Tritax Big Box REIT H1 2025 Earnings Report

Tritax Big Box REIT EPS Results

• Actual EPS: GBX 4.63
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Tritax Big Box REIT Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Tritax Big Box REIT Announcement Details

• Quarter: H1 2025
• Date: 8/6/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 4:00AM ET

Tritax Big Box REIT (LON:BBOX) (ticker: BBOX) is the largest listed investor in high-quality logistics warehouse assets and controls the largest logistics-focused land platform in the UK. BBOX is committed to delivering attractive and sustainable returns for Shareholders by investing in and actively managing existing built investments and land suitable for logistics development. The Company focuses on well-located, modern logistics assets, typically let to institutional-grade tenants on long-term leases with upward-only rent reviews and geographic and tenant diversification throughout the UK. The Company seeks to exploit the significant opportunity provided by the imbalance between strong occupational demand and constrained supply of modern logistics real estate in the UK. The Company is a real estate investment trust to which Part 12 of the UK Corporation Tax Act 2010 applies, is listed on the premium segment of the Official List of the UK Financial Conduct Authority (Ticker: BBOX) and is a constituent of the FTSE 250, FTSE EPRA/NAREIT and MSCI indices.

Tritax Big Box REIT H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted EPS rose by 6.4% with net rental income up 17.3% and dividends per share up 4.9%, reflecting strong H1 2025 financial results.
• Positive Sentiment: UKCM integration is complete and non-core disposals of £278 million are on track, supporting strategic execution and portfolio optimization.
• Positive Sentiment: Three core growth drivers—record rental reversion (+32% ERVs vs passing rent), an attractive logistics development pipeline, and high-yield data centre projects—are delivering today and underpin a 50% earnings growth target by 2030.
• Positive Sentiment: Balance sheet remains robust with 30.2% pro forma LTV, £500 million+ liquidity, 3.2% cost of debt, and a Baa1 positive rating, providing funding flexibility and resilience.
• Positive Sentiment: Management reiterates guidance of £200–250 million logistics CapEx, £200 million data centre CapEx, raised DMA income to ~£15 million, and £350–450 million disposals, underpinning future growth.

Presentation

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Good morning, and welcome to our results presentation for the six months ended June 30. I will shortly hand you over to our CEO, Colin Godfrey, but before I do, a couple of points to note. After the presentation, there will be an opportunity for investors and analysts to ask questions. As usual, there are two ways to do this. Firstly, you can submit your question in the webcast viewer, and in the interest of time, we will aggregate similar questions.

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Or alternatively, you can use the dial in details in this morning's announcement to ask your question verbally. As a reminder, we are in an offer period, so we are restricted in answering questions relating to our offer for warehouse REIT. Thank you.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Good morning, and welcome to our results presentation for the first six months of twenty twenty five. I'm Colin Godfrey, CEO of TriTax Big Box. As usual, I'll kick off with our key messages before handing over to Frankie, our CFO, to give an update on our financial and operational performance during the first half. I'll then outline the significant strategic progress that we've made in the period. And finally, we'll open up the lines for Q and A.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

As outlined at our Capital Markets Day in June, the key message I want to deliver today is that as well as driving strong operational performance, we have embedded very significant potential within our business, with the ability to deliver earnings growth of 50% by the 2030. And this will drive exceptional shareholder value, including superior risk adjusted returns from our logistics and data center developments. And as we outline here, we are making excellent strategic progress. We're delivering strong performance with attractive growth across all of our key financial KPIs. Our strategic execution is progressing well, with the UK Centimeters Logistics assets now fully integrated and performing well, and the non core disposal program fully on track.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We've also secured a second data center opportunity and successfully refinanced two debt facilities. And we have three powerful growth drivers that are delivering today and with the potential to deliver even more in the future. Record rental reversion supported by ongoing ERV growth as a result of being positioned in the right submarkets, an attractive logistics development pipeline that can capture the substantial and enduring demand for new buildings and exceptional returns through data center developments. Now it's important to stress that we carefully mitigate the risk across all our development activities by deploying our capital with pinpoint precision and taking advantage of the flexibility that we've deliberately built into our pipeline. Now I'll touch upon all of this in a moment, but for now, I'll hand you over to Frankie to explain the detail behind our strong performance in the period.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Frankie. Thank you, Colin, and good morning, everyone. Turning to the key financial highlights, as Colin says, we've delivered another period of strong performance. We've generated attractive levels of growth in adjusted EPS of 6.4%, and this has supported our growth in dividend per share of 4.9% for the period. Our property valuation performance has led to growth in EPRA NTA per share of 1.4% to 188.2, and a total accounting return for the six months of 3.6%, which is ahead of this time last year.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

This is enhanced, however, when excluding certain nonrecurring items, which I will set out on a later slide. So along with making significant strategic progress, our financial headlines demonstrate there's been another positive half for the company. Looking at income and earnings in more detail, we've continued to deliver growth in net rental income. This has increased by 17.3% to over £149,000,000 for the half, principally due to the acquisition of the UKCM portfolio in May 2024, which has now contributed for the whole of the first half of this year. We've recognized £13,300,000 of D and A income in the period, and we continue to operate with an efficient cost base.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Our EPRA cost ratio shown bottom right is 12.9% excluding vacancy costs, which continues to be extremely competitive for a full service development business in The UK. All of this contributes to an overall 16.4% increase in operating profit before changes in fair value and other adjustments. Our headline adjusted EPS grew by 6.4% to 4.63p. And when excluding the additional level of DMA income recognized in the usual way, our adjusted earnings is 4.29p per share, growth of 4.6%. In line with our policy, the overall dividend per share was 3.83p, up 4.9% from the prior period, resulting in a consistent dividend payout ratio of 89%.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

And as the top right hand chart shows, we continue to have significant embedded rental potential. The rent already contracted plus the portfolio rental reversion means that our current portfolio ERVs sit a combined 32% ahead of today's passing rent. And Colin will cover more on how we are capturing this later in the presentation. Our balance sheet remains very strong, underpinned by our high quality investment portfolio. Over the period, our portfolio value increased by 4.2% to £6,800,000,000 This includes a £92,000,000 gain on revaluation.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

