Tritax Big Box REIT (BBOX) Investor Update summary

Strategic Expansion and Market Opportunity

• Acquired a 74-acre site at Manor Farm, Heathrow, within the Slough Availability Zone, for a 147 MW data center project, with Phase 1 (107 MW) expected to complete in H2 2027 and Phase 2 (40 MW) by 2029, subject to planning.

• Pipeline of UK data center opportunities totals up to 1 GW of power, deliverable from 2028 onwards, leveraging logistics expertise and a four-year investment in power capabilities.

• London faces acute power shortages and high demand, creating favorable market dynamics and high barriers to entry for new data center developments.

• Data centers are classified as critical national infrastructure, supporting long-term rental growth and benefiting from strong government backing.

• Hyperscalers have announced £25 billion of investment into UK data centers, with target tenants including hyperscalers and high-quality co-locators.

Project Structure, Funding, and Governance

• Entered a 50% joint venture with a leading European renewable energy generator, enabling accelerated power delivery via pre-existing grid connections.

• Project is self-funded through existing resources and capital recycling, with an initial £80 million for site acquisition and total Phase 1 capex of approximately £365 million.

• Board conducted extensive due diligence, including independent advice and a fair and reasonable opinion from Jefferies; related party transactions fully disclosed.

• Land acquired from AIPUT for £70 million plus 21% of Phase 1 development profits; Tritax Management receives a development management fee (up to 5% of costs) and a 17.5% profit share, with 50% reinvested in shares.

• Board secured right of first refusal for future data center opportunities from Tritax Management, enhancing long-term growth prospects.

Financial Returns and Risk Management

• Phase 1 of Manor Farm targets a 9.3% net yield on cost, significantly above logistics development yields of 6–8%.

• Projected profit on cost for Phase 1 exceeds 40%, with significant development profit anticipated.

• Prime London data center assets command stabilized yields of 5.0–5.5%, making the project’s returns attractive.

• Construction is contingent on planning permission and pre-let agreements, materially de-risking capital deployment; if planning is not secured, the site is underwritten for logistics use.

• JV structure and secured grid connections reduce grid connection wait times from over 10 years to within the project timeline.