Quality Resilience Performance

Annual Report 2022

Specialists in UK logistics real estate

STRATEGIC REPORT

We are optimally positioned to take advantage of the strong market condition in UK logistics, underpinned by long-term structural growth.

Our purpose

Our purpose is to deliver sustainable, long-term logistics solutions that create compelling opportunities for our stakeholders and provide our customers with the space they need to succeed.

Our Manager

The Company's Manager, Tritax Management LLP, specialises in investing in mission-critical supply chain real assets, aligned with the structural trends shaping the future economy, including digitisation, automation, urbanisation and green energy. It has deep expertise in the sector, built up over more than 25 years.

The Manager has assembled a full-service UK logistics asset management capability for the Company, including specialist on-the-ground asset and property managers.

STRATEGIC REPORT

Our Strategic Framework
Highlights
Chairman's Statement
At a Glance
Our Customer Proposition
Our Investor Proposition
Supply Chain
Fund Manager's Q&A
Market Review
Our Business Model
Stakeholder Engagement and Section 172
Our Strategy
Key Performance Indicators
EPRA Performance Measures
ESG
Manager's Report
Financial Review
Principal Risks and Uncertainties
Task Force on Climate-related Financial Disclosures ("TCFD") Report
Going Concern and Viability Statement

CORPORATE GOVERNANCE

Chairman's Governance Overview
Board of Directors
Key Representatives of the Manager
Key Activities of 2022
Application of Code
Board Leadership and Company Purpose
Stakeholder Engagement
Division of Responsibilities
Nomination Committee Report
Audit, Risk and Internal Control
Audit and Risk Committee Report Management Engagement
Committee Report
Directors' Remuneration Report
Directors' Report

Directors' Responsibilities

FINANCIAL STATEMENTS

Independent Auditor's Report
Group Statement of Comprehensive Income
Group Statement of Financial Position
Group Statement of Changes in Equity
Group Cash Flow Statement
Notes to the Consolidated Accounts
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Accounts
Notes to the EPRA and Other Key Performance Indicators
Five Year Summary
Glossary of Terms
Company Information

Delivering against our strategy

Our business model

Our business model supports our purpose through our focus on delivering modern, well-located and sustainable logistics properties. These are thoughtfully designed to meet the current and future needs of fast-growing, ambitious companies.

Source high-quality	Invest and divest to
investments	create value
Develop on a risk-controlled basis	Proactively and responsibly manage assets

X Read more about our business model on pages 20 and 21

Our strategy

Our strategy aligns the Group to key market drivers, while ensuring it meets its wider responsibilities and carefully manages risk.

The strategy has three interlinked components that aim to deliver sustainable income and capital growth, resulting in attractive performance through the economic cycle that underpins a reliable and progressive dividend:

High-quality assets attracting world-leading companies

Direct and active management

Insight-driven development and innovation

X Read more about our strategy on pages 26 and 27

The value we create

By successfully implementing our strategy, we create value for all our stakeholders.

Customers

High-quality buildings that play a central role in fulfilling their business needs

Society

Job creation, tax revenues, local and green infrastructure, community support, enabling online shopping

Environment

Reduced impact through sustainably built assets and more efficient supply chains

Shareholders

Long-term income and capital growth

Lenders

Interest payments backed by secure cash flows

X Read more about our stakeholders on pages 22 to 24

X We have set objectives and initial targets for 2023 against each of these goals. See page 38

Strong operational performance

Increasing contracted rent and expected reduction in costs underpinning future earnings growth

• £28.4 million growth (+14.5%) in annual contracted rent to £224.0 million from development lettings and active management underpinning future earnings growth when compared to current passing rent of £205.1 million.

