Tritax Big Box REIT plc

Good afternoon and welcome to our results presentation for the six months ended 30th of June. I'll 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. You can submit your question in the webcast viewer and in the interest of time, we will aggregate similar questions. 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 very much.

Hello and welcome to our results presentation for the first six months of 2025. 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&A. 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 end of 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 CM Logistics assets now fully integrated and performing well, and the non-core disposal programme fully on track. We've also secured a second data centre opportunity and successfully refinanced two DEP 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 URV growth as a result of being positioned in the right sub-markets. An attractive logistics development pipeline that can capture the substantial and enduring demand for new buildings. And exceptional returns through data centre 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. Thank you, Colin. And hello, 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 APRA NTA per share of 1.4%, to 188.2 pence, and a total accounting return for the six months of 3.6%, which is ahead of this time last year. This is enhanced, however, when excluding certain non-recurring items, which I will set out on a later slide. So along with making significant strategic progress, our financial headlines demonstrate that it'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 million pounds for the half, principally due to the acquisition of the UKCM portfolio in May of 2024, which has now contributed for the whole of the first half of this year. And we continue to operate with an efficient cost base. Our EPRA cost ratio, shown bottom right, is 12.9% excluding vacancy costs. our headline adjusted EPS grew by 6.4% to 4.63 pence. In line with our policy, the overall dividend per share was 3.83 pence, up 4.9% from the prior period, resulting in a consistent dividend payout ratio of 89%. And as the top right-hand chart shows, we continue to have significant embedded rental potential. Our balance sheet remains very strong, underpinned by our high-quality investment portfolio. Over the period, our portfolio value increased by 4.2% to £6.8 billion. This includes a £92 million gain on revaluation. And we continue to generate excellent opportunities to allocate our capital, as you can see on the top right. On the bottom right we show that this has mainly been financed through our disposal programme, with £278 million of assets sold in the year to date. While we've been busy investing for growth and integrating the UKCM 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 1.4% and 0.9% 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 annualised. 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. 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. We continue to see attractive levels of ERV growth. This stood at 2.3% over the last six months or 6% over the past 12 months. 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 £5.6 million to our annual rents across the six months. As we outline 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. 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. And after the period end, we were pleased to report the letting of one newly developed unit at Rugby. As a result, you can see the pro forma 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 0.8 million square feet of developments reaching completion, adding one and a half million pounds to passing rent and with the potential to add a further 2.6 million pounds subject to leasing. 0.4 million square feet of this was delivered under a DMA contract. 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 our 2025 targets. 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, noting that during the period we have successfully refinanced two loans that were due to mature in the following 12 months. 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. We are reiterating the guidance we set out at our recent Capital Markets Day. So drawing this all together, it's been another period of progressive operational and financial performance for the business. 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 annualised. 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 centre development opportunities. And with that, I'll hand you back to Colin.

Thank you, Frankie. 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 behaviour, 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. After a subdued start to the year, leasing activity picked up from May and we saw 11.7 million 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 mid-year remains solid at 9.9 million 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%. But going forward, the 12-month development pipeline will be lower, with speculative space under construction significantly down to 7.3 million square feet from 12.8 million 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. Turning to the data centre market on the right, market dynamics remain very strong, with approximately 2.1 GW of additional demand anticipated by 2029, compared to the current installed base of 1.1 GW. This is evidenced in the exceptional interest that we've seen in our ManaFarm project with discussions advancing with 15 potential clients. Turning back to our strategy, it's important to emphasise that we've developed this in anticipation of the change in 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. We actively manage assets to really drive value and we optimise our portfolio by constantly recycling capital into higher returning opportunities, particularly into our development pipeline, which now encompasses data centres. 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 centres. 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. We show here the benefit of capturing our record rental reversion and reducing vacancy, which could add £83.8 million to contracted rent. And as highlighted on the right, We anticipate capturing approximately 77% of that over the course of the next three years. I'd now like to look at our active asset management in more detail, including UKCM, the acquisition that we completed in May of last year. We successfully integrated the UKCM logistics assets into our own business earlier this year. This means that we have the same visibility in 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 £4.5 million per annum. 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 sub-sector and I'm pleased to report that we are tracking precisely on plan. 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 minimises risk and maximises returns, such as the use of long-dated options to control development land, which is capital efficient and flexible, as shown bottom left. And as Frankie mentioned earlier, shortly after the period end, we announced a significant letting at one of our speculatively developed buildings at Rugby. 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 £3.9 million to our annual rent roll and at a yielding 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 centres, our third growth driver. Power is the scarce ingredient required to unlock value from data centres. And as outlined at our Capital Markets Day, we've invested further in our pipeline of power grid connection agreements, totalling over one gigawatt, and necessary land in the key locations desirable to data centre operators, focused on the London Availability Zone. we're pursuing a pre-let powered shell model, meaning we only deploy significant amounts of capital in construction of data centres when projects are substantially de-risked. At Manafarm, 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 second half of 2027. and benefit from an additional 40 megawatts of power available from 2029. And we're making excellent progress with exceptional levels of Occupy 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. Based on current anticipated timelines, construction would begin in early 2026, in which case the data centre could be built and be income-producing by the second half of 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. As outlined at our Capital Markets Day, we 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 to 25 million pounds per annum in rent. Subject to planning and in line with our pre-lect driven approach to construction, the data centre could be income-producing in tandem with power delivery in 2028, deploying capital only when the project has been substantially de-risked. 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. By capturing rental reversion, building out our logistics development pipeline and adding new exciting data centre opportunities, we have the potential to increase annual rental income from £300 million to circa £790 million per annum and to grow adjusted earnings by 50% by the end of 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 maximise 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. 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 maximise returns while minimising 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. 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. I'll now hand over to Ian to coordinate Q&A.