And we continue to generate excellent opportunities to allocate our capital. As you can see on the top right, We've deployed £167,000,000 into logistics development, pounds $2.00 1,000,000 to launch the first two projects of our data center strategy, and we've continued to take advantage of opportunities in the market with one big box asset purchase for £76,000,000. On the bottom right, we show that this has mainly been financed through our disposal program with £278,000,000 of assets sold in the year to date. £73,000,000 of this has either exchanged or completed post the period end, reducing our pro form a LTV today to 30.2%. Drawing this altogether, our EPRA NTA increased to £4,700,000,000 or 188.2p per share, up 1.4%.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

While we've been busy investing for growth and integrating the UKCN assets, we continue to deliver strong underlying total returns. Now this bridge obviously only covers the six month period, but starting on the left with our 2.5% earnings yield, we have incrementally added 1.40.9% to returns from our investment and development portfolios respectively, Delivering an underlying total accounting return of 4.8% for the six months or 9.6% when annualized. There are two items which I've separated from this underlying performance. The first is a reduction relating to the non core asset performance, and the second is an impairment recorded against a single site held on the land option as a result of planning related delays. Both of these items could therefore be considered as non recurring.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

All of these movements combined deliver the reported total accounting return of 3.6%. And on the right, we highlight some of the key drivers of value. Our equivalent yield has remained stable at 5.7%. We continue to see attractive levels of ERV growth. This stood at 2.3% over the last six months or 6% over the past twelve months, which remains significantly ahead of inflation.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Income growth has been a key component of the portfolio capital value performance of plus 1.4% over the six months. And our overall portfolio reversion, which provides significant near term opportunities to the business increases to a very attractive 29%. Turning to look at our operational performance in more detail, we're pleased to report that our active asset management continues to deliver good levels of rental growth. And you can see here that we've added £5,600,000 to our annual rents across the six months. As we outlined in the chart on the top left, 17.2% of our contracted rent was either reviewed or subject to lease events in the period, delivering a like for like rent uplift of 10.3% across those leases.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Of particular note is the continued strong performance we see in our open market reviews, which delivered a 23.5% average uplift in passing rent. Our rental performance in any given year is determined by the proportion of our leases subject to review or lease events. As you can see on the bottom left, 2025 is a year of proportionately lower reviews. But as we look forwards, we have a larger level of reviews falling due in 2026 and 2027, which should lead to an acceleration in income capture. Now looking onto the right, I've shown more detail on how vacancy within the portfolio is evolving and particularly highlighting the difference between our underlying portfolio and those newly developed assets coming through our development pipeline.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

As you can see, at the full year, we reported overall vacancy of 5.7%. Looking at the movements and in line with our active asset management ambitions, we've taken the opportunity to take four units back for renovation. One speculatively developed units reached practical completion, where there is very strong current interest, and this was coupled with a small amount of other lease expiries. So at the half year, our overall portfolio vacancy was broadly stable at 5.6% with an underlying vacancy of 2.6%. And after the period end, we were pleased to report the letting of one newly developed unit at Rugby.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

As a result, you can see the pro form a vacancy figure reduces by over 110 basis points to 4.5% as we stand here today. Turning to our development progress. This slide demonstrates how we continue to create value through our development pipeline. Consistent with last year, we're expecting our activity to be second half weighted. In the period, we had 800,000 square feet of developments reaching completion, adding £1,500,000 to passing rent and with the potential to add a further £2,600,000 subject to leasing.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

400,000 square feet of this was delivered under a DMA contract. We've commenced 1,100,000 square feet of new development starts, up slightly from this time last year with the potential to add over £10,000,000 of rental income. In terms of our current development activity, this consists of 2,500,000 square feet being actively developed, of which 54% has either been pre let or pre sold under a DMA contract. And as I mentioned, post period end, we are really pleased to have secured the new letting at Rugby on the largest of our recently completed developments. This adds 3,900,000 to contracted rent and Colin will expand on this in a bit more detail shortly.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

As you know, enhancing our sustainability performance is embedded across all our activities, and this continues to contribute to preserving and creating value. We've outlined here some of the key targets across our four sustainability pillars, and I'm glad to say we're making good progress towards targets. To highlight a few of these, our investment portfolio remains very highly rated from an EPC perspective, with 81% of our portfolio rated EPC B or higher. We're continuing to expand our rooftop solar program. During the year to date, we have added nearly four megawatts of new solar capacity, with a target of increasing the overall portfolio to over 30 megawatts by the end of the year.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Our natural capital plans are ongoing and we're making good progress creating positive impacts for the young people that live in and around the communities within which our assets are located. And this is all continuing to be reflected in our strong ESG ratings, including MSCI, GRESB and CDP as outlined along the bottom of the slide. Turning now to our balance sheet. I've already highlighted that this remains strong and it provides us with financial flexibility whilst insulating us from some of the volatility we continue to see in the capital markets. Let's start on the top left, where our debt maturity profile is well diversified by both source and maturity.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Noting that during the period, we have successfully refinanced two loans that were due to mature in the following twelve months. This includes a £150,000,000 bilateral loan and a £400,000,000 RCF. These loans have further extension options attached to them as indicated on the chart. And moving along the bottom from a corporate perspective. Our LTV remains well positioned at 30.9% or 30.2% when including the post period end disposals.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Our available liquidity remains healthy at nearly half a billion pounds. Our average cost of debt remains stable at 3.2% of which 86% of drawn amounts were either fixed or hedged. Our net debt to EBITDA and interest cover ratios at 7.9 times and 4.5 times respectively solidly support our Moody's credit rating, which remains a BAA1 positive. And in the right hand chart, we show that the potential from our rental reversion and vacancy capture, shown in the blue, is expected to far exceed the likely increase in finance costs shown in gold, as we gradually refinance our facilities into the future, thus underpinning our future earnings growth. Looking forward, we are continuing to invest for future growth.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

We are reiterating the guidance we set out at our recent Capital Markets Day. We are maintaining our Logistics Development CapEx guidance of £200,000,000 to £250,000,000 and our yield on cost target range of 6% to 8%. Our data center CapEx guidance for this year of £200,000,000 has been incurred fully in the first half as expected to secure our Manor Farm and second data center projects. In respect of these two projects, any material CapEx from this point will be contingent on securing planning consent. The yield on cost targets for our data centers are extremely compelling at 9% to 11%.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