Occupational market remains at near record levels

38 million sq ft of UK lettings in 2022 (2021: 42 million sq ft) to a diverse range of occupiers, the third highest year on record and 33% above the 10-year average.
UK supply constrained with ready to occupy vacant space remaining low at just 2.0% (Q4 2021: 1.6%)6 .
Transaction market slowed in H2 2022; full year investment volumes totalling £6.7 billion (2021: £11.2 billion).
Prime market yield for high-quality rack-rented logistics real estate investment with c.15-year unexpired lease and open market rent reviews was 5.0%6 as at 31 December 2022 (Q4 2021: 3.5%).

Record development lettings secure £23.3 million of contracted annual rent

£23.3 million of contracted annual rent secured from record 3.1 million sq ft of development lettings in line with 6–8% yield on cost guidance.
2.9 million sq ft of development starts in 2022, of which 2.4 million sq ft (82%) has been let to a range of high-quality customers.

Adding value through active management, customer engagement and ESG performance

£5.1 million added to contracted annual rent from rent reviews and a lease renewal.
Record like-for-like ERV growth of 9.2% over the year, with a 19.1% portfolio rental reversion at 31 December 2022.
Continued emphasis on enhancing ESG performance, demonstrated by inclusion in Sustainalytics' 2023 Top-Rated ESG Companies List increase in MSCI rating from BBB to AA and launch of new 2023 targets.

High-quality portfolio supports resilient and growing income

100% of rent collected in relation to FY 2022 (2021: 100%).
Long-term and full repairing and insuring (triple net) leases to a diverse range of large and resilient customers with 12.6 years weighted average unexpired lease term ("WAULT") as at 31 December 2022 (2021: 13.0 years).

Change in portfolio valuation and EPRA NTA from market repricing of logistics assets

• Total portfolio value of £5.06 billion as at 31 December 2022 (31 December 2021: £5.48 billion), equating to an equivalent yield of 5.3% (31 December 2021: 4.1%).

Maintaining a strong balance sheet

• 31.2% loan to value at 31 December 2022, within medium-term guidance range of 30–35% and maintaining substantial covenant headroom. Including the assets exchanged for disposal subsequent to the period end, the pro-forma FY 2022 LTV reduces to 29.0%.

Financial highlights

Adjusted earnings per share2

7.79p-5.3% (2021: 8.23p)

Adjusted earnings (excl. additional development management income)3

7.51p+1.8% (2021: 7.38p)

Total Accounting Return

-15.9%-46.4pts (2021: 30.5%)

Dividend per share

7.00p+4.5% (2021: 6.70p)

Dividend pay-out ratio (excl. additional development management income)3

93%+2.0pts (2021: 91%)

EPRA Net Tangible Assets per share

180.37p-19.0% (2021: 222.60p)

Contracted annual rent roll

£224.0m+14.5% (2021: £195.6m)

Operating profit1

£183.1m+2.9% (2021: £178.0m)

IFRS earnings per share

-32.08p-157.9% (2021: 55.39p)

Portfolio value4

IFRS net asset value per share

179.25p-17.9% (2021: 218.26p)

Loan to value ("LTV")

31.2%+7.7pts (2021: 23.5%)

Operating profit before changes in fair value and other adjustments.
1. See note 13 to the financial statements for reconciliation.
1. The anticipated run rate for development management income is £3.0–5.0 million per annum over the medium term. Adjusted EPS becomes 7.51 pence when excluding development management income above this anticipated run rate ("additional" development management income). £9.3 million of development management income is included in the 7.79 pence Adjusted earnings per share in 2022 (2021: £19.0 million included in 8.23 pence Adjusted earnings per share). Also see note 1 to EPRA and Other Key Performance Indicators.
1. The portfolio value includes the Group's investment assets and development assets, land options held at cost, the Group's share of joint venture assets and other property assets.
1. Excludes development assets, land and land options.
1. Source: CBRE.

Well positioned for the future

"We made excellent operational progress this year, successfully deploying capital into higher yielding development opportunities and delivering record levels of new lettings, validating both our strategy and our decision to accelerate development activity in 2022."