Ian. Good afternoon everyone and thank you very much indeed for joining us. We're now going to commence the live Q&A part of the presentation this afternoon and I've got Colin and Frankie here with me. Thank you very much indeed for submitting your questions through the portal. As a reminder you can submit questions I think on the right hand side of the panel that you're viewing this on. And so without further ado, I'll jump straight in. I've got a question asking about capital deployment. You talk about deploying capital with precision, but are there the opportunities out there to be able to do so with such precision? Perhaps Frankie, one for you to...

Yeah, I think that reference is largely, thank you for the question, largely focused towards our development pipeline. So just to remind everyone, we have the UK's largest development pipeline for logistics purposes and we are targeting a 6% to 8% yield on cost for logistics. Equally, we have set out our data centre strategy and have launched the first two projects on that strategy, and we are targeting a 9% to 11% yield on cost for that particular element. So both are very flexible. We typically are not drawing down land and owning land outright until we have received planning consent. And then when we embark upon construction, we either do that in two ways, one on a pre-let basis, And when we talk about pre-lets, that's an occupier committing to the building before we are constructing it. So we would sort of deduce that that is very de-risked when it gets to that point. We'd have a clear line of sight over the returns profile from which we can deliver from that building. That would be the rent would be fully underwritten with the agreement for lease and we'd have a fixed price construction contract that sat behind that. So we would know to a pretty fine degree what yield on cost and what profit on cost will be generated from that building. So yes, there are absolutely ways that we can do that. In fact, we have got many buildings coming out of the ground at the moment on a pre-let basis. Equally, we do have a running speculative program. The advantage is to having both of those channels available to us. When it comes to the spec program, it's educated spec development. So this is where we're commencing construction, having had a dialogue with a number of occupiers that we think are likely to take the building. And again, in that situation, we are talking rents we have a clear idea on what the cost is going to be to construct the building and again we you know within narrow parameters can identify yield on cost and profit on cost expectations around you know what that investment is going to return to us and to shareholders so Maybe a long-winded answer, but yes, absolutely. We are, in all respects of development, executing with precision.

Great. Thanks, Frankie. Next question. What is driving the contracted rent growth and how do you see this progressing over time?

Yes, so net rental income is up 17% period on period. The key drivers to that are we acquired the UKCM portfolio in May of 2024. So when we look at this year versus the last six months, UKCM featured for the full six-month period. It was only present from the middle of May to the end of June in the 2024 period. So that is a key driver to the overall growth in net rental income. We have obviously got the rental growth capture that we're capturing through our natural lease events. So where we've had rent reviews or where we've had rent expiries, we are capturing uplifts in rent. That's been strong in the period. We've achieved £5.6 million of growth in our gross rent through rent review capture. And on top of that, we've got the development programme. where buildings are completing, where new leases are coming on stream, that is additional rent that is being added to our gross rent. So it's a combination of all of those things. I think the UKCM acquisition is the biggest component given this current six months.