We've increased our guidance for DMA income for this year from £10,000,000 to approximately £15,000,000 And finally, looking at disposal guidance. As we previously outlined for this financial year, we anticipate $350,000,000 to £450,000,000 of disposals. And we have conducted over £275,000,000 in the year to date. On a longer term basis, we increased our disposal guidance to between £250,000,000 and £350,000,000 per annum to support our capital rotation into the range of accretive opportunities as set out here. So drawing this altogether, it's been another period of progressive operational and financial performance for the business.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

We've increased our net rental income by over 17%, adjusted EPS by 6.4%, and we've delivered a strong underlying 4.8% total accounting return for the half or 9.6% when annualized. And we continue to be in a very strong position looking forwards, supported by our strong balance sheet and our multiple proven funding levers. This underpins our three very clear and compelling growth drivers, which we are delivering against. And it's important to note that due to the careful way we think about and manage risk, we believe this gives us the ability to deliver superior risk adjusted returns through our high quality investment portfolio and through our attractive logistics and data center development opportunities. And with that, I'll hand you back to Colin. Thank you, Frankie.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Well, I'll now provide an update on our strategic progress. Starting with an update on the occupational market. Let's first look at occupational demand for industrial logistics. Structural demand drivers such as shifting consumer behavior, evolving supply chains and the drive for sustainability continue to underpin long term demand. And at the same time, there remain significant and systemic barriers to new supply in The UK, particularly the challenging planning process, which limits the speed that new projects can come to market.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

After subdued start to the year, leasing activity picked up from May, and we saw 11,700,000 square feet of take up in the first half, up 12% year on year as shown on the left. Despite macroeconomic uncertainty, this robust demand reinforces the critical nature of logistics buildings. Space under offer at midyear remains solid at 9,900,000 square feet. And looking forward, we expect second half demand to be consistent with recent years. Market vacancy, as shown bottom left, has increased to 7.1.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

But going forward, the twelve month development pipeline will be lower with speculative space under construction significantly down to 7,300,000 square feet from 12,800,000 at the year end. And our own portfolio is well placed. Inquiry levels are up compared to the year end, including more pre let conversations, and we have a higher proportion of demand at a more advanced stage of negotiation than we did six months ago. The market also continues to see good levels of rental growth. MSCI rental values increased by 2.4% in the first half with our own portfolio performing in line with this.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Turning to the data center market on the right, market dynamics remain very strong with approximately 2.1 gigawatts of additional demand anticipated by 2029 compared to the current installed base of 1.1 gigawatts. This is evidenced in the exceptional interest that we've seen in our Manapharm project with discussions advancing with 15 potential clients. Turning back to our strategy. It's important to emphasize that we've developed this in anticipation of the changing market conditions that we see today. We believe our high quality portfolio underpins the strong income characteristics of our business, providing shareholders with a high degree of resilience.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We actively manage assets to really drive value, and we optimize our portfolio by constantly recycling capital into higher returning opportunities, particularly into our development pipeline, which now encompasses data centers. This strategic focus gives us three very clear growth drivers that you can see here on the right: capturing record rental reversion, developing our attractive and flexible logistics pipeline, and driving exceptional returns through data centers. Let's look briefly at each of these growth drivers in turn. First, how we are capturing our record rental reversion. Now as Frankie outlined, we've already made excellent progress in the first half of this year, and there's plenty more to come.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We show here the benefit of capturing our record rental reversion and reducing vacancy, which could add £83,800,000 to contracted rent. And as highlighted on the right, we anticipate capturing approximately 77% of that over the course of the next three years. And it's worth noting that these are all at today's ERVs and UK rents continue to grow underpinned by the strong structural drivers that I mentioned earlier. Capturing rental reversion requires very little capital, and we have a strong track record of meeting or exceeding ERVs, thanks to our team's expertise. So we're confident in our ability to capture this inherent opportunity that sits within our business, and which to a degree is just a factor of time in terms of its delivery.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I'd now like to look at our active asset management in more detail, including UKCM, the acquisition that we completed in May. We successfully integrated the UKCM Logistics assets into our own business earlier this year. This means that we have the same visibility and data analytics as we do for our big box portfolio. Our asset managers have created business plans for each property and are actively progressing these opportunities. And you can see this clearly in the financial performance that has been delivered over the period, during which we've grown rents by over 13%, adding £4,500,000 per annum.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

This has been the strongest performing part of our portfolio since acquisition. It's adding an extra dimension to our business, enhancing our customer offer, and driving returns to shareholders. And on the right, you can see that we've made excellent progress in selling UKCM's non logistics assets, which now represent less than 3% of our GAV. We've now sold assets in every subsector, and I'm pleased to report that we are tracking precisely on plan. Consistent with our guidance, we expect to fully exit these noncore assets by May, at values which, in aggregate, are in line with the acquisition price that we paid.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So UKCM has already been a great success for us, and we expect that to continue. Turning now to our second growth driver, logistics development. Here, we continue to deliver attractive returns whilst creating new best in class buildings for our investment portfolio. Our development model is highly flexible, capital efficient and gives us the ability to deploy capital with precision and accurately match market conditions. Our approach to development minimizes risk and maximizes returns, such as the use of long dated options to control development land, which is capital efficient and flexible as Shane Bottom left.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

The 2,500,000 square feet of space that we currently have under construction has a rental potential of £23,100,000. And of this, 54% is either pre let or pre sold, meaning that £11,100,000 is already secured and will add to passing rent upon practical completion. We have a very attractive pipeline of potential pre let opportunities with nearly 1,000,000 square feet currently in solicitors' hands, and with the potential to add £8,800,000 to our annual rental income. We've also got strong interest in our speculative space of 1,200,000 square feet with the potential to add a further £10,700,000 to annual rent. And as Frankie mentioned earlier, shortly after the period end, we announced a significant letting at one of our speculatively developed buildings at Rugby.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

This letting to a leading data management business highlights the attractions of the location and our successful approach to development, setting a record rental level for the park, adding £3,900,000 to our annual rent roll and at a yield on cost at the upper end of our guidance range. With high levels of occupier interest, we expect development lettings to be second half weighted, consistent with 2024. And we're applying the same low risk and high return philosophy to opportunities in data centers, our third growth driver. Power is the scarce ingredient required to unlock value from data centers. And as outlined at our Capital Markets Day, we've invested further in our pipeline of power grid connection agreements totaling over one gigawatt and necessary land in the key locations desirable to data center operators focused on the London availability zone.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