Aubrey Adams Chairman

Strong operational performance and record development activity

Operationally and strategically, 2022 was an excellent year for the Company. Through our development programme, we let a record 3.1 million sq ft of space and secured £23.3 million of additional rental income, which will increasingly flow through into earnings during the course of 2023, and we will see the full benefit in 2024. We also continued to enhance our income and protect value through the active management of our high-quality portfolio. During 2022, the occupational market remained strong, with high occupier demand, very low availability and as a consequence rising rents across the UK. This is underpinned by the long-term structural tailwinds of e-commerce growth, supply chain optimisation and sustainability.

Macroeconomic factors impacting property valuations

The second half of the year saw investment market conditions deteriorate due to macroeconomic and geopolitical issues. A significant adjustment in underlying interest rates, in an attempt to curb high levels of inflation in the UK economy, caused a sharp increase in overall cost of capital and subsequently drove property yields higher. The relatively low volumes of investment transactions that completed in the latter part of the year were likely to have been priced around the time of the UK's "mini Budget" in September and October, when uncertainty was at its height. The valuers have been quick to reflect this in year-end valuations, which has led to a decline in our portfolio valuation and net asset value. We expect higher quality assets, of the type we own, to stabilise quicker and be more resilient in the face of a potentially weaker UK economy. Although we see the potential for some further but limited outward yield movements in the first half of the year, since the year end we have seen encouraging signs of the investment market stabilising and we believe there remains significant capital waiting to be deployed into the logistics sector, given its favourable long-term fundamentals.

A high-quality and resilient platform

In more uncertain times, we benefit from having built a business focused on quality. Our investment portfolio is differentiated by its high-quality and modern logistics real estate assets with strong ESG credentials, let on long leases to a resilient and diverse customer base that includes many of the world's leading companies. The investment portfolio comprises more than 90% of our portfolio value and provides a strong foundation to our income generation and a resilient platform from which to pursue growth opportunities through active management and our development land portfolio.

Complementing our investment portfolio is our development land portfolio. We have structured our development activities to enhance returns while minimising risk and maintaining flexibility using options over land. The land options include a defined discount to prevailing land values at the time of drawdown and they give us greater discretion and flexibility around capital deployment. The scale of our combined investment portfolio and development platform gives us in-depth insight into the market which enables us to effectively adjust our development activity to match market conditions. This puts us in a strong position to maximise returns while minimising development risk. Through development, we can create an attractive pipeline of high-quality new buildings, which meet the highest ESG requirements, in a range of sizes, from small and last mile buildings through to the largest distribution centres, with a variety of lease structures all at an attractive yield on cost. The development pipeline, with its potential range of locations and building sizes, helps us better meet a broader range of requirements from customers and maintain the modernity of assets within our investment portfolio and can enhance the average unexpired lease term.

We actively manage our investment portfolio by working to enhance the value of assets we own. We dispose of those assets which no longer meet our return expectations and selectively acquired assets in the market where we see strong potential. Proceeds from investment disposals will also be used to fund our developments. Given the volatility in the investment market during 2022, we decided to reduce our acquisition activity. However, as markets normalise, we expect to see opportunities to make investment acquisitions that enhance portfolio returns, with a focus on assets with open market leases in a range of building sizes.

Continuing to improve our ESG performance

In addition to the clear imperative around environmental issues, we believe there is a strong alignment between value, financial performance and ESG. In simple terms, looking ahead we think buildings with superior ESG credentials attract more demand from customers and in turn will be more marketable and command higher rents. It is pleasing to see our work being recognised, with improving ESG scores, including being named in Sustainalytics' 2023 Top-Rated ESG Companies List, improving our MSCI rating to AA (an upgrade from BBB), and improving our GRESB score to 83/100 (an improvement from our score of 81/100 in 2021). We still have much to do, and a key priority has been establishing a clear baseline from which to launch our new 2023 ESG targets. While these encompass the full range of factors we are considering, most notable within these targets is an enhanced commitment to achieve net zero carbon across all aspects of our business by 2040, rather than our previously stated 2050 target. You can read more about our new targets, and our approach to ESG in more detail on pages 32 to 38.