Noting also that within UKCM, the logistics component is performed particularly strongly with rents up 13.2% over the period.

Great. And then maybe just turning to the market, do you feel there is more rental growth to come given that some think the market is perhaps a bit toppy?

Yes I do because whilst the market has to some degree been slightly subdued against where we thought it would be by now as a consequence of continued macroeconomic headwinds and geopolitical risk, we do see a pressure cooker of demand building. We know that there are significant structural tailwinds that are supporting the logistics market in the UK. Increasingly complex supply chain frameworks globally. I think there's also been a sort of deglobalisation effect A lot of our customers are telling us that they want to upgrade to larger, more sophisticated buildings that have the capability of delivering economies of scale benefits, cost savings and efficiencies, and they are investing quite significantly in those buildings in automation etc. Those aspirations, however, can to some degree sit largely unfulfilled, with customers wanting those things but not yet having the confidence to do them. Once we get a bit more macroeconomic confidence in the market, we think probably we'll see a lift in market demand, but of course all the time in the last recent period, demand's been fairly constant, around 20 million square feet of take-up. It's more or less matched against new building delivery. Whilst the vacancy rate has increased, that's mainly off the back of grey space, the second-hand space coming back into the market. And the key thing to note is that you need to be developing new buildings if you want to capture the letting activity in the market because two-thirds of lettings that have been taking place have been for new buildings. And so fundamentally when you look at our own capture of rental growth, when you look at ELV growth which has been over 4% reported by MSCI and indeed our own portfolio has delivered that on an annualised basis, for the first half, I think those are pretty impressive numbers in what we see as a relatively weak market. So I do think there's upside potential and we think that that vacancy rate will start falling into next year as a consequence of a reduced number of speculative development starts that we've seen recently.

Great. A couple of very similar questions, which I'll try and aggregate into one, which is basically how does the company balance between acquiring large-scale big box warehouses and potentially smaller or more flexible logistics facilities?

Okay, that's a good question. So look, this isn't a precise science and one has to remain flexible. I think that there are two components to this. The first one is being opportunistic and that's what we exhibited when we acquired the UKCM portfolio. We felt that it was really complementary to our business at a point in time in the market. which we felt looked attractive to us. And indeed that has been borne out because it's performed exceptionally well and we're completely on track with that. And as we sit here today, I think it's about 10% of our portfolio roughly is in smaller scale last mile M&I type assets. So we're very much, you know, still the name over the door is still very much representative of the business largely in larger scale big boxes. Just to remind you that for over 10 years, we had 100% rent collection record. We had zero vacancy in our portfolio, not one single day of vacant building in 10 years. And I think that talks to the quality of our buildings and their locations, the modernity of them. the importance of them, the scarcity of them, and the quality of our customers that are underpinning that rent, many of which are world-class customers. You put all that together and you end up with a highly resilient income stream that supports our dividend. And so, fundamentally, when we think about the relationship between size of buildings, yes, when you have smaller scale buildings, typically the yield is tighter. You would expect stronger rental growth as a consequence of that because it potentially carries a high degree of risk. You will naturally have an element of vacancy because you want to be able to take buildings back, refurbish them, create a new rental tone to use on that park to drive rents forward. So there's much more asset management intensive on the smaller scale buildings and that's wrapped up in the whole framework of how we think about those buildings but The larger scale logistics assets, we have really deep relationships with our customers. We know what they're doing. We know why they want these buildings. They invest in those buildings, often with automation, etc. And that's one of the reasons why they sign very long-term leases. So you see a very different lease profile for larger scale buildings than you do with smaller scale buildings. So when we think about that in totality, what it does is it gives us the ability to provide a full suite service offer to our customer range right the way through from the smaller scale buildings in the urban environments right up to the larger scale regional and national distribution buildings and that's what our customers have been telling us that they want for quite some time and that's one of the reasons that underpinned the UKCM acquisition and our further interest in urban logistics assets.

Great, thanks Colin. A question here. Are there any new strategic partnerships or collaborations that Tritax is pursuing to strengthen its market position or diversify its offerings?

Not currently, although we... have and continue to consider such opportunities, both in terms of potential joint ventures, joint portfolio positioning, etc. The one thing we've already reported, and I'm talking in terms of a live situation, the one thing we've reported is our relationship with EDF. on the data center platform, which is incredibly strong and very, very important to our Power First strategy and value delivery on data centers. And that's informed the way we positioned ourselves in data centers. It's very, very exciting. We have a close relationship with EDF and we look forward to working with them on a number of projects over the coming years.