But crucial to near term value capture is the accelerated pace of our power delivery, sequenced to go live annually from 2027 through to 02/1931. We're pursuing a pre let powered shell model, meaning we only deploy significant amounts of capital in construction of data centers when projects are substantially derisked. At Manor Farm, we're putting this low risk and high return approach into practice. We have 107 megawatts of power with a firm delivery date in the 2027 and benefit from an additional 40 megawatts of power available from 2029. And we're making excellent progress with exceptional levels of occupier interest in the scheme with commercial terms expected to be negotiated during the third quarter and aiming to secure a pre let by the end of this year.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Planning is progressing as anticipated with the scheme now at the planning inspectorate, and we would anticipate hearing more on that during the course of Q3. We will only deploy further significant capital when we've received planning and have secured a pre let on attractive terms. Based on current anticipated timelines, construction will begin in early twenty twenty six, in which case the data center could be built and be income producing by the 2027. Our power first approach means that this is an exceptionally rapid timetable in a location that is significantly power constrained and where many others are having to wait until the mid 2030s to have access to power. But we're not stopping at Manor Farm.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

As outlined at our Capital Markets Day, we've purchased a second site for a major new 125 megawatt data center project located within the London availability zone. We're targeting a 10 to 11% yield on cost, in this case, generating £23,000,000 to £25,000,000 per annum in rent. And subject to planning and in line with our pre let driven approach to construction, the data center could be income producing in tandem with power delivery in 2028, deploying capital only when the project has been substantially derisked. So drawing our three growth drivers together, we believe that we have inherent organic growth opportunities that are compelling and exceptional for a UK listed REIT. You can see the building blocks here.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

By capturing rental reversion, building out our logistics development pipeline and adding new exciting data center opportunities, we have the potential to increase annual rental income from £300,000,000 to circa £790,000,000 per annum, and to grow adjusted earnings by 50% by the 2030, and assuming a primarily disposal driven funding model. These figures ignore the possibility of further market rental growth or any yield compression, so there is further upside potential. We therefore have a truly compelling combination of reliable growing income and opportunities to drive both income and capital growth to maximize returns for shareholders. To conclude, we believe our business offers shareholders a compelling combination of superior risk adjusted earnings growth underpinned by resilience. This is built on the quality, growth and efficiency that we're delivering across the business.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

The quality of our portfolio provides resilience through the economic cycle and delivers exceptional compounding income from assets that make up 91% of our GAV. Building on this, we have powerful organic growth drivers, which I've talked about in detail. For each of these, we see ways to maximize returns while minimizing risks. And finally, we have an efficient, low cost and agile structure, benefiting from triple net leases and with access to multiple funding sources at attractive costs. And our strategy is really working.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We're delivering attractive earnings growth, dividend progression, and sector leading total accounting returns. We've got one of the lowest cost ratios for a REIT with an attractive development pipeline, and we've got an incredibly strong balance sheet. Bringing all of this together, we're in a great position to deliver strong earnings growth and superior risk adjusted returns for our shareholders. That concludes the presentation. Thank you for listening.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I'll now hand over to Iain to coordinate Q and A. Iain?

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Good morning, everyone, and welcome to the Q and A section of this morning's presentation. We're joined this morning in addition with Tim O'Reilly on my left, our Director of Strategic Power, who joined Tri Tax Management nearly four years ago from the National Grid and Henry Stratton, on my far right, our Head of Research. We've got Sergey on the line. He's going to help us with the calls, and we'll probably begin the Q and A with the phone lines, please. Sergey?

[Operator]

Thank you. Our first question is from Jon Wong from Kempen. Please go ahead.

[John Vuong, Director - Equity Research at Van Lanschot Kempen]

Hi, good morning. Thanks for taking my question.

[John Vuong, Director - Equity Research at Van Lanschot Kempen]

I think you mentioned there's 1,200,000 square feet of space under negotiation. In what stages are these negotiations? And how much do you expect to convert over H2?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Hi, Jon. There are various stages of negotiation. We do have some overlap in terms of interest in some of those buildings. So it's not as though it's a single occupier. It does take time to convert lettings.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So, you know, on a pre let basis, by way of example, it can take twelve plus months in in the current market. Spec lettings tend to be quicker, And we would expect to convert some of that during the second half, but not necessarily all of it. But we'll obviously keep you appraised of progress, but we're very optimistic about the outturn for that interest in those buildings.

[John Vuong, Director - Equity Research at Van Lanschot Kempen]

Okay, that's clear. And then you also mentioned there's another 2,000,000 square feet of space on the discussion. But just looking at these as well as the negotiations, what are your thoughts on your fee growth over, say, the next twelve months?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We've given medium term guidance of three to 5% for our market. I think for our business, we're pretty optimistic. The MSCI data you've seen is delivering over 4% on an annualized basis for the first half and our business is tracking that very closely. And indeed, that was the same case last year. There is some regional differences in the data points.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

But generally speaking, we feel that those sorts of numbers are sustainable in the market where we've got controlled levels of supply and still maintaining attractive levels of demand. I mean, Henry, do you want to sort of expand on that at all?

[Henry Stratton, Head - Research at Tritax Big Box REIT]

Yes. I think just to add to that, on the regional element, there are some differences emerging. We're seeing regions continue to move through their cycle, but it's as much now about spec, building size as well as location. And that's, I think, really the key to the rental growth story across The U. K.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

It's become more detailed, more nuanced, if you like. But certainly, there's still strong pockets of growth in the market at the moment.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Thanks for your questions, John.

[John Vuong, Director - Equity Research at Van Lanschot Kempen]

That's clear. Thank you.

[Operator]

Thank you. Our next question is from Rob Jones from BNP Paribas, Exane. Please go ahead.

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

Thank you. Fantastic pronunciation.

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

Three from me. One is Manor Farm, one is UKCM disposals and then the third one on occupied market activity. Taking reverse order, Colin, I think you said kind of market wide tenant demand for H2 expect to be consistent with recent years. But within your own portfolio inquiry levels are up. And Frank, you kind of commented on that this morning since about May time.