Strong balance sheet and significant liquidity

With an LTV at the year end of 31.2%, within our guidance range of 30–35%, and benefiting from a low cost of debt with fixed or capped interest rates across the vast majority of our debt facilities, we have maintained our balance sheet strength despite the downward adjustment in our portfolio value during the second half of 2022. We had available liquidity in excess of £500 million at the year end, with no loan maturities until the end of 2024. We agreed increases to our revolving credit facilities of £200 million in the year, demonstrating support from our lenders. Our balance sheet strength both increases our resilience to further changes in asset valuations and provides us with the ability to continue to efficiently fund our strategy.

Financial performance and dividend

Our underlying financial performance was good and in line with our expectations. Adjusted earnings increased by 8.3% when excluding additional DMA income, although as a consequence of higher average shares in issue we saw a more modest increase in Adjusted EPS1 of 1.8%. The contribution made by our development activity secured a 14.5% increase in contracted annual rent during 2022. With the majority of these development assets still under construction, and therefore not yet contributing to gross rental income, this provides us with confidence in our ability to grow earnings during 2023, with the full benefit expected in 2024. The decline in the fair value of the portfolio, principally driven by outward yield movements due to macro economic factors, resulted in EPRA Net Tangible Assets of 180.37 pence per share (31 December 2021: 222.60 pence).

The reduction in EPRA NTA will be a contributing factor to an expected reduction in the investment management fee in FY 2023 which, combined with the increasing income contribution from development completions, we believe will result in a lower EPRA Cost Ratio for 2023.

Having paid three interim dividends of 1.675 pence each, we have declared a fourth interim dividend of 1.975 pence per share, to give a total for the year of 7.0 pence, an increase of 4.5% (2021: 6.70 pence).

Karen Whitworth appointed as Senior Independent Director

In November 2022, we announced changes to some Board and Committee responsibilities. The principal change was Karen Whitworth's appointment as Senior Independent Director ("SID"), in addition to being the Board's champion for ESG matters, and taking over from Alastair Hughes, who had been in the role since May 2021. Alastair made an invaluable contribution as SID and he will continue to play an important part as a Non-Executive Director to the Group.

Adjusted earnings per share1

7.00p+4.5% (2021: 6.70p)

Dividend per share

Excluding additional development management income.

Enhancements to the Investment Management Agreement

As previously reported, during the year Shareholders approved a new Investment Management Agreement, the contract that defines the relationship between the Company and the Manager, with an extended term, expanded key person principles and a lower NTA derived fee scale from 1 July 2022. This reduces costs and gives us additional security in respect of our main service provider. On behalf of the Board, I would like to thank the Manager for their performance during the year, particularly in navigating the changing investment landscape and delivering the strong operational performance we report today. See the Manager's Report for further details.

Outlook supported by long-term structural drivers, strategic positioning and portfolio quality

The strong operational performance we have delivered in 2022 through our extensive development letting activity will begin to make an increasing contribution to FY 2023 earnings and a full contribution in FY 2024. Development led leasing will be complemented with ongoing rental growth from our investment portfolio through a blend of inflation linked and open market rent reviews plus the potential for lease renewals.

We have seen exceptionally high occupational demand for new logistics space in recent times although it is likely that a more challenging economic backdrop may moderate occupational demand to levels which historically would have still been considered strong. The structural demand drivers, combined with very low levels of new logistics buildings supply, are expected to continue to support attractive rental growth in the future.

