the Group’s
significant risks, or a combination of those risks. The key
assumptions sensitised for the forecast cash flows in downside
scenarios were portfolio value, which was sensitised by up to a
25%reduction or to vacant possession value upon lease expiry,
occupation of buildings where assumptions were made over
certainlease events and client defaults with sensitivities, rental
uplifts assumed to be between 0% and 7% per annum upon
reviews, cost inflation was assumed to be up to 6% per annum
anddebt cost assumptions varied upon refinancing taking into
account current market interest rates.
The principal risks on pages 72 to 75 summarise those matters that
could prevent the Group from delivering on its strategy. A number
ofthese principal risks, because of their nature or potential impact,
could also threaten the Group’s ability to continue in business in its
current form if they were to occur.
The Directors paid particular attention to the risk of a deterioration
ineconomic outlook which would impact property fundamentals,
including investor and occupier demand which could have a
negative impact on valuations, and give rise to a reduction in the
availability of finance. The Board also paid attention to the impact
ofeither a delay to the receipt of planning permission or the risk of
not achieving planning consent as well as the impact of inflationary
costs on raw materials in the current environment. Given the
flexibility within the land portfolio, in a downturn scenario the Group
could effectively pause all uncommitted development. The remaining
principal risks, whilst having an impact on the Group’s business
model, are not considered by the Directors to have a reasonable
likelihood of impacting the Group’s viability over the five-year period
to 28 February 2030.
The sensitivities performed were designed to be severe but
plausible; and to take full account of the availability of mitigating
actions that could be taken to avoid or reduce the impact or
occurrence of the underlying risks:
Downturn in economic outlook: Key assumptions including
occupancy, void periods, planning risk, rental growth and yields
were sensitised to reflect reasonably plausible levels associated
withan economic downturn. The assumptions were considered in
light of the current inflationary environment and associated impact
on interest rates in particular. Various forms of sensitivity analysis
have been performed, in particular with regard to the financial
performance of the Group’s clients, taking into account any
discussions held with clients surrounding their operational
performance, including their current status on rent collection.
Restricted availability of finance: The Group does not have a
significant refinancing event occurring until June 2026. Financing is
arranged in advance of expected requirements and theDirectors
have reasonable confidence that additional or replacement debt
facilities will be put in place when the need arises. Some assurance
can be taken from the increase in the RCF agreement in October
2023 from a supportive set of lenders to the Group as well as the
refinance of UKCM debt in July 2024. The Group also benefits from
a Baa1 credit rating from Moody’s and has a track record of strong
execution when it has previously sought to raise debt in the public
markets. This provides the Directors with comfort that the
refinancing of debt as it falls due over the viability period.
Furthermore, the Group has the ability to make disposals of
investment properties to meet the future financing requirements
under the development portfolio.
Viability Statement
Having considered the forecast cash flows and covenant
compliance and the impact of the sensitivities in combination,
theDirectors confirm that they have a reasonable expectation that
theGroup will be able to continue in operation and meet its liabilities
as they fall due over the period ending 28 February 2030.
The Strategic Report was approved by the Board and signed on
itsbehalf by:
Aubrey Adams OBE, FCA, FRICS
Independent Chair
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
76
STRATEGIC REPORT
Tritax Big Box REIT plc Annual Report 2024
77
Chair’s Governance Overview
GOOD GOVERNANCE IS
THECORNERSTONEOF A
THRIVING ORGANISATION
Aubrey Adams OBE, FCA, FRICS
Independent Chair
Governance highlights for 2024
• As approved by Shareholders at a General Meeting in May 2024,
completed the acquisition of UK Commercial Property REIT Limited
(“UKCM”).
• Conducted a strategic review of the business in October 2024.
• Broadened the Company’s investment case via the investment
into data centres post-year end.
• In addition to UKCM, oversaw the successful acquisition of one other
asset for £47.7 million.
• Oversaw the successful disposal of five assets, worth £140.4 million.
• Met all of the requirements set out in the Financial Reporting
Council’s Guidance on Risk Management, Internal Control and
Related Financialand Business Reporting.
• Enhanced the Company’s oversight of the risk management process.
• Completed the brand integration exercise between the Company
andTritax Symmetry (now Tritax Big Box Development), including
upgrading the Company’s website.
• Awarded a Sustainalytics score of 6.4 (Negligible Risk).
• Reviewed the Manager’s succession planning framework.
• Undertook a review of NED fees.
• Conducted an externally-facilitated Board and Committee
effectiveness review.
• Appointed new Independent Non-Executive Director, Kirsty
Wilman, on1September 2024.
• Held two Board training sessions.
Dear Shareholders,
This report seeks to demonstrate and explain the Company’s core
governance-related processes and procedures, and highlights the
key governance actions which have taken place during the period.
The Board continues to believe that sound corporate governance
plays a key role in shaping the long-term success of the Company
and provides a strong foundation for the delivery of its
strategicobjectives.
Board priorities
One of our key priorities as a Board is to oversee the successful
implementation of the business’ strategy and ensure the Company
ispositioned for long-term success. The Board continues to support
the Manager in potential investment and divestment decisions,
including exploring possible opportunities in the urban logistics
market, and ensures ongoing compliance with the Company’s
Investment Policy and Objectives. The Board held a strategy day
inOctober 2024 which provided an opportunity to focus on the
strategic opportunities as well as the prevailing macroeconomic
climate outside the routine consideration of the Board.
During the year, the Company acquired the entire issued share
capital of UK Commercial Property REIT Limited (“UKCM”), whose
high-quality urban logistics portfolio complemented the Company’s
existing strategy, offering opportunities to increase income, capital
growth and cost savings. The all-share offer for UKCM was
completed on 16 May 2024, through the issue of 577 million new
ordinary shares in the Company at a price of 166.96 pence per
share. This reflected consideration paid of £962.9 million.
The Board also agreed, as part of its annual strategy meeting, that it
should be allocating capital towards data centre assets. As a result,
on 21 January 2025, the Company announced that it had acquired a
74-acre site at Heathrow, London, a key FLAP-D prime EMEA data
centre location (the “Manor Farm site”), with a view of developing
one of Europe’s most sought after data centres.
The Company entered into a development management agreement
with the Manager, which is deemed to be a relevant related party
transaction under UK Listing Rule 11.5.4 R. The Board, through
itsthorough and detailed due diligence process, considered this
transaction fair and reasonable as far as the Shareholders of the
Company are concerned.
Delivering on our objectives
As well as the UKCM and Manor Farm site acquisitions, the Company
successfully sold five assets in the year to 31 December 2024 and
received a total consideration of £140.4 million (£94.4 million of
which related to the four non-strategic assets acquired through the
UKCM acquisition). Post year end, a further £165.8 million of
Tritax Big Box REIT plc Annual Report 2024
78
GOVERNANCE
disposals (£86.8 million of which two were UKCM non-strategic
assets) have been completed. These disposals were conducted at
or above most recent valuations, and delivered a blended Net Initial
Yield of 6.2%. All these disposals are consistent with the Company’s
strategy, the proceeds from which are being recycled into higher
returning opportunities, primarily within the development pipeline.
I am pleased to report that we further improved our Sustainalytics
score to a 6.4 (Negligible Risk) and were awarded the Global Top 50,
Industry Top Rated and Region Top Rated badges. During this year,
we also continued to enhance our ESG strategy, including improved
collection of ESG data and ESG integration across the asset lifecycle.
The Company continues to work with CBRE to improve our overall
TCFD disclosure. We also continue to embed climate reporting into
our governance framework and align the carbon performance of
theportfolio to the Paris Agreement decarbonisation pathways.
Karen Whitworth, our Senior Independent Director (“SID”) and
“ESGChampion”, engages directly with the Manager’s ESG Director
on various ESG topics. For further information, please see
pages 46 to 52.
Post year end, as well as the Manor Farm site, the Group
simultaneously acquired a 50% share in a joint venture with a
leadingEuropean utility company to provide 147 MW of power to
thesite. Following these acquisitions, the Group intends to develop,
subject to planning consent, one of the UK’s largest data centres
ina prime London location and deliver exceptional returns for the
Company’s Shareholders.
Board and Committee composition
The Company has a strong and fully independent Board with
adiverse range of skills and extensive real estate and logistics
experience. In 2023, the Nomination Committee had recommended
the recruitment of an additional Independent Non-Executive Director
with the requisite real estate experience. On 1 September 2024, we
were delighted to welcome Kirsty Wilman to the Board. Kirsty brings
a wealth of experience having held senior operations and finance
rolesin the real estate industry. Further details can be found in the
Nomination Committee report on pages 98 to 101.
In line with the Board’s Diversity and Inclusion Policy, I am pleased to
report that the Company achieved all three UK Listing Rules diversity
targets during the year, with more than 40% female Board Directors,
one of the senior positions being held by a female and one individual
from an ethnic minority background. Further detail on the Board’s
approach to diversity can be found on page 101.
The skills and diversity of the Board will continue to be monitored by
the Nomination Committee in its wider Board succession planning.
For further details, please see page 101.
Board development
We continue to receive regular updates and briefings on corporate
governance as well as wider regulatory changes within the market,
such as the impact of the Audit and Corporate Governance reform,
to ensure we comply with all applicable laws and regulations.
During the year, the Board completed two training sessions which
have been facilitated by a combination of external advisers and
representatives of the Manager. The training sessions help toinform
and upskill the Board and ensure we have sufficient knowledge to
discharge our duties effectively. The Board is confident that it is
fullyprepared in order to comply with the provisions of the new
2024AIC Code of Corporate Governance, which came into effect
on1 January 2025. Further details can be found on page 99.
Board effectiveness review
During the year, in compliance with Principle L and Provision 26
ofthe AIC Code, the Board completed an external Board and
Committee effectiveness review. This exercise reviewed the
performance of the Board, its Committees and my role as
Independent Chair. We are pleased to report that the review was
positive, demonstrated a high level of challenge and support, and
highlighted a few priorities and potential efficiency enhancements for
the Board to focus on over the next period. Further details can be
found on page 100.
For 2025, this exercise will be managed internally.
Board engagement
We believe that our positive engagement and working relationship
with the Manager are key to enhancing the Company’s governance
arrangements and ensuring that they are robust and fit for purpose.
We work closely with the Manager to identify areas for improvement
and best practice which promotes an open and collaborative culture.
We regularly engage with the Company’s advisers, to discuss investor
feedback they have received and/or gauge their views on corporate
strategy and performance. We also provide investors with regular
updates on significant business events, specifically financial
performance and investment activity, through announcements via
theRegulatory News Service of the London Stock Exchange (“RNS”).
These updates are also uploaded to the Company’s website
(https://www.tritaxbigbox.co.uk/investors/regulatory-news).
Priorities for 2025
Looking ahead to 2025, the Board will continue to seek alignment
with best governance practice and, as diversity targets have been
achieved, to monitor ongoing compliance with all applicable rules
and regulations.
Aubrey Adams OBE, FCA, FRICS
Independent Chair
27 February 2025
Statement of compliance
The Board of Tritax Big Box REIT plc has considered the Principles
and Provisions of the 2019 AIC Code of Corporate Governance (the
“AIC Code”). The AIC Code addresses the Principles and Provisions
set out in the UK Corporate Governance Code (the “UK Code”), and
sets out additional Provisions on issues that are of specific relevance
to investment companies.
The Board considers that reporting against the Principles and
Provisions of the AIC Code, which has been endorsed by the Financial
Reporting Council, provides more relevant information to
Shareholders.
The Company has fully complied with the Principles and Provisions
ofthe AIC Code.
The AIC Code is available on the AIC website (www.theaic.co.uk).
Itincludes an explanation of how the AIC Code adapts the Principles
and Provisions set out in the UK Code to make them relevant for
investment companies.
> For further details, please see pages 86 and 87
Tritax Big Box REIT plc Annual Report 2024
79
Board of Directors
THE RIGHT
LEADERSHIP
Aubrey Adams OBE, FCA, FRICS
Independent Chair
Appointed Tenure
11 September 2017 7 years 6 months
Relevant skills and experience
• Almost 40 years’ experience at board level
in the real estate industry, including part of
his executive career as chief executive of
Savills plc
• Extensive experience as a chairman and
non-executive director, including as senior
independent director of Associated British
Ports plc and chairman of Max Property
Group plc
• Fellow of the Institute of Chartered
Accountants in England and Wales
• Fellow of the Royal Institution
ofCharteredSurveyors
Key external appointments
• Chairman of the board of trustees
ofWigmore Hall since May 2011
• Director of Nameco (No.522) Ltd since 2015
Karen Whitworth FCA
Senior Independent Director
Appointed Tenure
21 October 2019 5 years 5 months
Relevant skills and experience
• Over 20 years of board level experience
inpublic and private organisations
• Strong operational, strategic, commercial,
customer and supply chain background
gained through holding senior positions at
JSainsbury plc and at Intercontinental
Group plc
• Non-executive director and chair of the
audit and risk committee of Pets at Home
Group plc until May 2021
• Supervisory member and audit committee
member of GS1 UK Limited from 2013 to 2018
• Independent adviser to Growup Farms
Limited from 2019 to 2025
• Managing director of Whitworth Holdings
Limited from 2012 to 2022, when the
business was sold
• Chairman’s adviser and finance director at
BGS Holdings Limited (trading as
“Tunetribe”) from 2005 to 2007
• Fellow of the Institute of Chartered
Accountants in England and Wales
Key external appointments
• Non-executive director, chair of the audit
committee, and member of the remuneration
and sustainability committees of Tesco plc
since June 2021
• Non-executive director and audit committee
chair of The Rank Group Plc since November
2019 and senior independent director since
January 2022
• Non-executive director of Nuffield Health
(anot-for-profit registered charity) since
September 2023
Elizabeth Brown
Independent Non-Executive Director
Appointed Tenure
15 December 2021 3 years 3 months
Relevant skills and experience
• Brings a clear focus on consumer trends
and market insights, identifying growth
opportunities and translating these into
value-creating strategies
• 22 years’ experience in strategy and M&A,
as a former strategy consultant with L.E.K.
Consulting from 2002 to 2005
• Investment director at the RBS Special
Opportunities Fund from 2005 to 2012
• Head of Corporate Development from
2013-2017 and Strategy Director of Services
from 2016 to 2017 atCurry’s
• Previously Group Strategy Director at
Diageo from 2019 to 2023
Key external appointments
• Chief Strategy Officer at Inchcape plc since
February 2023
M A M NN A M
Tritax Big Box REIT plc Annual Report 2024
80
GOVERNANCE
Wu Gang
Independent Non-Executive
Director
Appointed Tenure
1 October 2021 3 years 5 months
Relevant skills and
experience
• A strong strategic and financial
advisory background and a
wealth of international
experience gained from a
career of over 25 years in
investment banking in Asia
andEurope
• Set up and led the European
investment banking team at
CITIC CLSA, the international
investment banking platform of
CITIC Securities, from 2015 to
January 2019
• Held senior level positions at
ICBC International, The Royal
Bank of Scotland, and HSBC
in Hong Kong and London and
spent earlier career with Merrill
Lynch and Goldman Sachs
• Served as a non-executive
director of Laird Plc from
January 2017 to June 2018
• Served as a Senior Advisor at
Rothschild & Co Hong Kong
Limited from January 2019 to
January 2023
Key external appointments
• Non-executive director of
Ashurst LLP since April 2019
• Non-executive director of
IGGroup Holdings plc since
October 2020
Alastair Hughes FRICS
Independent Non-Executive
Director
Appointed Tenure
1 February 2019 6 years 1 month
Relevant skills and
experience
• Over 30 years’ experience in
the UK and international real
estate markets both at an
operational and strategic level
• Former director and global
executive board member of
Jones Lang LaSalle Inc (“JLL”),
previously serving as managing
director of JLL in the UK,
before becoming CEO for
Europe, Middle East and Africa
and then CEO for Asia Pacific
• Fellow of the Royal Institution
of Chartered Surveyors
Key external appointments
• Chair of Schroder Real Estate
Investment Trust Limited since
October 2021, non-executive
director since April 2017
• Non-executive director of
TheBritish Land Company plc
since January 2018
• Non-executive director
ofQuadReal, a Canadian
Property Group, since
October2019
Richard Laing FCA
Independent Non-Executive
Director
Appointed Tenure
16 May 2018 6 years 10 months
Relevant skills and
experience
• Experienced non-executive
director and non-executive
chairman of quoted and
unquoted businesses
• In-depth knowledge of financial
matters through his previous
roles as finance director and
chief executive of CDC Group
plc for 11 years; as finance
director of De La Rue plc; as
financial analyst and manager
at Bookers Group plc; and five
years at
PricewaterhouseCoopers
• Non-executive director and
chairman of the audit and risk
committee of JP Morgan
Emerging Markets Investment
Trust plc from January 2015
toFebruary 2024
• Fellow of the Institute
ofChartered Accountants
inEngland and Wales
Key external appointments
• Chairman of 3i Infrastructure
plc since January 2016
• Trustee of the Leeds Castle
Retirement Benefit Scheme
since September 2012
Kirsty Wilman FCA
Independent Non-Executive
Director
Appointed Tenure
1 September 2024 6 months
Relevant skills and
experience
• More than 20 years’ finance
and operational experience
• Chief Operating Officer for
theReal Estate Division at
Federated Hermes Ltd from
2023 to 2024
• Various operations and
financeroles held at Federated
Hermes from 2010 to 2024
including responsibility for
RealEstate and Private
Creditportfolios
• Previous roles at Ernst & Young
LLP and Kingston Smith LLP
from 2002 to 2010
• Non-executive director of
RealEstate Balance from 2022
to 2024
• Fellow of the Institute
ofChartered Accountants
inEngland and Wales
Key external appointments
• Chief Operating and Financial
Officer at Rebalance Earth
Venture Limited since June 2024
MAM NA M
A
Audit and Risk Committee
M
Management Engagement Committee
N
Nomination Committee
Chair
MA
Tritax Big Box REIT plc Annual Report 2024
81
Governance at a Glance
OUR CORPORATE
GOVERNANCE STRUCTURE
Male 57%
Female 43%
0-2 years 1
3-5 years 3
6+ years 3
Green
Finance
Sub-
Committee
Disclosure
Committee
ESG
Committee
Operations
Committee
Executive
Committee
Investment
Committee
Audit
and Risk
Committee
Nomination
Committee
Management
Engagement
Committee
Risk
Committee
I
n
d
e
p
e
n
d
e
n
t
o
v
e
r
s
i
g
h
t
a
n
d
r
i
g
o
r
o
u
s
c
h
a
l
l
e
n
g
e
Board of Directors
Manager has delegated
authority to these
Committees
M
a
n
a
g
e
r
Board Committee
Manager Committee
Board gender split Non-Executive Director tenure
Financial
Property
Retail
ESG
Logistics
Governance/PLC
E-commerce
Risk Management
Strategy
Board relevant
sectorexperience
The Board has a complementary range of skills
which are relevant to the Group’s medium and
longer-term objectives.
The Board considers Richard Laing to have
recent and relevant financial expertise to Chair
the Audit and Risk Committee. Karen
Whitworth, Wu Gang and Kirsty Wilman are
also considered to be financial industry experts
by the Board.
Tritax Big Box REIT plc Annual Report 2024
82
GOVERNANCE
Key Representatives of the Manager
Tritax Management LLP (the “Manager”) acts as the Company’s Alternative Investment Fund
Manager (“AIFM”) for the purposes of the Alternative Investment Fund Manager Directive (“AIFMD”)
and as such the Board has delegated authority to the Manager to conduct portfolio and risk
management services on behalf of the Company. Whilst the Manager has the ultimate
responsibility to make the final decision over portfolio and risk management services, the Board
actively discusses potential investments and divestments with the Manager and ensures ongoing
compliance with the Company’s Investment Policy and Investment Objectives.
This complies with The Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations
2018, which replaces the European Securities and Markets Authority (“ESMA”) guidelines
published on 13 August 2013 in respect of the AIFMD and ensures that the Company continues to
adopt best governance practice.
EX
Executive Committee
I
Investment Committee
O
Operations Committee
R
Risk Committee
E
ESG Committee
G
Green Finance Sub-Committee
Chair
Colin Godfrey BSc
(Hons) MRICS
CEO, Tritax Big Box REIT plc
Relevant skills and experience
Colin is responsible for leading the Group’s
fund management function and has overall
responsibility for the provision of strategic
investment advice to the Group. Colin began
his career with Barclays Bank before joining
Conran Roche in the late 1980s. Once
qualified as a chartered surveyor, Colin
specialised in portfolio fund management,
withparticular responsibility for the £1 billion
assets of the British Gas Staff Pension
Scheme. In2000, Colin was a founding
Director of SG Commercial and became a
partner of the Tritax Group in 2004.
Frankie Whitehead FCA
CFO, Tritax Big Box REIT plc
Relevant skills and experience
Frankie is responsible for all aspects of the
Group’s finance and corporate reporting
functions. He brings his extensive experience
of capital markets and complex corporate
transactions to the role. Frankie is a Fellow
ofthe Institute of Chartered Accountants in
England and Wales. He joined Tritax in 2014
following the Company’s IPO. Frankie
previously performed the role of Financial
Controller at Primary Health Properties PLC
and trained and qualified at PKF (UK) LLP
which subsequently merged with BDO LLP.
Frankie became a partner of the Tritax
Group in 2020.
Petrina Austin BSc
(Hons) MRICS
Head of Asset Management
Relevant skills and experience
Petrina leads the Group’s asset and property
management service, incorporating ESG and
insurance functions. She has developed the
capabilities of the team to extend the skills in
logistics and industrial operations, integrating
ESG and power considerations into analysis.
Petrina qualified as a chartered surveyor in
1998. Petrina has over 27 years’ property and
finance related asset management experience
having held roles at Knight Frank and King
Sturge (now JLL) before joining the Tritax
Group in 2007, and becoming a
partner in 2017.
Bjorn Hobart BSc
(Hons) MA, MRICS
Investment Director
Relevant skills and experience
Bjorn is responsible for managing the
Company’s investment portfolio and serves
asChair of the Investment Committee. Bjorn
started his career at Faber Maunsell (now
AECOM) and went on to undertake an MA in
Property Valuation and Law. In 2007, Bjorn
joined SG Commercial and joined the Tritax
Group in 2011, becoming a partner in 2017.
James Dunlop BSc
(Hons) MRICS
CEO, Investment, Tritax Group
Relevant skills and experience
James is responsible for identifying, sourcing
and structuring suitable investment assets for
the Company. James started his career at
Weatherall Green and Smith (now BNP Paribas
Real Estate) where he qualified as a chartered
surveyor in its Investment Development and
Agency division in 1991. In 2000, James
formed SG Commercial, then became a
partner of the Tritax Group in 2005.
Henry Franklin Qualified
Solicitor, CTA
Chief Operating Officer
Relevant skills and experience
Henry is responsible for tax, legal and
compliance activities, working closely with
theBoard, the management team and external
advisers to ensure the robustness of the tax
and legal structure. Henry is a qualified solicitor
who completed his articles with Ashurst LLP in
2001, qualifying as a chartered tax adviser in
2004, before moving to Fladgate LLP in 2005.
Henry joined the Tritax Group as a
partner in 2008.
EX
EX
GI
I
I
R
O O E
O
I
EX EX
EX
I
Tritax Big Box REIT plc Annual Report 2024
83
Key Representatives of the Manager continued
The Tritax Big Box Team
EX
Executive Committee
I
Investment Committee
O
Operations Committee
R
Risk Committee
E
ESG Committee
G
Green Finance Sub-Committee
> To read more about our colleagues please go to https://www.tritaxbigbox.co.uk/about-us/our-team/
Mark Fergusson
Head of Occupational Leasing
Catherine Fry
Head of Risk and Compliance
Andrew Dickman
MD, Development
Tom Leeming
Development Director
Hana Beard
Group Company Secretary
Chase French
Head of Financial and
Portfolio Analytics
Ian Brown
Head of Corporate Strategy
andInvestor Relations
Will Oliver
FD, Development
O E
O
EX
Charlie Withers
Partner, Development Director
Henry Stratton
Head of Research
Alan Somerville
ESG Director
Jonathan Wallis
Development Director
R
GER
EX
I
ER
Tritax Big Box REIT plc Annual Report 2024
84
GOVERNANCE
Key Activities in 2024
KEY ACTIVITIES OF THE
COMPANY IN 2024
January to
March 2024
• Declared an interim dividend
of 2.05 pence per share, in
respect of the three months
to 31 December 2023.
• Further improved our
Sustainalytics score to a
6.4(Negligible Risk) and
awarded the Global Top 50,
Industry Top Rated and
Region Top Rated badges.
• Reached agreement on the
key terms of the all-share
offer for the entire issued
share capital of UK
Commercial Property REIT
Limited (“UKCM”).
• Approved the Annual Report
and Accounts for the year
ended 31 December 2023.
• Agreed action plan following
Board and Committee
effectiveness review tofocus
on in 2024.
• In addition to UKCM, oversaw
the successful acquisition
ofone other asset for
£47.7million.
• Held a Shareholder
governance roadshow with
the Chair and/or SID meeting
seven institutions.
April to
June 2024
• Declared an interim dividend
of 1.825 pence per share, in
respect of the three months
to 31 March 2024.
• Held the Company’s Annual
General Meeting.
• Held a General Meeting to
seek Shareholder approval
for the UKCM acquisition.
Once obtained, completed
the UKCM acquisition shortly
after.
• Held a Board training session
(facilitated by Ashurst),
covering audit and corporate
governance reforms, risk
management and internal
control and greenwashing.
July to
September 2024
• Declared an interim dividend
of 1.825 pence per share, in
respect of the three months
to 30 June 2024.
• Approved the interim
results2024.
• Appointed a new
Non-Executive Director,
KirstyWilman.
• Conducted the performance
review of the Manager.
• Refinanced the Company’s
£150.0 million loan with
Barclays.
October to
December 2024
• Declared an interim dividend
of 1.825 pence per share, in
respect of the three months
to 30 September 2024.
• Held the annual
Strategymeeting.
• Reviewed and enhanced
governance procedures
inrespect of related party
considerations for data
centre strategy.
• Conducted an externally-
facilitated Board and
Committee effectiveness
review.
• Completed a brand
integration exercise between
the Company and TBBD,
with an upgrade to the
Company’s website that
includes an integrated
development element.
• Held a Board training session
(facilitated by the TBBD
team), covering contractor
monitoring/market data and
site analytics.
• Held a Shareholder
governance roadshow with
the Chair and/or SID meeting
eleven institutions.
• Completed asset disposals
for a total consideration of
£140.4 million.
• Conducted the performance
review of the Company’s
keysuppliers.
Post year end
• Declared an interim dividend of 2.185 pence per share, in
respect of the three months to 31December 2024.
• Agreed the 2025 action plan following the externally-
facilitated Board and Committee effectiveness review.
• Approved the Annual Report and Accounts for the year
ended 31 December 2024.
• Completed further asset disposals for a total consideration
of£165.8 million.
• Reviewed the Manager’s succession plans.
• Completed purchase of the Manor Farm site and of a 50%
share in joint venture with leading European utility company
to deliver 147 MW of power to the Manor Farm site (subject
toplanning consent).
• Held a Board training session on data centres.
Tritax Big Box REIT plc Annual Report 2024
85
Application of Code
APPLICATION OF
AIC CODEPRINCIPLES
The AIC Code, and the underlying UK Code, have placed increased
emphasis on “comply or explain” with regard to the principles of the
Code. Our explanations of how we have applied the main principles
ofthe AIC Code can be found below.
Board leadership and Company purpose
Principle A. A successful company is led by an effective board,
whose role is to promote the long-term sustainable success of the
company, generating value for shareholders and contributing to
wider society.
Strategic Report pages 1 to 76
Board Leadership and Company Purpose pages 88 to 91
Principle B. The board should establish the company’s purpose,
values and strategy, and satisfy itself that these and its culture are
aligned. All directors must act with integrity, lead by example and
promote the desired culture.
Strategic Report pages 1 to 76
Board Leadership and Company Purpose pages 88 to 91
DivisionofResponsibilities pages 94 to 97
Principle C. The board should ensure that the necessary resources
are in place for the company to meet its objectives and measure
performance against them. The board should also establish a
framework of prudent and effective controls, which enable risk
tobeassessed and managed.
Principal Risks and Uncertainties pages 70 to 75
Section 172 Statement page 67
Audit, Risk and Internal Control pages 102 and 103
Audit and Risk Committee Report pages 104 to 107
Principle D. In order for the company to meet its responsibilities to
shareholders and stakeholders, the board should ensure effective
engagement with, and encourage participation from, these parties.
Stakeholders pages 40 to 41, 67 to 69
Section 172 Statement page 67
Division of responsibilities
Principle F. The chair leads the board and is responsible for
itsoverall effectiveness in directing the company. They should
demonstrate objective judgement throughout their tenure and
promote a culture of openness and debate. In addition, the chair
facilitates constructive board relations and the effective contribution
of all non-executive directors, and ensures that directors receive
accurate, timely and clear information.
Board Leadership and Company Purpose pages 88 to 91
Division of Responsibilities pages 94 to 97
Principle G. The board should consist of an appropriate
combination of directors (and, in particular, independent
non-executive directors) such that no one individual or small
groupofindividuals dominates the board’s decision making.
Division of Responsibilities pages 94 to 97
Composition, Succession and Evaluation pages 80 and 81, 98 to 101
Principle H. Non-executive directors should have sufficient time to
meet their board responsibilities. They should provide constructive
challenge, strategic guidance, offer specialist advice and hold
third-party service providers to account.
Board Leadership and Company Purpose pages 88 to 91
Division of Responsibilities pages 94 to 97
Audit and Risk Committee Report pages 104 to 107
Management Engagement Committee Report pages 108 to 110
Principle I. The board, supported by the company secretary, should
ensure that it has the policies, processes, information, time and
resources it needs in order to function effectively and efficiently.
Division of Responsibilities pages 94 to 97
Nomination Committee Report pages 98 to 101
Composition, succession and evaluation
Principle J. Appointments to the board should be subject to
aformal, rigorous and transparent procedure, and an effective
succession plan should be maintained. Both appointments and
succession plans should be based on merit and objective criteria.
and, within this context, should promote diversity of gender, social
and ethnic backgrounds, cognitive and personal strengths.
Nomination Committee Report pages 98 to 101
Principle K. The board and its committees should have a
combination of skills, experience and knowledge. Consideration
should be given to the length of service of the board as a whole
andmembership regularly refreshed.
Composition, Succession and Evaluation pages 80 and 81, 98 to101
Tritax Big Box REIT plc Annual Report 2024
86
GOVERNANCE
Composition, succession and evaluation continued
Principle L. Annual evaluation of the board should consider its
composition, diversity and how effectively members work together to
achieve objectives. Individual evaluation should demonstrate whether
each director continues to contribute effectively.
Nomination Committee Report pages 98 to 101
Audit, risk and internal control
Principle M. The board should establish formal and transparent
policies and procedures to ensure the independence and effectiveness
of external audit functions and satisfy itself on the integrity of financial
and narrative statements.
Audit, Risk and Internal Control pages 102 and 103
Audit and Risk Committee Report pages 104 to 107
Principle N. The board should present a fair, balanced and
understandable assessment of the company’s position and prospects.
Audit and Risk Committee Report pages 104 to 107
Directors’ Responsibilities Statements page 116
Principle O. The board should establish procedures to manage risk,
oversee the internal control framework, and determine the nature and
extent of the principal risks the company is willing to take in order to
achieve its long-term strategic objectives.
Principal Risks and Uncertainties pages 70 to 75
Viability Statement page 76
Audit, Risk and Internal Control pages 102 and 103
Audit and Risk Committee Report pages 104 to 107
Notes to the Consolidated Accounts pages 128 to 149
Remuneration
Principle P. Remuneration policies and practices should be designed
to support strategy and promote long-term sustainable success.
Management Engagement Committee Report pages 108 to 110
Directors’ Remuneration Report pages 111 to 113
Principle Q. A formal and transparent procedure for developing
policy on remuneration should be established. No director should
beinvolved in deciding their own remuneration outcome.
Directors’ Remuneration Report pages 111 to 113
Principle R. Directors should exercise independent judgement and
discretion when authorising remuneration outcomes, taking account
of company and individual performance, and wider circumstances.
Directors’ Remuneration Report pages 111 to 113
Key Board statements
Requirement Board statement Where to find further information
Going concern basis The Board is of the opinion that the going
concern basis adopted in the preparation
ofthe Annual Report is appropriate.
Further details are set out on page 76 of the
Strategic Report.
Viability Statement The Board is of the opinion that the Viability
Statement adopted in the preparation of
theAnnual Report is appropriate.
Further details are set out on page 76 of the
Strategic Report.
Annual review of systems
of risk management and
internal control
A continuing process for identifying, evaluating
and managing the risks the Company faces
has been established and the Board has
reviewed the effectiveness ofthe internal
control systems.
Further details are set out in Audit, Risk and
Internal Control on pages 102 and 103 of
this Corporate Governance Report.
Robust assessment of the Company’s
emerging and principal risks to the
business model, future performance,
solvency and liquidity of the Company
The Audit and Risk Committee and the Board
undertake a full risk review twice a year where
all the emerging and principal risks and
uncertainties facing the Company and the
Group are considered.
Further details can be found in Principal
Risks and Uncertainties on pages 70 to 75
ofthe Strategic Report.
Fair, balanced and understandable The Independent Non-Executive Directors
confirm that to the best of their knowledge the
Annual Report and Accounts taken as a whole
is fair, balanced and understandable and
provides the information necessary for
Shareholders to assess the Company’s
performance, business model and strategy.
Further details of the fair, balanced and
understandable statement can be found in
the Audit and Risk Committee Report on
pages 104 to 107.
Appointment of the Manager The Independent Non-Executive Directors
consider the continuing appointment of the
Manager on the terms agreed in the
Investment Management Agreement dated
11September 2017, asamended on 4 May
2022, to be in the best interests of the Company.
Further details are set out in the
Management Engagement Committee
Report on pages 108 to 110.
Section 172 of the Companies Act 2006 The Independent Non-Executive Directors
have considered the requirements of Section
172 when making strategicdecisions.
Further details are set out on page 67 of the
Strategic Report.
TCFD The Independent Non-Executive Directors
have voluntarily reported on the TCFD
requirements.
Further details are set out on pages 53 to 64
of the Strategic Report.
Tritax Big Box REIT plc Annual Report 2024
87
Board Leadership and Company Purpose
How we govern the Company
The Board is responsible for promoting the long-term sustainable
success of the Company and generating value for its Shareholders
and other stakeholders through effective leadership.
The Board and the Manager work closely together to maintain
thehighest standards of corporate governance. We believe that
ourpositive engagement and working relationship with the Manager
are key to enhancing the Company’s governance arrangements and
ensuring that they are robust and fit for purpose. We work closely
with the Manager to identify areas for improvement and best
practice which creates an open and collaborative culture. The
Company’s success is based upon the effective implementation of
its strategy by the Manager and third-party service providers under
the leadership of the Board. The Board’s culture provides a forum for
constructive and robust debate, which the Board believes has been
crucial to the success of the Company to date.
The Company’s purpose is to deliver sustainable logistics solutions
that create compelling opportunities for our stakeholders and provide
our clients with the space to succeed. In order to achieve this, the
Board has determined the Company’s Investment Objectives and
Investment Policy. It has overall responsibility for the Company’s
activities, including reviewing investment activity, performance,
business conduct and strategy, in compliance with the principles
ofgood corporate governance. The Board has delegated the
day-to-day operational aspects of running the Company to the
Manager and approved a schedule of matters reserved for its
consideration and approval, which are set out on this page.
Although the Board does not formally approve investment proposals
or decisions, as thisis a matter delegated to the Manager, the Board
is kept fully informed and notified of investment and divestment
proposals and decisions to enable the Independent Non-Executive
Directors to undertake their responsibilities and duties appropriately.
During the consideration of the data centre opportunities, the Board
adopted enhanced governance procedures specifically relating to
the related party elements of the data centre strategy, which involved
two of the Independent Non-Executive Directors being in attendance
at the Manager’s Investment Committee meetings when data centre
topics were being discussed. Additionally, due to the nature of the
transaction, it was agreed that the decision to invest in data centres
should be a matter reserved for the Board.