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

What I wanted to know is in terms of that increased level of potential occupier interest, is that driven by a function of the space that you have available? Or do you think it is a genuine pickup in interest levels? I don't know how one might measure that.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Look, I think the market situation is fairly consistent. I'll hand over to Henry in a moment. But yes, of course, I mean, the market's been fairly footloose in recent times. So if you haven't been in creating spec opportunity, then you're less likely to capture your fair share of lettings in the market. So that's been an important part of our program.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And as a consequence, Rob, yes, there is an element of our activity increase that comes from having really high quality spec buildings available in key markets. Henry, do you want to sort of expand on the Yes. Market elements of

[Henry Stratton, Head - Research at Tritax Big Box REIT]

Rob, I'd say three things, I think, to the market. First of all, that diverse demand is very much there in the market at the moment. So we've got all of our main categories active in different ways. So whether that's manufacturing, still looking to evolve their networks. Supermarkets, particularly interesting at the moment, looking to upgrade and modernize their portfolios, particularly around the cold store element, bringing in new technology.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

And of course, that's playing into trends like the need for additional power. E commerce is in the market directly also through the 3PLs, and the 3PLs are picking up work as many are using them for solutions in the near term as they look at the challenges that continue to assist in the supply chain. So that's an encouraging picture. And as we talked about in the presentation, certainly, we've seen a recovery in activity from May after a slow start to the year with the tariff picture, etcetera. So the second then is that we're seeing that change from those three structural drivers, and that continues to drive the activity that we talk about over the medium term.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

That lift and that growth is still there. Those structural drivers remain very supportive for our sector. And then just overall on those numbers, think some important differentiation across the market as a whole, requirements are down slightly from the end of last year. But in our portfolio, they're up a fraction. As Colin mentioned, there's more at further stages of negotiation, which is encouraging.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Thanks, Emory.

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

Okay, great. And then just taking the last two together. UKCM, so cumulative disposals to date, have you got a figure, and I remember we've seen a figure before, about 3% in terms of the disposals proceeds to date versus, say, acquisition price, which I guess is the figure I care most about more than book value? And then the last one is on Manapharm, which was the so Amy Peckham, is obviously the case officer, and her wider planning inspectorate team. What gives you confidence, Colm, that you might anticipate hearing more on Mana Farm in Q3? Because I think the decision date is currently penciled in for some day in Q4, think it's October 14, something like that.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Yes. Thanks, Rob. So look, the first answer is that we've disposed of 80 sorry, $275,000,000 worth of assets. We've got another £8,000,000 exchanged. So in total, $283,000,000 completed and exchanged.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We've got EUR 49,000,000 under offer as well. So assuming that the under offer moves through to exchange, it would leave us with around about EUR 133,000,000 to go. I think we're really happy with the program, the disposals there. It's absolutely on time. And we're broadly in line with the acquisition level that we paid for those investments when we acquired thirteen months ago in May.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So absolutely on target in terms of the financial metrics for that portfolio as well. And UKCM has performed very well for us since we've acquired it. As I said earlier, the logistics component part of that alone, we've delivered a 13% uplift in rent since we acquired the portfolio. As to Manor Farm, perhaps I can ask Tim just to talk you through that last piece of the question on timing.

[Tim O'Reilly, Director - Strategic Power at Tritax Management]

Yes, absolutely. So as you say, Rob, we are currently looking for an appeal decision on October 14, so the hearing has been scheduled and representations are being made with the legal teams. In terms of ongoing process around pre let, so we are active on the pre let process currently, We've got a number of people or a number of parties in the data room scouring the detail of the scheme with very positive feedback so far. And we're searching to down select to a first stage offer process in Q3 and then to final stage two bids in Q4, at which point we'll then select our preferred operator.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I think it's just worth

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

Very clear.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I think it's just worth just overlaying on that, Rob, that obviously the UK government has categorized data centers as critical national infrastructure and supportive of its AI expansion plan. And our project to Manapharm is one of the most important buildings of its type and would be one the largest and most sophisticated data centers in The UK. So very important in terms what the government is trying to achieve.

[Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas]

Yes, thanks very much. Impressive ERV growth today and strong performance across the portfolio. The stocks should be up for. But yes, thanks very much.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Thank you, Rob.

[Operator]

Thank you. Our next question is from Cannon Mali from Qualitics. Please go ahead.

[Callum Marley, Equity Analyst at Kolytics]

Good morning, guys, and thanks for taking my questions. Three quick ones. The first one, you mentioned in the press release that a reduction in completion reflects mostly strong comps in 2024. Where are the current development completion levels of €400,000 and post period letting levels of €400,000 relative to pre COVID levels? And is this more of a normalized run rate going forward?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Crikey, that's a tricky question, I'm trying to think back to pre COVID levels. Look, I think it's fair to say that pre COVID, obviously there was an explosive level of occupational demand and development activity post COVID, there was initially a lull while everyone tried to work out what was going on. There were some constraints in relation to workforce activity with construction, of course, but the market got a handle on that. And then there was this obviously very significant demand push, if you like, from occupiers, particularly backed off against an increase in demand from online. It took a while for that to come through because, of course, pushing the button on development, bringing the materials to site, etcetera, takes takes time.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

But generally speaking, I would say that we're sort of round probably back to sort of pre COVID levels around that. Would you say, Henry, what's your sort of take on it? Yeah.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

So for the market, absolutely. So the last couple of years, we've seen low 20,000,000 square foot of take up in The UK, different numbers from different agencies, but that's the CBRE numbers that we use. We think we're broadly on track for that this year, as we talked about. And that's pretty consistent with what the market was doing sort of pre-twenty And obviously, as Colin said, we have that explosion in between. So the market really has leveled out back around these numbers.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

But I think the important element here is also the diversity that's in the market these days. There's a lot of organizations looking to evolve their supply chains, revisiting their networks, and that's driving this rotation of space towards higher quality new buildings of the type that we own and develop. And so critical for us is having the capability to be able to meet that demand in the current environment and meet the requirements that occupiers have to not only hold more stock but also run more efficient supply chains. And high quality buildings with the associated benefits are the key way to do that.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And I think just to finish on that point, I mean, as a business, the way we think about this, remember, our development land platform is highly flexible. It's very, very capital efficient because it's mainly controlled through option agreements. And so in the context of changing market dynamics, we're able to flex that within a fairly short period of time. So we're not heavily committed to development at any particular point in the market cycle. And we've got a really good line of sight on demand coming through that we look to match with our development activity.