While we continue to see high levels of interest from occupiers with incremental space requirements, with greater economic uncertainty, and due to the volatility in the investment market, we expect to revert to our long-term guidance for new construction starts in 2023 of 2–3 million sq ft, targeting capital expenditure into development of £200–250 million. We see the potential for some further, albeit more limited, yield expansion in the first half of the year, but we are witnessing encouraging early signs of stabilisation in the investment market which could manifest more clearly in the second half. A moderated pace of development, combined with our ability to rotate capital from standing investments, allows us to maintain a strong balance sheet, with LTV within a 30–35% range, while continuing to capture attractive investment and development opportunities.

Looking further ahead, the outlook for the sector remains positive. The structural tailwinds in the occupational market continue as occupiers seek to reduce their own cost pressures by generating greater internal operating efficiencies, led by optimisation of supply chains. As the current spike in inflation recedes, we see good prospects for rental growth to exceed inflation over the medium term which will help us to deliver attractive returns to our Shareholders.

Aubrey Adams

Chairman 1 March 2023

Our portfolio

Our investments and development sites are in strategically important logistics locations across the UK that provide easy access to transport infrastructure, skilled workforce and power.

Investment portfolio Strategic land and development portfolio Ports

Diversified by customer and sector

Our portfolio is let to 51 customers across 79 assets, providing a high degree of diversification by customer and by sector. These customers include some of the world's largest companies and are weighted towards defensive, non-cyclical or high-growth sectors, helping to reduce our risk.

Investment portfolio

We own the UK's largest portfolio of logistics investment assets and the largest logistics-focused development land platform, offering the potential to deliver attractive, sustainable income and capital growth to Shareholders over the long term. These assets are typically mission critical to our customers' businesses and support our ESG goals, as set out on page 38.

79 investment assets

A portfolio that reflects our strategy

Our portfolio is weighted towards assets that deliver resilient and growing income.

The majority of these are Foundation assets, which provide long-term and secure income from high-quality occupiers, combined with a smaller proportion of Value Add assets which offer additional upside potential through our active approach to management, such as renewing leases, adding extensions and enhancing environmental performance.

Development portfolio

The development portfolio comprises 25 sites, which between them have the potential over the long term to deliver c.40 million sq ft of new logistics space, more than double our existing investment portfolio.

Development pipeline of growth opportunities Planning process stage Unallocated/allocated Outline consent Detailed consent

	Future consent pipeline	Near-term development pipeline		Current development pipeline
Timing	Longer-term land held under option	Potential starts in following 12–24 months	Potential starts within the next 12 months	Development under construction
Size	28.4m sq ft	8.5m sq ft	2.3m sq ft	3.0m sq ft
Rent potential	£234m	£70m	£18m	c.£23.6m
Potential to deliver 2–3m sq ft per annum of development starts over the next 10 years

n Existing portfolio

n Land portfolio potential
1. For illustrative purposes only, assumes no future rental growth and includes portfolio reversion.

Providing high-quality space

In line with our purpose, we work closely with our customers to deliver the space they need to succeed.

X Read more about the future of supply chains on pages 12 to 13

We are customer focused

The Manager's team works in partnership with our customers to ensure our buildings maximise their operational effectiveness. This direct approach helps to future proof our buildings for our customers and to grow income and capital values for Shareholders.

Being close to our customers gives us a competitive edge, by providing insight into future demand and occupier requirements. We supplement this information with specialist supply chain advice, so we better understand their logistics operations and property network. This insight informs our development and asset management activities, to reduce risk and enhance returns for Shareholders.

The right size

With the UK's largest investment and land portfolios, we are able to provide new and existing customers with a range of building sizes to suit their requirements. This makes them flexible and efficient and generates economies of scale, enabling cost efficiencies for our customers.

Sustainable

Our customers are increasingly looking to occupy sustainable assets. 98% of our investment portfolio has an EPC grade of A–C and we continue to invest in ESG initiatives such as on-site renewable energy generation. Our development activity includes our commitment to net zero carbon in construction.