Great. Now, question here. The results are impressive. Is there likely to be some dividend growth going forward? And if so, could you give a range?

Yes.

Thank you for the question. So I think the largest statement that we've made at the Capital Markets Day, we've reiterated this morning, is with regards to growth in adjusted earnings out to the end of 2030 and that is a 50% target to grow adjusted earnings for that next six year period. So I think the way one could think about that is if you break that back in effect to an annualised growth rate, It's about 7%. Given the investment that we are making currently into the early stages of our data center strategy, there's a bit of a ramp up in terms of the profile of that growth. So as we move through time, the growth rate is likely to accelerate. So one shouldn't just take a straight seven year linear position and extrapolate that across the full time frame. Now that's an earnings target and naturally we pay out 90% of our adjusted earnings. So one should see our dividends and our earnings kind of progress in reasonable lockstep. So one could also translate that to a straight dividend positioning.

Great, thanks. And perhaps one I can talk to here about the growing importance of sustainability and what innovative green initiatives or certifications the company is adopting to enhance asset value and tenant appeal. It's probably worth beginning just building on what Colin was saying about the modernity of the assets that we have within the portfolio. And that's reflected in the strong EPC ratings that we already have. So you'll be aware that over 80% of our portfolio is rated B or above. which we think is probably one of the strongest in the UK. And for those buildings that fall below that threshold, we have plans in place to bring that performance up to line. And unlike a lot of what I describe as sort of more traditional or legacy real estate assets, the assets that we own are actually very cost-effective and easy to operate from an EPC perspective. So the incremental capital investment required to bring the rest of the portfolio up is particularly small. And the asset, the capital we're deploying, which a lot of it will go into roof-mounted solar, actually delivers a very attractive return in its own right. So I think improving the environmental performance of the portfolio is a significant opportunity for us. The other point I would note as well is that it's very much the direction of travel for our clients as they want more sustainable buildings and we see that very much in our development portfolio where our ability to build brand new best in class and buildings that are incredibly sustainable is a key competitive advantage and we announced shortly after the period end a letting to a global data management business One of the main attractions for them at that site was the building's environmental performance. So a lot of opportunity there, both in terms of building from a very strong foundation in terms of the ESG performance of our assets, but a lot of opportunity, I think, to continue to grow the business, generate value, and also preserve value within the investment portfolio. Maybe a slight change of tack. We've had a couple of questions about buying opportunities, which I think we'll refer to as asset acquisitions. Are you seeing opportunities in the market to expand our operations?

Yes. I think there's certainly signs that there's increased level of liquidity in terms of assets and portfolios looking to come to the market. And we see virtually everything that there is to see, both from an off-market point of view and what's being marketed. We appraise everything. If you look at our track record, we've bought very well. Historically, we've typically bought us a 50 bps discount to what we feel is the true market value of assets. We will continue to appraise those opportunities. But this really talks to the hierarchy of capital deployment within the business and how we see that on a risk-adjusted basis. basis in terms of total return and so it's a pretty high bar for us in terms of acquiring standing stock. When one thinks about the yield on cost and total return that we can deliver both from logistics development but more importantly from data centres and so six to eight on logistics which is trending in the sevens and upper sevens. and 9 to 11 on data centers for yield on cost and obviously very significant levels of total return. But none of those elements are sort of cannibalizing the other and we do look to maximize returns from every component part of our business and so you will see us having confidence in fulfilling our DC program and our logistics development programs. you will see us buying and selling investment assets, standing investment assets from time to time where we think that we can improve the quality of the portfolio and deliver increased returns for shareholders. And of course, the sales programme that we've very successfully executed in recent years has been supportive of our CapEx desires in support of development in logistics and going forward we'll be doing the same for DCs.

Great. Quite an interesting question here. What is Tritax Big Box's perspective on emerging technologies such as autonomous delivery vehicles and how they might impact the logistics real estate landscape?