As well as regular Board meetings, the Board also meets for
dedicated strategy meetings, in which the Company’s immediate,
medium and long-term strategy is discussed, and holds ad hoc
meetings to consider specific issues, transactions, the market
generally and its stakeholders.
There is frequent engagement and interaction between the Manager
and Tritax Big Box Development Holdings Ltd (“TBBDHL”, formerly
known as Tritax Symmetry Limited) regarding the development
pipeline and the status of current projects, and the Board is kept
abreast of any notable updates to ensure appropriate oversight and
governance. A brand integration exercise between the Company
and the Tritax Big Box Development (“TBBD”) business took place
during the year, resulting in future-proofing of the business. Regular
meetings are being held to provide a forum for reporting on detailed
project matters by TBBD tothe Manager and for discussion of the
wider business strategy.
The Manager retains approval rights in relation to transactional
documentation proposed to be entered into by TBBD and
subsidiaries within the Group.
Board reserved matters
• Reviewing and approving Board composition, including the
appointment of Independent Non-Executive Directors.
• Approving and implementing the Company’s strategy.
• Approving the budget, financial plans and Annual and Interim
financial reports.
• Approving the dividend policy.
• Reviewing property valuations and valuations of its interest
rate derivatives.
• Overseeing treasury policy and managing the Company’s
capital structure.
• Reviewing and monitoring the Manager’s ongoing
compliance with the Company’s Investment Objectives
andInvestment Policy.
• Overseeing the services provided by the Manager and,
inconjunction with the Manager, the Company’s principal
service providers.
• Reviewing and approving all compliance and
governancematters.
• Approving the issuance of new Ordinary Share capital.
A typical Board agenda includes:
• a review of investment performance;
• a review of investments, divestments and asset
managementinitiatives;
• a report on the development activities of the Group;
• an update on investment opportunities available in the market
andhow they fit within the Company’s strategy;
• a report on the property market;
• a review of the Company’s financial performance;
• an update on ESG targets and KPIs;
• a review of the Company’s financial forecast, cash flow and
abilityto meet targets, including a review of the Company’s
debtcovenants and debt maturity;
• a review of the Company’s financial and regulatory compliance;
• updates on Shareholder and stakeholder relations;
• updates on the Company’s capital market activity and share
priceperformance;
• specific regulatory, compliance or corporate governance updates;
• a biannual risk management review;
• dividend declaration approval (quarterly);
• investor relations update; and
• marketing and communications update.
Tritax Big Box REIT plc Annual Report 2024
88
GOVERNANCE
Strategy
The 2024 strategy meeting took place in October 2024
andfocused on assessing whether the Company’s strategy
remained fit for purpose to ensure the Company’s long-term
success. The meeting involved the full Board, key members
ofthe Manager and some of the Company’s key advisers. The
advisers provided the Board with an update on the European
data centre market, the different type of data centre operators
and the development process for data centres. This was followed
by the Manager displaying its “power-first” strategy and some
of the near term opportunities that the Manager had been
pursuing.
The Board and Manager then discussed the risks of investing
indata centres, alongside the Manager’s view over the level
ofreturn it should expect from data centres, compared to
logistics assets.
The Board felt that the alternative opportunity to allocate certain
capital to data centres was a compelling one, and approved the
concept of data centre investment.
> For more information on the Board’s decision to invest in
data centres, please see Stakeholder Questions on page 40
and Key Decisions of the Board on page 93
The Board agreed to continue to monitor the performance of
the investment portfolio and where appropriate, recycle capital
into opportunities that would aid in improving performance.
TheBoard also agreed that the returns from the Company’s
logistics development pipeline remained attractive in the
context of heightened cost of capital, on a risk-adjusted basis.
The Board also reviewed other opportunities and agreed to
continue to seek to diversify the portfolio further with regards
toasset size.
> Please see page 10 for more details on strategy in the
Strategic Report, and page 2 for more details on Purpose
Given the current dynamics of the logistics market, with
strongdemand but limited supply of suitable assets, the Board
believes that the Company is well positioned to capture further
value through the Group’s development pipeline.
Our focus in 2025 and beyond
For 2025 and beyond, we will be focusing on the three, clear,
multi-year growth drivers of the business:
• Driving net rental income growth through the rental reversion
capture within the portfolio.
• Delivering further development activity through a combination
of pre-let and speculative schemes.
• Progressing the data centre opportunity at Manor Farm site
which can deliver exceptional returns for our Shareholders.
The Board is also looking forward to resuming its site visit
programme in 2025.
Culture
The culture and ethos of the Company are integral to its
success. The Board promotes open dialogue and frequent,
honest and open communication between the Manager and
other key providers and advisers to the Company. Whilst the
Company is externally managed, the Board is confident that the
culture within the Manager is aligned with that of the Board.
The Board believes that its positive engagement and working
relationship with the Manager helps the business achieve its
objectives by creating an open and collaborative culture,
whilstallowing for constructive challenge. The Independent
Non-Executive Directors meet regularly with members of the
Manager outside of Board meetings to discuss various key
issues relating to Company matters.
The Company’s success is based upon the effective
implementation of its strategy by the Manager and third-party
providers under the leadership of the Board. The Board’s
culture provides a forum for constructive and robust debate,
and the Board believes that this has been fundamental to the
success of the Company to date.
Tritax Big Box REIT plc Annual Report 2024
89
Board Leadership and Company Purpose continued
ESG
Delivering ESG performance is core to our business. The ESG
Committee of the Manager regularly reports to and engages with
theBoard on its ESG activities. The ESG Committee has ultimate
responsibility for all ESG-related policies of the Manager and
recommends them to the Operations Committee, for final review.
Forfull details of all policies, please refer to the Manager’s website.
The Board’s ESG Champion meets regularly with the Manager’s
ESG Director to discuss progress on the ESG strategy and has
in-depth reviews into key ESG issues relevant to the Board and
theCompany. This year, key matters discussed included:
• Impact on capital and rental values from ESG and carbon
performance;
• Evolving ESG regulation; and
• Evolving client requirements for sustainable buildings.
> Please see page 53 to 64 for the TCFD disclosures, including
further information on the board’s oversight of climate change
During the year, the Board continued to embed ESG within the
Company’s strategy and provide ESG focus at Board meetings.
TheCompany improved its performance against several key ESG
benchmarks and indices and maintained its performance against
others (see performance on pages 47 to 50).
The Company has made a commitment to achieve net zero carbon
(“NZC”) for its direct activities (Scope 1 and 2 emissions) by 2025, for
Scope 3 emissions related to construction by 2030, and for its total
Scope 3 emissions by 2040. To effectively manage the
decarbonisation of the portfolio, the Company instructed Mace
Consulting to build a bespoke decarbonisation data platform to allow
detailed asset-by-asset analysis of carbon performance. This new
platform will integrate our asset NZC roadmaps with our asset
management plans. We have engaged extensively over the year with
the new pilotUK Net Zero Carbon Buildings Standard (“UKNZCBS”)
to ensure that our future plans align with market evolution.
To ensure that we are prepared for future regulatory change the
Company undertook a double materiality assessment during 2024
and has scoped out the objectives of the TNFD disclosure regime.
> For further information on our ESG strategy, targets and
performance, please refer to pages 46 to 52
To demonstrate its own commitment to sustainability, the Manager
procures renewable energy and sends zero waste to landfill. It also
retained its achieved ISO 14001 accreditation in December 2024.
Relations with Shareholders and
otherstakeholders
Maintaining strong relationships with the Company’s Shareholders
and other stakeholders with an understanding of their priorities and
concerns is a key objective of the Board. The Chair and the Senior
Independent Director (“SID”), alongside the CEO and CFO for Tritax
BigBox REIT plc and the Head of Strategy and Investor Relations of
the Manager are the Company’s principal spokespeople who
regularly communicate with the Company’s Shareholders, the
press, analysts, investors and other stakeholders. All Independent
Non-Executive Directors are available to speak to Shareholders on
any matters relating to the Company. Throughout the year the
representatives of the Manager attended Shareholder conferences
and devoted time to meeting with existing Shareholders and
prospective new investors.
During the year, the Board wrote to larger Shareholders to offer
meetings with the Chair and SID. The Chair and SID met with eleven
institutions in December 2024, representing approximately 15% of
the share register. Key areas of discussion included the Company’s
strategy, succession planning, Company structure and formulation
of the fee paid to the Manager.
> Further details of the Company’s engagement with our other key
stakeholders can be found on pages 67 to 69 and 92 and 93
Investor site visit to Rugby
Tritax Big Box REIT plc Annual Report 2024
90
GOVERNANCE
Site visit to Biggleswade
Site visits
There is continued demand from Shareholders and prospective
investors to visit our assets and development sites. Over the course
of the year, investor site visits to Rugby, Birmingham, Biggleswade
and Radlett were hosted, providing an opportunity to see the range
and quality of the real estate within the portfolio. We balance the
desire for Shareholders to visit sites with the need to avoid disruption
to our clients.
Annual General Meeting (“AGM”)
The Company’s general meetings provide the Board and the
Manager with a valuable opportunity to engage with its Shareholders
on governance and strategy. All the Independent Non-Executive
Directors usually attend the AGM and make themselves available to
answer Shareholder questions. The Chair also makes himself
available outside of these meetings tospeak to Shareholders.
The SID is available for Shareholders to contact if other channels
ofcommunication with the Company are not available or are
inappropriate. The Independent Non-Executive Directors also
regularly attend Shareholder events.
We encourage Shareholders to attend and vote at the AGM and
takethe opportunity to engage with the Board and the Manager.
TheBoard considers it important that Shareholders continue to
haveopportunities to engage with them and Shareholders are
encouraged to ask questions or raise matters of concern by
emailingthe Company Secretary.
The Chair and the SID as well as other Independent Non-Executive
Directors can be contacted by emailing the Company Secretary on
company.secretary@tritaxbigbox.co.uk, who will pass the
communication directly to the relevant person, or by post to the
Company’s registered office.
On 1 May 2024, in addition to the AGM, the Company also held a
General Meeting, where Shareholders were asked to vote on the
proposed acquisition of UK Commercial Property REIT Limited.
Public communications
The Company ensures that any price sensitive information is
released to all Shareholders at the same time and in accordance
with regulatory requirements. All Company announcements which
are released through the London Stock Exchange’s Regulatory
News Service (“RNS”) are made available on the Company’s
website. The website holds share price and dividend information,
investor presentations, the Key Information Document required by
PRIIPS regulations (as updated for current FCA guidance) and the
Annual Report; all are available for download. The Company’s
Annual Report will be dispatched to Shareholders upon request.
Tritax Big Box REIT plc Annual Report 2024
91
Stakeholder Engagement
KEY DECISIONS
OF THE BOARD
Acquisition of UK Commercial Property
REIT Limited
On 12 February 2024, the Company announced that it had reached
agreement with the Board of UK Commercial Property REIT Limited
(“UKCM”) on key terms for the Company to acquire the entire issued
share capital of UKCM (via a Guernsey Court approved Scheme of
Arrangement), and consideration for which would be the issue of
new Ordinary Shares in the Company.
The Board gave much consideration to the transaction in the
preceding months, following a recommendation from the Manager,
as well as consultation with the Company’s advisers.
Stakeholders considered
How were stakeholders’ views
taken into account?
Several meetings were held
between the Board, the Manager
and its advisers, taking into
account what was in the best
interests of the Shareholders
The Company held a General
Meeting, at which Shareholders
were able to vote on the acquisition
Impact – what actions were
taken as a result of this
engagement/taking concerns
into account?
The Board was able to ensure that
it met all the relevant statutory and
regulatory requirements, as well
as verifying the valuation of the
target acquisition (UKCM)
Shareholders approved the
acquisition of UKCM
Long-term effects
ofthedecision?
The Company acquired UKCM
on16 May 2024
The assets and liabilities of both
the Company and UKCM were
combined from 16 May 2024
Realisation of longer term
Shareholder value through
thecombination
Additional capital for the
Companyfollowing sale of
UKCMnon-strategic assets
UKCM: Precision Park
Once the key terms had been agreed in February 2024, over the
next few weeks, the Board (as well as the Manager) engaged with
their own brokers and financial advisers, lenders, legal advisers,
accountants/auditors and independent valuers to carry out
valuations and due diligence in relation to UKCM, and to prepare
therequisite legal and regulatory documentation, RNS announcements
in compliance with the Takeover Code, aswell as Directors’
undertakings and investor presentations.
The transaction also required regulatory approvals:
• as the acquisition was a Class 1 transaction (under the provisions
of the Listing Rules at that time), the Company was required
toproduce a Circular as well as a Prospectus, which required
approval from the Financial Conduct Authority; and
• as the Company and UKCM both invested in logistics real estate
assets in the UK, the Company was required to submit a customary,
short briefing paper to the CMA’s Mergers Intelligence Committee
for clearance to proceed.
Following approval by the Board, on 21 March 2024, the Company
announced details of the acquisition and, on 9 April 2024, published
a combined Class 1 Circular and Prospectus and, on 1 May 2024, a
General Meeting was held for Shareholders to vote on (and approve)
the acquisition.
The acquisition of UKCM was completed on 16 May 2024.
Tritax Big Box REIT plc Annual Report 2024
92
GOVERNANCE
Data centre development opportunity
The Board was presented with an opportunity from the Manager
toleverage their power and real estate capabilities to enter the data
centre market through the development of a data centre to be
located at Manor Farm, Slough.
Data centres represent a new area of investment for the Company,
falling outside of the scope of the existing IMA with the Manager, and
the origin of the opportunity entailed both transacting with a related
party and considering a new fee construct for the Manager.
Stakeholders considered
> For further information on the Company’s stakeholders, please see pages 67 to 69
Our stakeholders
The Manager and its employees Our clients Government, regulators andlocalcouncils
Our Shareholders Our lenders Our communities
Our suppliers
How were stakeholders’
views taken into account?
Ongoing engagement with
theManager and its employees
andShareholders
Shareholders were consulted
through presentations and Q&A’s
The views of Shareholders were
discussed between the Board,
Manager and advisers
Long-term effects of the decision?
The Company acquired a site at
Heathrow and subject to planning
consent, the acquisition of the
land and stake in the JV facilitates
an accelerated timeline to the
potential delivery of power to
support the development of a
major data centre scheme
Right of first refusal agreed
withthe Manager over
1gigawatt pipeline
Impact – what actions were
taken as a result of this
engagement/taking concerns
into account?
The Board worked closely with the
Company’s advisers to ensure all
legal and regulatory requirements
had been considered
Updates to governance and
conflict management framework
for data centre investment
CGI of Manor Farm, Slough
The Board spent an extensive amount of time during the Strategy
Day, and subsequently at formal Board meetings and informal
discussions with the Manager, assessing the benefits, drawbacks
and risks of the proposal, focusing on the impact of this investment
on Shareholders, and the wider stakeholder community. The Board
also considered their Directors’ duty to promote the long term
success of the Company.
The Board sought additional advice from the Company’s legal
advisers, and financial brokers and Corporate Sponsors. The
Manager’s assumptions around the project were independently
verified by CBRE and PwC, so the Board could ensure they
werereasonable. During the due diligence and decision-making
process, the Manager placed emphasis on ensuring that all
Independent Non-Executive Directors were comfortable with all
components of the project. A sub-committee of the Board was
constituted to work closely with the Manager to provide robust
challenge and oversight at an operational level. TwoBoard members
also participated in Investment Committee meetings, where these
opportunities were considered.
Extensive negotiations were undertaken on the form and level of
thefee paid to the Manager. The Board believes they have secured
access to compelling data centre opportunities offering potentially
exceptional returns at below market levels of fees.
The Company delivered a Shareholder presentation and Shareholder
Q&A session to ensure Shareholders were informed of the
investment, and to answer their questions.
The Board believes that investment in data centres is a decisive
andexciting first step for the Company in the data centre market.
This gives the Company a considerable competitive advantage
incapturing the growing demand for data centre infrastructure.
Tritax Big Box REIT plc Annual Report 2024
93
Division of Responsibilities
The Board
The Board is responsible for promoting the long-term sustainable success
of the Company, working towards strategic objectives and generating
value for Shareholders and other stakeholders.
> To read more see pages 80 and 81
Chair
Key roles and responsibilities
• Responsible for the leadership and effectiveness of the Board and for setting
the Board agenda.
• Ensuring effective communication so that the Board is aware of the views of
Shareholders and other stakeholders, and demonstrates objective judgement.
• Promoting a culture of openness and debate.
Senior Independent Director
Key roles and responsibilities
• Acting as a sounding board for the Chair and a trusted intermediary
forother Independent Non-Executive Directors.
• Responsible for Chair’s succession planning.
• Available to discuss with Shareholders any concerns that cannot be
resolved through the normal channels of communication with the Chair.
• Leading the other Independent Non-Executive Directors in evaluating the
performance of the Chair.
The Manager
Day-to-day running of the Company including: making the final decision,
in consultation with the Board, in respect of investments and divestments,
financial management, asset management and investor relations. Colin
Godfrey as CEO for Tritax Big Box REIT plc, James Dunlop as CEO of
Investments, Henry Franklin as COO of the Manager, and Frankie
Whitehead as CFO for Tritax Big Box REIT plc, oversee the Manager’s
relationship with the Company.
> To read more see pages 83 to 84
The Manager
Key roles and responsibilities
• Making the final decisions in respect of investments and divestments.
• Risk management.
• Financial management.
• Asset management.
• Investor relations.
• ESG.
> To read more see pages 22 to 33, 83 and 84
Company Secretariat andCompliance
Key roles and responsibilities
• Overseeing the Company’s governance structure and managing the
Company’s regulatory compliance.
• Administering the Group’s subsidiaries.
Tritax Big Box Developments Holdings Limited
(“TBBDHL”) Board Meeting
• Chaired by Frankie Whitehead, comprising other members of the Manager
and representatives of TBBD.
• Responsible for the wider business strategy of TBBD including
determining, implementing and reviewing the investment and development
strategy to deliver the Group’s objectives.
• The Board is also responsible for corporate matters such as detailed
financial reviews, risk and ESG reviews, tracking and monitoring against
the investment mandate and DMA compliance.
Board Committees
The Board has delegated some of its responsibilities to its three
formalCommittees: the Nomination, Audit and Risk, and Management
Engagement Committees. The Board has also established a Disclosure
Committee which meets as and when required. The Company ensures
that all of the Board Committees have sufficient resources and skills to
carry out their obligations.
These Committees are each chaired by a different Independent
Non-Executive Director and have their own Terms of Reference, which
canbe found on the Company’s website (or copies are available on
request from the Company Secretary).
The Terms of Reference are reviewed as necessary by the Board as a
whole. The Company Secretary acts as secretary to these Committees
and each Committee Chair reports the outcome of the meetings to
the Board.
> To read more see pages 98 to 110
Audit and Risk Committee
• Reviewing the integrity of the Group’s financial statements and any significant
financial reporting judgements.
• Reviewing and monitoring the relationship with the Auditor.
• Reviewing the internal controls of the Administrator.
• Overseeing the Company’s risk management process.
• Advising the Board on whether the Annual Report and Accounts provide
afair, balanced and understandable view of the Company’s performance,
position and strategy.
• Considering and reviewing the Company’s Viability and GoingConcern Statements.
• Reviewing the annual and interim property valuations.
> To read more see pages 104 to 107
Nomination Committee
• Reviewing the Board composition and assessing whether the balance of
skills, experience, knowledge, diversity and independence is appropriate
to enable the Board to operate effectively.
• Managing succession planning and ensuring that the Independent
Non-Executive Directors receive necessary training, including ESG topics.
• Board and Committee effectiveness reviews.
> To read more see pages 98 to 101
Disclosure Committee
• Identifying inside information and maintaining disclosure registers in the
form of insider lists.
• Determining whether delayed disclosure is appropriate on a case-by-case
basis and liaising with the FCA as necessary.
• Supervising and overseeing the preparation of disclosures to the market.
• Chaired by Aubrey Adams and comprises various members of the Manager.
Management Engagement Committee
• Reviewing the Company’s main suppliers including the Manager, the Joint
Financial Advisers and Brokers, the valuers and the Registrar to ensure
that the Company is receiving a high level of performance along with value
for money.
• Overseeing re-tenders and new supplier appointments.
• Reviewing the performance of the Manager.
• Overseeing the Manager’s succession planning.
> To read more see pages 108 to 110
Manager Committees
The Company’s Investment Manager has delegated some of its
responsibility to five Committees: the Investment, Executive, Operations,
Risk and ESG Committees. The ESG Committee has also established a
Sub-Committee, the Green Finance Sub-Committee.
Investment Committee
• Chaired by Bjorn Hobart and attended by various members of the Manager.
• Reviewing and recommending investments and divestments.
• Reviewing, approving and monitoring activities within the development
portfolio.
Executive Committee
• Chaired by Frankie Whitehead, comprising various members of the Manager.
• Oversight of the Group as a whole and is responsible for reviewing the
corporate and capital strategy and activities of the Company and making
recommendations to the Board as necessary.
Operations Committee
• Chaired by Henry Franklin and comprising various members of the Manager.
• Oversight of the internal controls of Tritax Management LLP and the statutory
audit process.
• Approval of all Tritax Management LLP policies and procedures.
• Review of Tritax Management LLP’s staff-related matters.
ESG Committee
• Chaired by Petrina Austin, comprising various members of the Manager,
including the ESG Director.
• Responsible for oversight of ESG and sustainability matters.
• Reviewing and making recommendations to the Manager’s Executive
Committee and the Company’s Board, regarding progress on integrating
ESG factors into business strategy and decision making.
• Providing oversight of the Manager’s policies in terms of performance,
communication and engagement on ESG and sustainability matters, to
ensure the Manager and the Company are effective in meeting their social
and regulatory requirements and achieving their objective of being socially
responsible corporate entities.
Risk Committee
• Chaired by Alasdair Evans, the Chief Financial Officer of the Manager,
comprising various members of the Manager, and the Chief
OperatingOfficer.
• Responsible for identifying, recording and measuring risks to the
Manager’s Operations Committee and implementing controls to mitigate
such risks.
• Oversight of the risk assessments made by the Company as well as other
real estate funds to amplify the focus on risk and to ensure the Company
is alerted to any new risks identified by the Manager.
Green Finance Sub-Committee (Sub-Committee
ofESGCommittee)
• Chaired by Alasdair Evans and comprised of members of the Manager’s
asset management and finance teams.
• Review the Green Portfolio of the Company to confirm that the assets
andprojects included in the Green Portfolio meet the criteria set out in
theframework.
• Review the framework to reflect any changes with regards to the
Company’s sustainability strategy and market standards.
• Approve the Green Finance Report ahead of circulation to investors.
• Monitor evolution of the capital markets in terms of disclosure and
reporting in order to be in line with market best practices.
Tritax Big Box REIT plc Annual Report 2024
94
GOVERNANCE
The Board
The Board is responsible for promoting the long-term sustainable success
of the Company, working towards strategic objectives and generating
value for Shareholders and other stakeholders.
> To read more see pages 80 and 81
Chair
Key roles and responsibilities
• Responsible for the leadership and effectiveness of the Board and for setting
the Board agenda.
• Ensuring effective communication so that the Board is aware of the views of
Shareholders and other stakeholders, and demonstrates objective judgement.
• Promoting a culture of openness and debate.
Senior Independent Director
Key roles and responsibilities
• Acting as a sounding board for the Chair and a trusted intermediary
forother Independent Non-Executive Directors.
• Responsible for Chair’s succession planning.
• Available to discuss with Shareholders any concerns that cannot be
resolved through the normal channels of communication with the Chair.
• Leading the other Independent Non-Executive Directors in evaluating the
performance of the Chair.
The Manager
Day-to-day running of the Company including: making the final decision,
in consultation with the Board, in respect of investments and divestments,
financial management, asset management and investor relations. Colin
Godfrey as CEO for Tritax Big Box REIT plc, James Dunlop as CEO of
Investments, Henry Franklin as COO of the Manager, and Frankie
Whitehead as CFO for Tritax Big Box REIT plc, oversee the Manager’s
relationship with the Company.
> To read more see pages 83 to 84
The Manager
Key roles and responsibilities
• Making the final decisions in respect of investments and divestments.
• Risk management.
• Financial management.
• Asset management.
• Investor relations.
• ESG.
> To read more see pages 22 to 33, 83 and 84
Company Secretariat andCompliance
Key roles and responsibilities
• Overseeing the Company’s governance structure and managing the
Company’s regulatory compliance.
• Administering the Group’s subsidiaries.
Tritax Big Box Developments Holdings Limited
(“TBBDHL”) Board Meeting
• Chaired by Frankie Whitehead, comprising other members of the Manager
and representatives of TBBD.
• Responsible for the wider business strategy of TBBD including
determining, implementing and reviewing the investment and development
strategy to deliver the Group’s objectives.
• The Board is also responsible for corporate matters such as detailed
financial reviews, risk and ESG reviews, tracking and monitoring against
the investment mandate and DMA compliance.
Board Committees
The Board has delegated some of its responsibilities to its three
formalCommittees: the Nomination, Audit and Risk, and Management
Engagement Committees. The Board has also established a Disclosure
Committee which meets as and when required. The Company ensures
that all of the Board Committees have sufficient resources and skills to
carry out their obligations.
These Committees are each chaired by a different Independent
Non-Executive Director and have their own Terms of Reference, which
canbe found on the Company’s website (or copies are available on
request from the Company Secretary).
The Terms of Reference are reviewed as necessary by the Board as a
whole. The Company Secretary acts as secretary to these Committees
and each Committee Chair reports the outcome of the meetings to
the Board.
> To read more see pages 98 to 110
Audit and Risk Committee
• Reviewing the integrity of the Group’s financial statements and any significant
financial reporting judgements.
• Reviewing and monitoring the relationship with the Auditor.
• Reviewing the internal controls of the Administrator.
• Overseeing the Company’s risk management process.
• Advising the Board on whether the Annual Report and Accounts provide
afair, balanced and understandable view of the Company’s performance,
position and strategy.
• Considering and reviewing the Company’s Viability and GoingConcern Statements.
• Reviewing the annual and interim property valuations.
> To read more see pages 104 to 107
Nomination Committee
• Reviewing the Board composition and assessing whether the balance of
skills, experience, knowledge, diversity and independence is appropriate
to enable the Board to operate effectively.
• Managing succession planning and ensuring that the Independent
Non-Executive Directors receive necessary training, including ESG topics.
• Board and Committee effectiveness reviews.
> To read more see pages 98 to 101
Disclosure Committee
• Identifying inside information and maintaining disclosure registers in the
form of insider lists.
• Determining whether delayed disclosure is appropriate on a case-by-case
basis and liaising with the FCA as necessary.
• Supervising and overseeing the preparation of disclosures to the market.
• Chaired by Aubrey Adams and comprises various members of the Manager.
Management Engagement Committee
• Reviewing the Company’s main suppliers including the Manager, the Joint
Financial Advisers and Brokers, the valuers and the Registrar to ensure
that the Company is receiving a high level of performance along with value
for money.
• Overseeing re-tenders and new supplier appointments.
• Reviewing the performance of the Manager.
• Overseeing the Manager’s succession planning.
> To read more see pages 108 to 110
Manager Committees
The Company’s Investment Manager has delegated some of its
responsibility to five Committees: the Investment, Executive, Operations,
Risk and ESG Committees. The ESG Committee has also established a
Sub-Committee, the Green Finance Sub-Committee.
Investment Committee
• Chaired by Bjorn Hobart and attended by various members of the Manager.
• Reviewing and recommending investments and divestments.
• Reviewing, approving and monitoring activities within the development
portfolio.
Executive Committee
• Chaired by Frankie Whitehead, comprising various members of the Manager.
• Oversight of the Group as a whole and is responsible for reviewing the
corporate and capital strategy and activities of the Company and making
recommendations to the Board as necessary.
Operations Committee
• Chaired by Henry Franklin and comprising various members of the Manager.
• Oversight of the internal controls of Tritax Management LLP and the statutory
audit process.
• Approval of all Tritax Management LLP policies and procedures.
• Review of Tritax Management LLP’s staff-related matters.
ESG Committee
• Chaired by Petrina Austin, comprising various members of the Manager,
including the ESG Director.
• Responsible for oversight of ESG and sustainability matters.
• Reviewing and making recommendations to the Manager’s Executive
Committee and the Company’s Board, regarding progress on integrating
ESG factors into business strategy and decision making.
• Providing oversight of the Manager’s policies in terms of performance,
communication and engagement on ESG and sustainability matters, to
ensure the Manager and the Company are effective in meeting their social
and regulatory requirements and achieving their objective of being socially
responsible corporate entities.
Risk Committee
• Chaired by Alasdair Evans, the Chief Financial Officer of the Manager,
comprising various members of the Manager, and the Chief
OperatingOfficer.
• Responsible for identifying, recording and measuring risks to the
Manager’s Operations Committee and implementing controls to mitigate
such risks.
• Oversight of the risk assessments made by the Company as well as other
real estate funds to amplify the focus on risk and to ensure the Company
is alerted to any new risks identified by the Manager.
Green Finance Sub-Committee (Sub-Committee
ofESGCommittee)
• Chaired by Alasdair Evans and comprised of members of the Manager’s
asset management and finance teams.
• Review the Green Portfolio of the Company to confirm that the assets
andprojects included in the Green Portfolio meet the criteria set out in
theframework.
• Review the framework to reflect any changes with regards to the
Company’s sustainability strategy and market standards.
• Approve the Green Finance Report ahead of circulation to investors.
• Monitor evolution of the capital markets in terms of disclosure and
reporting in order to be in line with market best practices.
Tritax Big Box REIT plc Annual Report 2024
95
Division of Responsibilities continued
The Board and its Committees
The Board currently consists of seven Independent Non-Executive
Directors, all independent of the Manager. All Directors are also
considered to be independent by the Board when considering the
matters set out in Provision 13 of the AIC Code. We believe that the
Board is well balanced and possesses a sufficient breadth of skills,
variety of backgrounds, relevant experience and knowledge to ensure
it functions effectively and promotes the long-term sustainable
success of the Company, whilst generating Shareholder value
andkeeping in mind wider stakeholder interests.
> Further details can be found on page 82
Directors’ biographies are set out on pages 80 and 81. In accordance
with the requirements of the AIC Code, Kirsty Wilman will stand for
election and all continuing Directors will stand for re-election at the
Company’s AGM on 7 May 2025.
We have not established a Remuneration Committee as the
Boardhas no Executive Directors and the Company has no other
employees. The Board as a whole is responsible for reviewing the
scale and structure of the Directors’ remuneration. Details of the
Directors’ remuneration for the year ended 31 December 2024 are
included in the Directors’ Remuneration Report on pages 111 to 113.
Conflicts of interest
Each Independent Non-Executive Director has a duty to avoid a
situation in which he or she has adirect or indirect interest that may
conflict with the interests of the Company. The Board may authorise
any potential conflicts, where appropriate, in accordance with the
Articles of Association. Where apotential conflict of interest arises,
aDirector will declare their interest at the relevant Board meeting
and will not participate in the decision making in respect of the
relevant business.
Board meetings
During 2024, seven scheduled Board meetings were held, plus
seven further ad hoc meetings and two sub-Committee meetings
which dealt with transactional and other specific events such as the
acquisition of UKCM, data centre opportunities and
dividenddeclaration.
The Board meetings follow a formal agenda, which is approved by
the Chair and circulated by the Company Secretary in advance of
the meeting to all Independent Non-Executive Directors and other
attendees. At each Board meeting, every agenda item is considered
against the Company’s strategy, its Investment Objectives, its
Investment Policy, Section 172 and the Directors’ duties.
The Board is kept fully informed of potential investment or divestment
opportunities, along with wider property market intelligence, through
a comprehensive set of Board papers prepared by the Manager
prior to each meeting. Included within this pack arethe investment
reports prepared by the Manager’s Investment Committee for each
acquisition, disposal, asset management and development
opportunity. Representatives of the Manager are invited to attend
the Board meetings as are representatives of theCompany’s other
advisers as required.
Outside the Board meetings, the Manager shares recommendations
around investment opportunities and keeps the Independent
Non-Executive Directors fully informed on the progress of
transactions. The Board also has full access to the management
team and the Company Secretarial teamat all times to discuss any
specific matters outside of formal meetings. The Company
Secretarial team continues to build on the recommendations made
by the Board effectiveness review as they relate to Board papers,
with a focus on creating more succinct summaries and
papers overall.
The Chair and the Senior Independent Director
Our Independent Chair, Aubrey Adams, has no relationships that
could create a conflict of interest between his interest and those
ofShareholders or the Manager.
As we are subject to the AIC Code, there is no requirement
foralimitation on the length of tenure of the Chair. However,
werecognise that there is a significant body of opinion that tenure
should be limited to nine years and we take this into account in our
succession planning.
The Chair’s other significant commitments include chair of the board
of Trustees of Wigmore Hall. For the Chair’s full biography, please
refer to page 80 and the Company website. The Board believes he
dedicates sufficient time to his role as Chair of the Company. The
Board has adopted a Policy on Tenure and Re-election; for more
information, please refer to page 98.
As Chair, Aubrey sets the agenda for Board meetings with
assistance from the Company Secretary, manages the meeting
timetable and facilitates open and constructive dialogue
during meetings.
Karen Whitworth is fully embedded into her role as SID and
continues to act as the ESG Champion of the Board.
The SID and the other Independent Non-Executive Directors met
during the year, without theChair, to appraise his performance and
to deliberate his fees. Theoutcome of the meetings is detailed on
pa ges 111 a nd 112.
Tritax Big Box REIT plc Annual Report 2024
96
GOVERNANCE
Q&A with Aubrey Adams,
Independent Chair
Q: How do you engage with the Manager, and
in particular with Colin Godfrey (the CEO)?
My role as Chair has three principal dimensions. First, to scrutinise
the Manager to ensure Shareholders are being correctly served.
Second, to provide counsel and be a sounding board for the
Manager. Finally, to promote and nurture constructive relations
and open communication between the Directors and the
Manager, both inside and outside formal Board meetings.
The Board maintains a good, consistent and active level of
dialogue with the Manager. Some of the Partners of TMLLP
attend the Company’s Board meetings by invitation, and engage
in regular discussions with Directors. Representatives of the
Manager are also invited to update the Board on operational
matters. These can include investment and development
performance, asset management, financial updates, marketing
and investor relations, ESG and Governance.
In addition to the Board meetings, I meet with Colin at least
fortnightly, predominantly in person. Outside of these scheduled
meetings, we also maintain regular contact, with additional
discussions as required (for example during transactions) and by
email. In general, the working relationship itself is similar to that
between the Chair and the executive management of an internally
managed FTSE-listed company.
Q: How well do you think the Board, working
with the Manager, performs with regard to
strategy and long-term thinking?
The Board is ultimately responsible for approving and
implementing the Company’s strategy, and ensuring that it
alignswith Shareholder interests and regulatory requirements.
Meanwhile, the Manager is responsible for the more operational
aspects in relation to the Company.
We hold a formal annual Strategy meeting, where as well as
receiving the latest updates on the industrial logistics market and
the economy, we consider and investigate other potential areas of
business development from the Company’s advisers and/or
keyrepresentatives of the Manager. Strategy is also regularly
discussed at intervening Board meetings. In 2024, we agreed to
explore the possibilities of entering the data centre market, which
provides a compelling strategic opportunity for the Company that
complements its existing business.
Q: What are your key reflections over the
past 8 years?
I first joined the Board in September 2017, was appointed Senior
Independent Director in March 2019 and took on the role of the
Chair in May 2021.
Starting at its IPO in 2013, the Company has built what I believe
isone of the best logistics real estate portfolios in the UK. During
my tenure, and supported by ongoing structural trends, the
Company has gone through an exponential growth period. This
has included several transactions of varying complexity; from
capital recycling via asset acquisitions and disposals, through to
equity issues and a placing. In 2019, the Company acquired DB
Symmetry (now Tritax Big Box Development), to strengthen the
Company’s offering with the addition of an in-house property
development capability. In 2024, we made further significant
progress on our strategic priorities, with the acquisition of UKCM
and this was further enhanced with our decisive step towards
data centres announced in January 2025.
It has been a truly exciting period for the Company, and a
pleasure for me to be a part of this journey so far.