[Callum Marley, Equity Analyst at Kolytics]

Okay. And on the second one, the medium growth opportunity on Slide 25 of your presentation has changed by about EUR 60,000,000 from the investment update or the investor update, particularly as it relates to the timing of the EUR 128,000,000 logistics development passing ramp. Has anything changed there regarding your view on logistics development timing?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So which section in particular are you referring to there, Callum?

[Callum Marley, Equity Analyst at Kolytics]

The January in the investor update and then the on Slide 25,000,000 it's changed your total medium opportunity.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Let's just push back a bit.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

I think it's a function of timing, Kalam. So what we would have reported at the CMD would have been based on the December position, given we hadn't updated the market since then. We've rolled forward six months. So it's a feature of timing that's driven that change.

[Callum Marley, Equity Analyst at Kolytics]

Okay. Nothing in terms of like your outlook or any concerns?

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

No, obviously, ERVs have moved on as well in the meantime. So it's a bit of timing and a of the ERVs being applied to current portfolio as at thirty June.

[Callum Marley, Equity Analyst at Kolytics]

Okay. And then the last one, just on that, if the development environment for logistics remains muted or potentially gets worse, how flexible is your strategy in pivoting more towards the one gigawatt of identified data center capacity? Would you deploy more into that segment over the next twelve or twenty four months? And then as a follow-up, what is the typical power capacity range that you're targeting for new data center development? We expect more in that 100 to 200 megawatt range.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Callum, okay. So I'll take the first part of that before handing over to Tim. I think, look, we look to maximize returns for our business on a risk adjusted basis. And every component part of our businesses, we're looking to optimize returns from. So they're not mutually exclusive, they don't cannibalize one another.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So it's not as though we're going we're in a situation we're going to reduce logistics development in favor of data center development by way of example. Yes, DCs have got the potential to deliver higher yield on cost and potentially higher profit on cost. There's quite a long incubation period that we've taken make sure we've got the right sites on our Power First strategy. And we're looking to deploy that obviously from 2027 to 2031 broadly in terms of power delivery timelines. But look, we see the logistics development opportunity as remaining very positive.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I think that the market has been a little bit subdued. We'd hoped that it would loosen up a bit, become a bit more positive, but the macroeconomic backdrop has influenced that. But it's still pretty good. The market's pretty good, and I think it could get better off the back of a little more macroeconomic positivity and geopolitical improvement. Tim, over to you on the power delivery on DCs.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Sure. So we are currently focused on projects that are broadly sort of 50 megawatts plus. Obviously, the larger those projects, greater the economies of scale, particularly from power and infrastructure deployment, though we are keen to meet occupational demand. So in terms of what the occupiers need on a facility and a campus basis. So preference for those larger schemes, but still flexible to deliver the space that makes most sense for operators. And kind just to pick up on your point sorry, just to pick up on your point about the income bridge. At the Capital Markets Day, that medium term is encompassing the full five years that is associated with the earnings growth aspiration. As presented within the results today, that is consistent with how we've previously presented that medium term bucket. So that will be the that's the primary delta between those two numbers.

[Callum Marley, Equity Analyst at Kolytics]

Okay. Thanks for the clarification. Thank you.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Thanks, Kalam, for your questions.

[Operator]

Thank you. And our next question is from Suraj Goyal from Green Street. Please go ahead.

[Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC]

Thanks for taking my questions. So just a couple from me. One around ERVs and one around developments. So on ERVs for the logistics portfolio, I see that the first half twenty twenty five print represents acceleration versus the first half of last year. I want to know what is driving that?

[Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC]

And also how many prints are you expecting over the second half to make the like for like ERV disclosure? And what you expect those prints to be? And then other industrial peers are showing some softer prints in sort of urban markets, an area that you've started to increase your exposure to. Are you wary or concerned at all over the short to medium term trajectory? I just want to hear your thoughts on that, and then I can dig into the development side.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Okay. So should we tag team on that, Henry? I mean, you want to start off?

[Henry Stratton, Head - Research at Tritax Big Box REIT]

Yes. Shall I start off? On the ERV this quarter, I think also translating that across the market, we've seen headline rents increase in three of the seven regions in the first half of this year. And so we've still got this picture of decent rental growth, certainly by longer term standards, as we've talked about. And so that's filtering through into the market as a whole, as I say, in this more nuanced picture between some pockets of oversupply, but plenty where, again, those challenges don't exist.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

So that's the backdrop, I think, from the wider market in terms of the first half of this year.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Yes. I mean one the other things I would just point to is, look, ERV growth is is basically recorded based on prime rental growth for a particular region. So is the is the highest rent where that's moving to period to period? It doesn't necessarily well, it doesn't record the underlying rental growth that one can see. So just to give you an example, and this is kind of to to to the sort of the last point that you mentioned, Suraj.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

The in London, by way of example, we've, you know, we've seen prime rents flat line now for, what is it, about two and a half years. But underlying that, the the fringe prime, good secondary market is still performing strongly. And very, very crudely, there's been a pushdown effect from occupiers that have hit a bit of a glass ceiling of affordability, and they've been looking for more affordable space. And, of course, if you're able to offer a high quality building that's perhaps been refurbished in a really good location, then an occupier can take that for, say, £25 a foot instead of $30.35 pounds a foot, then you can see why those dynamics are playing out. So we're still seeing good levels of rental growth in in the, if you like, the the some of the submarkets, not necessarily at the prime rental level.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

The other thing to note is that prime rents do tend to sort of jump. So if you have a, you know, the the best park in a region and it's the last plot and you get a bit of competitive tension for that, the rent can jump quite considerably. Once that last plot's taken, there's nothing else to to deliver a new prime rental tone because you've got no new building to to to to provide that. Until such time as the next part comes along, for instance, to provide that that that opportunity. And so you can see gaps.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And so looking at the headline level and saying to yourself, okay, well, there's been zero rental growth at an ARV level in a particular region. It doesn't tell the full story. You've really got to unpeel the onion and understand what's happening underneath that. And that's where we're delivering as a business very, very strongly.

[Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC]

Perfect. Thank you. That's very helpful. I'll quickly go on to the second question. So development is, of course, a big part of your strategy.

[Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC]

It's clear that you continue to target 2,000,000 to 3,000,000 square feet development starting the year with a decent amount being speculative. How confident are you with speculative development given the ongoing economic uncertainty? I appreciate that there has been some improvements since May, and you have clearly alluded to it in the presentation. Are there any new tenant types you're targeting? Because one thing I'm kind of thinking here is, with development economics still fairly attractive, how can we be confident that supply won't accelerate at any given moment?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Okay. So look, the first thing is, as I said earlier, our development activity is very flexible. You will have seen from our presentation that we've delivered a high level of pre lets in terms of our activities, something we consistently monitor. We are constantly monitoring the level of occupational interest in the market is recorded by agencies. We are talking to our existing customers and and those that are showing interest in our sites.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

It gives us a really good line of of sight. You you've seen announcements recently by way of example of of companies such as Amazon that have got a a 10,000,000 square foot requirement in The UK market. You you know, you won't be surprised to hear that we're we're talking to Amazon. We're the largest landlord in Europe. We've done more business with them than anyone else in the last six years.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

We've We own and have developed some of their most strategically important buildings in The UK marketplace. So it just gives you a feel that there is some really good activity being undertaken and occupiers that are they're certainly the largest occupiers that are performing well and are investing in their businesses. Henry, do you want to just expand a little bit

[Henry Stratton, Head - Research at Tritax Big Box REIT]

on Yes. Can I just put a couple of numbers on that? So first half of this year, 4,500,000 square foot of take up out of the 11.7 was absorbed by speculatively developed buildings. So that's up 1,000,000 square foot on the first half of last year. So nearly 40% of take up in the first half of this year went to newly developed speculative buildings. Of course, occupiers have the opportunity to see those there in front of them and make decisions around them.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

So that's an encouraging backdrop from the development side. And long term, typically, about twothree of demand is absorbed by new buildings, either through speculatively developed or build to suit pre let activity. Again, first half of this year, that was about 70%. So that development business is a key way to access demand in the market. And then just on the supply side and concerns going forward, I think one thing to note is that the market is well informed around supply these days.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

A number of organizations do a very good job of communicating on this. And if you look at a market like the Northeast, you'll see a good example. It came out of the pandemic with an oversupply of space, and very little has been built speculatively in that market since. And we've seen a fairly consistent process now of available space declining in that market. And again, we're seeing rents move up as a result.

[Henry Stratton, Head - Research at Tritax Big Box REIT]

So I think there's a well informed market now around this on the development side, which is to the benefit of everybody operating in this space.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Yes. And just to finish on that. I mean the supply piece in terms of its elasticity is driven by two component parts. The first one is planning. If you look at history, there's fairly consistent levels of planning consents being delivered in The UK.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And the second one, of course, is the ability to deliver those buildings on the ground. And so we monitor development starts. And at the other end of the spectrum, obviously, we're we're monitoring the the planning applications. But on the development starts point, you know, as we said in the presentation, the number of development starts is reducing. And so when we think about the the vacancy rate that's up to 7.1%, one of the reasons why we think that it will reduce again, assuming steady state level of take up in the marketplace is because there are fewer number of development starts on the ground and that will manifest in a a reduced level of buildings available to let during the course of 2026 into 2027.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And as and as Henry said, part of the unpeeling of the onion of vacancy is understanding how much of that space is is new, modern, and how much of it's gray space against the backdrop of of of take up. And and and as Henry said, you know, there's there's two thirds of of of take up is for for new buildings. So if you're not in the development game, then you're going to miss out on a very significant amount of opportunity for lettings.

[Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC]

Very clear. Thank you very much.

[Operator]

The next question is from Paul May from Barclays. Please go ahead.

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

Hi, guys. Just a couple of quick ones. Appreciate lots of positive commentary and a lot of questions on the market, but the underlying data does seem to suggest it's not as strong as you're sort of highlighting in terms of base rates continue to increase in pretty much all markets, take up levels are down year on year and down on '23, which itself was a pretty poor year. So what makes your portfolio different? I mean, noting prime rents broadly flattish in many markets. Obviously, you've delivered growth.

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

You're confident on leasing up your developments. Just wonder what differentiates your product and your assets and your locations versus the broader prime market, which seems to be struggling.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Well, Paul. That's amazing endorsement that you've just made for our business. And I think you're absolutely right. I mean, we pride ourselves on having, I think the highest quality in my view, the highest quality logistics portfolio in Europe. It's very modern.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

You recall that we had over a ten year track record of 100% occupation and zero voids until we started acquiring smaller scale buildings. And I think that talks to the strength of occupational demand for our buildings, partly because they are in the main larger scale buildings. These larger scale buildings are let to larger scale financial covenanted occupiers. They invest in those buildings in many ways, but including automation. And as a consequence of which, they take longer term leases.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So they're long term strategic decisions that they're making in those buildings. And because we are essentially kings of the larger scale market, and when you note and you look at the numbers, the demand factors have been stronger for larger scale buildings in recent times. So this is one of the reasons why we performed very well. But we we we do see this as a two ends of the spectrum really. It's the largest scale buildings, but but also, obviously, as a consequence of the UKCM acquisition, we've concentrated on, you know, have a Southeast focused portfolio in MLI and smaller scale logistics, but not at the uber prime end of the market.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

And that talks to the point I was making earlier where there's still really good rental growth, levels in some of those submarkets, in the subprime, level. So it's really understanding the nuances, both geographically, timing and quality of buildings, size of buildings, etcetera, to make sure that you're you're in the optimized locations to to maximize returns for your portfolio.

