(Alliance News) - Tritax Big Box REIT PLC on Friday noted elevated energy costs, high inflation and high interest rates as it reported a decline in net asset value, while its outlook was optimistic.

The London-based real estate investment trust managed by London-based Tritax Management LLP said net asset value per share as at December 31 declined 2.3% to 175.13 pence each from 179.25p a year prior. Further, EPRA net tangible assets per share deteriorated 1.8% to 177.15p from 180.37p over the same period.

Contracted annual net roll edged up 0.6% to GBP225.3 million as at December 31 from GBP224.0 million year-on-year.

The company noted: "The economic backdrop was challenging in 2023, with high inflation, rising interest rates, lower growth, and still elevated energy costs impacting consumer and business confidence. The covenant strength of our customer base was demonstrated through 100% rent collection in the year. Occupier decision making was impacted however, with take-up dropping back to pre-pandemic levels after three years of elevated demand."

Finance expenses increased 40% to GBP55.3 million from GBP39.4 million.

More positively, Tritax Big Box swung to an annual pretax profit of GBP70.6 million in 2023, from a loss of GBP601.0 million in 2022. That is on the back of a gain of GBP126.7 million in fair value movements in financial asset, compared to a loss of GBP578.1 million.

The company raised its total dividend by 4.3% to 7.30 pence per share for 2023 from 7.00p for 2022.

Looking ahead, the company cited "excellent long-term growth potential, as we capture significant reversion in the investment portfolio, drive returns through development and continue to optimise our portfolio by redeploying capital into higher returning opportunities. These inherent attributes for growth are further supported by the strong fundamentals of the UK logistics market."

It added that ongoing rental growth and stable or declining construction costs are having a positive impact on its development yield on cost.

Tritax Big Box said: "Overall rental income growth will be supported by the significant reversion within the investment portfolio and the practical completion of let development assets throughout the year. Given the structural support within the market, we continue to expect to see overall positive movement in rental levels in the core markets in which we operate."

Tritax Big Box shares rose 1.2% to 148.40 pence each on Friday morning in London.

By Tom Budszus, Alliance News slot editor

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