Attendance at Board and Committee meetings during the year ended 31 December 2024
All Independent Non-Executive Directors are expected to devote sufficient time to the Company’s affairs to fulfil their duties as Directors and
toattend all scheduled meetings of the Board and of the Committees on which they serve. Where Independent Non-Executive Directors are
unable to attend a meeting, they will provide their comments on the Board papers received in advance of the meeting to the Chair, who will
share such input with the rest of the Board and the Manager. The Nomination Committee is satisfied that all the Independent Non-Executive
Directors, including the Chair, have sufficient time to meet their commitments.
The table below sets out the Board and Committee attendance at scheduled meetings during the year.
Aubrey
Adams
Elizabeth
Brown Wu Gang
Alastair
Hughes
Richard
Laing
Karen
Whitworth
1
Kirsty
Wilman
2
Board
3
7/7 7/7 7/7 7/7 7/7 7/7 2/2
Audit and Risk Committee N/A 7/7 7/7 N/A 7/7 6/7 1/1
Management Engagement Committee 2/2 2/2 2/2 2/2 2/2 2/2 1/1
Nomination Committee
4
1/1 N/A N/A 1/1 N/A 1/1 N/A
Strategy meeting 1/1 1/1 1/1 1/1 1/1 1/1 1/1
1. Karen Whitworth was unable to attend the January Audit and Risk Committee meeting due to a prior professional commitment. However, she provided her
comments to the Committee Chair in advance of the meeting.
2. Kirsty Wilman was appointed as an Independent Non-Executive Director of the Company on 1 September 2024. She has attended all Board and Committee
meetings since her appointment.
3. In addition to the seven scheduled Board meetings, there were also seven additional (ad hoc) meetings and two Board Sub-Committee meetings during the year.
4. There was one scheduled Nomination Committee meeting during the year. In addition, there were three other meetings held during the year (in February, June
and July) at which the appointment of the new Independent Non-Executive Director was addressed.
Tritax Big Box REIT plc Annual Report 2024
97
Nomination Committee Report
“ Ensuring the Board has
thenecessary skills and
diversitytodeliver on our
strategic objectives.”
Membership
Aubrey Adams, Chair
Alastair Hughes
Karen Whitworth
> For full details on Committee attendance, please refer
topage97
Key areas of focus in 2024:
• following the decision taken in 2023, recruited an additional
Independent Non-Executive Director in 2024 with real
estate expertise;
• commenced work to address the recommendations
andactions following the Board and Committee
performance evaluation;
• worked towards meeting the UK Listing Rule requirement
relating to female representation on the Board; and
• proposed the re-election of the Independent Non-Executive
Directors at the 2024 AGM, which was held on 1 May 2024.
Aubrey Adams OBE, FCA, FRICS
Chair of the Nomination Committee
Dear Shareholders,
I am pleased to present the Nomination Committee Report for the
year ended 31 December 2024.
The Committee’s role is to review the size, structure and composition
of the Board, including succession planning, and to ensure that
ithas the right mix of skills, experience, knowledge and diversity to
enable the Company to fulfil its strategic objectives. TheCommittee
is also responsible for making recommendations for new appointments
to the Board and for reviewing the performance and terms of
engagement for the existing Independent Non-Executive Directors.
The Nomination Committee operates within defined Terms of
Reference which are available on the Company’s website or from
the Company Secretary. We met for one scheduled and three
adhoc meetings during 2024.
Policy on tenure and succession planning
The Board has implemented a Policy on Tenure and Re-election,
and in accordance with the Provisions of the AIC Code, all the
Independent Non-Executive Directors will offer themselves for
election/re-election at each AGM. We considered the ongoing
independence of each of the Non-Executive Directors, their
respective skills, experience and time commitment, as well
asanyother external appointments held by the Independent
Non-Executive Directors. We believe that each Independent
Non-Executive Director has contributed a significant amount
duringthe year. Following the advice of the Committee and in
linewith the AIC Code, the Board will recommend the election
ofKirsty Wilman (who joined the Board as a newly appointed
Independent Non-Executive Director in September 2024) and the
re-election of continuing Independent Non-Executive Directors
atthe forthcoming AGM on 7 May 2025.
Independent Non-Executive Directors are appointed for an initial
period of three years and their performance is evaluated at least
annually during the Board and Committee effectiveness review.
Inaccordance with the Principles of the AIC Code, we do not
consider it necessary to mandatorily replace a Director after a
predetermined period of tenure. We are, however, mindful of the
circumstances of each Independent Non-Executive Director and
implement succession planning accordingly.
As indicated in the 2023 Annual Report and Accounts, the
Nomination Committee dedicated time during the year to consider
succession planning. Following a review of the composition, skills,
and experience of the Board, together with the wider succession
plan of the Board, the Committee recommended the recruitment
ofan additional Independent Non-Executive Director. During 2024,
the Committee engaged with Russell Reynolds Associates, an
executive recruitment agency, to support the search. The Committee
was mindful of the UK Listing Rule obligations relating to female
representation on the Board and, whilst ensuring that the
appointment was primarily based on merit, took these obligations
(in addition to diversity as a whole) into account, against objective
selection criteria during the recruitment process. Further
information on the recruitment process can be found on page 100.
Tritax Big Box REIT plc Annual Report 2024
98
GOVERNANCE
Board diversity and inclusion
The Company reports against the UK Listing Rule targets and has
included a statement of compliance on page 101. The Board now
consists of three female and four male Directors, meaning we have
43% female Board representation and have thereby met the UK
Listing Rule diversity targets (please see the Roadmap to diversity
on page 101 for details). The Board will continue to review its
composition in line with the business requirements of the Company,
prevailing Corporate governance guidelines and diversity targets.
The Company does not have any employees. In respect of
appointments to the Board, we consider that each candidate should
be appointed on merit to make sure that the best candidate for the
role is appointed every time. We commit to diversity and inclusion
with respect to all protected characteristics, including gender, at
Board level, and encourage candidates from all education
backgrounds and all walks of life. No candidate will face
discrimination due to their race, ethnicity, country of origin,
nationality, cultural background, gender or any other protected
characteristic in the Board nomination process. What is important
tous is professional achievement and the ability to be a successful
Independent Non-Executive Director based on the individual’s skill
set and experience.
Qualifications are considered when necessary to ensure compliance
with regulation such as in relation to appointments to the Audit and
Risk Committee, where we consider Richard Laing, Karen Whitworth,
Wu Gang and Kirsty Wilman to have significant financial experience.
We regularly review the Company’s Diversity and Inclusion Policy.
Director training programme
We recognise that it is essential to keep abreast of regulatory and
compliance changes, including ESG-related issues. Accordingly,
abespoke training programme is agreed and arranged for Independent
Non-Executive Directors. Annually, the Board receives regular
training and updates from the Company’s external service providers
as well as the Manager’s Company Secretary, the Head of Research,
the ESG Director, the Head of Risk and Compliance and many
others, on corporate governance developments, financial regulatory
changes and on relevant issues, including ESG topics, industrial
logistics market updates and so on.
During the year the Board received formal training sessions and
updates including: a session facilitated by Ashurst, which covered
audit and corporate governance reforms, risk management and
internal control and greenwashing; and a session presented by
theTBBD team, covering contractor monitoring/market data and site
analytics. In both cases, the training was well-received by the Board.
The 2024 Board effectiveness review confirmed that the training
programme is well structured. Accordingly, the Company Secretary
will continue to work on preparing the formal training plan for 2025.
In addition to the bespoke training programme, each Independent
Non-Executive Director is expected to maintain their individual
professional skills and is responsible for identifying any training needs
to help them ensure that they maintain the requisite knowledge to
beable to consider and understand the Company’s responsibilities,
business and strategy. The Independent Non-Executive Directors
have access tothe advice and services of the Company Secretary.
The Independent Non-Executive Directors are also entitled to take
independent advice at the Company’s reasonable expense
at any time.
Director induction
The Company Secretary conducts a comprehensive induction
process for all new Board members which aims to provide a broad
introduction to the Group. Each new appointment receives a tailored
programme comprising one-to-one meetings with current Board
Independent Non-Executive Directors, representatives of the
Manager, the Company’s key advisers and BDO LLP, the Company’s
Auditor. This is supported by a comprehensive library of corporate
documentation, Board packs and key financial and operational
information. All new Independent Non-Executive Directors are also
invited on a site visit of the Company’s assets.
Committee evaluation
The overall performance of the Nomination Committee was rated
highly, particularly its review of Board composition and its
recruitment of Kirsty Wilman.
Priorities for 2025
A priority for 2025 will be future succession planning for the Board.
We will also continue to monitor and ensure achievement of the UK
Listing Rule and other diversity targets.
Aubrey Adams OBE, FCA, FRICS
Chair of the Nomination Committee
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
99
Nomination Committee Report continued
Board effectiveness review
The Board’s policy is to carry out an annual effectiveness review
of the Board, its Committees and individual Directors and key
representatives of the Manager. In 2024, this evaluation was
conducted by an external facilitator, Sam Allen Associates (“SAA”).
The review consisted of a combination of meetings and completion
of a questionnaire. SAA set out the main areas for consideration at
the start of the process, including: Board, composition, roles and
responsibilities; overall Board effectiveness, quality of debate and
strategic input; Board culture, dynamics and leadership; Board
processes, reporting and agendas; organisation of the Board and
Committees; relationship between Board and the Manager;
communication and accountability; succession planning processes;
Board development; and Chair appraisal.
The process of how the review was conducted is set out below.
Outcome of the evaluation
Overall, the outcome of the 2024 Board and Committee
effectiveness review was very positive, with the Board and the
Manager being seen by all attendees as being a very capable
group of people, who respect each other, possess a good level
of challenge and support and have positive and united intent for
the business.
Actions from the evaluation
The Board met in February 2025 to discuss the Board and
Committee effectiveness review, and the following priorities
wereidentified:
• Succession planning for the Chair and other Independent
Non-Executive Directors in line with key timelines;
• Regular reviews on strategy (in addition to the annual Strategy
meeting); and
• More Independent Non-Executive Director-only meetings.
The review also covered the Chair’s performance, and was very
positive. The Independent Non-Executive Directors are of the
opinion that the Board benefits from the Chair’s effective
stewardship of the Board, his real estate and general business
experience, also his communication skills, which seek to involve
all Independent Non-Executive Directors in discussions and to
ensure that the Board and the Manager work collaboratively.
The Company Secretary worked with SAA to initiate the review, agree
the evaluation timetable and notify Board members.
SAA gathered the data from the questionnaire,
interviews, reviews of Board & Committee
meetings, minutes and past reviews, and
prepared a report with recommendations.
SAA then met with the Chair, the Senior Independent Director and the
Company Secretary to design the questionnaire.
SAA created a bespoke questionnaire (approved by the Chair) which was circulated to all Board members and four key representatives of the
Manager for completion; held one-to-one interviews with all Board members and the Manager’s representatives; and observed the December 2024
Board, Audit & Risk and Management Engagement Committee meetings. They also reviewed results of past reviews and minutes.
SAA had a meeting with the Chair and the
Senior Independent Director to discuss the
report and agree an action plan.
The results of the Board effectiveness
review were presented at the February 2025
Board meeting.
1
4
2
5
3
6
Board appointment process
Kirsty Wilman was appointed as an Independent Non-Executive Director of the Company on 1 September 2024. Outlined below is the
process that was followed by the Company.
The Committee reviewed the Company’s
Board and Committee composition and,
based on the size and complexity ofthe
business, recommended the recruitment of
an additional Independent Non-Executive
Director with real estate experience.
The Committee received applications from
a diverse pool of applicants, and reviewed
all applications against the requirements set
outin the role profile, assessed any actual
or potential conflicts of interests and
evaluated a shortlist of five candidates
foran initial interview.
The Committee finalised a profile for the
new role, setting out the purpose, key
responsibilities, and the desired skill set
andattributes of the new Director.
Following the first round of interviews,
theCommittee selected two of the five
candidates for a meeting with the remaining
Board members, as well as the CEO and
CFO of the Company.
Following a review of a number of
recruitment agencies, the Committee
identified a shortlist of three agencies. The
three agencies were asked to submit a
proposition for the recruitment of
anon-executive director. Following a tender
process, Russell Reynolds Associates was
the agency that was selected.
The Committee reviewed and considered
allfeedback provided from the interview
process. It also considered the candidates’
other appointments and commitments,
toensure that the successful appointee
would have sufficient time to devote to the
Company’s business. Reference checks and
due diligence were then carried out before
the Committee identified a candidate to
recommend to the Board.
4
1
5
2
6
3
Tritax Big Box REIT plc Annual Report 2024
100
GOVERNANCE
Statement of compliance with UK Listing Rule
6.6.6 R (10)
On 1 September 2024, after a robust selection process, the
Committee recommended, and the Board approved, the
appointment of Kirsty Wilman. Following Kirsty’s appointment, the
Company has now met all three UK Listing Rule diversity targets,
as demonstrated in the tables below.
Ongoing compliance
The Committee will continue to monitor the skills and diversity of
the Board to maintain compliance with UK Listing Rule 6.6.6 R(10)
diversity targets whilst, at the same time, ensuring that all Board
appointments continue to be based on merit and against any
objective selection criteria that has been set, during any future
recruitment process.
Table for reporting on gender identity or sex
Number of Board
members
Percentage
of Board
Number of senior
positions
Men 4 57% 1
Women 3 43% 1
Not specified/prefer not to say — 0% —
Table for reporting on ethnic background
Number of Board
members
Percentage
of Board
Number of senior
positions
White British or other white (including minority white groups) 6 86% 2
Mixed/multiple ethnic groups — 0% —
Asian/Asian British 1 14% —
Black/African/Caribbean/Black British — 0% —
Other ethnic group — 0% —
Not specified/prefer not to say — 0% —
* In accordance with the UK Listing Rules, as an externally managed investment company, the analysis has been undertaken in respect of the Independent
Non-Executive Directors only as the Company has no executive management who are Directors, including the roles of CEO and CFO. The Company
considersthe Chair and the SID to be the applicable senior roles within the business and has reported against these roles in the tables above.
How we collected data
On appointment to the Board, all Directors are asked to complete a New Directors’ Questionnaire.
Board Diversity Targets
Objective Progress as at 31 December 2024
At least 40% of individuals on the Board to be female Objective met: The Board achieved this targeting during 2024.
At least one of the senior positions on the Board to be
held by a female
Objective met: The Company considers the Chair and the SID to be the applicable
senior roles. The SID is a female.
At least one individual on the Board to be from a
minority ethnic background (as defined by the Office for
National Statistics (“ONS”) excluding those listed by the
ONS as coming from a white ethnic background)
Objective met: One Independent Non-Executive Director meets this requirement.
Roadmap to diversity
Identifying
what we need
The Board places great emphasis
on ensuring that its own
membership reflects diversity in
its broadest sense. The Board
used all reasonable endeavours to
comply with the UK Listing Rule
diversity targets. The Company
has included a statement in its
Annual Report (above), confirming
diversity targets are achieved.
Recognising what we have
The Nomination Committee continually
reviews the Directors’ skills matrix ensuring
that the Board and its Committees
maintain the necessary skills to deliver
the Company’s strategic priorities.
Whilst the Company has met the UK
Listing Rules requirements for Board
diversity as well as the
recommendations of the Parker Review
as at 31 December 2024, the Board
recognises the need to continually
monitor Board diversity.
Accordingly, the Board continues to
review its Diversity and Inclusion Policy,
as well as its training and development
programme to ensure it maintains an
inclusive and well-balanced Board.
Tritax Big Box REIT plc Annual Report 2024
101
Audit, Risk and Internal Control
The Board is responsible for delivering robust and sustainable value
to its Shareholders and wider stakeholders by setting and working
towards strategic objectives. In order to do so we undertake robust
assessments of the risks which the Group faces and ensure controls
and mitigations are in place to manage those risks. The Company’s
key risks are set out on pages 70 to 75 of the Strategic Report.
The Audit and Risk Committee reviewed the principal and emerging
business risks of the Company on behalf of the Board, with a
specific focus on changes to the Company’s overall risk profile
arising from the corporate acquisition of UKCM, portfolio strategy
and industry competition, the change in Government and
subsequent Budget and its impact on the performance of the
sectors clients operate in, the volatility in the financial markets and
impact on the Company’s share price, and the performance of the
UK economy and its impact on the potential of client default, as
described on pages 104 to 107.
The Board and Audit and Risk Committee regularly review the
financial position of the Company and perform an assessment of
any risks in relation to the Company’s business model, the Group’s
future performance, liquidity and solvency as well as any risks
relating to specific or proposed investments and clients or initiatives
relating to assets. To facilitate this process, the Manager produces
financial reports, which include the latest management accounts, a
review and report on the Company’s financial forecast, a report on
proposed and existing investment, asset management and
development initiatives, substantiation of any dividend payments and
a general update on the financial health of the Company.
As the Company’s AIFM, the Manager is subject to reporting and
ongoing compliance under the AIFMD. As part of this regulatory
process, Langham Hall UK Depositary LLP has been retained by the
Company and is responsible for cash monitoring, asset verification
and oversight of the Company and the Manager, including Tritax Big
Box Development Ltd (previously Tritax Symmetry). Langham Hall
UK Depositary LLP reports quarterly to the Board and the Manager.
The Manager also employs a Head of Risk and Compliance to
discharge the Manager’s obligations in accordance with the AIFMD.
Risk management and internal controls review
The Company’s internal control and risk management systems
andprocesses are designed to identify, manage and mitigate the
financial, operational and regulatory risks that are inherent to the
Group and safeguard the Group’s assets. These safeguards and
systems in place are designed to manage (rather than eliminate)
therisk of failure to achieve business objectives and can only
provide reasonable, but not absolute, assurance against material
misstatement or loss.
The Board and the Manager have, together, reviewed all financial
performance and results notifications. Non-financial internal
controlsinclude the systems of operational and compliance
controlsmaintained by the Company’s administrator, Waystone
FundServices (the “Administrator”), and by the Manager in relation
to theCompany’s business, as well as the management of key risks
referred to in the Strategic Report on pages 70 to 75.
The Board has contractually delegated responsibility for administrative
and accounting services to the Administrator and for Company
secretarial services to the Manager. These suppliers have their own
internal control systems relating to these matters, which we have
reviewed as part of the Company’s Financial Position and Prospects
Procedures (FPPP) document. During the year, the FPPP document
was reviewed, updated and approved in April 2024 as part of the
acquisition of UKCM, and in December 2024 as part of the annual
review process.
The Company is managed externally by the Manager. All payments
of Company funds are authorised by the Manager in accordance
with the duties delegated to it pursuant to the terms of the
Investment Management Agreement (“IMA”) and in accordance
withthe provisions of the AIFMD. Additionally, the Manager
operatesin accordance with parameters set out in the Company’s
Schedule of Delegated Authorities which further bolsters the
internalcontrols environment.
The Manager instructs the Administrator to make the duly authorised
payment and Langham Hall UK Depositary LLP, as part of its role as
Depositary, reviews each material payment in relation to the specific
test areas as mentioned in the report overleaf.
The Audit and Risk Committee considers that the internal controls in
place and the function undertaken by Langham Hall UK Depositary
LLP, alongside the external audit, provides the appropriate rigour
and assurance over the managing of Company funds. In addition
tothis, the Administrator has its own internal audit performed on
anannual basis by BDO LLP, from which the Company reviews
anyfindings. The 2024 audit did not raise any significant findings.
Internal control and risk assessment process
In accordance with the AIC Code, the Board has established a
continuing process for identifying, evaluating and managing the
risksthe Company faces and has reviewed the effectiveness of the
internal control systems.
This includes reviewing reports from the Auditor (details of which are
included in the Audit and Risk Committee Report), regular reports
from the Company Secretary (outlining corporate activity within the
Group and the Company’s compliance with the AIC Code) and
proposed future initiatives relating to the Company’s governance
and compliance framework. The Audit and Risk Committee also
receives quarterly compliance reports prepared by Langham Hall UK
Depositary LLP and reviews the formal risk assessment conducted
by the Audit and Risk Committee and the Manager twice a year.
Furthermore, the Board actively considers investment opportunities,
asset management initiatives, debt and equity fundraisings and
other financial matters against the requirements of the Company’s
Investment Objectives and Investment Policy.
The Audit and Risk Committee also conducts a robust assessment
of the principal and emerging risks to the business model, future
performance, solvency and liquidity of the Company at least twice a
year and reports its findings to the Board. The Manager is asked to
analyse and report on the risks which the Company may encounter
on specific transactions including, for example, an adverse decision
regarding the development of an asset at the planning stages or a
sudden change in market conditions before the launch of an equity
raise or debt issue. The Board then considers each risk in turn,
probing the Manager’s assumptions and analysing whether the risk
factors attributed to each individual risk are fair and accurate, and
the effectof any mitigating factors.
The Board also consider principal and emerging risks at each
strategy meeting and challenge the Manager to actively review the
risks it includes. Please see pages 70 to 75 for more details on
emerging and principal risks.
The Manager maintains a risk register, where perceived risks and
associated mitigations are recorded, and this is shared with the
Board for approval.
The Manager also reports to the Board twice a year on the
Company’s longer-term viability, which includes financial sensitivities
and stress testing of the business to ensure that the adoption of the
going concern basis and longer-term viability is appropriate.
Tritax Big Box REIT plc Annual Report 2024
102
GOVERNANCE
Anti-bribery and corruption
The Board has a zero tolerance policy towards bribery and
corruption and is committed to carrying out business fairly, honestly
and openly.
In considering the Bribery Act 2010, at the date of this report, the
Board had assessed the perceived risks to the Company arising
from bribery and corruption and identified aspects of the business,
which may be improved to mitigate such risks. The Manager actively
reviews and monitors perceived risks. Responsibility for anti-bribery
and corruption has been assigned to the Head of Risk and
Compliance within the Manager who reports to the Committee
biannually on any compliance matters.
All employees of the Manager are required to undertake training to
prevent all types of financial crime, including bribery and corruption.
Modern slavery and human trafficking policy
The Group is committed to maintaining the highest standards of
ethical behaviour and expects the same of its business partners.
Slavery and human trafficking are entirely incompatible with the
Group’s business ethics and the Board believes that every effort
should be made to eliminate slavery and human trafficking from the
Group’s supply chain.
The Board, alongside the Manager, recognises that the real estate
and construction sectors rank highly for modern slavery risks, and
that by assessing the different tiers of our supply chain, we can
understand and assess the modern slavery risk. The Manager, on
behalf of the Company, maintains internal controls and systems to
manage the risk of modern slavery and human trafficking within the
organisation and supply chains.
We seek to mitigate the Group’s exposure by engaging with
reputable professional service firms and suppliers. Our third-party
suppliers, including asset and property managers, are experienced
and professional suppliers, well-established in the market, and
therefore we expect them to adhere to our modern slavery
standards and legislated modern slavery act. As well as adhering to
the Modern Slavery Act 2015, we and the Manager believe that we
need to go above and beyond what is compliant and expect our
suppliers to do the same.
In line with the Company’s zero-tolerance approach to modern
slavery, we regularly request formal governance information from the
Group’s current suppliers, and request details of suppliers’ modern
slavery policies in our contract procurement process. This enables
the Group to conduct due diligence and risk assessment of current
and potential suppliers through the direct monitoring of the Group’s
business and supply chain risk. Additionally, our property and asset
managers undertake on-site inspections on standing assets, which
enable us to check supplier and client practices, and these are
recorded in the inspection proforma. For developments, monthly
updates are provided from the on-site managers, which include
monitoring of modern slavery risks.
We are committed to reviewing the way we assess modern slavery
in our supply chain and will continue to monitor and collaborate with
the Group’s suppliers, clients and developers, to ensure that they
have systems and controls that reduce the risk of facilitating modern
slavery and human trafficking.
Depositary statement
Established in 2013, Langham Hall UK Depositary LLP is an
FCA regulated firm that works in conjunction with the Manager
and the Company to act as depositary. Consisting exclusively
of qualified and trainee accountants and alternative specialists,
the entity represents net assets of US$129 billion and we
deploy our services to over 175 alternative investment funds
across various jurisdictions worldwide. Our role as depositary
primarily involves oversight of the control environment of the
Company, in line with the requirements of the Alternative
Investment Fund Managers Directive (the “AIFMD”).
Our cash monitoring activity provides oversight of all the
Company-held bank accounts with specific testing of bank
transactions triggered by share issues, property income
distributions via dividend payments, acquisitions and third-
party financing. We review whether cash transactions are
appropriately authorised and timely. The objective of our asset
verification process is to perform a review of the legal title of all
properties held by the Company, and shareholding of special
purpose vehicles beneath the Company.
We test whether on an ongoing basis the Company is being
operated by the Manager in line with the Company’s
prospectus, and the internal control environment of the
Manager. This includes a review of the Company’s and Tritax
Big Box Developments’ decision papers and minutes. We work
with the Manager in discharging our duties, holding formal
meetings with senior staff on a quarterly basis, and submit
quarterly reports to the Manager and the Company, which are
then presented to the Board of Directors, setting out our work
performed and the corresponding findings for the period.
In the year ended 31 December 2024, our work included the
review of one share issue, one all-share combination of the
Company and UK Commercial Property REIT Limited, four
property income distributions, six investment property
acquisitions, and four investment property disposals. Based on
the work performed during this period, we confirm that no
issues came to our attention to indicate that controls are not
operating appropriately.
Joe Hime
Head of UK
For and on behalf of Langham Hall UK Depositary LLP,
London,UK
27 February 2025
Langham Hall UK Depositary LLP is a limited liability
partnership registered in England and Wales
(with registered number OC388007).
Tritax Big Box REIT plc Annual Report 2024
103
Audit and Risk Committee Report
Dear Shareholders,
I am pleased to present the Audit and Risk Committee Report for the
year ended 31 December 2024. The Audit and Risk Committee’s role
is to oversee the Company’s financial reporting process, including the
risk management and internal financial controls in place within the
Manager and key suppliers, the valuation of the property portfolio, the
Group’s compliance with accepted accounting standards and other
regulatory requirements as well as the activities of the Auditor.
We operate within defined Terms of Reference, which are available on
the Company’s website and on request from the Company Secretary.
All Audit and Risk Committee members are Independent Non-
Executive Directors of the Company, neither connected to the Manager
nor the Auditor. The Committee believes that its members have the right
balance of skills and experience to be able to function effectively. I am a
Fellow of the Institute of Chartered Accountants in England and Wales,
and have extensive, recent and relevant experience gained as Finance
Director of CDC Group plc and De La Rue plc as well as my other
non-executive positions. The Committee considers me and Karen
Whitworth to be financial industry experts given our financial
backgrounds. Wu Gang brings a wealth of financial expertise from his
career in investment banking, with Kirsty Wilman bringing substantial
finance and operational experience from her previous roles as Business
and Finance Director across the real estate sector. As such we consider
80% of the Committee to have significant financial experience.
Further details of each Independent Non-Executive Directors’
experience can be found in the biographies on pages 80 and 81.
During the year we met for seven scheduled meetings, following the
Company’s corporate calendar, which ensures that the meetings are
aligned to the Company’s financial reporting timetable. The Company
Secretary and I ensure that the meetings are of sufficient length to allow
the Committee to consider all important matters, and the Committee is
satisfied that it receives full information in a timely manner to allow it to
fulfil its obligations. These meetings are attended by the Committee
members, as well as representatives of the Manager, the Company
Secretary and where necessary the Auditor, BDO LLP, and the
Company’s Chair. We also met with the Auditor without any
representative of the Manager present. The Committee also met with
the Company’s independent valuers, CBRE and Colliers in July 2024,
and JLL, CBRE and Colliers in January 2025 as part of the interim and
year-end audit processes. As the Committee Chair, I have had regular
communications with the Company Secretary, the Company’s CFO and
the Auditor. In addition, the Committee has discussions throughout the
year outside of the formal Committee meetings.
Membership
Richard Laing, Chair
Karen Whitworth
Wu Gang
Elizabeth Brown
Kirsty Wilman
> For full details on Committee attendance, please refer
topage97
Key areas of focus in 2024:
• recommended to the Board that the Annual Report and Accounts for
2023, taken as whole, is fair, balanced and understandable and that
it provides the information necessary for Shareholders to assess the
Company’s position and performance, business model and strategy;
• reviewed the interim results for 2024 and recommended these to
the Board for approval;
• monitored the integrity of the financial statements of the Company
and any formal announcements relating to the Company’s financial
performance and reviewed any significant financial reporting
judgements contained in them;
• enhanced the effectiveness of the Group’s assessment of risk to
ensure actions are being taken to mitigate the Group’s exposure to risk;
• monitored the implications of amendments to Provision 29 of
theUK Corporate Governance Code on the Company and
commenced work to review the Company’s risk
managementframework;
• reviewed the robustness of the Company’s internal financial
controls and the efficiency of the internal control and risk
management systems used by the Company;
• assessed the quality, independence and objectivity of the annual and
interim property valuations prepared by the Company’s independent
valuers and challenged the assumptions used by the valuers in
preparing the valuations to gain assurance around the valuation process;
• welcomed JLL as an independent valuer for the Company;
• reviewed and considered the basis of the Viability and Going
Concern Statements made by the Directors;
• reviewed the Committee’s membership and appointed Kirsty
Wilman as member of the Audit and Risk Committee to further
strengthen the skills and experience of the Committee;
• reviewed and monitored the Company’s relationship with its Auditor
and rotated the audit partner;
• reviewed the accounting and reporting implications of changes
instandards and best practice;
• maintained ESEF reporting;
• monitored development of the BEIS audit reform; and
• reviewed and approved the FPPP.
Richard Laing FCA
Chair of the Audit and Risk Committee
“ Enhancing risk management in
preparation for reporting under
Provision 29.”
Tritax Big Box REIT plc Annual Report 2024
104
GOVERNANCE
Audit process
Planning meeting
We meet with the Auditor and
the Manager before the
preparation of each of the
interim and annual results, to
plan and discuss the scope
ofthe audit or review as
appropriate, and challenge
where necessary to ensure
its rigour.
Scope
At these meetings, the Auditor
prepares a detailed audit or
review plan which is discussed
and questioned by us and the
Manager to ensure that all
areas of the business are
appropriately reviewed and
that the materiality thresholds
are set at the appropriate level,
which varies depending on the
matter in question.
Challenge
We discuss with the Auditor its
views over significant risk
areas and why it considers
these to be risk areas. The
Committee, where
appropriate, continues to
challenge and seek comfort
from the Auditor over those
areas which drive audit quality.
Ongoing review
We meet with the Auditor
again just prior to the
conclusion of the review or
audit to consider, challenge
and evaluate its
findings in depth.
Financial reporting and significant judgements
The Company has a well-established internal control and risk
management system, and robust processes for the preparation of
financial reports. The Committee receives reports from the Manager
and Auditor on changes to accounting policies, legislation and best
practice and areas of significant judgement by the Manager. They
pay particular attention to transactions which they deem important
due to size or complexity.
During the year, a variety of financial information and reports
wereprepared by the Manager and provided to the Board and to
the Committee. These included budgets, periodic re-forecasting
following acquisitions or corporate activity, and reports on general
compliance matters. The Committee received updates from the
Auditor on changes to the audit scope arising from the acquisition
ofUKCM and the revised audit standards.
The Committee undertook the following activities with respect to the
monitoring of the integrity of financial reporting:
• monitored the integrity of the financial information published in
theInterim and Annual Reports and considered whether suitable
and appropriate estimates and judgements have been made in
respect of areas which could have a material impact on the
financial statements. We also considered the processes
undertaken by the Manager to ensure that the financial
statements are fair, balanced and understandable;
• assessed the quality of the annual and interim property valuations
prepared by the Company’s independent valuers and challenged
the assumptions used by the valuers in preparing the valuation;
• reviewed the robustness of the Company’s internal financial
controls and the efficiency of the internal control and risk
management systems used by the Company;
• reviewed the accounting and reporting implications of changes
instandards or best practice;
• reviewed and considered the basis of the Viability and Going
Concern Statements made by the Directors; and
• reviewed and monitored the Company’s relationship with its Auditor.
Internal control and risk management
The Board recognises that effective risk management is a key
component of long-term success and welcomes changes to the
UKCorporate Governance Code which aims to strengthen risk
management and internal control requirements.
During the year, the Committee reviewed the risk appetite and risk
tolerance set for each principal risk facing the business to ensure
that risk is managed effectively within the parameters approved by
the Board, and to ensure that the parameters set remain appropriate
for the size and complexity of the business. The Committee
monitored the effectiveness of the Group’s assessment of risk to
ensure appropriate actions were being taken to mitigate the Group’s
exposure to risk.
Given the significance of the corporate transaction during the year,
the Committee assessed whether any changes to the Company’s
principal and emerging risks were required as a result of the
acquisition of UKCM, and reviewed the robustness of risk mitigants
in place. The results from the risk review can be found on pages 70
and 75. The Committee will continue to monitor the management of
these risks.
Additionally, the Committee dedicated time to reviewing the impact
of changes to the UK Corporate Governance Code on the Company.
The Committee paid particular attention to the enhanced reporting
requirements under Provision 29 relating to the Board’s monitoring
and review of the effectiveness of the Company’s risk management
and internal control framework, and the effectiveness of material
controls. During the year, the Committee commenced work to agree
a pathway with key milestones around compliance with Provision 29.
Preparedness for corporate reporting and the Board declaration
under Provision 29 will remain a key focus for the Committee in 2025.
1.
2.
3.
4.
Tritax Big Box REIT plc Annual Report 2024
105
Audit and Risk Committee Report continued
Going Concern and Viability
The Committee challenged and reviewed the processes and
controls surrounding the Going Concern and Viability Statements
and was able to take comfort in the level of scrutiny involved within
the process from both the Manager and Akur, in its capacity as
independent financial adviser to the Company.
The Committee also regularly reviews the Company’s ability to
continue to pay a progressive dividend. This financial information
was extensively reviewed and debated both at Committee and
Board level across a number of meetings.
We have expanded on the following matters in further detail as they
are determined as some of the most significant risks of material
misstatement in the financial statements.
Valuation of property portfolio
We have separated the valuation appointments, such that CBRE and
JLL value our investment assets and Colliers values our development
assets, both on a biannual basis. The Group’s portfolio value was
£6.54 billion on 31 December 2024 (compared to £5.03 billion on
31December 2023).
Following production of the draft valuation by the valuers, the
Manager meets with the valuers to discuss and challenge various
elements of the property valuation to assure themselves of the
robustness of the valuation process and the valuation methodology
applied. The Auditor, in fulfilling its function as independent Auditor
to the Company, also meets with the valuers to discuss, and where
necessary, challenge the assumptions within the property
valuations. The Committee also meets with both valuers to discuss
and challenge the valuation and to ensure it was conducted
properly, independently and could be fully supported. Subject to
reviewing and agreeing any subsequent changes, the Committee
also receives a copy of the property valuations for the portfolio once
they have been reviewed by the Manager and after the Auditor has
met with the valuers. The performance of the valuers is assessed on
an annual basis by the Management Engagement Committee. In
accordance with the Valuer Rotation policy introduced by the Royal
Institution of Chartered Surveyors (“RICS”) in 2024, the Manager
brought forward its valuer rotation for certain assets in the
investment portfolio that would have been valued by CBRE for over
10 years by RICS’s April 2026 deadline. Following a robust tender
process led by the Manager, JLL was appointed in November 2024.
They undertook the valuation of 28% of the investment portfolio as
at 31 December 2024.
During the year, the following valuers conducted the valuation on
behalf of CBRE: John Barham and James Hughes conducted the
valuation for June 2024, and Ben Thomas and Naomi Butler
conducted the December 2024 valuation. Rosanna Brown and
Stuart Smith conducted the December 2024 valuation on
behalf of JLL.
As explained in note 17 to the financial statements, CBRE, JLL
andColliers independently valued the properties in accordance
withIAS 40 “Investment Property”. We have reviewed the underlying
assumptions within the property valuations and discussed these
with the Manager and the valuers and have concluded that the
valuation is appropriate with a particular regard to the current
environment.
The Board approved the CBRE and the Colliers valuation in August
2024 and the JLL, CBRE and Colliers valuation in February 2025 in
respect of the interim and annual valuations.
Land options
As we consider that land options do not meet the definition of
investment property, land options will be classified as a non-financial
asset and measured at cost less provision for impairment under
IFRS in the Group Statement of Financial Position. Land options are
measured at fair value and included as such within EPRA NTA.