That's a good question. Well obviously we've got one eye on AI and its impact on DCs and I think it's undeniable that we're just needing more and more and more data. So that's a really positive trend that we're looking into with all of the work that we've put in over the last few years into data centres. As regards logistics buildings, as human beings we need physical things and they need to be stored and they need to be transported. They need protection from the elements and they need security and that's largely what large scale logistics buildings do. In recent times they've been automated so That part of the tech piece is absolutely manifest increasingly in buildings and we're seeing even 3PLs now implementing that and that can involve wall climbing, picking equipment on the racks, conveyor systems. You've seen the likes of Amazon employ the Kiva robotic systems etc. Ocado with the Hive system in the buildings, we see RDF tagging frameworks and barcode scanning to monitor stock movements in the warehouse and outside of it, improving stock control, understanding where that product is at the moment in time and ensuring that that product isn't depleted through things like theft. There's a lot that's taking place in our world. We, however, as landlords and investors in logistics properties, we typically own the envelope and so we're not investing in that tech. Part of the reason for that is, and the same philosophy applies to our Powered Shell approach in data centres, is that we're not tech experts. Tech can go out of date very, very quickly. So the amortisation rates that you would need to apply in that tech timeline can be very, very short. We are investing in assets that have a very, very long lifespan. and so we don't feel that they sit very well together but obviously we're supportive of our customers when they went to employ that tech within our buildings but they are duty-bound to put that building back in the condition it was when they originally took it if they do employ tech in the intervening period.

I think the area that underpins all of the technologies that Colin's talked about is really access to power. So we're seeing across our portfolio requirements for power really increasing exponentially, in part to power the autonomy that is increasingly in our buildings, but also as clients seek to decarbonize their vehicle fleets as well. So our kind of investment in our power capabilities not only have an incredible benefit for our data center pipeline, but actually underpinning a lot of this technology that's coming down the tracks or has already been implemented with our clients in our logistics buildings to deliver the efficiencies and economies of scale that Colin alluded to.

Just one further point to add on to that Ian. All of our buildings we're developing have EV charging for cars, increasingly for vans and HGVs subject to the expected tenant use and size of the building. and they are EV ready for every parking space, so that can be retrofitted or expanded in the future, all the wiring's in place to deliver that. And I think that the question is a very pertinent one because it's expected that that will rise quite significantly and I think we're very well positioned to take advantage of that.

And continuing on the theme of power, who are the competitors in the data center space and what are they forecasting?

forecasting in, do we know what that means? I don't, I suspect that's probably... Other listed peers?

Possibly.

I think there's a risk, okay, so look, the market's quite fragmented and it's relatively young and it's in its infancy in terms of its growth potential and I think we feel it has a very, very long way to go. That's partly evidenced by the slide that we showed earlier and the market depth is essentially measured in gigawatts. So there's 1.1 gigawatt of current market size installed capacity. And as I said in my presentation, there's additional demand identified for 2029 of an additional 2.1 gigawatts. So that would kind of imply the market's going to sort of increased by 200% in the next few years. So there's a lot to play for there. I think that there will be new entrants to that market in terms of supply as well. So it's not a particularly mature market in terms of the number of players. I mean, obviously there are some listed players and some well-known players that that the viewers may be familiar with. But it's not a market that's... I think it's a market that's going to grow. In terms of the listed space, I mean, Lecibro have a number of buildings in West London. I think slightly different than... It's an existing stock platform that they own. That is a strong location for logistics in the UK. But they're following a fully fitted model. And obviously there are different risk return parameters attached to fully fitted versus powered shell. We're taking a powered shell route. We believe that risk return, that is particularly attractive. We're targeting on most of our DC projects, double digit yield on cost, which we feel for a powered shell route is particularly strong. given that other parties in the European space in recent times have been sort of talking about similar numbers for a fully fitted model, which we feel carries a much higher degree of risk.

And Colin touched upon the EDF relationship that we have. I think our key competitive advantage in the space is the quantum of power that we have and the accelerated timelines that we have to the delivery of that power. So particularly with our Manor Farm site, to have 107 megawatts of power in the absolutely key sow availability zone is a huge competitive advantage. So I think that is something that, again, the attraction of that is manifest in the level of occupational interest we've had. And as Colin mentioned in the presentation, 15 NDAs signed now with really the full spectrum of data center operators who ultimately will be our clients in these buildings, as Colin mentioned. I think that concludes. I think that's all the questions we've got, actually.

Great. Well, thank you very much indeed, everyone, for taking the time to join us this afternoon and your continued interest in and support of the team here and Tritex Big Box REIT. I wish you a... A very pleasant afternoon. Thank you. Thank you for joining us today. That concludes the Tritax Big Box investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.