Modern

Our investment portfolio has an average building age of 10 years and our development activity creates a long-term pipeline of state-of-the-art buildings, to meet the requirements of market-leading occupiers.

Well located

Our investment and land assets are in strategically important logistics locations, which benefit from strong transport infrastructure and suitable power and labour supplies.

Innovative

The scale and flexibility of our buildings make them suitable for a wide range of customers to install the latest technology, including highly automated and robotic stocking and retrieval systems, which improve efficiencies and reduce costs.

A compelling investment case

Tritax Big Box is dedicated to investing in and developing high-quality logistics assets in the UK. We offer investors a sustainable blend of long-term growing income and capital growth.

We focus on attracting high-quality and resilient customers, engaging directly to grow and maintain income and capital values through active management, and delivering insight-led development from our land portfolio.

X Read more about our strategy on pages 26 and 27

A resilient portfolio

We have constructed a portfolio of high-quality assets, in key locations, let to customers operating in strong business segments. The portfolio has proven its ability to generate highly visible and resilient income, even in uncertain times. We complement this strong foundation with assets in a range of sizes and locations that allow us to apply our asset management expertise to drive greater returns.

X Read more about our portfolio on pages 6 and 7

Attractive development opportunities

We have the UK's largest logistics-focused land platform, giving us an attractive pipeline of internally generated opportunities for longterm phased delivery and an attractive yield on cost target of 6–8%.

X Read more about development opportunities on pages 8 and 9

Financial discipline

With a loan-to-value ratio of 31.2%, the Group is well financed, with a strong balance sheet, significant headroom and a range of funding sources to support our growth ambitions and drive Shareholder returns.

Long-term structural drivers

We believe this is the most attractive and dynamic sector in commercial property. There are major long-term structural trends driving occupational and investor demand for large-scale logistics assets. These trends have many years to run and events such as Covid-19 and Brexit have helped to sustain and accelerate them.

X Read more about our structural drivers on page 5

A sustainable approach

ESG considerations are central to all our investment decisions. From integrating ESG initiatives into our asset management plans, to developing net zero carbon buildings, or funding through Green Finance, ESG factors are fully considered to ensure long-term risks and opportunities are addressed.

X Read more about our ESG strategy on page 32 to 38

Extensive expertise

The Manager's deep understanding of our sector, combined with the calibre of its team and network of contacts, gives us the capabilities we need to identify opportunities and successfully execute our strategy.

X Read more about our expertise on pages 39 to 47 and page 74

Supply Chain

High-quality buildings

Modern and prime logistics buildings occupy an increasingly critical position within our customers' supply chain and must meet a broader range of requirements.

Workplace Providing a safe workspace with an increasing component of office and collaborative working spaces and higher levels of amenities such as cafes, restaurants and gyms.

Technology and maintenance Greater requirements for high levels of automation, supported by power and digital infrastructure, sensors and smart building technology, increasing overall central network visibility of inventory.

Biodiversity and wellbeing

Focus on increasing local biodiversity and measures that improve general employee wellbeing, such as green and active spaces and wildlife habitats.

Operations

Customers are seeking highly efficient buildings with high-quality floors and greater loading requirements combined with increased roof height, appropriate access, yard space and parking to help support efficient operations.

Labour

Customers frequently note access to a high-quality local labour market as one of their greatest requirements. Choice of location and ways to enhance overall employee proposition are now being factored into new logistics buildings.

Zero carbon

Customers are now focused on achieving their Paris-aligned performance pathways, increasing focus on whole life carbon emissions from supply chains and logistics buildings.

Social impact and partnerships Customers must increasingly consider their social impact, and how they can support employee and community engagement and support local supply chains.

Energy generation and use Access to significant amounts of affordable, reliable and increasingly decarbonised power is a central requirement for customers to support greater automation and electrification of vehicle fleets.