Fair, balanced and understandable financial
statements
The production and audit of the Group’s Annual Report is
acomprehensive process, requiring input from a number of
contributors. To reach a conclusion on whether the Annual Report is
fair, balanced and understandable, as required under the AIC Code,
the Board has requested that the Committee advise on whether it
considers that the Annual Report fulfils these requirements. In
outlining our advice, we have considered the following:
• the comprehensive documentation that outlines the controls in
place for the production of the Annual Report, including the
verification processes to confirm the factual content;
• the detailed reviews undertaken at various stages of the
production process by the Manager, Administrator, Joint Financial
Advisers, Auditor and Committee, which are intended to ensure
consistency and overall balance;
• controls enforced by the Manager, Administrator and other
third-party service providers, to ensure complete and accurate
financial records and security of the Company’s assets;
• the satisfactory ISAE 3402 control report produced by the
Administrator for the period to 30 September 2024, which has
been reviewed and reported upon by the Administrator’s external
Auditor, to verify the effectiveness of the Administrator’s internal
controls; and
• a letter provided by the Administrator that there have been no
changes to its control environment since 30 September 2024
andthat all internal controls in place at the time of the last review
remain active.
As a result of the work performed, we have concluded and
reportedto the Board that the Annual Report for the year ended
31December 2024, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
Shareholders to assess the Company’s position, performance,
business model and strategy.
Task Force on Climate-related Financial
Disclosures (“TCFD”)
Building on our TCFD disclosures in the 2023 Annual Report, I am
pleased to note that, working alongside the Manager, the Committee
reviewed the Company’s climate risks facing the business and
advised the Board accordingly. ESG Consulting Group at CBRE
Limited assisted the Company with the TCFD reporting. Please refer
to pages 53 to 64 for our 2024 TCFD disclosures.
During the year the Committee evaluated the Company’s key
climate-related risks.
ESEF
I can confirm that the Company’s consolidated financial statements
have been prepared in a digital format under the European Single
Format regulatory standard (“ESEF RTS”).
Tritax Big Box REIT plc Annual Report 2024
106
GOVERNANCE
Internal audit
The Company does not have an internal audit function and, following
an internal risk review, we do not consider it necessary for the Company
to have one. No separate internal audit work was engaged by the
Committee in 2024. The Committee will continue to review this
position in 2025 to determine if, in certain instances, the Company
would benefit from internal audit services.
External audit
The Audit and Risk Committee recommended that BDO LLP
bereappointed following a re-tender in 2017. The period of total
uninterrupted engagement is 11 years, covering the years ending
31December 2014 to 31 December 2024. In line with mandatory
Audit Partner rotation, Richard Levy was appointed Audit Partner.
This year is the eighth year that BDO LLP has conducted the
auditpost its re-tender in 2017. The Company confirms that it has
complied with the Competition and Markets Authority’s Order in the
year. The Committee recognises that a competitive tender for audit
services will be required in respect of the audit for the year ending
31 December 2026 at the latest. The Committee has assessed and
valued the quality and stability of the relationship with BDO LLP as
current Auditor and remains overall satisfied with the level of service
received. The Committee will commence a competitive tender
process ahead of the deadline.
The Committee monitors the performance of the external Auditor
and the external audit process and considers the Audit Committees
and External Audit: Minimum Standard guidance as part of this review.
The Committee provides an in-depth evaluation of its performance
following the external audit, and then makes a recommendation to
the Board. When considering the appropriateness of the reappointment
of BDO LLP, we also consider in our review, the ratio of audit to
non-audit fees and the effectiveness of the audit process, together
with other relevant review processes. We were satisfied that we
should recommend the reappointment of BDO LLP.
The Committee has met with the key members of the audit team
over the course of the year and BDO LLP has formally confirmed its
independence as part of the reporting process.
We consider that the audit team assigned to the Company by BDO
LLP has a good understanding of the Company’s business which
enables it to produce a detailed, high-quality, in-depth audit and
permits the team to scrutinise and challenge the Company’s
financial procedures and significant judgements. We ask the Auditor
to explain the key audit risks and how these have been addressed.
We also considered BDO LLP’s internal quality control procedures
and transparency report and found them to be sufficient.
The feedback to BDO LLP as part of the FRC’s Audit Quality Review
of Tier 1 firms was received by the Committee and discussed with
BDO LLP. The Committee acknowledges that none of the matters
raised by the FRC were considered by the Committee to be directly
relevant to the Company. Overall, the Committee remains satisfied
that the audit process is transparent and of good quality and that
theAuditor has met the agreed audit plan.
Please refer to note 10 in the financial statements for a summary
offees paid to the Auditor.
We continue to believe that, in some circumstances, the external
Auditor’s understanding of the Company’s business can be
beneficial in improving the efficiency and effectiveness of advisory
work. For this reason, we continue to engage BDO LLP as reporting
accountants on the Company’s issues of equity and debt capital
inthe normal course of the Company’s business. During the year,
BDO LLP was appointed as reporting accountants in relation to the
acquisition of UKCM. PricewaterhouseCoopers LLP was appointed
to assist with financial and tax due diligence on corporate
acquisitions and to provide general tax compliance advice.
Ratio of audit to non-audit services
Non-audit 26%
Audit 74%
To help safeguard BDO LLP’s objectivity and independence, we
operate a Non-Audit Services Policy which requires approval by the
Committee above a certain threshold before the external Auditor is
engaged to provide any permitted non-audit services and outlines
certain prohibited services.
The Company paid £355,940 in fees to the Auditor for non-audit
services during 2024. These fees are set out in the table below.
Work undertaken
Rationale for using
the external Auditor
Fee
£
Interim review Work is normally
performed by an external
Auditor
75,000
Agreed upon procedures
over the Adjusted NAV
Extension of audit
procedures
13,440
UKCM Reporting
Accountant
Advisory role for
acquisition of UKCM
267,500
Total 355,940
The ratio of audit to non-audit services received in the year was 26%
(2023: 9%). The Committee periodically monitors the ratio to ensure
that any fees for permissible non-audit services do not exceed 70%
of the average audit fees paid in the last three years.
Committee evaluation
The Board commissioned an externally facilitated Board effectiveness
review during the year. The overall performance of the Committee
was rated highly: the Committee is considered to be effective and
well managed, with the right balance of expertise and experience.
Priorities for 2025
The Committee will continue to focus on enhancing the Company’s
risk management and internal control framework and reviewing
material controls in preparation for Provision 29 reporting
requirements. The Committee will continue to work with the
Manager to ensure the Company’s Annual Report and Accounts
remain fair, balanced and understandable and that the audit process
remains robust.
Richard Laing FCA
Chair of the Audit and Risk Committee
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
107
Management Engagement Committee Report
Dear Shareholders,
I am pleased to present the Management Engagement Committee
Report for the year ended 31 December 2024. The Management
Engagement Committee’s role is to review the performance of the
Manager and the Company’s key service providers and if required
torecommend the re-tender of their services for consideration by
the Board. The Committee is also responsible for overseeing any
amendments to the IMA.
During the year, the Committee met for two scheduled meetings,
which focused on: the oversight of succession planning for key
senior roles within the Manager both in the long and short term; the
performance of the Manager itself; assessing the performance
oftheManager’s key suppliers and implementing any such
recommendation from this assessment.
To ensure open and regular communication between the Manager
and the Board, certain key representatives of the Manager are
invited to attend all Board meetings to update the Board on the
Company’s portfolio activity and discuss the general market
conditions and the financial performance and strategy of the
Company. Details of the Company’s performance in 2024 have
beenset out in the Strategic Report. During the year, the Committee
conducted a thorough review of the Manager’s performance to
ensure that it remained in line with the IMA and KPIs as outlined
inthe service level agreement between the Company and the
Manager. The Committee concluded that the Manager continued
toperform well and no concerns were raised.
Suppliers
The Manager prepared a Key Supplier Review report. Following a
detailed review and discussion, we agreed with the Manager that the
performance of the Company’s current service providers for the past
year continued to be satisfactory, and in several cases exceptional.
The Committee along with the Manager will continue to review the
performance of these key suppliers in 2024.
As mentioned in the Audit and Risk Committee Report on page 104,
JLL was appointed in November 2024 as part of the Manager’s
valuer rotation process. JLL provided valuation services for 28% of
the investment portfolio as at 31 December 2024, and its services
will be monitored by the Committee as part of the annual Key
Supplier Review report.
The Manager
Under the terms of the IMA and in accordance with the ESMA
guidance, as to the interpretation of the rules under AIFMD, the Board
has delegated the day-to-day responsibility for running the Company to
the Manager. The Manager is responsible for making investment and
divestment decisions in accordance with the Company’s Investment
Policy along with asset management of the existing portfolio.
The Board continues to review all investment and divestment
decisions and development activity, as well as the asset
management policy activity performed by the Manager, remaining
responsible for ensuring that these decisions are made in
accordance with the Company’s Investment Policy.
“ Ensuring the provision of high
quality services to the Company
by monitoring service levels
from the Manager and
key suppliers.”
Elizabeth Brown
Chair of the Management Engagement Committee
Membership
Elizabeth Brown, Chair
Aubrey Adams
Wu Gang
Alastair Hughes
Richard Laing
Karen Whitworth
Kirsty Wilman
> For full details on Committee attendance, please refer to
page 97
Key areas of focus in 2024:
• reviewed the Manager’s succession planning proposals;
• reviewed the performance of the Manager;
• reviewed the Manager’s key suppliers and their
performance; and
• recommended appointment of JLL as valuer for the
Company, in addition to CBRE and Colliers.
Tritax Big Box REIT plc Annual Report 2024
108
GOVERNANCE
The Committee also reviews the Manager’s culture and organisational
structure. The Manager increased the number of employees during
2024 to ensure that the Company is well served and has invested in
key support functions. The Manager’s COO regularly updates the
Board on the internal operations of the Manager and the Committee
continues to monitor this on an ongoing basis.
As such we consider that all the policies of the Manager relate to all
their employees, suppliers and operating partners. The Company is
a REIT with no employees, hence all data and metrics covering the
employees of our Manager are deemed relevant.
The Board is in touch with abrdn Holdings Limited regarding its 60%
ownership interest in the Manager and remains confident that this
relationship continues to serve Shareholders well. This extends to
appraising financial incentivisation of the senior management team
and strategy of the Manager to ensure that the Company is able to
attract and retain outstanding talent to best serve Shareholders.
Investment Management Agreement
The revised IMA was approved by the Shareholders on 4 May 2022.
The IMA continues on a rolling basis, with either party having the
right to terminate the IMA, by giving at least 24 months’ notice, no
earlier than 4 May 2025. The 2022 IMA reduced costs and ensures
that the Company has the right skills and resources in place to
deliver returns to Shareholders over the long term.
Conflict management
The IMA contains robust conflict provisions and the Manager is
notpermitted in any circumstance to manage another fund with
anexclusive investment strategy focusing on distribution or
logisticsassets in excess of 300,000 sq ft located within the UK.
TheManager is permitted to acquire and manage UK distribution or
logistics assets which provide less than 300,000 sq ft of accommodation
on behalf of other funds subject to certain caveats designed to
ensure that any assets which may be of interest to the Company
areoffered to the Company in priority to other funds managed
bythe Manager.
The Manager has an Investment Allocation Policy. This policy exists
toensure fair allocation of assets between funds managed by the
Manager and describes the mechanism to be applied by the Manager
to identify actual or potential conflicts. This policy is reviewed annually
by the Manager and was last reviewed in May 2024.
In addition, in January 2025, the Manager granted the Company a
right of first refusal in respect of data centre assets and sites suitable
for development into data centres sourced by the Manager.
The Company and the Manager have adopted a new Governance
and Conflicts Framework, which applies to transactions between the
Manager and the Company in the context of assets acquired by the
Manager that may represent data centre development assets for the
Company, and which sets out various procedures and controls to
ensure that such transactions are carried out as far as possible on
an arm’s length basis.
Investment Management fee
Under the terms of the IMA, the Manager is entitled to a
management fee in consideration for its services. This is payable
incash by the Company each quarter and is calculated based on
apercentage of the Company’s EPRA Net Tangible Assets (“EPRA
NTA”) disregarding cash or cash equivalents. The fee is payable
quarterly in arrears and the Manager is obliged to apply 25% of the
fee in shares of the Company (“Management Shares”) (see below for
further detail). If the Group buys or sells any assets after the date at
which the relevant EPRA NTA is calculated, the EPRA NTA is
adjusted pro rata for the net purchase or sale price, less any
third-party debt drawn or repaid whilst remaining capped
at EPRA NTA.
The revised management fee, applicable from 1 July 2022, is as set
out below:
EPRA NTA value
Relevant
percentage
Up to and including £2 billion 0.7%
Above £2 billion and up to and including £3 billion 0.6%
Above £3 billion and up to and including £3.5 billion 0.5%
Above £3.5 billion 0.4%
During specified periods after publication of the Company’s annual
or interim results, the members of the Manager are obliged to use
25% of the management fee (net of any VAT, personal taxation
liabilities and dealing costs, including stamp duty or stamp duty
reserve tax) (the “net cash amount”) to acquire Management Shares.
Where the EPRA NTA is below the prevailing share price, new
Ordinary Shares will be issued at a price equivalent to the prevailing
EPRA NTA per share, adjusted for any dividend declared after the
EPRA NTA per share is announced, if the new shares do not qualify
for receipt of this dividend. Inthe circumstances where the EPRA
NTA is above the prevailing share price, the Company’s Broker will
be instructed to acquire Ordinary Shares in the market for those
persons, to the value as near as possible equal to the net
cash amount.
The Management Shares may be allocated to any of the Partners
ofthe Manager, and all employees of the Manager are eligible to
receive share allocations at the discretion of the Manager.
On 1 March 2024, the Manager purchased 1,500,031 Ordinary
Shares in the market which were allocated to the Manager’s
Partners, its staff and abrdn Holdings Limited in respect of the net
cash amount, relating to the six-month period to 31 December 2023.
The purchase price was 149.26 pence per Ordinary Share.
On 7 August 2024, the Manager purchased 1,407,286 Ordinary
Shares in the market which were allocated to the Manager’s
Partners, its staff and abrdn Holdings Limited in respect of the
netcash amount, relating to the six-month period to 30 June 2024.
The purchase price was 160.78 pence per Ordinary Share.
Partners of the Manager and its staff had the following beneficial
interests as at the date of this report:
PDMR or person closely associated
Number of
Ordinary
Shares held
Percentage of
issued share
capital as at
27 February 2025
Colin Godfrey 3,059,133 0.1233%
James Dunlop 2,996,772 0.1208%
Henry Franklin 2,223,975 0.0897%
Bjorn Hobart 456,752 0.0184%
Petrina Austin 402,154 0.0162%
Frankie Whitehead 237,512 0.0096%
Tritax Management LLP 95,275 0.0038%
Staff of Tritax Management LLP
1
1,132,670 0.0456%
abrdn Holdings Limited
2
6,397,532 0.2578%
Total 17,001,775 0.6853%
1. The figure comprises Ordinary Shares issued to staff of Tritax Management
LLP under the terms of the IMA and at IPO, and does not include other
shares that may have otherwise been acquired by staff.
2. The figure comprises Ordinary Shares issued to abrdn Holdings Limited
under the terms of the IMA and it does not include other shares that may
otherwise have been acquired by abrdn Holdings Limited.
Tritax Big Box REIT plc Annual Report 2024
109
Management Engagement Committee Report continued
Development Management Agreement
As announced by the Company on 21 January 2025, the Manager
has been appointed as development manager in connection with the
development at the Manor Farm site, pursuant to a Development
Management Agreement (“DMA”). The Manager’s development
management and technical services obligations include pursuing
planning, overseeing construction, lining up a data centre client
pre-let and overseeing technical aspects of the Company’s role in its
joint venture at the Manor Farm site.
Pursuant to the terms of the DMA, the Manager is entitled to:
• a one-off £6.1 million payment in consideration for the Manager’s
50% ownership of the JV, including a first right of refusal for the
Company on the Manager’s data centre pipeline;
• a development management fee of 3.5% of development costs,
contingent on planning permission;
• a fee of 1.5% of estimated development costs, payable on
securing planning and a pre-let for a data centre to the
Company’s satisfaction; and
• a profit share of 17.5% of development profits, contingent upon
delivery of a practically completed and let data centre.
The Manager is required to procure that 50% of the profit share
amount (net of any VAT, stamp duty and other taxation liabilities)
would be applied to the subscription or acquisition of shares in the
Company, depending on whether the Company’s shares are trading
at a discount to the Company’s EPRA NTA per share. As at the date
of this report, no amounts were payable pursuant to the profit
share amounts.
AIFM Directive
The AIFMD became part of UK law in 2013. It regulated AIFMs
andimposed obligations on managers of alternative investment
funds (“AIFs”) in the EU or who market shares in AIFs to EU
investors. Under the AIFMD, the AIFM must comply with various
organisational, operational and transparency obligations. The
European Union (Withdrawal) Act 2018 (“EUWA”) repealed the
European Communities Act 1972 on the day the UK left the EU
andconverted into UK domestic law the existing body of directly
applicable EU law. In the UK, AIFMs must now comply with The
Alternative Investment Fund Managers (Amendment) (EU Exit)
Regulations 2018. The Manager is authorised by the Financial
Conduct Authority as an AIFM and provides all relevant investment
management and advisory services to the Company, including
regulated activities. The Manager is responsible for making
investment and divestment decisions in respect of the Company’s
assets as part of its regulatory responsibility for the overall portfolio
and risk management of the Company. This is in line with The
Alternative Investment Fund Managers (Amendment) (EU Exit)
Regulations 2018 on the application of the AIFMD.
AIFM remuneration policy applied by
the Manager
As a full scope AIFM, the Manager must apply a remuneration policy
in line with its business strategy, objectives, values and interests, as
well as those of the AIFs it manages or its investors. The policy must
include measures to avoid conflicts of interest. This ensures that the
Partners have a vested interest in ensuring the Manager remains
financially sound.
The annual fee paid by the Company is based on a percentage
ofitsEPRA NTA, as set out on page 109. In addition, the Manager’s
Partners are required to apply 25% of that fee (net of tax and certain
other costs, as described on the previous page) to the purchase
ofManagement Shares. Management Shares are subject to a
12-month lock-in period. This aligns the interests of the Manager
andits Partners with the strategy and interests of the Company and
its Shareholders. The Manager and its Partners allocate a proportion
of the Management Shares to members of staff in adherence with
the general guidance on the AIFM Remuneration Code.
The Manager’s partnership board meets at least twice a year to
discuss the remuneration of its entire staff. Staff are remunerated in
accordance with their seniority, expertise, professional qualifications,
responsibilities and performance. They are paid salaries in line with
market rates and, in profitable years, awarded a discretionary bonus
from a bonus pool worth, in aggregate, at least 5% of the Manager’s
profits. The discretionary bonus may consist of cash or Ordinary
Shares in the Company allocated to certain members of staff out
ofthe Management Shares. This means that staff remuneration
ispredominantly fixed and the variable element is determined by
theManager’s overall profitability, rather than the performance
ofaparticular AIF. Where relevant, the proportion of variable
remuneration adheres to the requirements set out in the AIFM
Remuneration Code.
The Manager’s Partners are entitled to their partnership share of
itsprofits and losses. During the year and as at 31 December 2024,
none of the Partners were entitled to additional partnership
drawingsthat depended on the performance of any AIFs managed
bythe partnership. The Partner’s remuneration for the year ended
31 December 2024 therefore depended on the Manager’s overall
profitability, rather than the performance of any AIFs.
Committee evaluation
The overall performance on the Management Engagement
Committee for the period was positively rated, with open and
challenging discussion.
Priorities for 2025
The Committee will focus on the review and performance of the
Manager and its key suppliers. The Committee will continue to work
closely with the Manager to oversee its succession planning.
Elizabeth Brown
Chair of the Management Engagement Committee
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
110
GOVERNANCE
Directors’ Remuneration Report
Annual statement
The Company only has Independent Non-Executive Directors and therefore does not consider it necessary to establish a separate
Remuneration Committee. The Directors’ remuneration is disclosed below. The Remuneration Report will be presented at the AGM
on7May2025 for Shareholder consideration and approval.
Directors’ Remuneration Policy
The Directors’ Remuneration Policy was last approved by the Company’s Shareholders at the AGM on 1 May 2024.
The Company’s policy is to determine the level of Directors’ fees with regard to those payable to non-executive directors of comparable REITs
andthe time each Director dedicates to the Company’s affairs.
The Independent Non-Executive Directors are entitled to their annual fee and reasonable expenses. No element of the Directors’ remuneration
isperformance related, nor does any Independent Non-Executive Director have any entitlement to pensions, share options or any Long Term
Incentive Plans from the Company. Under the Company’s Articles, all Independent Non-Executive Directors are entitled to the remuneration
determined from time to time by the Board. There were no revisions to the policy during the period.
Directors’ fees benchmarking
In line with best governance practice, the Board requested that the Manager conduct a fee benchmarking exercise.
The exercise was facilitated by the Company Secretary and it compared the Company with its peer group and additional FTSE 350
companies. Additional input was sought from Russell Reynolds Associates to ascertain comparative data on the remuneration market for
non-executive directors specifically within the REIT sector and also other real estate FTSE-350 listed companies (both internally and externally
managed) by market capitalisation.
As a result and following a number of meetings, the Board (without the Chair present) agreed that the Chair’s fee should increase by 15% in
order to bring it in line with fees paid to chairs of other listed REITs, especially taking into account the Chair’s experience, both within the
industry and within the role itself, and also given the time, complexity and level of responsibilities required within the role of the Chair of
the Company.
Additionally, the Nomination Committee recommended to the Board, and the Board approved, an increase in the base NED fee, an increase
inthe Senior Independent Director fee and the Committee Chair fee of 5% (rounded to the nearest £500), all with effect from 1 July 2024.
Again, the Nomination Committee took into consideration the time, complexity and level of responsibility required for each of the Independent
Non-Executive Directors to fulfil their roles on the Board of the Company as it’s strategy evolves to include a portfolio of greater scale
andcomplexity.
Based upon the above changes, the fees payable during the year ended 31 December 2024 are set out in the table below.
Role
Fee as at
1 January 2024
£
Fee as at
1 July 2024
£ Change in fee
Chair’s fee 126,000 145,000 15%
Base fee for Independent Non-Executive Director 56,700 59,500 5%
Additional fee:
– Senior Independent Director 5,250 5,500 5%
– Committee Chair: Audit and Risk Committee 10,500 11,000 5%
– Committee Chair: Management Engagement Committee 5,250 5,500 5%
Annual Report on Remuneration (audited)
The fees paid to the past and current Independent Non-Executive Directors in the year to 31 December 2024, which have been audited, are
set out below. In addition, each Independent Non-Executive Director is entitled to recover all reasonable expenses incurred in connection with
performing his or her duties as a Director. Directors’ expenses for the year to 31 December 2024 totalled £444 (2023: £607). No other
remuneration was paid or payable during the year to any Director. There have been no payments to past Directors or for loss of office.
Annual fee
Expenses
Total fixed remuneration
Director
For year
ended
31 December 2024
1,2
£
For year
ended
31 December 2023
£
For year
ended
31 December 2024
£
For year
ended
31 December 2023
£
For year
ended
31 December 2024
£
For year
ended
31 December 2023
£
Aubrey Adams 135,500 123,000 — — 135,500 123,000
Elizabeth Brown 63,475 60,702 — — 63,475 60,702
Wu Gang 58,100 55,350 23 130 58,123 55,480
Alastair Hughes 58,100 55,558 — — 58,100 55,558
Richard Laing 68,850 65,600 421 477 69,271 66,077
Karen Whitworth 63,475 60,475 — — 63,475 60,475
Kirsty Wilman
3
19,833 — — — 19,833 —
1. The Chair’s fee was increased by 15% with effect from 1 July 2024.
2. The Independent Non-Executive Director base fee and additional fees increased by 5% with effect from 1 July 2024.
3. Kirsty Wilman was appointed as an Independent Non-Executive Director on 1 September 2024. Her fee has been pro-rated for the four months that she
served as a Director during the year ended 31 December 2024.
Tritax Big Box REIT plc Annual Report 2024
111
Directors’ Remuneration Report continued
Annual change in remuneration
The table below illustrates the year-on-year percentage change in remuneration for the Independent Non-Executive Directors.
2020 2021 2022 * 2023
+
2024
#
Aubrey Adams 3.9% 118%
1
0% 3% 10%
Elizabeth Brown — — 18%
2
11% 5%
Wu Gang — — 8% 3% 5%
Alastair Hughes 0% 10%
3
-2%
3
3% 5%
Richard Laing 7% 0% 7% 3% 5%
Karen Whitworth 0% 10%
4
7%
4
3% 5%
Kirsty Wilman — — — — —
* The Independent Non-Executive Director base fee level was increased with effect from 1 January 2022 from £50,000 to £54,000 per annum.
+ The Independent Non-Executive Director base fee, the Chair’s fee, the SID fee and the fees for the roles of the Chair of the Audit & Risk Committee and the
Management Executive Committee increased by 5% with effect from 1 July 2023.
# The Independent Non-Executive Director base fee and additional fees increased by 5% and the Chair’s fee increased by 15% with effect from 1 July 2024.
1. Aubrey Adams was appointed Chair effective 5 May 2021.
2. Elizabeth Brown was appointed Chair of the Management Engagement Committee effective 4 November 2022.
3. Alastair Hughes was appointed Senior Independent Director from 5 May 2021 to 4 November 2022.
4. Karen Whitworth was appointed Chair of the Management Engagement Committee from 1 October 2021 to 4 November 2022, then Senior Independent
Director effective 4 November 2022.
Each Independent Non-Executive Director has been appointed pursuant to a Letter of Appointment. All Independent Non-Executive Directors
are appointed for a three-year term, subject to annual re-election at the Company’s AGM. No Director has a service contract with the
Company, nor are any such contracts proposed. The Directors’ appointments can be terminated in accordance with the notice provisions and
the Articles and, in certain circumstances, without compensation. The terms of appointment of the Directors are set out in the below table.
Director Letter of appointment dated
Expected and actual
date of expiry
Unexpired term as at
31 December 2024 Notice period
Aubrey Adams 11 September 2017 11 September 2027 33 months 3 months
11 September 2019
11 September 2021
11 September 2024
Elizabeth Brown 15 December 2021 15 December 2027 35 months 3 months
15 December 2024
Wu Gang 1 October 2021 1 October 2027 33 months 3 months
1 October 2024
Alastair Hughes 1 February 2019 1 February 2026 13 months 3 months
1 February 2021
1 February 2023
Richard Laing 16 May 2018 16 May 2025 5 months 3 months
16 May 2020
4 May 2022
Karen Whitworth 21 October 2019 21 October 2027 34 months 3 months
21 October 2021
21 October 2024
Kirsty Wilman 1 September 2024 1 September 2027 32 months 3 months
External advisers
The Board and its Committees have access to sufficient resources to discharge their duties. As part of the Directors’ fee benchmarking
exercise, Russell Reynolds Associates provided its view on the NED fee market.
Statement of consideration of Shareholder views
The Company is committed to ongoing Shareholder dialogue and takes an active interest in voting outcomes. If there are substantial votes
against any resolutions, the Company will consult with Shareholders in order to understand the reasons for any such vote. The Company will
provide an update on the views received from Shareholders no later than six months after the meeting and any resulting action will be detailed
in the next Annual Report. Ordinary resolutions require a simple majority of 50% and special resolutions require 75% to be passed.
The Directors’ Remuneration Policy and the Directors’ Remuneration Report were approved by Shareholders at the Company’s AGM held
on1 May 2024. The voting on the respective resolutions was as shown below:
Resolution For % * Against % Votes withheld
Directors’ Remuneration Policy 99.97% 0.03% 19,084,621
Directors’ Remuneration Report 99.98% 0.02% 12,056,995
* Including votes in favour and discretion.
Tritax Big Box REIT plc Annual Report 2024
112
GOVERNANCE
Directors’ shareholdings (audited)
There is no requirement for the Independent Non-Executive Directors of the Company to own shares in the Company. As at 27 February 2025,
the Directors and their persons closely associated held the shareholdings listed below.
Director
1
Number of
shares
held
Percentage
of issued
share capital
Dividends
received
31 December
2024
£
Aubrey Adams 300,000 0.012% 21,345
Elizabeth Brown 20,382 0.001% 1,534
Wu Gang 8,600 0.0003% 524
Alastair Hughes 76,783 0.003% 5,157
Richard Laing 78,610 0.003% 5,329
Karen Whitworth 60,498 0.002% 3,942
Kirsty Wilman — — —
1. Includes shareholdings of Directors and persons closely associated (as defined by the UK Market Abuse Regulation).
The shareholdings of these Directors are not significant and, therefore, do not compromise their independence.
Relative importance on spend on pay (audited)
Director
2024
£m
2023
£m
Change
%
Directors’ remuneration 0.5 0.5 0%
Investment management fees 24.6 22.0 12%
Dividends paid to Shareholders 174.9 135.6 29%
Other items
The Company maintains Directors’ and Officers’ liability insurance cover, at its expense, on the Directors’ behalf.
As the Company does not have any employees, the Company is not required to produce pay ratio tables.
Aubrey Adams OBE, FCA, FRICS
Independent Chair
27 February 2025
Total Shareholder Return
The graph below shows the Total Shareholder Return (as required by Company Law) of the Company’s Ordinary Shares relative to a return
ona hypothetical holding over the same period in the FTSE 250 and the FTSE All-Share REIT Index.
Total Shareholder Return is the measure of returns provided by a company to Shareholders reflecting share price movements and assuming
reinvestment of dividends.
Pence
15
10
5
0
(5)
(10)
(15)
(20)
(25)
Tritax Big Box REIT PLC FTSE 250 FTSE All-Share/Real Estate Investment Trusts
Jan 24 Feb 24 Mar 24 Apr 24 May 24 Jun 24 Jul 24 Aug 24 Sep 24 Oct 24 Nov 24 Dec 24
Tritax Big Box REIT plc Annual Report 2024
113
Directors’ Report
Introduction
The Directors are pleased to present the Annual Report, including
the Company’s audited financial statements as at, and for the year
ended, 31 December 2024.
The Directors’ Report and the Strategic Report comprise the
“Management Report” for the purposes of Disclosure Guidance and
Transparency Rule 4.1.5R.
Statutory information contained elsewhere in the
Annual Report
Information required to be part of this Directors’ Report can be
found elsewhere in the Annual Report and is incorporated into this
report by reference, as indicated in the relevant section.
Incorporation by reference
The Corporate Governance Report (pages 78 to 116 of this Annual Report and Accounts for the year ended 31 December 2024) is incorporated
by reference into this Directors’ Report.
Financial results and dividends
The financial results for the year can be found in the Group Statement of Comprehensive Income on page 124.
The following interim dividends amounting to, in aggregate, 7.660 pence per share were declared in respect of the year ended 31 December 2024:
Period covered by interim dividend Date declared
Dividend payable
(pence per share) Dividend record date Dividend payment date
1 January 2024 to 31March 2024 2 May 2024 1.825 24 May 2024 7 June 2024
1 April 2024 to 30June2024 7 August 2024 1.825 23 August 2024 6 September 2024
1 July 2024 to 30September 2024 10 October 2024 1.825 1 November 2024 27 November 2024
1 October 2024 to 31December 2024 28 February 2025 2.185 14 March 2025 28 March 2025
Political donations
No political donations were made during the year.
Employees
The Group has no employees and therefore no employee share scheme or policies on equal opportunities and disabilities.
Share capital
On 16 May 2024, the Company issued 576,939,134 new Ordinary Shares in the Company, pursuant to the Scheme of Arrangement relating
tothe Company’s acquisition of UK Commercial Property REIT Limited (“UKCM”), whereby those shareholders of UKCM whose names appeared
onthe UKCM register of members at 6pm on 15 May 2024 were, subject to certain conditions, entitled to received 0.444 Ordinary Shares in the
Company for each UKCM ordinary share held.
Following the issue of the new Ordinary Shares on 16 May 2024, the share capital of Company consisted of 2,480,677,459 Ordinary Shares.
Therewere no further issues of new shares during the year.
As at 31 December 2024 (and as at the date of this report), there were 2,480,677,459 Ordinary Shares in issue.
Ordinary Shares Number
Gross proceeds
£
Balance as at 1 January 2024 1,903,738,325 N/A
Shares issued on 16 May 2024 576,939,134 N/A
Balance as at 31 December 2024 2,480,677,459
Restrictions on transfer of securities in the Company
There are no restrictions on the transfer of securities in the Company, except as a result of:
• the FCA’s UK Listing Rules, which require certain individuals to have approval to deal in the Company’s shares; and
• the Company’s Articles of Association, which allow the Board to decline to register a transfer of shares or otherwise impose a restriction on
shares, to prevent the Company or the Manager breaching any law or regulation.
The Company is not aware of any agreements between holders of securities that may result in restrictions on transferring securities in the Company.
Securities carrying special rights
No person holds securities in the Company carrying special rights with regard to control of the Company.
Information Location in Annual Report
Directors Pages 80 and 81
Section 172 Page 67
Business relationships Pages 1 to 76
Directors’ interest in shares Page 113
Future developments of the Company Pages 10 to 11
Financial instruments Note 4.3 on page 130
Corporate Governance Statement Pages 78 to 97
Going Concern and Viability Page 76
Disclosure of information to Auditor Page 115
Share capital Page 114
TCFD Pages 53 to 64
SECR reporting Page 65 to 66
Tritax Big Box REIT plc Annual Report 2024
114
GOVERNANCE
Substantial shareholdings
As at 10 February 2025, the Company is aware of the following substantial shareholdings, which were directly or indirectly interested in 3%
ormore of the total voting rights in the Company’s issued share capital. As at 10 February 2025, the issued share capital remained the same
as at 31 December 2024 with 2,480,677,459 Ordinary Shares in issue.
Shareholder name
Holding as at
10 February 2025 %
Phoenix Life Insurance Company* 250,315,411 10.09
BlackRock* 214,324,513 8.64
Vanguard Group 138,502,630 5.58
Aviva Investors 106,707,043 4.30
Cohen & Steers 94,544,040 3.81
Legal & General Investment Management 81,172,415 3.27
* Shareholdings for companies indicated are as at 31 January 2025.
Amendment of Articles of Association
The Articles may be amended by a special resolution of the
Company’s Shareholders.
Powers of the Directors
The Board will manage the Company’s business and may exercise
all the Company’s powers, subject to the Articles, the Companies
Act and any directions given by the Company by special resolution.
Powers in relation to the Company issuing
its shares
At the AGM held on 1 May 2024, the Directors were granted a
renewed general authority to allot Ordinary Shares in accordance
with Section 551 of the Companies Act 2006, up to an aggregate
nominal amount of £12,691,588. Of those Ordinary Shares, the
Directors were granted authority to issue up to an aggregate nominal
amount of £951,869 (which is equivalent to 5% of the Company’s
issued share capital as at that date) non-pre-emptively and wholly
for cash and authority to issue up to an aggregate nominal amount
of £951,869 to be used only for the purpose of financing (or
refinancing, if the authority is to be used within six months after the
original transaction), a transaction which the Directors determine to
be an acquisition or other capital investment of a kind contemplated
by the Statement of Principles on Disapplying Pre-Emption Rights.
These authorities replaced the equivalent authorities given to the
Directors at the AGM held on 1 May 2023.
These authorities expire at the next AGM in Q2 2025 to be held on
7 May 2025.
Authority to Purchase Own Shares
At the 2024 AGM Shareholders authorised the Company to
makemarket purchases of its own shares up to a maximum of
190,373,832 Ordinary Shares, equivalent to approximately 10% of
the Company’s issued share capital at the time. The Company has
not exercised this authority to date.
Change of control
Under the Group’s financing facilities, any change of control at the
borrower or immediate Parent Company level may trigger a repayment
of the outstanding amounts to the lending banks or institutions.
In certain facilities including the issue of recent loan notes, the change
of control provisions also include a change of control at the ultimate
Parent Company level.
Appointment and replacement of Directors
Details of the process by which Directors can be appointed or replaced
are included in the Nomination Committee Report on pages 98 to 101.