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

So we shouldn't be concerned by the lower pre letting level at all. You stay very, very confident at least that over the second half.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I think as I as I said earlier, the occupational market has been impacted by by macroeconomic and and geopolitical factors, and that has been sustained for longer than I think we'd hoped. But I but I do talk to a pressure cooker of demand building. We know that a lot of occupiers, you know, want bigger, more efficient buildings. They want to consolidate from older, smaller, organically acquired buildings in their history. They want to invest in their businesses.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

They're just looking for a little bit more confidence before doing so. But some of them are running out of time. And some of them are saying to us, look, we're realizing now that this disruptive world that we're living in is the new norm. And we're going to have to start making decisions to invest in our businesses with confidence for the future despite continuation of weaker macroeconomic conditions. So I think that I certainly don't see that occupational picture is going to get worse.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

I mean, as I've mentioned earlier, the development starts into 2026 and thinking about the supply demand dynamics, we think quite favorable. It's just a point in time now. You're looking at data points that perhaps don't look quite so rosy. But looking forward, I think we feel pretty confident in the market opportunity and certainly into the medium term.

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

Okay. And then a separate question on the DMA situation. Obviously, you seem to be recurringly delivering above the guided recurring DMA income. Just wondered at what point probably a couple of questions. At what point do you potentially increase your recurring DMA over the medium term from 3,000,000 to 5,000,000 Is that a possibility?

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

And then the second question, looking at your adjusted numbers, it appears you've taken about 4,500,000 or so, 5,000,000 of recurring DMA in your adjusted numbers. So does that imply you're not assuming anything to come through in the recurring numbers in the second half? And just understanding your adjusted earnings ex the DMA, whether effectively that will be zero from DMA in the second half? Thanks.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Yes. Thanks for the question, Paul. So the DMA, as we've said in the past, it's a variable number. So it's quite hard to guide to over a longer term basis. Where we have contracts in place, we tend to update the in year guidance or the guidance for the following year.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

At the moment, there are no plans to adjust the longer term outlook. So the 3,000,000 to $5,000,000 of DMA would remain. As things stand today, all of our DMA contracts would conclude in FY twenty twenty five. So there is nothing currently that is live to generate DMA incoming in 2026. If and when that is the case, we will update on that accordingly.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

In terms of the recognition of that, we've taken the same stance that we have in all of the years gone by. If there is up to GBP 4,000,000 of DMA in the first half, we recognize that within the adjusted EPS number. And therefore, we won't be including any further DMA in that excluding DMA number for the second half. It's fully taken in the first half.

[Paul May, Director & Head - Real Estate Equity Research at Barclays]

Perfect. Thank you very much. Thank you.

[Operator]

As there are no further questions in the phone queue, I would like to hand the call back over to Owen for Ian for any webcast questions.

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Thanks, Sergey. Thank you, Sergey. So we've got a couple of questions on the from the webcast. The first one was just a bit of a what was the £200,000,000 of CapEx related to DCs spent on? And how much was paid to Tritax management?

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Yes, the GBP $2.00 1,000,000 invested into data centers in the first half. That is all in keeping with guidance and expectation. That is a combination of land and investment in power connections. Obviously, the Manor Farm site is one of those. There was a second project that we talked to in the Capital Markets Day.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

We haven't given the location there, but that site is in the broader London availability zone. So it's a combination of land and power. With regards to Tritex management, I think as set out in our January 2025 announcement on Manor Farm, there was GBP 6,100,000.0 paid as consideration for Big Box's investment in the JV. So Tritex management held the investment in the JV vehicle with JV partner and with the power connection for Manor Farm, and Big Box essentially stepped into that for a consideration of GBP 6,100,000.0.

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Great. A couple of questions from Bjorn Zeitsma at Panmure, Liberum. Can you give us a sense of the age of the vacancy within your portfolio? And how much of the space is spec that has not let up since COVID? Second question is, which regions are suffering from oversupply and which are seeing the strongest take up?

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

And the final question is, can we again confirm that the reiterated guidance to grow adjusted earnings by 50% is on a per share basis? As I can't see this mentioned in the numbers?

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Okay. I'll take the first one of those. The only building that we have, I think it's a little over two years now in terms of vacancy, is a 300,000 square foot building at Little Brook in London. The East Side Of London market has been a little bit subdued. But as to the remainder of our development portfolio, we're typically operating within a sort of twelve month time horizon.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

So on a rolling basis in terms of development completions and getting those buildings let, So they're letting up pretty quickly. We've got no long term vacancy in our ongoing spec development program. And obviously, the pre lets by the nature of the name already let before we start building the buildings.

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Much worth adding as well that a lot of that vacancy we inherited through the UKCM acquisition as well within the underlying investment portfolio as well.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Sorry, I thought that the question was about the development vacancy, but it's a good point here. Thanks.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

Just on the 50 adjusted earnings ambition. Firstly, that's obviously very attractive for any business in today's market. Breaking that back broadly is a 7% CAGR between now and 2030. I think the one thing I would say there is that one should not straight line that over that period. We're going through a period of investment, particularly into the data center opportunities.

[Frankie Whitehead, Partner & CFO at Tritax Big Box REIT]

That will lead to an acceleration of that earnings growth as we move through time and as through some of those data center schemes come on board. So that's the first thing. And then yes, reiteration around its conversion on a per share basis that is predicated on a business plan that is self financed. I think that is in keeping with the guidance we've given around CapEx deployment and how we expect to fund that through disposals and use of balance sheet. So yes, that does convert to a 50% earnings growth on a per share basis.

[Ian Brown, Head - Corporate Strategy & Investor Relations at Tritax Big Box REIT]

Great. I think that concludes the Q and A. There's no further questions either on the webcast or the on the phones.

[Colin Godfrey, Partner & CEO at Tritax Big Box REIT]

Great. Thanks, Ian. Well, it just remains for me to thank everyone who's joined us on the webcast and the phones today. Thank you for listening. Thank you for continuing to support Trattic's Big Box REIT, and we look forward to catching up with you again soon. Have a good day.

Participants

Executives

• Ian Brown, Head - Corporate Strategy & Investor Relations
• Colin Godfrey, Partner & CEO
• Frankie Whitehead, Partner & CFO
• Henry Stratton, Head - Research

Analysts

• John Vuong, Director - Equity Research at Van Lanschot Kempen
• Rob Jones, Executive Director - Real Estate Equity Research at BNP Paribas
• Tim O'Reilly, Director - Strategic Power at Tritax Management
• Callum Marley, Equity Analyst at Kolytics
• Suraj Goyal, Senior Associate - Equity Research at Green Street Advisors, LLC
• Paul May, Director & Head - Real Estate Equity Research at Barclays