Stakeholder questions

Petrina Austin Head of Asset Management

Frankie Whitehead Chief Financial Officer for Tritax Big Box REIT plc

Q: With high levels of rental growth and increases in business rates, is affordability becoming an issue for your customers?

Rental growth and business rates will have some impact on our customers. However, we believe that these elements remain a relatively small component of the overall cost of their supply chains and we aren't seeing affordability being an issue. The pandemic accelerated e-commerce sales and exposed vulnerabilities in supply chains, causing companies to recognise the importance of warehouses in increasing resilience and this has produced strong occupational demand. Supply of new buildings is constrained by the planning system and is not meeting demand with the result that we are experiencing healthy levels of rental growth. A weaker economic backdrop may mean we experience rental growth at a lower rate than some of the exceptional levels reported in 2021 and 2022; however, we expect to continue to capture attractive levels of rental growth via indexation and open market lease events.

"We are in a good position to manage and mitigate cost increases. Currently we remain confident in targeting an attractive 6–8% yield on cost for our development programme."

Q: What impact has higher interest rates had on your balance sheet and cost of debt?

We entered this period of heightened volatility in the debt capital markets in a very strong position because we have maintained a conservative approach to borrowings. Our debt is either fixed cost, or hedged with interest rate caps, and we have no near-term debt maturities. This strong balance sheet position has insulated us from the immediate effects of the increasing rate environment. When considering future funding we will consider the impact on our LTV guidance, which remains a 30–35% range. As a result, it is likely that the quantum of our capex/investment into development will be broadly similar to the levels of disposals we achieve as we efficiently recycle capital into higher returning opportunities. Given the overall change in the cost of debt in the market, our marginal cost of debt will increase but the effects will be limited and phased over time.

Colin Godfrey Chief Executive Officer for Tritax Big Box REIT plc

Bjorn Hobart Investment Director

Q: How has cost inflation impacted on your development activities?

We have structured our development activity to be low-risk and highly flexible. We control most of our land through options, which have a pre-agreed embedded discount, and we control when we trigger the options and buy in the land. This allows us discretion to either scale up or down our development activities given market conditions. Through a combination of fixed-cost build contracts, the attractive nature of the land options and strong rental growth we have been able to manage and minimise the impact of cost inflation, allowing us to maintain our 6–8% yield on cost target, although when inflation was at its peak some of our projects were at the lower end of this range. In more recent months, we have begun to see a stabilisation in building costs, and in some instances a reduction, resulting in the yield on cost for an increasing proportion of projects improving towards the midpoint of our guidance range.

Q: How has Tritax Big Box REIT performed in terms of ESG over the last financial year?

We have continued to perform strongly from an ESG perspective in FY 2022, as seen by our improving GRESB ratings (83/100 for standing investments and 99/100 for developments) and our Sustainalytics score (negligible risk, 8.3) for which we were recognised in Sustainalytics' 2023 Top-Rated ESG Companies List by region and sector. We also improved our MSCI rating from BBB to AA.

This performance continues to be underpinned by our strong relationships with our customers, with whom we regularly engage to better understand their needs. This has resulted in improving our data coverage for our assets, and we are continuing to roll out the installation of on-site solar photovoltaic projects, with the total solar photovoltaic capacity installed across our portfolio now standing at 14.6 MW.

We continue to make progress on the delivery of our net zero carbon strategy and we have updated the net zero carbon pathway for the portfolio. Our updated ESG targets are disclosed in the ESG section.

Q: What impact have declining asset values had on the business?

The primary impact of declining asset values is an increase in our LTV from 23.5% to 31.2% due to a 15.2% decrease in the like-for-like value of our investment assets.

We took steps to preserve our balance sheet strength, such as reducing the level of speculative development, and we are also evaluating disposals of assets where we've maximised returns and it is attractive for us to recycle capital into higher returning opportunities. We recently exchanged on the sale of £150 million of assets at a price in line with our 31 December 2022 valuation, and we continue to progress other opportunities. Including the assets exchanged for disposal subsequent to the period end, the pro-forma FY 2022 LTV reduces to 29.0%.