Disclosure of information to the Auditor
The Directors, who were members of the Board at the time
ofapproving the Directors’ Report, have confirmed that:
• so far as each Director is aware, there is no relevant audit
information of which the Company’s Auditor is not aware; and
• each Director has taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s Auditor is
aware of that information.
Events subsequent to the year-end date
For details of events since the year-end date, please refer to note 36
on page 149 to the consolidated financial statements.
Independent Auditor
BDO LLP has expressed its willingness to continue as Auditor
forthefinancial year ending 31 December 2025.
Manager and service providers
The Manager during the year was Tritax Management LLP. Details
ofthe Manager and certain elements of the Investment Management
Agreement are set out in the Management Engagement Committee
Report on pages 108 to 110.
Additional information
In accordance with UK Listing Rule (“UKLR”) 6.6.4 R, the only
disclosure requirement required under UKLR 6.6.1 R is the disclosure
ofcapitalised interest, which is disclosed in note 13 on page 135.
Annual General Meeting
It is planned for the Company’s AGM to be held at the offices of
Ashurst LLP at London Fruit & Wool Exchange, 1 Duval Square,
London E1 6PW, on 7 May 2025.
This report was approved by the Board on 27 February 2025.
Tritax Management LLP
Company Secretary
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
115
Directors’ Responsibilities
In respect of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with UK adopted international
accounting standards and applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors are required to
prepare the Group financial statements in accordance with UK
adopted international accounting standards and have elected to
prepare the Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under
Company Law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss for the Group for that period.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• state whether the Group financial statements have been prepared
in accordance with UK adopted international accounting
standards, subject to any material departures disclosed and
explained in the financial statements;
• state whether the Company financial statements have been
prepared in accordance with Financial Reporting Standard 101
“Reduced Disclosure Framework” (“FRS 101”) subject to any
material departures disclosed and explained in the Company
financial statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business; and
• prepare a Directors’ Report, a Strategic Report and Directors’
Remuneration Report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to
ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the
Groupand Company and hence for taking reasonable steps for
theprevention and detection of fraud and other irregularities. The
Directors are responsible for ensuring that the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for Shareholders to assess
the Group’s performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and
the financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors. The Directors’ responsibility
also extends to the ongoing integrity of the financial statements
contained therein.
Directors’ responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
• the Group financial statements have been prepared in accordance
with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit and
loss of the Group; and
• the Annual Report includes a fair review of the development and
performance of the business and the financial position of the
Group and Parent Company, together with a description of the
principal risks and uncertainties that they face.
Aubrey Adams OBE, FCA, FRICS
Independent Chair
27 February 2025
Tritax Big Box REIT plc Annual Report 2024
116
Tritax Big Box REIT plc Annual Report 2022
117
Tritax Big Box REIT plc Annual Report 2024
117
FINANCIAL STATEMENTS
Independent Auditor’s Report
To the members of Tritax Big Box REIT plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Tritax Big Box REIT plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2024 which comprise the Group Statement of Comprehensive Income, the Group Statement of Financial Position, the Group
Statement of Changes in Equity, the Group Cash Flow Statement, the Company Statement of Financial Position, the Company Statement of
Changes in Equity and notes to the financial statements, including material accounting policy information. The financial reporting framework that
has been applied in the preparation of the Group financial statements is applicable law and UK adopted international accounting standards. The
financial reporting framework that has been applied in the preparation of the Parent Company financial statements is United Kingdom Accounting
Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the Audit and Risk Committee.
Independence
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors in November 2013 to audit the financial
statements for the year ended 31 December 2014 and subsequent financial periods. The period of total uninterrupted engagement including
retenders and reappointments is 11 years, covering the years ended 31 December 2014 to 31 December 2024. We remain independent of
the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• using our knowledge of the Group and its market sector together with the current general economic environment to assess the Directors’
identification of the inherent risks to the Group’s business and how these might impact the Group and the Parent Company’s ability to
remain a going concern for the going concern period, being the period to 28 February 2026, which is at least 12 months from when the
financial statements are authorised for issue;
• obtaining an understanding of the Directors’ process for assessing going concern including an understanding of the key assumptions used;
• obtaining the Directors’ going concern assessment;
• assessing the Group’s forecasts cash flows with reference to historic performance and challenging the Directors’ forecast assumptions in
comparison to the current performance of the Group;
• testing the inputs into the forecasts for reasonableness based on historic performance and corroboration to contractual agreements
whereavailable;
• agreeing the Group’s available borrowing facilities and the related terms and covenants to loan agreements;
• obtaining covenant calculations and forecast calculations to test for any potential future covenant breaches. We also considered the
covenant compliance headroom for sensitivity to both future changes in property valuations and the Group’s future financial performance;
• considering board minutes, and evidence obtained through the audit and challenging the Directors on the identification of any contradictory
information in the forecast cash flows and the resulting impact on the going concern assessment;
• analysing the Directors’ stress testing calculations and challenging the assumptions made using our knowledge of the business and of the
current economic climate, to assess the reasonableness of the downside scenarios selected; and
• reviewing the disclosures in the financial statements relating to going concern to check that the disclosure is consistent with the Directors’
going concern assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group or the Parent Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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Independent Auditor’s Report continued
To the members of Tritax Big Box REIT plc
An overview of the scope of our audit
Overview
Coverage 100% (2023: 100%) of Group profit before tax
100% (2023: 100%) of Group revenue
100% (2023: 100%) of Group total assets
Key audit matters Valuation of investment properties, including properties
under construction
2024 2023
Materiality Group financial statements as a whole
£67m (2023: £50m) based on 1% (2023: 1%) of total assets
Our audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control, and
assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
The Group operates solely in the United Kingdom, and all audit procedures were performed by the Group audit team. We identified three
significant components for which full scope audits were performed being:
• the Tritax Big Box REIT component (which includes the Parent Company);
• the Tritax Big Box Development component; and
• the UK Commercial Property REIT component.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements included:
• Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their potential
impacts on the financial statements and to adequately disclose climate-related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this
particular sector;
• Review of the minutes of Board and Audit Committee meeting and other papers related to climate change to determine if there were any
climate related matters affecting the financial statements which we are not already aware of, evaluating the impact of these, if any.
• We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and commitments
have been reflected, where appropriate, in the Directors’ going concern assessment and in management’s judgements and estimates in
relation to the investment property valuation.
We also assessed the consistency of managements disclosures included as Statutory Other Information on page 53 with the financial
statements and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by climate-related risks.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of
the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
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FINANCIAL STATEMENTS
An overview of the scope of our audit continued
Key audit matters continued
Key audit matter How the scope of our audit addressed the
keyaudit matter
Valuation of investment
property portfolio,
including properties
under construction
Refer to note 3 on
significant accounting
judgements, estimates and
assumptions; and note 4 on
material accounting policy
information.
Refer to note 17 in relation to
investment property.
The Group’s investment property portfolio
comprises:
• Standing assets: these are existing
properties that are currently let or available
to let. They are valued using the yield
methodology approach in accordance
with RICS methodology and IFRS 13 Fair
Value Measurement.
• Properties under construction: these are
properties being built, which have agreed
pre lets with clients.
Properties under construction have a
different risk and investment profile to the
standing assets. They are valued using the
residual method, which estimates the fair
value of the completed project using the yield
methodology approach, less estimated costs
to completion.
The valuation of investment property requires
significant judgement and estimates by
the Directors, with the assistance of their
appointed valuer (“the Valuer”) and is
therefore considered a significant risk due to
the subjective nature of certain assumptions
inherent in each valuation.
Any input inaccuracies or unreasonable
bases used in the valuation judgements
(such as capitalisation yields, rental
values, and in the case of properties under
construction, costs to complete) could result
in a material misstatement in the valuation of
investment property, therefore impacting the
Group’s financial statements.
There is also a risk that the Directors may
unduly influence the significant judgements
and estimates in respect of property
valuations in order to achieve property
valuation or other performance or financial
targets or to meet market expectations.
For these reasons we consider the valuation
of the investment property portfolio,
including properties under construction to be
a key audit matter.
We responded to this matter by performing the
followingprocedures:
We read the external valuation reports prepared by
the Group’s Valuers and checked that the approaches
used were consistent with the requirements of relevant
accounting standards.
We assessed the Valuers’ competence and capabilities
and read their terms of engagement with the Group,
to determine if any matter could have affected their
independence and objectivity, and if the Directors could
have influenced their decisions over the significant
judgements and estimates, or imposed scope limitations
upon their work.
We checked the data provided to the Valuers by the
Group to determine whether it was consistent with the
information that we audited. This data included inputs
such as current rent and lease terms, which we have
agreed on a sample basis to executed lease agreements
as part of our audit work.
We engaged our internal valuations experts in discussions
with the Valuers to gain an understanding of the valuation
methods and assumptions used. With the assistance from
our internal valuations experts, we analysed the valuation
movements for the properties, and the reasonability of
their yields to check if they are in line with the market.
We challenged the assumptions utilised by the Valuers
within the valuation by benchmarking the valuation to the
expectations that we developed using independent data
around the year end.
We assessed the estimated costs to complete
and progress of development for properties under
construction by agreeing the total estimated costs of
the property to the underlying agreements and relevant
supporting documentation. We then verified costs already
incurred in the current year to our additions testing (tested
on a sample basis), while the total cost incurred in prior
years was agreed to the audited numbers in the prior
year, with the remainder being costs to complete. The
forecasted costs to complete were also agreed to the
cost to complete reports produced by the audited entity.
We agreed the cost to complete reports to latest invoices
where available.
We assessed the reasonableness of these forecasts
by assessing management’s ability to forecast, and we
also performed a retrospective review of the accuracy
of management’s forecast by assessing completed
properties, and comparing the estimated total costs
forthese properties to the actual costs incurred.
We checked that the property valuations have been
properly included in the financial statements. We also
assessed whether the disclosures in the financial
statements are appropriate and in accordance with
relevant accounting standards.
Key observation:
Based on our work we consider assumptions adopted
by the Directors in the valuation were reasonable and the
methodology applied was appropriate.
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Independent Auditor’s Report continued
To the members of Tritax Big Box REIT plc
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality
to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the
basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements Parent Company financial statements
2024
£m
2023
£m
2024
£m
2023
£m
Materiality 67 50 49 38
Basis for determining materiality 1% of total assets 1% of total assets 1% of total assets 1% of total assets
Rationale for the benchmark applied We determined that total assets would be the most appropriate basis for determining
overall materiality as we consider it to be the principal considerations for the users
of the financial statements in assessing the financial performance of the Group and
Parent Company.
Performance materiality 50.2 37.5 36.8 28.5
Basis for determining
performancemateriality
75% of materiality
Rationale for the percentage applied
forperformance materiality
The level of performance materiality applied was set based on the low number of
components, low value of brought forward adjustments impacting the current year and
theexpected total value of known and likely misstatements based on past experience.
Specific materiality
For the Group, we determined that for other account balances and classes of transactions that impact the calculation of European Public Real
Estate Association (“EPRA”) earnings, a misstatement of less than materiality for the financial statements as a whole, specific materiality, could
influence the economic decisions of users. EPRA earnings excludes the impact of the net surplus on revaluation of investment properties,
profit on disposals of investment properties, any impairment of land options and interest rate derivatives. We consider this to be a key
performance measure of the Group. As a result, we determined materiality for these items to be 5% of EPRA earnings, being £9.8m (2023:
£5.6m based on 5% of EPRA earnings).
For the Parent Company, we determined that for trade and other receivables, trade and other payables, borrowings, expenses, interest
income and expenses, a misstatement of less than materiality for the financial statements as a whole, specific materiality, could influence the
economic decisions of users. As a result, we determined materiality for these items to be £6.6m, (2023: £4.7m) based on 5% of the Parent
Company’s profit before tax (2023:5% of the Parent Company’s profit before tax).
We further applied a performance materiality level of 75% for both the Group and Parent Company (2023: 75%) of specific materiality to ensure
that the risk of errors exceeding specific materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all individual audit differences impacting the Group in excess of
£2.0m (2023: £1.5m) and for those items impacting the calculation of EPRA earnings, all individual audit differences in excess of £0.3m (2023:
£0.28m). Regarding the Parent Company, we agreed that we would report all individual audit differences in excess of £1.47m (2023: £1.14m) and
for trade and other receivables, trade and other payables, borrowings, expenses, interest income and expenses, all individual audit differences
in excess of £0.19m (2032: £0.27m) We also agreed to report differences below these thresholds that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report other
than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
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FINANCIAL STATEMENTS
Corporate Governance Statement
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and longer-
term viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified, set out on page 76.
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate, set out on page 76.
Other Code provisions • Directors’ statement on fair, balanced and understandable, set out on page 116.
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks, set out on page 70.
• The section of the annual report that describes the review of effectiveness of risk management
and internal control systems, set out on page 102.
• The section describing the work of the Audit and Risk Committee, set out on page 104 to 107.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic Report and
Directors’ Report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in
the Strategic report or the Directors’ report
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which we are required
toreport by exception
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration report to
be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
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Independent Auditor’s Report continued
To the members of Tritax Big Box REIT plc
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be, but not limited to, the Companies Act 2006, the UK Listing Rules, the REIT tax
regime requirements and legislation relevant to the rental of properties. We considered the extent to which non-compliance might have a
material effect on the Group and Parent Company’s’ financial statements. We also considered the Group’s own control environment for
monitoring its compliance withlaws and regulation, and obtained and reviewed their papers on compliance, in addition to performing our own
procedures.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax experts in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Irregularities including fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
• Involvement of forensic specialists in the audit to review our fraud risk assessment in relation to the environment at the entity and the fraud
risk to specific financial statement areas;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
Based on our risk assessment, we considered the areas most susceptible to fraud to be revenue recognition, valuation of investment property
portfolio, and management override of controls.
Our procedures in response to the above included:
Addressing the risk of management override of controls by:
• testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation and
evaluating whether there was evidence of bias by management or the Directors that represented a risk of material misstatement due to
fraud; and
• Assessing significant estimates made by management for bias on key audit matters.
Addressing the risk of intentional misstatement of revenue by:
• setting expectations for the annual revenue to be recognised for the year for each property, comparing it to the actual amounts recognised
and investigating variances. We confirmed lease details back to the underlying signed agreements and a sample to receipt of cash
(whereamounts had been received prior to the year-end). We also tested the rent smoothing adjustments to supporting documentation.
Our responses to the valuation of investment property are set out in the key audit matters section above.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were deemed
to have the appropriate competence and capabilities, and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
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FINANCIAL STATEMENTS
Auditor’s responsibilities for the audit of the financial statements continued
Irregularities including fraud continued
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures
performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them
in an auditor’s 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Richard Levy (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
27 February 2025
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Group Statement of Comprehensive Income
For the year ended 31 December 2024
Year endedYear ended
31 December 31 December
20242023
Note £m£m
Gross rental income
6
281.1
222.2
Service charge income
6
13.1
6.2
Service charge expense
7
(15.6)
(6.3)
Direct property expenses
(2.6)
—
Net rental income
276.0
222.1
Gross operating income
8
86.3
—
Other operating costs
9
(63.3)
—
Other operating income
23.0
—
Administrative and other expenses
10
(33.7)
(28.9)
Operating profit before changes in fair value and other adjustments
1
265.3
193.2
Changes in fair value of investment properties
17
243.7
(38.1)
Gain/(loss) on disposal of investment properties
17
8.4
(1.6)
Share of profit from joint ventures
19
0.1
0.4
Dividend income
0.2
—
Fair value movements in financial asset
27
0.9
(0.1)
Impairment of intangible and other property assets
(4.0)
(2.7)
Share-based payment charge
25
—
(2.9)
Changes in fair value of contingent consideration payable
25
—
(0.4)
Extinguishment of B and C share liabilities
25
—
(21.1)
Operating profit
514.6
126.7
Finance income
12
8.4
10.4
Finance expense
13
(71.9)
(55.3)
Changes in fair value of interest rate derivatives
27
(5.3)
(11.2)
Profit before taxation
445.8
70.6
Taxation
14
(0.3)
(0.6)
Profit and total comprehensive income
445.5
70.0
Earnings per share
15
19.67p
3.72p
1. Operating profit before changes in fair value of investment properties, gain/(loss) on disposal of investment properties, share of profit from joint ventures,
dividend income, fair value movements in financial assets, impairment of intangible and other property assets and share-based payment charges.
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FINANCIAL STATEMENTS
Group Statement of Financial Position
As at 31 December 2024
At At
31 December 31 December
2024 2023
Note£m £m
Non-current assets
Investment property
17
5,929.4
4,843.6
Investment in land options
18
148.8
157.4
Investment in joint ventures
19
24.4
24.8
Other property assets
1.7
2.3
Intangible assets
0.7
1.1
Financial assets
27
3.2
2.3
Interest rate derivatives
27
7.6
11.1
Trade and other receivables
22
3.9
1.0
Total non-current assets
6,119.7
5,043.6
Current assets
Trade and other receivables
22
56.0
22.0
Assets held for sale
20
440.4
—
Cash at bank
23
80.6
36.4
Tax asset
14
2.0
—
Total current assets
579.0
58.4
Total assets
6,698.7
5,102.0
Current liabilities
Deferred rental income
(59.5)
(38.6)
Trade and other payables
24
(112.5)
(106.9)
Tax liabilities
14
(1.9)
(2.2)
Total current liabilities
(173.9)
(147.7)
Non-current liabilities
Trade and other payables
24
(3.9)
(1.0)
Bank borrowings
26
(811.7)
(474.7)
Loan notes
26
(1,141.8)
(1,140.5)
Deferred consideration
—
(4.1)
Total non-current liabilities
(1,957.4)
(1,620.3)
Total liabilities
(2,131.3)
(1,768.0)
Total net assets
4,567.4
3,334.0
Equity
Share capital
30
24.8
19.0
Share premium reserve
30
49.2
49.2
Capital reduction reserve
30
1,289.0
1,463.9
Merger reserve
30
957.0
—
Retained earnings
30
2,247.4
1,801.9
Total equity
4,567.4
3,334.0
Net asset value per share
31
184.12p
175.13p
EPRA Net Tangible Asset per share
31
185.56p
177.15p
These financial statements were approved by the Board of Directors on 27 February 2025 and signed on its behalf by:
Aubrey Adams OBE, FCA, FRICS
Independent Chair
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Group Statement of Changes in Equity
For the year ended 31 December 2024
Capital
ShareShareMergerreductionRetained
capital premium reserve reserve earnings Total
Note£m£m£m£m£m£m
1 January 2024
19.0
49.2
—
1,463.9
1,801.9
3,334.0
Profit for the year and total comprehensive income
—
—
—
—
445.5
445.5
19.0
49.2
—
1,463.9
2,247.4
3,779.5
Contributions and distributions:
Share issue in relation to the UKCM acquisition
30
5.8
—
957.0
—
—
962.8
Dividends paid
16
—
—
—
(174.9)
—
(174.9)
31 December 2024
24.8
49.2
957.0
1,289.0
2,247.4
4,567.4
Capital
ShareShareMerger reductionRetained
capital premium reserve reserve earnings Total
Note£m£m£m£m£m£m
1 January 2023
18.7
764.3
—
835.1
1,731.9
3,350.0
Profit for the year and total comprehensive income
—
—
—
—
70.0
70.0
18.7
764.3
—
835.1
1,801.9
3,420.0
Contributions and distributions:
Shares issued in relation to extinguishment
ofshare-based payment
30
0.3
49.3
—
—
—
49.6
Transfer between reserves
—
(764.4)
—
764.4
—
—
Share-based payments
—
—
—
—
4.5
4.5
Transfer of share-based payments to liabilities to
reflectsettlement
—
—
—
—
(4.5)
(4.5)
Dividends paid
16
—
—
—
(135.6)
—
(135.6)
31 December 2023
19.0
49.2
—
1,463.9
1,801.9
3,334.0
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FINANCIAL STATEMENTS
Group Cash Flow Statement
For the year ended 31 December 2024
Year ended Year ended
31 December 31 December
2024 2023
Note£m£m
Cash flows from operating activities
Profits for the period (attributable to the Shareholders)
445.5
70.0
Tax charge
0.3
0.6
Changes in fair value of contingent consideration payable
—
0.4
Finance income
12
(8.4)
(10.4)
Finance expense
13
71.9
55.3
Changes in fair value of interest rate derivatives
5.3
11.2
Share-based payment charges
—
2.9
Extinguishment of B and C share liabilities
—
21.1
Impairment of intangible and other property assets
4.0
2.7
Amortisation of intangible property assets
0.6
—
Movement on valuation of financial asset
(0.9)
—
Share of profit from joint ventures
(0.1)
(0.4)
(Gain)/loss on disposal of investment properties
(8.4)
1.6
Changes in fair value of investment properties
17
(243.7)
38.1
Accretion of client lease incentive
6
(21.4)
(16.2)
(Increase)/decrease in trade and other receivables
(33.4)
3.5
Increase in deferred income
12.7
3.9
(Decrease)/increase in trade and other payables
(26.0)
0.6
Cash generated from operations
198.0
184.9
Taxation (charge)/credit
14
(2.6)
0.4
Net cash flow generated from operating activities
195.4
185.3
Investing activities
Additions to investment properties
(196.2)
(308.9)
Additions to land options
18
(16.9)
(16.8)
Net working capital acquired on the acquisition of UKCM
(8.1)
—
Purchase of equity investment
—
(66.6)
Purchase of financial asset
—
(2.4)
Additions to joint ventures
—
(0.3)
Net proceeds from disposal of investment properties
137.8
326.8
Interest received
12
0.7
0.2
Dividends received from joint ventures
0.4
0.8
Net cash flow used in investing activities
(82.3)
(67.2)
Financing activities
Proceeds from issue of Ordinary Share capital
—
49.6
Bank borrowings drawn
26
340.0
409.0
Bank and other borrowings repaid
26
(178.0)
(407.0)
Interest derivatives received
12
7.0
9.9
Loan arrangement fees paid
(1.2)
(5.1)
Bank interest paid
(60.6)
(47.9)
Interest cap premium paid
(1.8)
(2.4)
Dividends paid to equity holders
(174.1)
(135.3)
Net cash flow used from financing activities
(68.7)
(129.2)
Net increase in cash and cash equivalents for the year
44.4
(11.2)
Cash and cash equivalents at start of year
23
36.2
47.4
Cash and cash equivalents at end of year
23
80.6
36.2
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Notes to the Consolidated Accounts
1. Corporate information
The consolidated financial statements of the Group for the year ended 31 December 2024 comprise the results of Tritax Big Box REIT plc
(the “Company”) and its subsidiaries (together, the “Group”) and were approved by the Board for issue on 27 February 2025. The Company
is a public limited company incorporated and domiciled in England and Wales. The Company’s Ordinary Shares are admitted to the official list
of the UK Listing Authority, a division of the Financial Conduct Authority, and traded on the London Stock Exchange. The registered address
of the Company is disclosed in the Company information.
The nature of the Group’s operations and its principal activities are set out in the Strategic Report.
Accounting policies
2. Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The comparative information disclosed relates to the year ended 31 December 2023.
The Group’s financial statements have been prepared on a historical cost basis, other than as explained in the accounting policies below.
The consolidated financial statements are presented in Sterling, which is also the Company’s functional currency, and all values are rounded
to the nearest £0.1 million, except where otherwise indicated.
The Group has chosen to adopt European Public Real Estate Association (“EPRA”) best practice guidelines for calculating key metrics such
as net asset value and earnings per share (www.epra.com/finance/financial-reporting/guidelines).
2.1. Going concern
The Board has assessed the appropriateness of the going concern basis in preparing these financial statements. Any going concern
assessment considers the Group’s financial position, cash flows, liquidity and capital commitments including its continued access to
its debt facilities and headroom under financial loan covenants.
The Directors have considered the cash flow forecasts for the Group for a period of at least twelve months from the date of approval of these
consolidated financial statements. These forecasts include the Directors’ assessment of plausible downside scenarios. The Directors have reviewed
the current and projected financial position of the Group, making reasonable assumptions about its future trading performance. Various forms of
sensitivity analysis have been performed having particular regard to the financial performance of its clients’ track record of rental receipts, whilst
taking into account any discussions held with the client surrounding their future rental obligations. The analysis also included sensitising the impact
of portfolio valuation movements through market volatility, rent collection and client default. These scenarios all paid regard to the current economic
environment.
The Group has a strong track record around rent collection with no history of significant levels of bad debt or arrears. Generally speaking, we have
strong clients with robust balance sheets and strong cash flows. The Directors have also considered the arrears position in light of IFRS 9, expected
credit loss model, see Note 22 for further details.
As at 31 December 2024, the Group had an aggregate £519.0 million of undrawn commitments under its senior debt facilities as well as £80.6m of
cash held at bank, of which £101.2 million was committed under various development related contracts. In January and February 2025 the Group
also acquired a logistical asset for £74.3 million and sold or exchanged to sell £86.8 million of non-strategic assets and £79.0 million of logistics
investment assets.
At 31 December 2024 the Group’s loan to value ratio stood at 28.8%, with the debt portfolio having an average maturity term of approximately
4.5 years. As at the date of approval of this report, the Group has substantial headroom within its financial loan covenants. As at 31 December 2024
property values would have to fall by more than 50% before loan covenants are breached.
The Group’s financial covenants have been complied with for all loans throughout the period and up to the date of approval of these financial statements.
The Directors have assessed the ability of the Group and Company to continue as a going concern and are not aware of any material uncertainties
that may cast significant doubt upon the ability of the Group and Company to continue as a going concern. Therefore the Directors are satisfied that
the Group has the resources to continue in business until at least 28 February 2026.
3. 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.
3.1. 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:
Other operating income
Other operating income is receivable from development management agreements (“DMA”) in place with third parties. Development
management income is recognised in the accounting period in which the services are rendered and a significant reversal is not expected
in future periods.
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FINANCIAL STATEMENTS
3. Significant accounting judgements, estimates and assumptions continued
3.1. Judgements continued
Other operating income continued
Judgement is exercised in identifying performance obligations including the sale of land with planning consent, completing land and infrastructure
works and managing the construction of an asset. The transaction price is allocated fairly between the different performance obligations (refer
to notes 8 and 9). Certain performance obligations are recognised at a point in time (for example a land transaction) and others are recognised
over time (such as services under a DMA) each contract outlines the scope, deliverables, milestones, and payment terms. Revenue is recognised
based on the work completed to date using the percentage-of-completion method (input method), which is based on costs incurred relative to
total expected costs.
Acquisitions of property through corporate vehicles
Some property transactions are large or complex and require management to make judgements when considering the appropriate accounting
treatment. These include acquisitions of property through corporate vehicles, which could represent either asset acquisitions or business
combinations under IFRS 3 (refer to note 4.9).
During the period the Group acquired the entire issued share capital of UK Commercial Property REIT (‘UKCM’). UKCM was a real estate
investment trust with its operations managed by abrdn Fund Managers Limited (‘abrdn’). The management contract with abrdn made them
responsible for the operations required to manage the properties owned by the UKCM. Simultaneously upon acquisition, the management
contract between abrdn and UKCM was immediately cancelled as the operations of the Group were taken over by Tritax Management LLP
who remain the Investment Manager to the enlarged Group.
As the Group did not acquire any of UKCM’s critical processes which enabled them to create outputs, it was concluded that the transaction
did not meet the definition of a business combination under IFRS 3, and therefore has been accounted for as an asset acquisition (refer
to note 37).
Land options
Land options, and other non-financial assets, are initially capitalised at cost and considered for any impairment indication annually.
The impairment review includes consideration of the resale value of the option, likelihood of achieving planning consent and current
recoverable value as determined by an independent external valuer. In the calculation of the resale value or recoverable value of land
options, several estimates are required which includes the expected size of the development, expected rental and capitalisation rates,
estimated build costs, the time to complete the development and anticipated progress with achieving planning consent, as well as the
associated risks of achieving the above.
3.2. Estimates
Fair valuation of investment property
The market value of investment property is determined by an independent property valuation expert (see note 17) 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 and the principles of both IAS 40 and IFRS 13.
The valuations have been prepared in accordance with the RICS Valuation – Global Standards January 2022 (the “Red Book”). Factors
reflected comprise current market conditions including Net Initial Yield applied, annual rents and estimated rental values, lease lengths,
location and building specification which would include climate-related considerations. The Net Initial Yield, being the most significant
estimate, is subject to changes depending on the market conditions which are assessed on a periodic basis. The significant methods
and assumptions used by the valuers in estimating the fair value of investment property, together with the sensitivity analysis on the most
subjective inputs, are set out in note 17.
4. Material accounting policies
4.1. Segmental information
The Directors are of the opinion that the Group is engaged in a single segment business, being the investment in UK logistics assets and
land options with a view to developing logistics and holding these for investment purposes. The Directors consider that these properties
have similar economic characteristics in nature and as a result they have been reported as a single reportable operating business. During the
current year, the Group acquired non-logistics assets as part of the UKCM acquisition. These assets share similar economic characteristics
to the existing portfolio and collectively they form an insignificant proportion of the Group’s portfolio. In addition to this, the monitoring and
strategic decision-making processes are no different from the existing logistics core portfolio. Therefore, the Directors consider there to be
a single reportable segment.
4.2. Investment property and investment property under construction
Investment property comprises completed property that is held to earn rentals or for capital appreciation, or both. Property held under a lease
is classified as investment property when it is held to earn rentals or for capital appreciation or both, rather than for sale in the ordinary course
of business or for use in production or administrative functions.
The corresponding entry upon recognising lease incentives or fixed/minimum rental uplifts is made to investment property. For further details
see accounting policy note 4.11.
Investment property is recognised once practical completion is achieved and is measured initially at cost including transaction costs. Transaction
costs include transfer taxes, professional fees for legal services and other costs incurred in order to bring the property to the condition necessary
for it to be capable of operating. Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes
in the fair values are included in the Group profit or loss in the year in which they arise under IAS 40 “Investment Property”.
Long leaseholds are accounted for as investment property as they meet the criteria for right of use assets.
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Notes to the Consolidated Accounts continued
4. Material accounting policies continued
4.2. Investment property and investment property under construction continued
Investment properties under construction are financed by the Group through development contracts to build logistics assets, in the form of
pre-let development and with an allowance of up to 5% of GAV in speculative development (with no pre-let secured). Investment properties
under construction are initially measured at cost (including the transaction costs), which reflect the Group’s investment in the assets.
Subsequently, 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.
Additions to properties include costs of a capital nature only. Expenditure is classified as capital when it results in identifiable future economic
benefits, which are expected to accrue to the Group. Capitalised expenditure also includes finance costs incurred on qualifying assets under
construction. All other property expenditure is expensed in the Group profit or loss as incurred.
Investment properties cease to be recognised when they have been disposed of or withdrawn permanently from use and no future economic
benefit is expected from disposal. The difference between the net disposal proceeds and the carrying amount of the asset would result in
either gains or losses at the retirement or disposal of investment property. Any gains or losses are recognised in the Group profit or loss in
the year of retirement or disposal.
4.3. Financial instruments
Fair value hierarchy
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period.
4.3.1. Financial assets
The Group classifies its financial assets into one of the categories discussed below. The Group’s accounting policy for each category is
as follows:
Fair value through profit or loss
This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value.
They are carried in the Group Statement of Financial Position at fair value with changes in fair value recognised in the Group profit or loss
in the finance income or expense line. It also comprises of non-controlling minority interest equity investments, the Group has voluntarily
classified these assets to be held at fair value through profit and loss.
Amortised cost
These assets arise principally from the provision of goods and services to clients (e.g. trade receivables), but also incorporate other types
of financial assets where the objective is to hold these assets in order to collect contractual cash flows and contractual cash flows are
solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost, being the effective interest rate method, less provision for impairment.
Impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a
provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from client default (being the failure of a
client to timely pay rent due) to determine the lifetime expected credit loss for the trade receivables. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off against the associated provision.
The Group’s financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the Group
Statement of Financial Position.
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original
maturities of three months or less.
4.3.2. Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired.
The Group’s accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises out-of-the-money derivatives where the time value does not offset the negative intrinsic value. They are carried in the
Group Statement of Financial Position at fair value with changes in fair value recognised in the Group Statement of Comprehensive Income.
Other than these derivative financial instruments, the Group does not have any liabilities held for trading nor has it designated any financial
liabilities as being at fair value through profit or loss.
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FINANCIAL STATEMENTS
4. Material accounting policies continued
4.3. Financial instruments continued
Fair value hierarchy continued
4.3.2. Financial liabilities continued
Other financial liabilities
Other financial liabilities include the following items:
Bank borrowings and the Group’s loan notes are initially recognised at fair value net of any transaction costs directly attributable to the issue
of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method,
which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Group
Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium
payable on redemption, as well as any interest or coupon payment while the liability is outstanding.
Debt modification
Debt modifications are subject to a qualitative and quantitative test to determine if a substantial modification has occurred. The outcome of
the tests will determine if the modification should be treated as a substantial modification under extinguishment accounting or an adjustment
to the existing liability under modification accounting.
4.4. Joint arrangements
The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control over the relevant activities of
the arrangement to the Group and at least one other party. Joint control is assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either:
• joint ventures: where the Group has rights to only the net assets of the joint arrangement; or
• joint operations: where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers:
• the structure of the joint arrangement;
• the legal form of joint arrangements structured through a separate vehicle;
• the contractual terms of the joint arrangement agreement; and
• any other facts and circumstances (including any other contractual arrangements).
The Group does not have any joint operations.
Joint ventures are initially recognised in the Group Statement of Financial Position at cost. Subsequently joint ventures are accounted for
using the equity method, where the Group’s share of post-acquisition profits and losses and other comprehensive income is recognised
in the Group Statement of Comprehensive Income.
Profits and losses arising on transactions between the Group and its joint ventures are recognised only to the extent of unrelated investors’
interests in the associate. The investor’s share in the joint venture’s profits and losses resulting from these transactions is eliminated against
the carrying value of the joint venture.
Any premium paid for an investment in a joint venture above the fair value of the Group’s share of the identifiable assets, liabilities and
contingent liabilities acquired is capitalised and included in the carrying amount of the investment in joint venture. Provision for impairment
in value is made where there is objective evidence that the investment in a joint venture has been impaired.
4.5. Goodwill
Goodwill is capitalised as an intangible asset, with any impairment in carrying value being charged to the Group Statement of Comprehensive
Income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is
credited in full to the Group Statement of Comprehensive Income on the acquisition date as a gain on bargain purchase or negative goodwill.
4.6. Intangible assets
As a result of the acquisition of Tritax Big Box Developments, the DMA between the Company and Tritax Big Box Developments Management
Limited is assessed as a favourable contract. It is recognised as an intangible asset on the Group Statement of Financial Position and is
amortised over the original eight year term of the DMA. The favourable element of the DMA was assessed with reference to a reasonable
mark-up that may be expected for these services if the agreement were set up at arm’s length, discounted over the eight-year period.
4.7. Land options
Land options are classified as non-financial assets as they are non-liquid assets with no active market and they cannot be readily converted
into cash. The options are exercisable at a future date subject to receiving planning consent. They are initially carried at cost and are tested for
impairment annually and whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the
carrying value of an asset exceeds its recoverable amount, the higher of value in use and fair value less costs to sell, the option is written down
accordingly as a charge to the Group Statement of Comprehensive Income. Once the options are exercised and the land is drawn down, they
are transferred into investment property.
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Notes to the Consolidated Accounts continued
4. Material accounting policies continued
4.8. Impairment of assets
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year
end. Other non-financial assets including intangible assets, investment in joint ventures and land options are subject to annual impairment
tests, or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value
of an asset exceeds its recoverable amount (the higher of value in use and fair value less costs to sell), the asset is impaired accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group
of assets to which it belongs for which there are separately identifiable cash flows, its cash-generating units (“CGUs”). Goodwill is allocated
on initial recognition to each of the Group’s CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in Group Statement of Comprehensive Income. An impairment loss recognised for goodwill is not reversed.
4.9. Business combination
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. Under the Definition of a Business (Amendments to IFRS 3 “Business
Combinations”), to be considered a business 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. The optional “concentration test” is also applied; where
substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired
would not represent a business. Therefore the Group accounts for an acquisition as a business combination where an integrated set of
activities is acquired in addition to the property.
Where an acquisition is considered to be a business combination the consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the Group Statement of Financial Position, the acquiree’s identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the acquisition date. Any excess of the cost of a business combination over
the Group’s interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired is treated as goodwill. Where the fair
value of identifiable assets, liabilities and contingent liabilities acquired exceeds the fair value of the purchase consideration, the difference is
treated as gain on bargain purchase and credited to the Group Statement of Comprehensive Income. The results of acquired operations are
included in the Group Statement of Comprehensive Income from the date on which control is obtained until the date on which control ceases.
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 arises.
Where amounts payable for the acquisition of a business are subject to a contingent consideration arrangement in which the payments
are automatically forfeited if employment terminates, the amounts are treated as remuneration for post-combination services rather than
consideration for the acquisition of a business.
4.10. Share-based payments
The Company entered into an agreement with the Tritax Big Box Development Shareholders where future amounts payable are based on the
Adjusted NAV of Tritax Big Box Developments Limited and subject to certain provisions around continuing employment. 25% of the amounts
payable are to be settled in cash with the remaining 75% settled in cash or shares at the discretion of the Company. Where the Company had
a present obligation to settle the amounts in cash, either through its stated intention or past practice, the Company accounted for the amounts
as cash settled share-based payments. The fair value of the cash settled obligation was recognised over the vesting period and presented as
a liability in the Group Statement of Financial Position. The liability was remeasured at each reporting date with the charge to the profit or loss
updated over the vesting period.
4.11. Property income
4.11.1. Rental income
Rental income arising from operating leases on investment property is accounted for on a straight line basis over the lease term and is
included in gross rental income in the Group Statement of Comprehensive Income. A rental adjustment is recognised from the rent review date
in relation to unsettled rent reviews, where the Directors are reasonably certain that the rental uplift will be agreed. Initial direct costs incurred
in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis as the lease income.
Rental income is invoiced, either monthly or quarterly in advance, and for all rental income that relates to a future period this is deferred and
appears within current liabilities on the Group Statement of Financial Position.
For leases, which contain fixed or minimum uplifts, the rental income arising from such uplifts is recognised on a straight-line basis over the
lease term.
Client lease incentives are recognised as a reduction of gross rental income on a straight-line basis over the term of the lease. The lease
term is the non-cancellable period of the lease together with any further term for which the client has the option to continue the lease where,
at the inception of the lease, the Directors are reasonably certain that the client will exercise that option.
When the Group enters into a pre-let development agreement no rental income is recognised under the agreement for lease until practical
completion has taken place, at which point rental income is recognised in the Group Statement of Comprehensive Income from the rent
commencement date.
4.11.2. Other operating income
The other operating income is generated through the Group providing development management services to third parties. It is recognised
on an accruals basis in the period in which the services have been rendered, performance obligations have been satisfied and a significant
reversal is not expected in future periods.
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FINANCIAL STATEMENTS
4. Material accounting policies continued
4.12. Taxation
Taxation on the profit or loss for the period not exempt under UK REIT regulations comprises current and deferred tax. Current tax is
expected tax payable on any profit not relating to the property rental business for the year, using tax rates enacted or substantively enacted
at the year-end date, including any adjustment to tax payable in respect of previous years. A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be available against which the asset can be utilised.
5. New standards issued
5.1. New standard issued and effective from 1 January 2024
The following standard and amendment to existing standards has been applied in preparing the financial statements.
The following amendments are effective for the period beginning 1 January 2024:
• Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants – Amendments to IAS 1.
• Lease Liability in a Sale and Leaseback – Amendments to IFRS 16.
• Disclosures: Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7.
There was no material effect from the adoption of the above-mentioned amendments to IFRS effective in the period. They have no significant
impact to the Group as they are either not relevant to the Group’s activities or require accounting which is already consistent with the Group’s
current accounting policies.
5.2. New standards issued but not yet effective
The following standards and amendments are effective for the annual reporting period beginning 1 January 2027:
• IFRS 18 “Presentation and Disclosure in Financial Statements” and;
• IFRS 19 “Subsidiaries without Public Accountability: Disclosures”.
The Group is assessing the impact of IFRS 18, issued by the IASB in April 2024, which replaces IAS 1 and introduces major amendments
to IFRS Standards, including IAS 8. While IFRS 18 does not affect recognition or measurement, it will significantly impact presentation
and disclosure, including, but not limited to profit or loss categorisation, aggregation/disaggregation, labelling, and management-defined
performance measures. The Group does not expect to be eligible to apply IFRS 19.
There are no 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.
6. Total property income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Rental income – freehold property
225.5
175.3
Rental income – long leasehold property
33.8
30.5
Spreading of client incentives and guaranteed rental uplifts
21.4
16.2
Other income
0.4
0.2
Gross rental income
281.1
222.2
Property insurance recoverable
4.9
4.5
Service charges recoverable
8.2
1.7
Total property insurance and service charge income
13.1
6.2
Total property income
294.2
228.4
There was one individual client representing more than 10% of gross rental income, constituting £37.3 million of rental income in 2024
(2023: £32.6 million).
7. Service charge expenses
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Property insurance expense
5.2
4.6
Service charge expense
10.4
1.7
Total property expenses
15.6
6.3
Tritax Big Box REIT plc Annual Report 2022
134
Tritax Big Box REIT plc Annual Report 2024
134
Notes to the Consolidated Accounts continued
8. Other operating income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
DMA income
67.4
—
Sale of land
18.9
—
Total other operating income
86.3
—
9. Other operating costs
Year ended Year ended
31 December 31 December
2024 2023
£m £m
DMA expense
47.2
—
Cost of land
16.1
—
Total other operating costs
63.3
—
10. Administrative and other expenses
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Investment management fees
24.6
22.0
Directors’ remuneration (note 11)
0.5
0.5
Auditor’s fees:
Fees payable for the audit of the Company’s annual accounts
0.8
0.4
Fees payable for the review of the Company’s interim accounts
0.1
0.1
Fees payable for the audit of the Company’s subsidiaries
0.1
0.1
Total Auditor’s fee
1.0
0.6
Development management fees
1.0
1.0
Corporate administration fees
0.8
0.6
Regulatory fees
0.2
0.2
Legal and professional fees
1.8
1.6
Marketing and promotional fees
1.6
0.6
Other costs
2.2
1.8
Total administrative and other expenses
33.7
28.9
11. Directors’ remuneration
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Directors’ fees
0.4
0.4
Employer’s National Insurance
0.1
0.1
0.5
0.5
12. Finance income
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interest received on bank deposits
0.7
0.2
Interest received on swaps and other derivatives
7.7
10.2
8.4
10.4
Tritax Big Box REIT plc Annual Report 2022
135
Tritax Big Box REIT plc Annual Report 2024
135
FINANCIAL STATEMENTS
13. Finance expense
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Interest payable on bank borrowings
36.9
23.7
Interest payable on loan notes
29.8
29.7
Commitment fees payable on bank borrowings
2.7
2.0
Unwinding of deferred consideration
0.4
0.1
Amortisation of loan arrangement fees
4.3
4.4
Unwinding of discount on fixed rate debt
3.8
—
77.9
59.9
Borrowing costs capitalised against development properties
(6.0)
(4.6)
Total finance expense
71.9
55.3
The rate at which interest is capitalised is the Group’s weighted average cost of debt as detailed in note 26.
14. Taxation
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Tax charge
0.3
0.6
The UK corporation tax rate for the financial year is 25%. Accordingly, this rate has been applied in the measurement of the Group’s tax liability
at 31 December 2024.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Profit/(loss) on ordinary activities before taxation
445.8
70.6
Theoretical tax at UK corporation tax rate of 25% (31 December 2023: 23.52%)
111.5
16.6
REIT exempt income
(50.2)
(37.3)
Non-taxable items
(62.3)
15.6
Residual losses
1.3
5.7
Total tax charge
0.3
0.6
Non taxable items include income and gains that are derived from the property rental business and are therefore exempt from UK corporation
tax in accordance with Part 12 of CTA 2010.
REIT exempt income includes property rental income that is exempt from UK corporation tax in accordance with Part 12 of CTA 2010.
The current year tax asset of £2.0 million relates to tax over paid on anticipated non-property profits arising in the year. The prior year there
was a current liability of £0.3 million.
A deferred tax liability is recognised for appropriation tax charges of £1.9 million (2023: £1.9 million) in relation to the business combination
which occurred in 2019.
A deferred tax asset is not recognised for UK revenue losses or capital losses where their future utilisation is uncertain. At 31 December 2024,
the total of such losses was £52.5 million (2023: £41.0 million) and the potential tax effect of these was £13.1 million (2023: £10.3 million).
Tritax Big Box REIT plc Annual Report 2022
136
Tritax Big Box REIT plc Annual Report 2024
136
Notes to the Consolidated Accounts continued
15. Earnings per share
Earnings per share “EPS” are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the
weighted average number of Ordinary Shares in issue during the period.
The calculation of basic earnings per share is based on the following:
Weighted
Net profit average
attributable to number of
Ordinary Ordinary Earnings
Shareholders
Shares
1
per share
For the year ended 31 December 2024 £m ’000 pence
Basic EPS – basic and diluted
445.5
2,264,719
19.67p
Adjustments to remove:
Changes in fair value of investment property
(243.7)
Changes in fair value of interest rate derivatives
5.3
Share of profit from joint ventures
(0.1)
Gain or disposal of investment properties
(8.4)
Amortisation of other property assets
0.6
Changes in fair value of financial asset
(0.9)
Impairment of intangible contract and other property assets
4.0
EPRA EPS
1
– basic and diluted
202.3
2,264,719
8.93p
Adjustments to include:
Fixed rental uplift adjustments
(8.9)
Amortisation of loan arrangement fees and intangibles
4.1
Unwinding of discount on fixed rate debt and deferred consideration
4.2
Adjusted EPS
1
– basic and diluted
201.7
2,264,719
8.91p
1. Based on the weighted average number of Ordinary Shares in issue throughout the year.
Weighted
Net profit average
attributable to number of
Ordinary Ordinary Earnings
Shareholders
Shares
1
per share
For the year ended 31 December 2023 (restated, due to change in EPRA guidance) £m ’000 pence
Basic EPS – basic and diluted
70.0
1,881,931
3.72p
Adjustments to remove:
Changes in fair value of investment property
38.1
Changes in fair value of interest rate derivatives
11.2
Share of profit from joint ventures
(0.4)
Loss on disposal of investment properties
1.6
Share of profit from joint ventures
2.30
Changes in fair value of financial asset
0.1
Impairment of intangible contract and other property assets
0.4
EPRA EPS
2 –
basic and diluted (restated)
123.3
1,881,931
6.55p
Adjustments to include:
Share-based payment charge
2.9
Fair value movement in contingent consideration
0.4
Extinguishment of B & C share liabilities
4
21.1
Fixed rental uplift adjustments
(6.2)
Amortisation of loan arrangement fees and intangibles
4.4
Adjusted EPS
2
– basic and diluted (restated)
145.9
1,881,931
7.75p
Tritax Big Box REIT plc Annual Report 2022
137
Tritax Big Box REIT plc Annual Report 2024
137
FINANCIAL STATEMENTS
15. Earnings per share continued
Weighted
Net profit average
attributable to number of
Ordinary Ordinary Earnings
Shareholders
Shares
1
per share
For the year ended 31 December 2023 (reported) £m ’000 pence
Basic EPS – basic and diluted
70.0
1,881,931
3.72p
Adjustments to remove:
Changes in fair value of investment property
38.1
Changes in fair value of interest rate derivatives
11.2
Finance income received on interest rate derivatives
3
(10.2)
Share of profit from joint ventures
(0.4)
Loss on disposal of investment properties
1.6
Share of profit from joint ventures
2.30
Changes in fair value of financial asset
0.1
Impairment of intangible contract and other property assets
0.4
EPRA EPS
2
– basic and diluted (reported)
113.1
1,881,931
6.01p
Adjustments to include:
Share-based payment charge
2.9
Fair value movement in contingent consideration
0.4
Extinguishment of B & C share liabilities
4
21.1
Fixed rental uplift adjustments
(6.2)
Amortisation of loan arrangement fees and intangibles
4.4
Finance income received on interest rate derivatives
3
10.2
Adjusted EPS
2
– basic and diluted (reported)
145.9
1,881,931
7.75p
1. Based on the weighted average number of Ordinary Shares in issue throughout the year.
2. Based on the weighted average number of Ordinary Shares in issue throughout the year, plus potentially issuable dilutive shares.
3. In accordance with the EPRA guidance the finance income received on interest rate derivatives was taken out of EPRA Earnings and was added back into
Adjusted Earnings as it gave a better reflection of the Group’s net interest expense which was supported by cash flows. During 2024 this guidance has since
changed and it is no longer required to be excluded from the EPRA EPS and the prior year has been restated to reflect this change.
4. This is a one-off charge in the prior year relating to the B&C settlement (please refer to note 25 for further details).
Adjusted earnings is a performance measure used by the Board to assess the Group’s dividend payments. The metric reduces EPRA earnings
by other 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.
Fixed rental uplift adjustments relate to adjustments to net rental income on leases with fixed or minimum uplifts embedded within their review
profiles. The total minimum income recognised over the lease term is recognised on a straight-line basis and therefore not fully supported by
cash flows during the early term of the lease, but this reverses towards the end of the lease.
Share-based payment charges related to the B and C Shareholders. Whilst impacting on earnings in the prior year, this value was considered
capital in nature from the perspective it relates to a B&C Share equity holding in Tritax Big Box Developments Limited. It was therefore
removed from Adjusted earnings.
16. Dividends paid
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Fourth interim dividend in respect of period ended 31 December 2023 at 2.050 pence per Ordinary Share
(fourth interim for 31 December 2022 at 1.975 pence per Ordinary Share)
39.0
36.9
First interim dividend in respect of year ended 31 December 2024 at 1.825 pence per Ordinary Share
(31December 2023: 1.750 pence)
45.3
32.7
Second interim dividend in respect of year ended 31 December 2024 at 1.825 pence per Ordinary Share
(31December 2023: 1.750 pence)
45.3
32.7
Third interim dividend in respect of year ended 31 December 2024 at 1.825 pence per Ordinary Share
(31December 2023: 1.750 pence)
45.3
33.3
Total dividends paid
174.9
135.6
Total dividends paid for the year (per share)
5.475
5.250
Total dividends unpaid but declared for the year (per share)
2.185
2.050
Total dividends declared for the year (per share)
7.660
7.300
Tritax Big Box REIT plc Annual Report 2022
138
Tritax Big Box REIT plc Annual Report 2024
138
Notes to the Consolidated Accounts continued
16. Dividends paid continued
On 27 February 2025, the Company approved the fourth interim dividend for declaration in respect of the year ended 31 December 2024 of 2.185
pence per share payable on 28 March 2025. The total dividends declared for the year of 7.66 pence are all property income distribution (“PID”).
17. Investment property
In accordance with IAS 40, investment property is stated at fair value as at 31 December 2024. The investment property has been
independently valued by CBRE Limited (“CBRE”), Jones Lang LaSalle Limited (“JLL”) and Colliers International Valuation UK LLP (“Colliers”),
they are accredited independent valuers with recognised and relevant professional qualifications and with recent experience in the locations
and categories of the investment properties being valued. CBRE and JLL value all investment property with leases attached or assets under
construction. Colliers values all land holdings and land options. The valuations have been prepared in accordance with the RICS Valuation –
Global Standards July 2017 (the “Red Book”) and incorporate the recommendations of the International Valuation Standards and the RICS
Valuation – Professional Standards UK January 2014 (revised April 2015) which are consistent with the principles set out in IFRS 13.
The valuers, in forming their opinion, make a series of assumptions, which are market related, such as Net Initial Yields and expected
rental values, and are based on the valuer’s professional judgement. The valuers have sufficient current local and national knowledge of
the particular property markets involved and has the skills and understanding to undertake the valuations competently. There have been
no changes to the assumptions made in the year as a result of a range of factors including the macro-economic environment, availability
of debt finance and physical and transition risks relating to climate change.
The valuers of the Group’s property portfolio have a working knowledge of the various ways that sustainability and environmental, social
and governance factors can impact value and have considered these, and how market participants are reflecting these in their pricing, in
arriving at their Opinion of Value and resulting valuations as at the balance sheet date. Currently, assets with the highest standards of ESG
are commanding higher rental levels, have lower future capital expenditure requirements, and are transacting at lower yields.
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 year and prior year have been treated as asset purchases rather than business combinations because
they are considered to be acquisitions of properties rather than businesses.
Investment Investment Investment
property property property under
freehold long leasehold construction Total
£m £m £m £m
As at 1 January 2024
4,004.3
580.9
258.4
4,843.6
Property additions
1
1,090.5
93.8
210.7
1,395.0
Fixed rental uplift and client lease incentives
2
20.5
1.9
—
22.4
Disposals
(134.6)
—
(22.2)
(156.8)
Transfer of completed property to investment property
188.4
—
(188.4)
—
Transfer from land options
—
—
21.9
21.9
Transfer to assets held for sale
(326.1)
(34.0)
(80.3)
(440.4)
Change in fair value during the year
158.5
19.5
65.7
243.7
As at 31 December 2024
5,001.5
662.1
265.8
5,929.4
Investment Investment Investment
property property property under
freehold long leasehold construction Total
£m £m £m £m
As at 1 January 2023
3,811.2
637.2
398.9
4,847.3
Property additions
109.1
0.1
195.8
305.0
Fixed rental uplift and client lease incentives
2
20.3
0.7
—
21.0
Disposals
(256.2)
(52.2)
—
(308.4)
Transfer of completed property to investment property
357.2
—
(357.2)
—
Transfer from land options
—
—
16.8
16.8
Change in fair value during the year
(37.3)
(4.9)
4.1
(38.1)
As at 31 December 2023
4,004.3
580.9
258.4
4,843.6
1. Acquisitions include UKCM assets at a valuation of £1,216.9 million less a price discount on acquisition of £67.8 million and other acquisitions of £245.9 million
(refer to note 37).
2. Included within the carrying value of investment property is £114.0 million (31 December 2023: £91.6 million) in respect of accrued contracted rental uplift
income. 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 difference between this and cash receipts changes the carrying value of the property against
which revaluations are measured.
31 December 31 December
2024 2023
£m £m
Investment property at fair value per Group Statement of Financial Position
5,929.4
4,843.6
Assets held for sale at fair value
440.4
—
Total investment property valuation
6,369.8
4,843.6
Tritax Big Box REIT plc Annual Report 2022
139
Tritax Big Box REIT plc Annual Report 2024
139
FINANCIAL STATEMENTS
17. Investment property continued
The Group has other capital commitments which represent financial commitments made in respect of direct construction, asset management
initiatives and development land. The Group had also agreed to exchange on the purchase of investment asset at the year end (refer to note 35).
Fees payable under the DMA totalling £2.5 million (2023: £nil ) have been capitalised in the year, being directly attributable to completed
development projects during the year.
Fair value hierarchy
The Group considers that all of its investment properties 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.”
Market value 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
The yield methodology approach is used when valuing the Group’s properties which uses market rental values capitalised with a market
capitalisation rate. This is sense-checked against the market comparable method (or market comparable approach) where a property’s fair
value is estimated based on comparable transactions in the market.
For investment property under construction and the land held for development, the properties are valued using both the residual method
approach and comparable method approach. Under the residual approach, the valuer initially assesses the investment value (using the above
methodology for completed properties). Then, the total estimated costs to complete (including notional finance costs and developer’s profit)
are deducted from the value to take into account the hypothetical purchaser’s management of the remaining development process and
their perception of risk with regard to construction and the property market (such as the potential cost overruns and letting risks). Under the
comparable approach, the value of the land is considered in the context of market transactions and what a hypothetical purchaser may pay
for the land, typically on a per acre basis. It is common for the valuer to consider both approaches when formulating their opinion of value,
where appropriate. Land values are sense-checked against the rate per acre derived from actual market transactions.
The key unobservable inputs made in determining fair values are as follows:
Unobservable input: estimated rental value (“ERV”)
The rent per square foot at which space could be let in the market conditions prevailing at the date of valuation.
Passing rents are dependent upon a number of variables in relation to the Group’s property. These include: size, location, client covenant
strength and terms of the lease.
Unobservable input: Net Initial Yield
The Net Initial Yield is defined as the initial gross income as a percentage of the market value (or purchase price as appropriate) plus standard
costs of purchase.
Unobservable Inputs
Net Initial Net Initial
31 December 2024 ERV range ERV average Yield range Yield average
Industrials £ psf £ psf % %
South East
6.25 – 19.00
11.52
3.99 – 5.94
4.51
South West
7.00 – 12.07
8.34
3.99 – 4.92
4.57
East Midlands
3.18 – 9.00
7.80
3.55 – 5.46
4.55
West Midlands
7.32 – 10.74
8.80
3.87 – 6.44
4.78
North East
4.90 – 8.00
6.42
4.39 – 5.74
4.93
North West
5.01 – 11.50
8.73
4.10 – 5.72
4.95
Scotland
5.03 – 7.15
6.14
5.50 – 7.53
6.10
Unobservable Inputs
Net Initial Net Initial
31 December 2024 ERV range ERV average Yield range Yield average
Non strategic £ psf £ psf % %
Office
22.31 – 39.19
30.13
6.72 – 12.85
8.86
Retail
16.59 – 30.88
23.69
5.69 – 7.40
6.51
Alternative
13.63 – 44.20
23.96
4.88 – 14.40
6.66
Tritax Big Box REIT plc Annual Report 2022
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Tritax Big Box REIT plc Annual Report 2024
140
Notes to the Consolidated Accounts continued
17. Investment property continued
Unobservable Inputs
Net Initial Net Initial
ERV range ERV average Yield range Yield average
31 December 2023 £ psf £ psf % %
South East
5.46 – 16.81
10.20
3.86 – 5.82
4.77
South West
6.50 – 6.50
6.50
4.75 – 4.75
4.75
East Midlands
6.39 – 11.25
7.88
3.75 – 5.82
4.72
West Midlands
6.82 – 9.96
8.10
3.27 – 6.00
4.54
Yorkshire and the Humber
6.20 – 8.00
6.99
4.32 – 6.00
4.96
North East
3.91 – 4.25
4.08
4.75 – 4.83
4.79
North West
5.00 – 11.25
7.95
4.23 – 5.75
4.90
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 judgements
and is inherently subjective by nature.
As a result the following sensitivity analysis has been prepared:
-5% in +5% in +0.25% Net -0.25% Net
passing rent passing rent Initial Yield Initial Yield
£m £m £m £m
(Decrease)/increase in the fair value of investment properties as at
31 December 2024
(283.2)
283.2
(282.6)
313.9
(Decrease)/increase in the fair value of investment properties as at
31 December 2023
(229.3)
229.3
(238.2)
265.9
The above includes data from the standing portfolio and does not include data from investment properties under construction. No reasonable
change in unobservable input in relation to investment properties under construction would have a material impact on the carrying value of
investment properties.
18. Investment in land options
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Opening balance
157.4
157.4
Costs capitalised in the year
16.9
16.8
Transferred to investment property
(21.9)
(16.8)
Impairment
(3.6)
—
Closing balance
148.8
157.4
The average maturity date across land options held is approximately 7.4 years (2023: 8.0 years) term remaining.
Fees payable under the DMA totalling £2.2 million (2023: £5.9 million) have been capitalised in the year, being directly attributable to the
ongoing development projects.
19. Investment in joint ventures
As at 31 December 2024 the Group has two joint ventures which have been equity accounted for.
The Group has the following joint ventures as at 31 December 2024:
Country of
Principal activity
incorporation
Ownership
Joint venture partner
HBB (J16) LLP
Property development
UK
50%
HB Midway Limited
Magnitude Land LLP
Property investment
UK
50%
Pochin Midpoint Limited
The registered office for the above joint ventures is: Unit B, Grange Park Court, Roman Way, Northampton, England NN4 5EA.
31 December 2024
31 December 2023
Total 100% Group’s share Total 100% Group’s share
Net investment £m £m £m £m
At beginning of year
49.6
24.8
54.4
27.2
Total comprehensive income
0.2
0.1
0.8
0.4
Impairment of JV asset
(0.2)
(0.1)
(4.6)
(2.3)
Capital repaid
(0.8)
(0.4)
(1.6)
(0.8)
Cash contributed
—
—
0.6
0.3
As at 31 December 2024
48.8
24.4
49.6
24.8
Tritax Big Box REIT plc Annual Report 2022
141
Tritax Big Box REIT plc Annual Report 2024
141
FINANCIAL STATEMENTS
19. Investment in joint ventures continued
As at 31 December 2024 the Group has two joint ventures which have been equity accounted for.
The Group has the following joint ventures as at 31 December 2024:
Comprehensive Income Statement
31 December 2024
31 December 2023
Total 100% Group’s share Total 100% Group’s share
Year ended 31 December 2024 £m £m £m £m
Net income
0.6
0.3
0.8
0.4
Administrative expenses
—
—
—
—
Profit before taxation
0.6
0.3
0.8
0.4
Taxation
—
—
—
—
Total comprehensive Profit
0.6
0.3
0.8
0.4
Statement of Financial Position
31 December 2024
31 December 2023
Total 100% Group’s share Total 100% Group’s share
As at 31 December 2024 £m £m £m £m
Investment property
5.4
2.7
4.8
2.4
Options to acquire land
43.2
21.6
43.2
21.6
Non-current assets
48.6
24.3
48.0
24.0
Other receivables
—
—
—
—
Cash
0.6
0.3
1.9
1.0
Current assets
0.6
0.3
1.9
1.0
Trade and other payables
(0.4)
(0.2)
(0.3)
(0.2)
Current liabilities
(0.4)
(0.2)
(0.3)
(0.2)
Net assets
48.8
24.4
49.6
24.8
20. Assets held for sale
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Industrial
79.0
—
Land
29.4
—
Non-strategic
332.0
—
Assets held for sale
440.4
—
As shown above, assets held for sale relate to one industrial asset which completed on 11 February 2025, one piece of land which forms
part of a DMA contract which completed on 6 January 2025 and 10 non-strategic assets acquired a part of the UKCM acquisition which
management has committed to a plan to dispose of these assets, with disposal expected to occur within a 12 month period.
Please refer to note 17 details into the inputs and assumptions used in determining the fair value of these assets as at 31 December 2024.
21. Investments
The Group comprises a number of Special Purpose Vehicle (SPV) subsidiaries. All SPV subsidiaries that form these financial statements are
noted within the Company financial statements in note 5.
22. Trade and other receivables
Year ended Year ended
31 December 31 December
2024 2023
Non-current trade and other receivables £m £m
Cash in public institutions
3.9
1.0
The cash in public institutions is a deposit of £3.9 million paid by certain clients to the Company, as part of their lease agreements.
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Trade receivables
26.5
9.4
Prepayments, accrued income and other receivables
29.5
7.4
VAT
—
5.2
Total trade and other receivables
56.0
22.0
Tritax Big Box REIT plc Annual Report 2022
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Tritax Big Box REIT plc Annual Report 2024
142
Notes to the Consolidated Accounts continued
22. Trade and other receivables continued
The carrying value of trade and other receivables classified at amortised cost approximates fair value. The increase in trade receivables in
the period was due to an increase in receivables relating to DMA projects and from the acquisition of UKCM.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit risk and ageing.
The expected loss rates are based on the Group’s historical credit losses experienced over the three-year period prior to the year end.
The historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group’s clients.
The expected credit loss provision as at 31 December 2024 was £0.6 million (31 December 2023: £0.3 million). No reasonably possible
changes in the assumptions underpinning the expected credit loss provision would give rise to a material expected credit loss.
23. Cash held at bank
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Cash and cash equivalents to agree with cash flow
80.6
36.2
Restricted cash
—
0.2
Total cash and cash equivalents
80.6
36.4
Restricted cash is cash where there is a legal restriction to specify its type of use, i.e. this may be where there is a joint arrangement with
a client under an asset management initiative.
Cash and cash equivalents reported in the Consolidated Statement of Cash Flows totalled £80.6 million (2023: £36.2 million) as at the year
end, which excludes long-term restricted and ring-fenced cash deposits totalling £nil million (2023: £0.2 million). Total cash held at bank as
reported in the Group Statement of Financial Position is £80.6 million (2023: £36.4 million).
24. Trade and other payables
Year ended Year ended
31 December 31 December
2024 2023
Non-current trade and other payables £m £m
Other payables
3.9
1.0
Year ended Year ended
31 December 31 December
2024 2023
£m £m
Trade and other payables
72.5
57.4
Bank loan interest payable
12.1
9.3
Deferred consideration
4.3
4.8
VAT
5.2
—
Accruals
18.4
35.4
Total trade and other payables
112.5
106.9
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
25. Amounts that were due to B and C Shareholders
Amounts that were due to B and C Shareholders comprised the fair value of the contingent consideration element of B and C Shares along
with the fair value of the obligation under the cash settled share-based payment element of B and C Shares.
Amounts that were due to B and C Shareholders are detailed in the table below:
Contingent Share-based
consideration payment Extinguishment Fair value
31 December 2023 £m £m £m £m
Opening balance
25.6
16.6
—
42.2
Fair value movement recognised
0.4
—
—
0.4
Share-based payment charge
—
2.9
—
2.9
Extinguishment of B and C share liabilities
—
—
21.1
21.1
Settlement of liabilities
(26.0)
(19.5)
(21.1)
(66.6)
Closing balance
—
—
—
—
The Group considered that the amounts due to the B and C Shareholders 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.
Tritax Big Box REIT plc Annual Report 2022
143
Tritax Big Box REIT plc Annual Report 2024
143
FINANCIAL STATEMENTS
26. Borrowings
The Group has a £300 million and £500 million sustainably linked unsecured revolving credit facility (RCF), providing significant operational
flexibility. Both facilities are provided by a syndicate of large multi-national banks.
During the period, the Group acquired an undrawn RCF of £150 million through the acquisition of UKCM on 16 May 2024. This facility was
extinguished on 24 July 2024, and the Group entered into a new £150 million RCF agreement on the same date. This RCF includes a fixed
element of £75 million, drawn at inception, with the remaining £75 million being variable. The loan matures on 24 July 2026, although the
facility benefits from two one year extension periods.
The Group also extended the term of the £500 million RCF by one year, from 12 October 2028 to 12 October 2029. This extension was
not considered a substantial modification as there were no significant changes to the loan’s terms and conditions.
As of 31 December 2024, 63% (December 2023: 61%) of the Group’s drawn debt is fixed term, with 37% floating term (December 2023:
39%). Including interest rate hedging, the Group has fixed term or hedged facilities totalling 93.4% of drawn debt as of 31 December 2024
(December 2023: 96%).
The weighted average cost of debt was 3.05% as of 31 December 2024 (December 2023: 2.93%). On the same date, the Group had
undrawn debt commitments of £519.0 million (31 December 2023: £531.0 million).
To remain compliant with its tightest financial covenants, the Group must maintain an interest cover above 1.5x, a loan-to-value ratio below
60%, and a gearing ratio below 150%. As at 31 December 2024, the Group had an interest cover of 4.4x, a loan-to-value ratio of 28.8%,
and a gearing ratio of 42.8%. Consequently, the Group has adhered to all these covenants throughout the year and is also expected to
comfortably meet these targets over the next twelve months.
A large part of the Group’s borrowings are unsecured financing arrangements. Below is a summary of the drawn and undrawn bank
borrowings for the period:
Bank borrowings Bank borrowings
drawn undrawn Total
£m £m £m
As at 1 January 2024
481.9
531.0
1,012.9
Bank borrowings drawn in the year under existing facilities
265.0
(265.0)
—
Bank borrowings repaid in the year under existing facilities
(178.0)
178.0
—
Book value of UKCM borrowings
200.0
—
200.0
New bank borrowing facility
75.0
75.0
150.0
As at 31 December 2024
843.9
519.0
1,362.9
Bank borrowings Bank borrowings
drawn undrawn Total
£m £m £m
As at 1 January 2023
479.9
483.0
962.9
Bank borrowings drawn in the year under existing facilities
215.0
(215.0)
—
Bank borrowings repaid in the year under existing facilities
(260.0)
260.0
—
Cancellation of bank borrowing facility
(147.0)
(303.0)
(450.0)
New bank borrowing facility
194.0
306.0
500.0
As at 31 December 2023
481.9
531.0
1,012.9
31 December 31 December
2024 2023
£m £m
Bank borrowings drawn: due in more than one year
843.9
481.9
Less: unamortised costs on bank borrowings
(6.7)
(7.2)
Fair value gain on UKCM borrowings on acquisition
(25.5)
—
811.7
474.7
31 December 31 December
2024 2023
Bonds £m £m
2.625% Bonds 2026
249.8
249.7
3.125% Bonds 2031
248.3
248.0
2.860% USPP 2028
250.0
250.0
2.980% USPP 2030
150.0
150.0
1.500% Green Bonds 2033
247.4
247.1
Less: unamortised costs on loan notes
(3.7)
(4.3)
1,141.8
1,140.5
The weighted average term to maturity of the Group’s debt as at the year end is 4.5 years (31 December 2023: 5.2 years).
Tritax Big Box REIT plc Annual Report 2022
144
Tritax Big Box REIT plc Annual Report 2024
144
Notes to the Consolidated Accounts continued
26. Borrowings continued
Maturity of borrowings
31 December 31 December
2024 2023
£m £m
Repayable between one and two years
424.0
—
Repayable between two and five years
819.9
909.9
Repayable in over five years
750.0
722.0
1,993.9
1,631.9
27. Financial instruments and fair values
27.1. Financial assets
31 December 31 December
2024 2023
£m £m
Non-current assets: financial asset
3.2
2.3
On 31 March 2023, the Group retained a 4% interest after the disposal of certain investment properties. The asset is valued using Level 2
observable inputs.
31 December 31 December
2024 2023
£m £m
Financial asset valuation brought forward
2.3
—
Additions
—
2.4
Changes in fair value of financial asset
0.9
(0.1)
3.2
2.3
27.2. Interest rate derivatives
To manage the interest rate risk from variable rate loans, the Group has entered into several interest rate derivatives. These include interest rate
caps and one interest rate swap, which fix or cap the rate to which compounded SONIA can rise. These derivatives match the initial term of
the respective loans.
As of the year end, the weighted average capped rate, excluding any margin payable, was 2.59% (2023: 2.43%). This effectively caps the
level to which SONIA can rise on £349.3 million (2023: £249.3 million) of notional hedged debt, limiting the impact of an interest rate rise on
this amount. The interest rate derivatives ensure that 93.4% of the Group’s drawn borrowings at the year end have a fixed or hedged interest
rate. The Group’s weighted average cost of debt at year end was 3.05% (2023: 2.93%). The total premium paid during the year to secure the
interest rate caps was £1.8 million (2023: £2.4 million).
The Group aims to hedge at least 90% of its total drawn debt portfolio using interest rate derivatives or fixed-rate loan arrangements. As of
the year end, the total proportion of drawn debt either hedged via interest rate derivatives or subject to fixed-rate loan agreements was 93.4%,
as shown below:
31 December 31 December
2024 2023
£m £m
Non-current assets: interest rate derivatives
7.6
11.1
The interest rate derivatives are valued 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.
31 December 31 December
2024 2023
£m £m
Interest rate derivative valuation brought forward
11.1
19.9
Premium paid
1.8
2.4
Changes in fair value of interest rate derivatives
(5.3)
(11.2)
Total interest rate derivatives
7.6
11.1
31 December 31 December
2024 2023
Drawn £m Drawn £m
Total borrowings drawn (note 26)
1,993.9
1,631.9
Notional value of effective interest rate derivatives and fixed-rate loans
1,862.3
1,561.4
Proportion of hedged debt
93.4%
95.7%
Tritax Big Box REIT plc Annual Report 2022
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145
FINANCIAL STATEMENTS
27. Financial instruments and fair values continued
Fair value hierarchy
The fair value of 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 year end.
This valuation technique falls within Level 2 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 years, nor have there been any transfers between Level 2 and Level 3 during any of the years.
28. 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 bank borrowings and derivatives is to finance the acquisition and development of the Group’s investment
property portfolio and hedge against the interest rate risk arising.
Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that are carried in the
financial statements:
Book value Fair value Book value Fair value
31 December 31 December 31 December 31 December
2024 2024 2023 2023
£m £m £m £m
Financial assets
Interest rate derivatives
7.6
7.6
2.3
2.3
Trade and other receivables
1
26.5
26.5
9.4
9.4
Cash held at bank
80.6
80.6
36.4
36.4
Financial liabilities
Trade and other payables
2
107.3
107.3
90.1
90.1
Borrowings
1,989.4
1,797.0
1,626.7
1,485.3
1. Excludes certain VAT, prepayments and other debtors.
2. Excludes tax and VAT liabilities.
Financial assets, interest rate derivatives are the only financial instruments measured at fair value through profit and loss. All other financial
assets and all financial liabilities are measured at amortised cost. All financial instruments were designated in their current categories upon
initial recognition.
The following table sets out the fair value of those financial liabilities measured at amortised cost where there is a difference between book
value and fair value.
Quoted prices in Significant Significant
active markets observable inputs unobservable
Total (Level 1) (Level 2) inputs (Level 3)
Date of valuation £m £m £m £m
Borrowings
31 December 2024
1,315.1
992.5
322.6
—
Borrowings
31 December 2023
1,165.4
1,012.1
153.3
—
The Group has four fixed-rate loans totalling £362.0 million, provided by PGIM (£90.0 million), Canada Life (£72.0 million) and Barings
(£200.0 million). The fair value is determined by discounting the delta between contractual and market cash flows at a weighted average
cost of capital discount rate. Market cash flows were built using the 12-year UK Gilt of 4.74% with an implied margin of 1.99% for the
2027 loan and 1.90% for the 2031 loan. The loans are considered to be a Level 2 fair value measurement. For all other bank loans there
is considered no other difference between fair value and carrying value.
The fair value of financial liabilities traded on active liquid markets, including the 2.625% Bonds 2026, 3.125% Bonds 2031, 1.5% Bonds
2033, 2.860% USPP 2028 and 2.980% USPP 2030, is determined with reference to the quoted market prices. These financial liabilities
are considered to be a Level 1 fair value measure.
The fair value of the financial liabilities at Level 1 fair value measure were £992.5 million (2023: £1,012.1 million) and the financial liabilities
at Level 2 fair value measure were £322.6 million (2023: £153.3 million).
Risk management
The Group is exposed to market risk (including interest rate risk), credit risk and liquidity 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 a number of
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
Statement of Comprehensive Income and net assets of a 100 basis point shift in interest rates would result in an increase of £4.8 million (2023:
£3.2 million) or a decrease of £4.8 million (2023: £3.2 million).
Tritax Big Box REIT plc Annual Report 2022
146
Tritax Big Box REIT plc Annual Report 2024
146
Notes to the Consolidated Accounts continued
28. Financial risk management continued
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or client 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 clients being required to pay rentals in advance under their lease obligations. The credit quality of the
client is assessed based on an extensive credit rating scorecard at the time of entering into a lease agreement.
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. We conduct ongoing covenant analysis of our clients and strengthened our team to support this work during the
period. The analysis combines publicly available financial and trading information with our own observations and client conversations as well
as the opinions of third-party professionals to form a view over the credit risk of counter-parties under our leases.
Trade receivables
Trade receivables, primarily client rentals, are presented in the Group Statement of Financial Position net of allowances for doubtful receivables
and are monitored on a case by case basis. Credit risk is primarily managed by requiring clients to pay rentals in advance and performing tests
around strength of covenant prior to acquisition and on an ongoing annual basis.
Credit risk related to financial instruments and cash deposits
One of the principal credit risks of the Group arises with the banks and financial institutions. The Board of Directors believes that the credit
risk on short-term deposits and current account cash balances is limited because the counterparties are banks, who are committed lenders
to the Group, with high credit ratings assigned by international credit-rating agencies.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital, the finance charges, principal repayments on its borrowings and its
commitments under forward funded development arrangements. It is the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due, as the majority of the Group’s assets are property investments and are therefore not readily realisable. The Group’s
objective is to ensure it has sufficient available funds for its operations and to fund its capital expenditure. This is achieved by continuous
monitoring of forecast and actual cash flows by management, ensuring it has appropriate levels of cash and available drawings to meet
liabilities as they fall due.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:
Less than Between Between More than
1 Year 1 and 2 years 2 and 5 years 5 years Total
£m £m £m £m £m
31 December 2024
Borrowings
67.9
486.6
937.9
783.7
2,276.1
Trade and other payables
112.5
—
—
3.9
116.4
180.4
486.6
937.9
787.6
2,392.5
31 December 2023
Borrowings
54.8
54.6
1,033.8
832.1
1,975.2
Trade and other payables
106.9
—
—
1.0
107.9
161.7
54.6
1,033.8
833.1
2,083.1
Included within the contracted payments is £282.3 million (2023: £343.2 million) of loan interest payable up to the point of maturity across
the facilities.
29. Capital management
The Board, with the assistance of the Investment Manager, monitors and reviews the Group’s capital so as to promote the long-term
success of the business, facilitate expansion and to maintain sustainable returns for Shareholders. The Group considers proceeds from
share issuances, bank borrowings and retained earnings as capital. The Group’s policy on borrowings is as set out below:
The level of borrowing will be on a prudent basis for the asset class, and will seek to achieve a low cost of funds, while maintaining flexibility
in the underlying security requirements, and the structure of both the portfolio and the REIT Group.
The Directors intend that the Group will maintain a conservative level of aggregate borrowings with a medium-term target of 30%–35%
of the Group’s gross assets.
The Group has complied with all covenants on its borrowings up to the date of this report (see note 26). All of the targets mentioned above sit
comfortably within the Group’s covenant levels, which include loan to value (“LTV”), interest cover ratio and loan to projected project cost ratio.
The Group LTV at the year end was 28.8% (2023: 31.6%) and there is substantial headroom within existing covenants.
Debt is drawn at the asset and corporate level, subject to the assessment of the optimal financing structure for the Group and having
consideration to key metrics including lender diversity, debt type and maturity profiles.
Tritax Big Box REIT plc Annual Report 2022
147
Tritax Big Box REIT plc Annual Report 2024
147
FINANCIAL STATEMENTS
30. Equity reserves
Share capital
The share capital relates to amounts subscribed for share capital at its nominal value:
31 December 31 December 31 December 31 December
2024 2024 2023 2023
Issued and fully paid at 1 pence each Number £m Number £m
Balance at beginning of year – £0.01 Ordinary Shares
1,903,738,325
19.0
1,868,826,992
18.7
Extinguishment of share based payment
—
—
34,911,333
0.3
Shares issued in relation to the acquisition of UKCM
576,939,134
5.8
—
—
Balance at end of year
2,480,677,459
24.8
1,903,738,325
19.0
On 17 May 2024, the Company issued 576.9 million Ordinary Shares at 166.9p per share (1p nominal value and a premium of 165.9p).
These shares were issued as consideration for acquiring 100% of the issued share capital of UK Commercial Property REIT. Shareholders
of UK Commercial Property REIT were entitled to receive 0.444 shares for each UK Commercial Property REIT share they held.
Share premium
The share premium relates to amounts subscribed for share capital in excess of its nominal value.
Merger reserve
Movements in the current period relate to the shares issued in relation the UKCM merger as described above (refer to note 17).
Capital reduction reserve
In 2015, 2018 and 2023, the Company by way of Special Resolution cancelled the then value of its share premium account, by an Order of the
High Court of Justice, Chancery Division. As a result of these cancellations, £422.6 million, £932.4 million and £764.4 million respectively were
transferred from the share premium account into the capital reduction reserve account. The capital reduction reserve account is classed as a
distributable reserve. Movements in the current year relate to dividends paid.
Retained earnings
Retained earnings relates to all net gains and losses not recognised elsewhere.
31. 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 year. As there are dilutive instruments outstanding, both basic and
diluted NAV per share are shown below.
31 December 31 December
2024 2023
£m £m
Net assets per Group Statement of Financial Position
4,567.4
3,334.0
EPRA NTA
4,603.2
3,372.5
Ordinary Shares:
Issued share capital (number)
2,480,677,459
1,903,738,325
Net asset value per share
184.12p
175.13p
31 December 2024
31 December 2023
EPRA NTA EPRA NRV EPRA NDV EPRA NTA EPRA NRV EPRA NDV
£m £m £m £m £m £m
NAV attributable to shareholders
4,567.4
4,567.4
4,567.4
3,334.0
3,334.0
3,334.0
Revaluation of land options
18.0
18.0
18.0
26.5
26.5
26.5
Mark-to-market adjustments of
derivatives
18.5
18.5
—
13.1
13.1
—
Intangibles
(0.7)
—
—
(1.1)
—
—
Fair value of debt
—
—
192.4
—
—
141.4
Real estate transfer tax
1
—
444.6
—
—
342.3
—
NAV
4,603.2
5,048.5
4,777.8
3,372.5
3,715.9
3,501.9
NAV per share
185.56p
203.51p
192.60p
177.15p
195.19p
183.95p
1. See notes to the EPRA NAV calculations for further details.
Tritax Big Box REIT plc Annual Report 2022
148
Tritax Big Box REIT plc Annual Report 2024
148
Notes to the Consolidated Accounts continued
32. Operating leases
The future minimum lease payments under non-cancellable operating leases receivable by the Group are as follows:
Less than Between Between Between Between More than
1 year 1 and 2 years 2 and 3 years 3 and 4 years 4 and 5 years 5 years Total
£m £m £m £m £m £m £m
31 December 2024
295.3
284.1
274.8
247.4
232.8
1,952.1
3,286.5
31 December 2023
201.9
204.5
199.3
195.1
179.6
1,808.5
2,788.9
The majority of the Group’s investment properties are leased to single clients, some of which have guarantees attached, under the terms
of a commercial property lease. Each has upward-only rent reviews that are linked to either RPI/CPI, open market or with fixed uplifts.
The weighted average unexpired lease term is 10.3 years (2023: 11.4 years).
33. Transactions with related parties
For the year ended 31 December 2024, 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.
Details of the amount paid for services provided by Tritax Management LLP (“the Manager”) are provided in note 11.
The total amount payable in the period relating to the Investment Management Agreement was £24.6 million (31 December 2023: £22.0 million),
with the total amount outstanding at the period end was £6.6 million (31 December 2023: £5.6 million).
The Manager receives a net fee relating to asset management services provided to three properties which are 4% owned by the Group,
amounting to £0.05 million for the period ended 31 December 2024 (31 December 2023: £0.05 million).
The total expense recognised in the Group Statement of Comprehensive Income relating to share-based payments under the Investment
Management Agreement was £5.0 million (2023: £4.5 million), of which £2.7 million (2023: £2.3 million) was outstanding at the year end.
Details of amounts paid to Directors for their services can be found within the Directors’ Remuneration Report.
During the year the six Members of the Manager included Colin Godfrey, James Dunlop, Henry Franklin, Petrina Austin, Bjorn Hobart and
Frankie Whitehead.
During the year the Directors who served during the year received the following dividends Aubrey Adams: £21,345 (2023: £17,340), Alastair
Hughes: £5,157 (2023: £3,358), Richard Laing: £5,329 (2023: £3,613), Karen Whitworth £3,942 (2023: £2,218) Wu Gang £524 (2023: £188)
and Elizabeth Brown £1,534 (2023: £1,255). See note 11 and Directors’ Remuneration Report for further details.
During the year the Members of the Manager received the following dividends: Colin Godfrey: £225,247 (2022: £196,830), James Dunlop:
£220,554 (2023: £194.074), Henry Franklin: £163,645 (2023: £144,283), Petrina Austin: £29,564 (2023: £25,334), Bjorn Hobart: £33,672
(2023: £29,188) and Frankie Whitehead £17,174 (2023: £13,766).
In January 2025, the Company entered into a development management agreement with Tritax Management. For full details please see the
Management Engagement Committee Report.
34. Reconciliation of liabilities to cash flows from financing activities
Derivative
financial
Borrowings instruments Loan notes Total
£m £m £m £m
Balance on 1 January 2024
474.7
(11.1)
1,140.5
1,604.1
Cash flows from financing activities:
Bank borrowings advanced
340.0
—
—
340.0
Bank borrowings repaid
(178.0)
—
—
(178.0)
Interest rate cap premium paid
—
(1.8)
—
(1.8)
Loan arrangement fees paid
(1.0)
—
(0.2)
(1.2)
Non-cash movements:
Book value of UKCM borrowings
174.5
—
—
174.5
Amortisation of loan arrangement fees
1.4
—
1.5
2.9
Fair value movement
—
5.4
—
5.4
Balance on 31 December 2024
811.6
(7.5)
1,141.8
1,945.9
In addition to the above cash flow movements in borrowings, interest was also paid of £60.6 million (2023: £47.9 million); this is included in the
movement in accruals.
Tritax Big Box REIT plc Annual Report 2022
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Tritax Big Box REIT plc Annual Report 2024
149
FINANCIAL STATEMENTS
34. Reconciliation of liabilities to cash flows from financing activities continued
Derivative
financial
Borrowings instruments Loan notes Total
£m £m £m £m
Balance on 1 January 2023
474.8
(19.9)
1,139.1
1,594.0
Cash flows from financing activities:
Bank borrowings advanced
409.0
—
—
409.0
Bank borrowings repaid
(407.0)
—
—
(407.0)
Interest rate cap premium paid
—
(2.4)
—
(2.4)
Loan arrangement fees paid
(5.1)
—
—
(5.1)
Non-cash movements:
Change in creditors for loan arrangement fees payable
0.1
—
—
0.1
Amortisation of loan arrangement fees
2.9
—
1.4
4.3
Fair value movement
—
11.2
—
11.2
Balance on 31 December 2023
474.7
(11.1)
1,140.5
1,604.1
35. Capital commitments
The Group had capital commitments of £101.2 million in relation to its development activity, asset management initiatives and commitments
under development land, outstanding as at 31 December 2024 (31 December 2023: £128.1 million). All commitments fall due within one year
from the date of this report.
36. Subsequent events
In January 2025, the Company announced it had purchased a 74-acre site at Heathrow, London within the Slough Availability Zone, a key
FLAP-D prime EMEA data centre location (the “Manor Farm site”), for £70.0 million.
Simultaneously, the Company acquired a 50% share in a joint venture with a leading European renewable and low carbon energy power
generator. The JV enables accelerated power delivery to the Manor Farm site using pre-existing grid connection agreements.
In connection with these arrangements, the Company has entered into a development management agreement with Tritax Management
pursuant to which Tritax Management has been appointed to provide development management and technical services, including pursuing
planning, overseeing construction, pre-letting services, technical electricity expertise and overseeing the technical aspects of the Company’s
role in the JV and all power related elements.
Tritax Management is a related party of the Company pursuant to UKLR 11.5.3R. The development management fee and profit share
payments outlined above to Tritax Management are deemed to be relevant related party transactions under UKLR 11.5.4R.
In January 2025, the Company acquired a 627k sq ft asset in Haydock, a core North West location, for £74.3 million.
In January and February 2025, the Company sold or exchanged to sell £86.8 million of non-strategic assets and £79.0 million of logistics
investment assets.
There were no other significant events occurring after the reporting period, but before the financial statements were authorised for issue.
37. Asset acquisition
The Group acquired all the shares of UKCM in exchange for shares in the Group. The shares issued in consideration for the acquisition qualify
for merger relief and as a result no share premium has been recognised and merger reserve has been established. The target operations were
solely the ownership of investment properties complete with extant client operating leases along with related cash, leverage, other associated
assets and working capital balances.
The consideration paid in shares of the company has been allocated across the net assets acquired by fair valuing the debt acquired, fair valuing
working capital acquired (given the short term nature of the amounts these values have been taken to represent cost), fair valuing cash acquired
(being the principal amount) with the remaining consideration being allocated across the investment properties acquired (refer to note 17 and 26).
16 May 2024
Assets and liabilities acquired: £m
Investment property fair value
1,216.9
Discount to cost on acquisition (67.8)
Investment property recognised at cost
1,149.1
Cash
26.7
Third party debt
(169.6)
Other net assets
(26.4)
Acquisition costs (16.9)
Consideration paid – shares
962.9
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Tritax Big Box REIT plc Annual Report 2024
150
Company Statement of Financial Position
As at 31 December 2024
Company Registration Number: 08215888
Note
At
31 December
2024
£m
At
31 December
2023
£m
Fixed assets
Investment in subsidiaries 5 3,798.9 2,166.9
Interest rate derivatives 10 0.7 1.0
Total fixed assets 3,799.6 2,167.9
Current assets
Trade and other receivables 6 1,278.3 1,710.9
Cash held at bank 7 7.6 1.1
Total current assets 1,285.9 1,712.0
Total assets 5,085.5 3,879.9
Current liabilities
Trade and other payables 8 (23.9) (19.4)
Loans from Group companies (174.6) (87.4)
Total current liabilities (198.5) (106.8)
Non-current liabilities
Bank borrowings 9 (426.1) (263.1)
Loan notes 9 (1,141.8) (1,140.5)
Total non-current liabilities (1,567.9) (1,403.6)
Total liabilities (1,766.4) (1,510.4)
Total net assets 3,319.1 2,369.5
Equity
Share capital 11 24.8 19.0
Share premium reserve 49.2 49.1
Capital reduction reserve 1,289.0 1,463.9
Merger reserve 957.0 —
Retained earnings 999.1 837.5
Total equity 3,319.1 2,369.5
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own
profit and loss account in these financial statements. The profit attributable to the Parent Company for the year ended 31 December 2024
amounted to £1 61 .6 million (31 December 2023: £160.8 million).
These financial statements were approved by the Board of Directors on 27 February 2025 and signed on its behalf by:
Aubrey Adams OBE, FCA, FRICS
Independent Chair
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151
FINANCIAL STATEMENTS
Company Statement of Changes in Equity
For the year ended 31 December 2024
Undistributable reserves Distributable reserves
Note
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Capital
reduction
reserve
£m
Retained
earnings
£m
Total
£m
1 January 2024 19.0 49.1 — 1,463.9 837.5 2,369.5
Profit for the year and total
comprehensive income — — — — 161.6 161.6
19.0 49.1 — 1,463.9 999.1 2,531.1
Contributions and
distributions
Share issue for UKCM
acquisition 5.8 0.1 957.0 — — 962.9
Dividends paid 4 — — — (174.9) — (174.9)
31 December 2024 24.8 49.2 957.0 1,289.0 999.1 3,319.1
Undistributable reserves Distributable reserves
Note
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Capital
reduction
reserve
£m
Retained
earnings
£m
Total
£m
1 January 2023 18.7 764.3 — 835.1 676.7 2,294.8
Profit for the year and total
comprehensive income — — — — 160.8 160.8
18.7 764.3 — 835.1 837.5 2,455.6
Contributions and
distributions
Shares issued in relation
extinguishment of B and C
liabilities 0.3 49.2 — — — 49.5
Transfer between reserves — (764.4) — 764.4 — —
Share-based payments — — — — 4.5 4.5
Transfer of share-based
payments to liabilities to
reflectsettlement — — — — (4.5) (4.5)
Dividends paid 4 — — — (135.6) — (135.6)
31 December 2023 19.0 49.1 — 1,463.9 837.5 2,369.5
Tritax Big Box REIT plc Annual Report 2022
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152
1. Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework
(“FRS101”). Assets are classified in accordance with the definitions of fixed and current assets in the Companies Act 2006.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore,
thesefinancial statements do not include:
• certain comparative information as otherwise required by adopted IFRS;
• certain disclosures regarding the Company’s capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with other wholly owned members of Tritax Big Box REIT plc.
In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included
inthe Company’s consolidated financial statements. These financial statements do not include certain disclosures in respect of:
• share-based payments;
• financial instruments;
• fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value.
Principal accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently
applied to all the years presented, unless otherwise stated.
Basis of accounting
These financial statements have been presented as required by the Companies Act 2006 and have been prepared under the historical cost
convention and in accordance with applicable Accounting Standards and policies in the United Kingdom (“UK GAAP”).
Currency
The Company financial statements are presented in Sterling which is also the Company’s functional currency and all values are rounded
tothenearest 0.1 million (£m), except where otherwise indicated.
Other income
Other income represents dividend income which has been declared by its subsidiaries and is recognised when it is received.
Dividends payable for Shareholders
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends
are recognised when approved by the Shareholders at an Annual General Meeting.
1.1 Financial assets
The Company classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was
acquired. The Company’s accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises in-the-money derivatives and out-of-money derivatives where the time value offsets the negative intrinsic value.
Theyare carried in the Company Statement of Financial Position at fair value with changes in fair value recognised in the profit or loss in the
finance income orexpense line. Other than derivative financial instruments which are not designated as hedging instruments, the Company
does not have anyassets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.
Amortised cost
These assets arise principally from the provision of goods and services to clients (such as trade receivables), but also incorporate other
types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and contractual cash flows are
solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost being the effective interest rate method, less provision for impairment.
Impairment provisions for current receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in
the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is
assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit
loss for the trade receivables. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written
off against the associated provision.
Notes to the Company Accounts
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153
FINANCIAL STATEMENTS
1. Accounting policies continued
1.1 Financial assets continued
Amortised cost continued
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected
credit loss model. The methodology used to determine the amount of provision is based on whether there has been a significant increase in
credit risk since initial recognition of the financial asset, 12-month expected credit losses along with gross interest income are recognised.
Forthose for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised.
For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Company’s financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the
Company Statement of Financial Position.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, and other short-term highly liquid investments with
originalmaturities of three months or less.
Investments in subsidiaries
The investments in subsidiary companies are included in the Company’s Balance Sheet at cost less provision for impairment.
Significant accounting judgements, estimates and assumptions
The preparation of the Company’s financial statements require 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 years. There were no significant accounting judgements, estimates or assumptions in preparing these
financial statements.
2. Standards issued and effective from 1 January 2024
There was no material effect from the adoption of other amendments to IFRS effective in the year. They have no impact to the Company
significantly as they are either not relevant to the Company’s activities or require accounting which is consistent with the Company’s current
accounting policies.
3. Taxation
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
UK corporation tax — —
The UK corporation tax rate for the financial year is 25%. Accordingly, this rate has been applied in the measurement of the Group’s tax liability
at 31 December 2024.
4. Dividends paid
For details of dividends paid by the Company during the year, refer to note 16 of the Group’s financial statements.
5. Investment in subsidiaries
31 December
2024
£m
31 December
2023
£m
As at 1 January 2,166.9 2,243.3
Increase in investments via share purchase 979.9 66.6
Debt for equity swap 661.2 —
Disposals (9.1) (143.0)
As at 31 December 3,798.9 2,166.9
The increase in investments were as a result of capitalisation of inter-company loans to fund the acquisitions made in the periods.
Tritax Big Box REIT plc Annual Report 2022
154
Tritax Big Box REIT plc Annual Report 2024
154
Notes to the Company Accounts continued
5. Investment in subsidiaries continued
The Company had the following undertakings as at 31 December 2024:
Principal activity Country of incorporation Ownership %
TBBR Holdings 1 Limited Investment holding company Jersey 100%*
TBBR Holdings 2 Limited Investment holding company Jersey 100%
Baljean Properties Limited Property investment Isle of Man 100%
Tritax Acquisition 2 Limited Investment holding company Jersey 100%
Tritax Acquisition 2 (SPV) Limited Investment holding company Jersey 100%
The Sherburn RDC Unit Trust Property investment Jersey 100%
G Avonmouth Unit Trust
#
Property Investment Jersey 100%
Tritax Acquisition 4 Limited Property investment Jersey 100%
Tritax Acquisition 5 Limited Property investment Jersey 100%
Sonoma Ventures Limited Property investment BVI 100%
Tritax REIT Acquisition 9 Limited Investment holding company UK¹ 100%*
Tritax Acquisition 10 Limited Property investment Jersey 100%
Tritax Acquisition 11 Limited Property investment Jersey 100%
Tritax Acquisition 12 Limited Property investment Jersey 100%
Tritax Acquisition 13 Limited Property investment Jersey 100%
Tritax Acquisition 14 Limited Property investment Jersey 100%
Tritax Worksop Limited Property investment BVI 100%
Tritax REIT Acquisition 16 Limited Investment holding company UK¹ 100%*
Tritax Acquisition 16 Limited Property investment Jersey 100%
Tritax Acquisition 17 Limited Property investment Jersey 100%
Tritax Acquisition 18 Limited Property investment Jersey 100%
Tritax Harlow Limited Property investment Guernsey 100%
Tritax Lymedale Limited Property investment Jersey 100%
Tritax Acquisition 21 Limited Property investment Jersey 100%
Tritax Acquisition 22 Limited Property investment Jersey 100%
Tritax Acquisition 23 Limited Property investment Jersey 100%
Tritax Acquisition 24 Limited Property investment Jersey 100%
Tritax Burton Upon Trent Limited Property investment BVI 100%
Tritax Acquisition 28 Limited Property investment Jersey 100%
Tritax Peterborough Limited Property investment Jersey 100%
Tritax Littlebrook 2 Limited Property investment Jersey 100%
Tritax Littlebrook 4 Limited Property investment Jersey 100%
Tritax Atherstone (UK) Limited Property investment UK¹ 100%
Tritax Stoke DC1&2 Limited Investment holding company Jersey 100%*
Tritax Stoke DC3 Limited Investment holding company Jersey 100%*
Tritax Holdings CL Debt Limited Investment holding company Jersey 100%*
Tritax Portbury Limited Property investment Jersey 100%
Tritax Newark Limited Property investment Jersey 100%
Tritax Carlisle Limited Investment holding company Jersey 100%*
Tritax Stoke Management Limited Management company UK¹ 100%
Tritax Holdings PGIM Debt Limited Investment holding company Jersey 100%*
Tritax Merlin 310 Trafford Park Limited Property investment Jersey 100%*
Tritax West Thurrock Limited Property investment Jersey 100%
Tritax Tamworth Limited Property investment Jersey 100%
Tritax Acquisition 35 Limited Property investment Jersey 100%
Tritax Acquisition 36 Limited Property investment Jersey 100%*
Tritax Acquisition 37 Limited Property investment Jersey 100%*
Tritax Acquisition 38 Limited Property investment Jersey 100%*
Tritax Acquisition 39 Limited Property investment Jersey 100%*
Tritax Acquisition 40 Limited Property investment Jersey 100%*
Tritax Acquisition 41 Limited Property investment Jersey 100%*
Tritax Littlebrook 1 Limited Property investment Jersey 100%
Tritax Littlebrook 3 Limited Property investment Jersey 100%
Tritax Atherstone Limited Investment holding company Jersey 100%*
Tritax Acquisition 42 Limited Property investment Jersey 100%*
Tritax Acquisition 43 Limited Property investment Jersey 100%*
Tritax Big Box REIT plc Annual Report 2022
155
Tritax Big Box REIT plc Annual Report 2024
155
FINANCIAL STATEMENTS
Principal activity Country of incorporation Ownership %
Tritax Carlisle UK Limited Investment holding company UK¹ 100%
Tritax Edinburgh Way Harlow Limited Property investment Jersey 100%*
Tritax Acquisition 45 Limited Property investment Jersey 100%*
Tritax Acquisition 46 Limited Property investment Jersey 100%*
Tritax Acquisition 47 Limited Property investment Jersey 100%*
Tritax Acquisition 48 Limited Property investment Jersey 100%*
Tritax Acquisition 49 Limited Property investment Jersey 100%*
Tritax Littlebrook Management Limited Property investment UK¹ 100%*
TBBR Holdings 4 Limited Investment holding company Jersey 100%*
Tritax Acquisition 50 Limited Property investment Jersey 100%*
Tritax Acquisition Electric Avenue Limited Property investment Jersey 100%*
Tritax Acquisition 51 Limited Property investment Jersey 100%*
Tritax Powerbox (Chelmsford) Propco Ltd (formally known as
TBBR Finance (Jersey) Limited) Financing company Jersey 100%*
Tritax PowerBox Member Co 1 Limited
#
Investment holding company UK¹ 100%*
Tritax PowerBox Member Co 2 Limited
#
Investment holding company UK¹ 100%*
UK Commercial Property REIT Limited
#
Investment holding company Guernsey 100%*
UK Commercial Property Estates Holdings Limited
#
Property investment Guernsey 100%
UK Commercial Property Finance Holdings Limited
#
Property investment Guernsey 100%
UK Commercial Property Estates Limited
#
Investment holding company Guernsey 100%
UK Commercial Property Holdings Limited
#
Investment holding company Guernsey 100%
St Georges Leicester Unit Trust
#
Property investment Jersey 100%
Junction 27 Retail Unit Trust
#
Property investment Jersey 100%
Rotunda Kingston Property Unit Trust
#
Property investment Jersey 100%
Tritax Big Box Development Holdings Ltd (formally known as
Tritax Symmetry Holdings Limited) Investment holding company Jersey 100%*
Tritax Big Box Developments Holdco 1 Ltd (formally known as
dbSymmetry Group Ltd) Investment holding company UK
2
100%
db Symmetry Ltd Investment holding company UK² 100%
Tritax Symmetry Power Ltd Investment holding company UK² 100%
Tritax Symmetry Power Biggleswade Ltd Investment holding company UK² 100%
Tritax Big Box Developments (BVI) Ltd (formally known as
TritaxSymmetry (BVI) Ltd) Investment holding company British Virgin Islands 100%
Tritax Symmetry Holdings (Biggleswade) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Biggleswade) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Holdings (Blyth) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Blyth) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Holdings (Middlewich) Co. Limited Investment holding company British Virgin Islands 100%
Tritax Symmetry Properties (Middlewich) Co. Limited Property investment British Virgin Islands 100%
Tritax Symmetry Development (Blyth) UK Ltd Property development UK² 100%
Tritax Symmetry Development (Biggleswade) UK Ltd Property development UK² 100%
Tritax Park Ardley Ltd (formally known as Tritax Symmetry Ardley Ltd) Property investment Jersey 100%
Tritax Symmetry Bicester 2 Ltd Property investment Jersey 100%
Tritax Park Northampton West Ltd (formally known as Tritax
Symmetry Northampton West Ltd) Property investment Jersey 100%
Tritax Symmetry Rugby South Ltd Property investment Jersey 100%
Tritax Park St Helens Ltd (formally known as Tritax symmetry
StHelens Ltd) Property investment Jersey 100%
Tritax Park Wigan Ltd (formally known as Tritax Symmetry Wigan Ltd) Property investment Jersey 100%
Tritax Park Oxford Ltd (formally known as Tritax Symmetry
OxfordLtd) Property investment Jersey 100%
Tritax Park Northampton Ltd (formally known as Tritax Symmetry
Northampton Ltd) Property investment Jersey 100%
Tritax Symmetry Merseyside 1 Ltd Property investment Jersey 100%
Tritax Park South Elmsall Ltd (formally known as Tritax Symmetry
South Elmsall Ltd) Property investment Jersey 100%
Tritax Symmetry (Goole) Ltd Property investment UK² 100%
5. Investment in subsidiaries continued
Tritax Big Box REIT plc Annual Report 2022
156
Tritax Big Box REIT plc Annual Report 2024
156
Notes to the Company Accounts continued
Principal activity Country of incorporation Ownership %
Tritax Big Box Development (Midlands) Ltd (formally known
asTritax Symmetry (Midlands) Ltd) Investment holding company UK² 100%
Tritax Symmetry (Aston Clinton) Ltd Property investment UK² 100%
Tritax Park Leicester South Ltd (formally known as
TritaxSymmetry Leicester South Ltd) Property investment Jersey 100%
Tritax Park Gloucester Ltd (formally known as
TritaxSymmetryGloucester Ltd) Property investment Jersey 100%
Tritax Symmetry (Speke) Ltd Property investment UK² 100%
Tritax Symmetry (Barwell) Ltd Property investment UK² 100%
Tritax Symmetry (Rugby) Ltd Property investment UK² 100%
Tritax Symmetry (Hinckley) Ltd Property investment UK² 100%
Tritax Symmetry (Darlington) Ltd Property investment UK² 100%
Tritax Symmetry (Blyth) Ltd Property investment UK² 100%
Tritax Symmetry (Bicester Reid) Ltd Property investment UK² 100%
Tritax Park Wigan UK Ltd (formally known as
TritaxSymmetry(Wigan) Ltd) Property investment UK² 100%
Tritax Symmetry (Land) LLP (formally known as
TritaxSymmetry(Land) LLP) Investment holding company UK² 100%
Tritax Symmetry (Kettering) LLP Property investment UK² 100%
Tritax Symmetry (Lutterworth) LLP Property investment UK² 100%
Tritax Big Box Developments (Northampton) LLP
(formallyknownas Tritax Symmetry (Northampton) LLP) Investment holding company UK² 100%
Symmetry Park Darlington Management Company Ltd Management company UK² 100%
Symmetry Park Aston Clinton Management Company Limited Management company UK² 100%
Tritax Symmetry Glasgow East Ltd Property investment Jersey 100%
Symmetry Park Biggleswade Management Company Limited Management company UK² 100%
Tritax Symmetry Biggleswade 2 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade 3 Ltd Property investment Jersey 100%
Tritax Symmetry Middlewich 1 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade 4 Ltd Property investment Jersey 100%
Tritax Symmetry Biggleswade Land Ltd Property investment UK² 100%
Symmetry Park Merseyside Management Company Limited Management company UK² 100%
Symmetry Park Kettering Management Company Limited Management company UK² 100%
Tritax Park Wigan Management Company Ltd (formally known
asSymmetry Park Wigan Management Company Limited) Management company UK² 100%
Symmetry Park Rugby Management Company Limited Management company UK² 100%
Tritax Symmetry Merseyside Land Ltd Property investment UK² 100%
Tritax Park Rugby West Ltd (formally known as
TritaxSymmetryWest Ltd) Property investment Jersey 100%
Tritax Symmetry Darlington 2 Ltd
#
Property investment Jersey 100%
Intermodal Logistics Park North Ltd (formally known as
TritaxSymmetry SFRI North Ltd)
#
Property investment Jersey 100%
Symmetry Park Biggleswade Management Company No 3 Ltd
#
Management company UK² 100%
Tritax Park Crewe Ltd
#
Property investment Jersey 100%
Tritax Symmetry Bicester 3 Ltd
#
Property investment Jersey 100%
Tritax Park Oxford Management Company Ltd
#
Management company UK² 100%
Tritax symmetry Rugby South 2 Ltd
#
Property investment Jersey 100%
* These are direct subsidiaries of the Company.
# These are new investments of the Company in the year.
The registered addresses for subsidiaries across the Group are consistent based on their country of incorporation and are as follows:
Jersey entities: 26 New Street, St Helier, Jersey JE2 3RA
Guernsey entities: Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 2JA
Isle of Man entities: 33-37 Athol Street, Douglas, Isle of Man IM1 1LB
British Virgin Islands entities: Jayla Place, Wickhams Cay 1, Road Town, Tortola, BVI VG1110
UK¹ entities: 72 Broadwick Street, London, W1F 9QZ
UK² entities: Unit B, Grange Park Court, Roman Way, Northampton, England NN4 5EA
5. Investment in subsidiaries continued
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157
Tritax Big Box REIT plc Annual Report 2024
157
FINANCIAL STATEMENTS
The Company also has interests in the following joint arrangements as at 31 December 2024:
Principal activity Country of incorporation Ownership %
Symmetry Park Doncaster Management Company Limited Management company UK² 50%
Symmetry Park Bicester Management Company Limited Management company UK² 33%
All of the companies registered offshore are managed onshore and are UK residents for UK corporation tax purposes, save for the Sherburn
Unit Trust, G Avonmouth Trust, St Georges Leicester Unit Trust, Junction 27 Retail Unit Trust and Rotunda Kingston Property Unit Trust.
6. Trade and other receivables
31 December 2024
£m
31 December 2023
£m
Amounts receivable from Group companies 1,276.9 1,709.7
Prepayments 0.1 0.1
Other receivables 1.3 1.1
Total trade and other receivables 1,278.3 1,710.9
All amounts that fall due for repayment within one year and are presented within current assets as required by the Companies Act. The loans to
Group companies are repayable on demand with no fixed repayment date although it is noted that a significant proportion of the amounts may not
be sought for repayment within one year depending on activity in the Group companies. Interest is charged between 0%–10% (2023: 0%–10%).
7. Cash held at bank
31 December 2024
£m
31 December 2023
£m
Cash held at bank 7.6 1.1
8. Trade and other payables
31 December 2024
£m
31 December 2023
£m
Trade and other payables 14.9 12.9
Accruals 9.0 6.5
Total trade and other payables 23.9 19.4
9. Borrowings
Bank borrowings drawn
31 December 2024
£m
31 December 2023
£m
Bank borrowings drawn: due in more than one year 431.0 269.0
Less: unamortised costs on bank borrowings (4.9) (5.9)
Total bank borrowings drawn 426.1 263.1
Loan notes
Bonds
31 December 2024
£m
31 December 2023
£m
2.625% Bonds 2026 249.8 249.7
3.125% Bonds 2031 248.3 248.0
2.860% USPP 2028 250.0 250.0
2.980% USPP 2030 150.0 150.0
1.500% Green Bonds 2033 247.4 247.1
Less: unamortised costs on loan notes (3.7) (4.3)
Non-current liabilities: net borrowings 1,141.8 1,140.5
Maturity of loan notes
31 December 2024
£m
31 December 2023
£m
Repayable between one and two years — —
Repayable between two and five years 249.8 249.7
Repayable in over five years 895.7 895.1
Total Borrowings 1,145.5 1,144.8
5. Investment in subsidiaries continued
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Notes to the Company Accounts continued
10. Interest rate derivatives
31 December 2024
£m
31 December 2023
£m
Total interest rate derivatives 0.7 1.0
The interest rate derivatives are valued 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.
31 December 2024
£m
31 December 2023
£m
Interest rate derivative valuation brought forward 1.0 —
Premium paid 0.9 1.2
Changes in fair value of interest rate derivatives (1.2) (0.2)
Total interest rate derivatives 0.7 1.0
An interest rate cap is used to mitigate the interest rate risk that arises as a result of entering into a variable rate linked loan to cap the rate
towhich SONIA can rise and is coterminous with the initial term of the loan.
The interest rate derivative is 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 Statement of Comprehensive Income.
11. Equity reserves
Refer to note 30 of the Group’s financial statements.
12. Related party transactions
The Company has taken advantage of the exemption not to disclose transactions with other members of the Group as the Company’s
ownfinancial statements are presented together with its consolidated financial statements.
For all other related party transactions make reference to note 33 of the Group’s financial statements.
13. Directors’ remuneration
Refer to note 11 of the Group’s financial statements.
14. Subsequent events
Refer to note 36 of the Group’s financial statements.
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FINANCIAL STATEMENTS
Please note that the below measures may not be comparable with similarly titled measures presented by other companies and should not
beviewed in isolation, but as supplementary information.
1. Adjusted earnings income statement
The Adjusted earning reflects our ability to generate earnings from our portfolio, which ultimately underpins dividend payments.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Gross rental income 281.1 222.2
Service charge income 13.1 6.2
Service charge expense (15.6) (6.3)
Direct property expenses (2.6) —
Fixed rental uplift adjustments (8.9) (6.2)
Net rental income 267.1 215.9
Other operating income 23.0 —
Amortisation of other property assets 0.6 —
Dividend Income 0.2 —
Administrative expenses (33.7) (28.9)
Adjusted operating profit before interest and tax 257.2 187.0
Net finance costs (63.5) (44.9)
Amortisation of loan arrangement fees 4.1 4.4
Unwinding of discount on fixed rate debt and deferred consideration 4.2 —
Adjusted earnings before tax 202.0 146.5
Tax on adjusted profit (0.3) (0.6)
Adjusted earnings after tax 201.7 145.9
Adjustment to remove additional DMA income (19.3) —
Adjusted earnings (exc. additional DMA income) 182.4 145.9
Weighted average number of Ordinary Shares 2,264,719,368 1,881,930,698
Adjusted earnings per share 8.91p 7.75p
Adjusted earnings per share (exc. additional DMA income) 8.05p 7.75p
2. EPRA Earnings per share
A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported
by earnings.
Year ended
31 December
2024
£m
Year ended
31 December
2023 (restated)
£m
Year ended
31 December
2023 (reported)
£m
Total comprehensive income (attributable to shareholders) 445.5 70.0 70.0
Adjustments to remove:
Changes in fair value of investment properties (243.7) 38.1 38.1
Changes in fair value of interest rate derivatives 5.3 11.2 11.2
Changes in fair value of financial asset (0.9) 0.1 0.1
Share of loss/(profits) from joint ventures (0.1) (0.4) (0.4)
Loss on disposal of investment properties (8.4) 1.6 1.6
Finance income received on interest rate derivatives
1
— — (10.2)
Amortisation of other property assets 0.6 — —
Impairment of intangible and other property assets 4.0 2.7 2.7
Profits to calculate EPRA Earnings per share 202.3 123.3 113.1
Weighted average number of Ordinary Shares 2,264,719,368 1,881,930,698 1,881,930,698
EPRA Earnings per share – basic 8.93p 6.55p 6.01p
1. There is no longer a requirement for Interest on derivatives to be taken out of EPRA EPS, per the latest EPRA best practice guidance and there for this has
been excluded in 2024.
Notes to the EPRA and Other Key Performance Indicators (Unaudited)
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3. EPRA NAV per share
A net asset value per share calculated in accordance with EPRA’s methodology.
31 December 2024 Note
EPRA NTA
£m
EPRA NRV
£m
EPRA NDV
£m
NAV attributable to shareholders 4,567.4 4,567.4 4,567.4
Revaluation of land options 18.0 18.0 18.0
Mark-to-market adjustments of derivatives 18.5 18.5 —
Intangibles (0.7) — —
Fair value of debt — — 192.4
Real estate transfer tax
1
— 444.6 —
At 31 December 2024 31 4,603.2 5,048.5 4,777.8
NAV per share 185.56p 203.51p 192.60p
31 December 2023 Note
EPRA NTA
£m
EPRA NRV
£m
EPRA NDV
£m
NAV attributable to shareholders 3,334.0 3,334.0 3,334.0
Revaluation of land options 26.5 26.5 26.5
Mark-to-market adjustments of derivatives 13.1 13.1 —
Intangibles (1.1) — —
Fair value of debt — — 141.4
Real estate transfer tax
1
— 342.3 —
At 31 December 2023 31 3,372.5 3,715.9 3,501.9
NAV per share 177.15p 195.19p 183.95p
1. EPRA NTA and EPRA NDV reflect IFRS values which are net of RETT. RETT are added back when calculating EPRA NRV.
4. EPRA Net Initial Yield (“NIY”) and EPRA “Topped Up” NIY
A measure to make it easier for investors to judge for themselves how the valuations of two portfolios compare.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Investment property – wholly owned 6,369.8 4,843.7
Investment property – share of joint ventures 4.4 4.2
Less: development properties (321.1) (262.7)
Completed property portfolio 6,053.1 4,585.2
Allowance for estimated purchasers’ costs 408.6 309.5
Gross up completed property portfolio valuation (B) 6,461.7 4,894.7
Annualised passing rental income 313.5 225.3
Less: contracted rental income in respect of development properties (16.7) (4.6)
Property outgoings (4.4) (0.2)
Less: contracted rent under rent-free period (17.3) (17.5)
Annualised net rents (A) 275.1 203.0
Contractual increases for fixed uplifts 22.6 22.1
Topped up annualised net rents (C) 297.7 225.1
EPRA Net Initial Yield (A/B) 4.26% 4.15%
EPRA Topped Up Net Initial Yield (C/B) 4.61% 4.60%
5. EPRA Vacancy rate
Estimated market rental value (ERV) of vacant space divided by the ERV of the whole portfolio.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Annualised estimated rental value of vacant premises 21.5 6.7
Portfolio estimated rental value
1
377.9 268.2
EPRA Vacancy rate 5.7% 2.5%
1. Excludes land held for development.
Notes to the EPRA and Other Key Performance Indicators (Unaudited) continued
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FINANCIAL STATEMENTS
6. EPRA Cost Ratio
A key measure to enable meaningful measurement of the changes in a company’s operating costs.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Property operating costs 4.4 0.2
Administration expenses 9.1 6.9
Management fees 24.6 22.0
Total costs including vacant property costs (A) 38.1 29.1
Vacant property cost (2.8) (0.1)
Total costs excluding vacant property costs (B) 35.3 29.0
Gross rental income – per IFRS 281.1 222.2
Gross rental income (C) 281.1 222.2
Total EPRA cost ratio (including vacant property costs) 13.6% 13.1%
Total EPRA cost ratio (excluding vacant property costs) 12.6% 13.1%
7. EPRA like-for-like rental income
Like-for-like net rental growth compares the growth of the net rental income of the portfolio that has been consistently in operation, and not
under development, during the two full preceding periods that are described.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Change
£m
Change
%
Like-for-like rental income 192.0 185.0
Other rental income 0.4 0.2
Like-for-like gross rental income 192.4 185.2 7.2 3.9%
Like-for-like irrecoverable property expenditure (0.2) (0.1)
Like-for-like net rental income 192.2 185.1 7.1 3.8%
Reconciliation to Net rental income per Statement of
Comprehensive Income:
Development properties 15.1 4.9
Properties sent back to development 0.5 4.7
Properties acquired 49.3 1.6
Properties disposed 2.4 9.6
Spreading of client incentives and guaranteed uplifts 21.4 16.2
Irrecoverable property expenditure (4.9) —
Total per Statement of Comprehensive Income 276.0 222.1 53.9 24.3%
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Notes to the EPRA and Other Key Performance Indicators (Unaudited) continued
8. EPRA property-related capital expenditure
Year end
31 December
2024
£m
Year ended
31 December
2023
£m
Acquisition
1
1,184.3 109.2
Development
2
243.6 208.1
Transfers to Investment Property (21.9) (16.8)
Investment properties:
Client incentives 22.4 21.0
Capitalised interest 6.0 4.6
Total Capex 1,434.4 326.1
Share for share acquisition of UKCM (1,149.1) —
Conversion from accrual to cash basis (50.5) (17.2)
Total Capex on a cash basis 234.8 308.9
1. See note 17.
2. See note 17 and note 18.
3. Fixed rental uplift and client lease incentives after adjusting for amortisation on rental uplift and client lease incentives.
9. Total Accounting Return (“TAR”)
Net total return, being the percentage change in EPRA NTA over the relevant period plus dividends paid.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Opening EPRA NTA 177.15p 180.37p
Closing EPRA NTA 185.56p 177.15p
Change in EPRA NTA 8.41p (3.22p)
Dividends paid 7.53p 7.23p
Total growth in EPRA NTA plus dividends paid 15.94p 4.01p
Total return 9.00% 2.2%
10. Total Expense Ratio
The ratio of total administration and property operating costs expressed as a percentage of average net asset value throughout the period.
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Total operating costs 33.7 28.9
Average net assets over the period 4,059.0 3,371.5
Total Expense Ratio 0.83% 0.86%
11. Loan to value ratio
The proportion of our gross asset value that is funded by net borrowings
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Gross debt drawn 1,963.9 1,626.7
Less: cash (80.6) (36.4)
Net debt 1,883.3 1,590.3
Gross property value 6,548.6 5,030.4
Loan to value ratio 28.8% 31.6%
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FINANCIAL STATEMENTS
12. EPRA loan to value ratio
The proportion of our gross asset value that is funded by net borrowings and working capital
Year ended
31 December
2024
£m
Year ended
31 December
2023
£m
Gross debt drawn 1,993.9 1,626.7
Working capital 58.4 87.1
Less: cash (80.6) (36.4)
Net debt 1,971.7 1,677.4
Gross property value 6,548.6 5,030.4
Loan to value ratio 30.1% 33.3%
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Five Year Summary
Group Statement of Comprehensive Income
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Gross rental income 281.1 222.2 206.2 184.7 161.6
Service charge income 13.1 6.2 6.3 5.1 4.6
Service charge expense (15.6) (6.3) (6.5) (5.2) (4.7)
Direct property expenses (2.6) — — — —
Net rental income 276.0 222.1 206.0 184.6 161.5
Other operating income 23.0 — 9.3 18.9 8.6
Administrative and other expenses (33.7) (28.9) (32.2) (25.5) (22.6)
Operating profit before changes in fair value of investment properties,
share of profit from joint ventures and share-based payment charges 265.3 193.2 183.1 178.0 147.5
Changes in fair value of investment properties 243.7 (38.1) (759.5) 840.9 351.1
Gain/(loss) on disposal of investment properties 8.4 (1.6) — 2.0 0.1
Share of profit from joint ventures 0.1 0.4 0.5 0.1 (0.1)
Dividend Income 0.2 — — — —
Fair value movements in financial asset 0.9 (0.1) — — —
Impairment of intangible and other property assets (4.0) (2.7) (1.4) (2.9) (0.4)
Share-based payment charge — (2.9) (1.9) (5.5) (5.9)
Changes in fair value of contingent consideration payable — (0.4) 1.1 (4.2) (2.9)
Extinguishment of B and C share liabilities — (21.1) — — —
Operating profit 514.6 126.7 (578.1) 1,008.4 489.4
Finance income 8.4 10.4 1.6 — —
Finance expense (71.9) (55.3) (39.4) (40.1) (37.6)
Changes in fair value of interest rate derivatives (5.3) (11.2) 14.9 2.8 (2.3)
Profit before taxation 445.8 70.6 (601.0) 971.1 449.5
Tax on profit for the period (0.3) (0.6) 1.6 1.5 (0.1)
Profit and total comprehensive income 445.5 70.0 (599.4) 972.6 449.4
Earnings per share – basic 19.67p 3.72p (32.08)p 55.4p 26.3p
Earnings per share – diluted 19.67p 3.72p (32.08)p 55.3p 26.3p
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FINANCIAL STATEMENTS
Group Statement of Financial Position
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Non-current assets
Intangible assets 0.7 1.1 1.4 1.7 2.0
Investment property 5,929.4 4,843.6 4,847.3 5,249.1 4,053.5
Investment in land options 148.8 157.4 157.4 201.5 228.1
Investment in joint ventures 24.4 24.8 27.2 25.6 28.5
Financial asset 3.2 2.3 — — —
Other property assets 1.7 2.3 2.3 4.0 9.4
Trade and other receivables 3.9 1.0 2.0 2.0 2.0
Interest rate derivatives 7.6 11.1 19.9 1.8 0.1
Total non-current assets 6,119.7 5,043.6 5,057.5 5,485.7 4,323.6
Current assets
Rent and other receivables 56.0 22.0 24.9 37.1 25.1
Assets held for sale 440.4 — 25.1 — —
Tax asset 2.0 — — — —
Cash at bank 80.6 36.4 47.6 71.1 57.8
Total current assets 579.0 58.4 97.6 108.2 82.9
Total assets 6,698.7 5,102.0 5,155.1 5,593.9 4,406.5
Current liabilities
Deferred rental income (59.5) (38.6) (34.7) (38.6) (36.1)
Trade and other payables (112.5) (106.9) (111.2) (85.9) (69.3)
Tax liabilities (1.9) (2.2) (1.1) (4.3) (1.9)
Total current liabilities (173.9) (147.7) (147.0) (128.8) (107.3)
Non-current liabilities
Trade and other payables (3.9) (1.0) (2.0) (2.0) (2.0)
Interest rate derivatives — — — — (1.1)
Bank borrowings (811.7) (474.7) (474.8) (207.6) (206.7)
Loan notes (1,141,8) (1,140.5) (1,139.1) (1,137.6) (1,136.4)
Deferred consideration — (4.1) — — —
Amounts due to third parties — — (42.2) (41.4) (31.7)
Total non-current liabilities (1,957.4) (1,620.3) (1,658.1) (1,388.6) (1,377.9)
Total liabilities (2,131.3) (1,768.0) (1,805.1) (1,517.4) (1,485.2)
Total net assets 4,567.4 3,334.0 3,350.0 4,076.5 2,921.3
Equity
Share capital 24.8 19.0 18.7 18.7 17.2
Share premium reserve 49.2 49.2 764.3 762.0 466.5
Capital reduction reserve 1,289.0 1,463.9 835.1 964.5 1,078.9
Merger Reserve 957.0
— — — —
Retained earnings 2,247.4 1,801.9 1,731.9 2,331.3 1,358.7
Total equity 4,567.4 3,334.0 3,350.0 4,076.5 2,921.3
Net asset value per share – basic 184.12p 175.13p 179.25p 218.26p 169.92p
Net asset value per share – diluted 184.12p 175.13p 179.25p 218.18p 169.92p
EPRA net asset value per share – basic and diluted 185.56p 177.15p 180.37p 222.52p 175.61p
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Glossary of Terms
“Adjusted earnings”
Post-tax earnings attributable to shareholders, adjusted to include
licence fees receivable on forward funded development assets and
adjusts for other earnings not supported by cash flows. “Adjusted
Earnings per share” or “Adjusted EPS” on a per share basis.
“B and C Shares”
The B and C Shares in Tritax Big Box Developments Holdings
Limited that were issued to the Tritax Big Box Development
Management shareholders.
“Big Box”
A “Big Box” property or asset refers to a specific subsegment of
the logistics sector of the real estate market, relating to very large
logistics warehouses (each with typically over 500,000 sq ft of
floor area) with the primary function of holding and distributing
finished goods, either downstream in the supply chain or direct
to consumers, and typically having the following characteristics:
generally a modern constructed building with eaves height
exceeding 12 metres; let on long leases with institutional-grade
clients; with regular, upward-only rental reviews; having a prime
geographical position to allow both efficient stocking (generally
withclose links to sea ports or rail freight hubs) and efficient
downstream distribution; and increasingly with sophisticated
automation systems or a highly bespoke fit out.
“Board”
The Directors of the Company.
“BREEAM”
The Building Research Establishment Environmental Assessment
Method certification of an asset’s environmental, social and
economic sustainability performance, using globally recognised
standards. Annualised rent, adjusting for the inclusion of rent
free periods.
“Contracted annual rent”
Annualised rent, adjusting for the inclusion of rent free period
“Company” or “TBBR”
Tritax Big Box REIT plc (Company number 08215888).
“CPI”
Consumer Price Index, a measure that examines the weighted
average of prices of a basket of consumer goods and services,
suchas transportation, food and medical care as calculated on
amonthly basis by the Office of National Statistics.
“Current development pipeline”
Assets that are in the course of construction or assets for which
wehave made a construction commitment.
“CVA”
A company voluntary liquidation, a legally binding agreement
between a business and its creditors which sets out a debt
repayment plan and enables a viable business to avoid insolvency.
“db Symmetry”
db Symmetry Group Ltd and db symmetry BVI Limited, together
with their subsidiary undertakings and joint venture interests,
whichwere acquired by the Group in February 2019.
“Directors”
The Directors of the Company as of the date of this report being the
Independent Non-Executive Directors of the Company, being Aubrey
Adams, Elizabeth Brown, Alastair Hughes, Richard Laing, Karen
Whitworth, Wu Gang and Kirsty Wilman.
“Development Management
Agreement” or “DMA”
An agreement between the Group and a developer setting out the
terms in respect of the development of an asset. In particular, the
development of the Symmetry Portfolio is the subject of a DMA
between Tritax Symmetry and Symmetry ManCo.
“Development portfolio” or
“Development assets”
The Group’s Development portfolio comprises its property assets
which are not Investment assets, including land, options over land
aswell as any assets under construction on a speculative basis.
“Dividend payout ratio”
Dividend per share divided by Adjusted Earnings per share.
“EPC rating”
A review of a property’s energy efficiency.
“EPRA”
European Public Real Estate Association.
“EPRA Earnings”
Earnings from operational activities (which excludes the licence
feesreceivable on our Forward Funded Development assets).
“EPRA NAV” or “EPRA Net Asset Value”
The Basic Net Asset Value adjusted to meet EPRA Best Practices
Recommendations Guidelines (2016) requirements by excluding the
impact of any fair value adjustments to debt and related derivatives
and other adjustments and reflecting the diluted number of Ordinary
Shares in issue.
“EPRA Triple Net Asset Value (“NNNAV”)”
EPRA NAV adjusted to include the fair values of financial
instruments, debt and deferred taxes.
“EPRA Net Tangible Asset (“NTA”)”
The Basic Net Asset Value adjusted to meet EPRA Best Practices
Recommendations Guidelines (2019) requirements by excluding
intangibles and the impact of any fair value adjustments to related
derivatives. This includes the revaluation of land options.
“EPRA Net Reinstatement Value (“NRV”)”
IFRS NAV adjusted to exclude the impact of any fair value
adjustments to related derivatives. This includes the revaluation
ofland options and the Real estate transfer tax (“RETT”).
“EPRA Net Disposal Value (“NDV”)”
IFRS NAV adjusted to include the fair values of debt and the
revaluation of land options.
“EPRA Net Initial Yield (“NIY”)”
Annualised rental income based on the cash rents passing at
the balance sheet date, less non-recoverable property operating
expenses, divided by the market value of the property, increased
with (estimated) purchaser’s costs.
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FINANCIAL STATEMENTS
“EPRA ‘Topped-Up’ NIY”
This measure incorporates an adjustment to the EPRA NIY in
respect of the expiration of rent-free periods (or other unexpired
lease incentives, such as discounted rent periods and step rents).
“EPRA Vacancy”
Estimated market rental value (“ERV”) of vacant space divided
bytheERV of the whole portfolio.
“EPRA Cost Ratio”
Administrative and operating costs (including and excluding costs
ofdirect vacancy) divided by gross rental income.
“ESG”
Environmental, Social and Governance.
“Estimated cost to completion”
Costs still to be expended on a development or redevelopment
topractical completion, including attributable interest.
“Estimated rental value” or “ERV”
The estimated annual market rental value of lettable space as
determined biannually by the Group’s valuers. This will normally
bedifferent from the rent being paid.
“FCA”
The United Kingdom Financial Conduct Authority (or any successor
entity or entities).
“Forward Funded Development”
Where the Company invests in an asset which is either ready
for, or in the course of, construction, pre-let to an acceptable
counterparty. In such circumstances, the Company seeks to
negotiate the receipt of immediate income from the asset, such that
the developer is paying the Company a return on its investment
during the construction phase and prior to the client commencing
rental payments under the terms of the lease. Expert developers
areappointed to run the development process.
“Foundation asset”
Foundation assets provide the core, low-risk income that underpins
our business. They are usually let on long leases to clients with
excellent covenant strength. These buildings are commonly new or
modern and in prime locations, and the leases have regular upward
only rent reviews, often either fixed or linked to Inflation Indices.
“FRI Lease”
Full Repairing and Insuring Lease. During the lease term, the client
is responsible for all repairs and decoration to the property, inside
and out, and the building insurance premium is recoverable from
the client.
“Future development pipeline”
The Group’s land portfolio for future development typically controlled
under option agreements which do not form part of the Current or
Near Term development pipelines.
“Gearing”
Net borrowings divided by total shareholders’ equity excluding
intangible assets and deferred tax provision.
“GIA”
Under the RICS Code of Measuring Practice (6th Edition) the Gross
Internal Area (“GIA”) is the basis of measurement for valuation of
industrial buildings (including ancillary offices) and warehouses.
Thearea of a building measured to the internal face of the perimeter
walls at each floor level (including the thickness of any internal walls).
All references to building sizes in this document are to the GIA.
“GAV”
The Group’s gross asset value.
“Global Real Estate Sustainability Benchmark
(“GRESB”) Assessment”
GRESB assesses the ESG performance of real estate and
infrastructure portfolios and assets worldwide, providing
standardised and validated data to the capital markets.
“Gross rental income”
Contracted rental income recognised in the period, in the income
statement, including surrender premiums and interest receivable
onfinance leases. Lease incentives, initial costs and any contracted
future rental increases are amortised on a straight-line basis over
thelease term.
“Group” or “REIT Group”
The Company and all of its subsidiary undertakings.
“Growth Covenant asset”
Growth Covenant assets are fundamentally sound assets in good
locations, let to clients we perceive to be undervalued at the point
of purchase and who have the potential to improve their financial
strength, such as young e-retailers or other companies withgrowth
prospects. These assets offer value enhancement through yield
compression.
“IMA”
The Investment Management Agreement between the Manager
andthe Company.
“Investment portfolio” or “Investment assets”
The Group’s Investment Portfolio comprises let or pre-let (in the
case of Forward Funded Developments) assets which are income
generating, as well as any speculative development assets which
have reached practical completion but remain unlet.
“Investment property”
Completed land and buildings held for rental income return and/or
capital appreciation.
“Land asset”
Opportunities identified in land which the Manager believes will
enable the Company to secure, typically, pre-let Forward Funded
Developments in locations which might otherwise attract lower
yields than the Company would want to pay, delivering enhanced
returns but controlling risk.
“Listing Rules”
The listing rules made by the Financial Conduct Authority under
section 73A of FSMA.
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Glossary of Terms continued
“Loan Notes”
The loan notes issued by the Company on 4 December 2018.
“Loan to Value (“LTV”)”
The proportion of our gross asset value that is funded by
netborrowings.
“London Stock Exchange”
London Stock Exchange plc.
“Manager”
Tritax Management LLP (partnership number 0C326500).
“Minimum Energy Efficiency
Standards (“MEES”)”
The legal standard for minimum energy efficiency which applies to
rented commercial buildings as regulated by the Energy Efficiency
(Private Rented Property) (England and Wales) Regulations 2015.
“Near-term Development Pipeline”
Sites which have either received planning consent or sites where
planning applications have been submitted prior to the year end.
“Net Initial Yield (“NIY”)”
The annual rent from a property divided by the combined total
ofitsacquisition price and expenses.
“Net rental income”
Gross rental income less ground rents paid, net service charge
expenses and property operating expenses.
“Net zero carbon”
Highly energy efficient and powered from on-site and/or
off-site renewable energy sources, with any remaining carbon
balance offset.
“Non-PID Dividend”
A dividend received by a shareholder of the principal company
thatis not a PID.
“Ordinary Shares”
Ordinary Shares of £0.01 each in the capital of the Company.
“Passing rent”
The annual rental income currently receivable on a property as at
the balance sheet date (which may be more or less than the ERV).
Excludes rental income where a rent-free period is in operation.
Excludes service charge income (which is netted off against service
charge expenses).
“PID” or “Property income distribution”
A dividend received by a shareholder of the principal company in
respect of profits and gains of the Property Rental Business of the
UK resident members of the REIT group or in respect of the profits
or gains of a non-UK resident member of the REIT group insofar as
they derive from their UK Property Rental Business.
“Portfolio”
The overall portfolio of the Company including both the Investment
and Development portfolios.
“Portfolio Value”
The value of the Portfolio which, as well as the Group’s standing
assets, includes capital commitments on Forward Funded
Developments, Land Assets held at cost, the Group’s share
ofjointventure assets and other property assets.
“Pre-let”
A lease signed with a client prior to commencement
ofadevelopment.
“REIT”
A qualifying entity which has elected to be treated as a Real Estate
Investment Trust for tax purposes. In the UK, such entities must
be listed on a recognised stock exchange, must be predominantly
engaged in property investment activities and must meet certain
ongoing qualifications.
“Rent roll”
See “Passing rent”.
“RPI”
Retail price index, an inflationary indicator that measures the change
in the cost of a fixed basket of retail goods as calculated on a
monthly basis by the Office of National Statistics.
“SDLT”
Stamp Duty Land Tax – the tax imposed by the UK Government
on the purchase of land and properties with values over a
certainthreshold.
“Shareholders”
The holders of Ordinary Shares.
“SONIA”
Sterling Overnight Index Average.
“Speculative development”
Where a development has commenced prior to a lease agreement
being signed in relation to that development.
“sq ft”
Square foot or square feet, as the context may require.
“Tritax Big Box Developments Management
Shareholders”
The holders of B and C Shares in Tritax Big Box Developments.
“Tritax Big Box Developments ManCo”/”TBBD”
Tritax Big Box Developments Limited, a private limited company
incorporated in England and Wales (registered number 11685402)
which has an exclusive development management agreement
with Tritax Big Box Developments Holdings Limited to manage the
development of the Tritax Big Box DevelopmentPortfolio.
“TBBDHL”
Tritax Big Box Development Holdings Limited (Company number
127784, incorporated in Jersey).
“TBBR”
Tritax Big Box REIT plc (Company number 08215888).
Tritax Big Box REIT plc Annual Report 2022
169
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169
FINANCIAL STATEMENTS
“TMLLP”
Tritax Management LLP, the Manager of TBBR.
“Topped up net initial yield”
Net initial yield adjusted to include notional rent in respect of
let properties which are subject to a rent-free period at the
valuation date thereby providing the Group with income during
the rent-free period. This is in accordance with EPRA’s Best
PracticesRecommendations.
“Total Expense Ratio” or “TER”
The ratio of total administration and property operating costs
expressed as a percentage of average net asset value throughout
the period.
“Total Accounting Return”
Net total return, being the percentage change in EPRA NTA
overtherelevant period plus dividends paid.
“Total Shareholder Return”
A measure of the return based upon share price movement
overtheperiod and assuming reinvestment of dividends.
“Triple Net Leases”
A triple net lease (NNN lease) is a commercial lease agreement in
which the client is responsible for paying property taxes, insurance,
and maintenance costs in addition to rent and utilities. This type of
lease shifts most property expenses from the landlord to the client.
“Tritax Big Box Developments”
Tritax Big Box Developments Holdings Limited, a limited company
incorporated in Jersey (registered number 127784).
“Tritax Big Box Portfolio”
The portfolio of assets held through Tritax Symmetry following
theacquisition of db Symmetry in February 2019, including land,
options over land and a number of assets under development.
“True Equivalent Yield (“TEY”)”
The internal rate of return from an Investment property, based on
thevalue of the property assuming the current passing rent reverts
to ERV on the basis of quarterly in advance rent receipts and
assuming the property becomes fully occupied over time.
“UK AIFMD Rules”
The laws, rules and regulations implementing AIFMD in the UK,
including without limitation, the Alternative Investment Fund
Managers Regulations 2013 and the Investment Funds sourcebook
of the FCA.
“Value Add asset”
These assets are typically let to clients with good covenants
and offer the chance to grow the assets’ capital value or rental
income, through lease engineering or physical improvements to
the property. We do this using our asset management capabilities
and understanding of client requirements. These are usually highly
re-lettable. It also includes assets developed on a speculative basis
which have reached practical completion but remain unlet at the
period end.
“WAULT” or “Weighted Average Unexpired
LeaseTerm”
The income for each property applied to the remaining life for an
individual property or the lease and expressed as a portfolio average
in years. In respect of Forward Funded Developments, the unexpired
term from lease start date.
“Waystone” or “Waystone Services”
A trading name of Waystone Fund Services Limited
(companynumber02056193).
“Yield on cost”
The expected gross yield based on the estimated current market
rental value (“ERV”) of the developments when fully let or actual
rental value for completed developments or those pre-let, as
appropriate, divided by the estimated or actual total costs of
thedevelopment.
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170
Company Information
Company Registration Number: 08215888
Incorporated in the United Kingdom
Directors, Management
and Advisers
Directors
Aubrey Adams OBE, FCA, FRICS
Independent Non-Executive Chair
Karen Whitworth FCA
Senior Independent Director
Alastair Hughes FRICS
Independent Non-Executive Director
Elizabeth Brown
Independent Non-Executive Director
Wu Gang
Independent Non-Executive Director
Richard Laing FCA
Independent Non-Executive Director
Kirsty Wilman FCA
Independent Non-Executive Director
Registered office
72 Broadwick Street
London W1F 9QZ
Manager
Tritax Management LLP
280 Bishopsgate
London
EC2M 4AG
Joint Financial Adviser
Akur Limited
66 St James’s Street
London
SW1A 1NE
Joint Financial Adviser and Joint
CorporateBroker
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Joint Corporate Broker
JP Morgan Cazenove Limited
27th Floor
25 Bank Street
London
E14 5JP
Legal Advisers to the Company
Ashurst LLP
London Fruit & Wool Exchange
1 Duval Square
London
E1 6PW
Burges Salmon LLP
One Glass Wharf
Bristol
BS2 0ZX
Maples Teesdale LLP
30 King Street
London
EC2V 8EE
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Company Secretary
Tritax Management LLP
c/o 72 Broadwick Street
London
W1F 9QZ
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Administrator
Waystone Fund ServicesLimited
Broadwalk House,
Southernhay West
Exeter
EX1 1TS
United Kingdom
Depository
Langham Hall UK Depositary LLP
8th Floor
1 Fleet Place
London
EC4M 7RA
Valuers
CBRE Limited
Henrietta House Henrietta Place
London
W1G 0NB
Colliers International Valuation UK LLP
50 George Street
London
W1U 7GA
Jones Lang LaSalle Limited
30 Warwick Street
London
W1B 5NH
Bankers
Bank of China Limited
London Branch
1 Lothbury
London
EC2R 7DB
Barclays Bank PLC
PO Box 3333
One Snowhill
Snow Hill Queensway
Birmingham
B3 2WN
BNP Paribas
10 Harewood Avenue
London
NW1 6AA
Canada Life Investments
1-6 Lombard Street
London
EC3V 9JU
Helaba Landesbank Hessen-Thüringen
Girozentrale
3rd Floor
95 Queen Victoria Street
London
EC4V 4HN
HSBC Bank plc
Level 2
8 Canada Square
Canary Wharf
London
E14 5HQ
J. P. Morgan Chase Bank N.A.
25 Bank Street
London
E14 5JP
PGIM Real Estate Finance
8th Floor
One London Bridge
London
SE1 9BG
Royal Bank of Scotland
250 Bishopsgate
London
EC2M 4AA
Santander
2 Triton Square
Regent’s Place
London
NW1 3AN
SMBC Bank International plc
100 Liverpool Street
London
EC2M 2AT
Sumitomo Mitsui Trust Bank
155 Bishopsgate
London
EC2M 3XU
Wells Fargo Bank, N.A.
33 King William Street
London
EC4R 9AT
Tritax Big Box REIT plc’s commitment to environmental stewardship is reflected in
this Annual Report, which has been printed on Revive 100 Silk, which is 100% post-
consumer recycled, FSC
®
certified and totally chlorine free (TCF) paper. Printed in
the UK by Pureprint Group using vegetable-based inks, with 99% of drywaste being
diverted from landfill. The printer is a CarbonNeutral
®
company. Both the mill and the
printer are certified to ISO 14001 (Environmental Management System) and ISO 9001
(Quality Management System).
Cautionary statement
This Annual Report and the Tritax Big Box REIT plc website may contain certain ‘forward-looking statements’ with respect toTritax Big Box REIT
plc’s (“Company”) financial condition, results of itsoperations and business, and certain plans, strategy, objectives, goals and expectations with
respect to these items and the economies and markets in which the Company operates. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such words as ‘anticipates’, ‘aims’, ‘due’, ‘could’, ‘may’, ‘should’, ‘will’, ‘would’, ‘expects’,
‘believes’, ‘intends’, ‘plans’, ‘targets’, ‘goal’ or ‘estimates’ or, in each case, their negative orother variations or comparable terminology.
Forward-looking statements arenot guarantees of future performance. Bytheir very nature forward-looking statements are inherently
unpredictable, speculative and involve risk and uncertainty because they relate to events and depend oncircumstances that will occur in
the future.
Many of these assumptions, risks and uncertainties relate to factors that are beyond the Company’s ability to control or estimate precisely.
Thereare anumber of such factorsthat could cause actual results and developments to differ materially from those expressed or implied by
these forward-looking statements. These factors include, but arenot limited to, changes in the economies and markets in which the Company
operates; changes in the legal, regulatory and competition frameworks in which the Company operates; changes in the markets from which the
Company raisesfinance; the impact of legal or other proceedings against or which affect the Company; changes in accounting practices and
interpretation of accounting standards under IFRS, and changes in interest and exchange rates. Any forward-looking statements made in this
Annual Report or Tritax Big Box REIT plc website, or made subsequently, which are attributable to the Company, or persons acting on their
behalf, are expressly qualified in their entirety by thefactors referred to above. Each forward-looking statement speaks only as of the
dateit is made.
Except as required by its legal or statutory obligations, the Company does not intend to update any forward-looking statements. Nothing
inthisAnnual Report or the Tritax Big Box REIT plc website should be construed as a profit forecast or an invitation to deal in the securities
ofthe Company.
Tritax Big Box REIT plc
72 Broadwick Street
London
W1F 9QZ
www.tritaxbigbox.co.uk
Tritax Big Box REIT plc Annual Report 2024
ACCOMMODATING
THE FUTURE