Although we see the potential for some further but limited outward yield shift in the first half of the year, since the year end we are seeing encouraging early signs of stabilisation in the investment market and we believe there remains significant capital waiting to be deployed into the logistics sector given its attractive fundamentals.

We also believe that the repricing of assets and volatility within the investment market create opportunities for us, particularly through potential investment acquisition activities.

Long-term structural drivers enhance the attractions of the sector

STRATEGIC REPORT

Three long-term drivers continue to underpin occupier demand for logistics real estate in the UK. Our strategy is aligned to these drivers, which are:

1. The growth of e-commerce

Consumers want faster, more flexible and more convenient ways to make purchases, which has driven strong growth in e-commerce over the last decade and beyond. Physical restrictions during Covid-19 accelerated the trend and online sales remain well above pre-pandemic levels, accounting for 26.5% of total UK retail sales in 2022, up from 19.2% in 20191 . Demographic and technology trends remain supportive and are expected to drive further growth over the medium term.

Logistics real estate plays a fundamental role in delivering online orders to consumers and managing returns rapidly and efficiently. Price transparency contributes to business models being orientated around throughput where delivery, speed and convenience are critical. This drives up distribution costs and our research shows that for e-commerce companies, rents are typically a relatively small proportion of total supply chain cost. Proximity to final delivery point is therefore essential and, as a result, leading e-commerce, omni-channel and parcel companies require large, flexible, well-located properties. This is contributing to demand for new and larger buildings which have the technical and ESG attributes required to support operations that are often highly automated and which can act as a hub for distribution to end consumers or urban/last mile facilities. Typically, we see these attributes manifest in areas such as floor quality and loading capacity, building height and flexibility, power availability, workplace safety, and the digital infrastructure required to connect to central logistics management systems.

2. The need to optimise supply chains

Global supply chains continue to face intense pressure even as Covid-19 related challenges subside. The high-inflation environment that has prevailed through 2022 has resulted in significant increases in costs which have exacerbated the challenges already evident from Brexit. Companies continue to review how they operate and adjust their supply chain accordingly. Additional resilience is now a priority alongside optimising for efficiency, productivity and cost. Occupiers continue to pursue a variety of solutions, including:

consolidating older disparate units into larger, often purpose-built distribution centres, which offer economies of scale and the ability to optimise staffing and distribution costs as well as stock levels;
deploying automation and technology to stock, retrieve and process products in volume and at speed. These systems are most suited to large, modern logistics buildings;
bringing more inventory onshore and reviewing every aspect of their supply chains, from manufacturing and transportation to storage. This "deglobalisation" effect is further increasing demand for high-quality logistics space closer to the end consumer. It also has the benefit of reducing the environmental impact of supply chains, by cutting the distances goods must travel; and
outsourcing supply chain functions to specialists or leveraging third-party logistics providers' ("3PLs") networks to provide overflow space for stock. 3PLs were particularly active in the market in 2022 accounting for 33% of leasing activity2 .

3. The drive for ESG performance

Most organisations are now striving to be more sustainable. This offers numerous benefits, including:

reducing their environmental impact and improving the resilience of their operations and assets;
cutting energy use, helping to protect them from high and volatile energy prices, and increasing demand for renewable energy sources;
increasing employee and local community engagement through enhanced comfort and wellbeing facilities, which is important in a highly competitive labour market; and
helping them to meet the ESG demands of their own investors and other stakeholders.

Modern logistics assets have important sustainability features, such as enhanced insulation, LED lighting and large roof spaces capable of accommodating solar PV. These buildings are also more likely to meet future regulations, such as minimum energy performance standards. In addition, larger modern buildings lend themselves to better staff facilities, such as gyms, canteens and offices, and have more scope for green space, which can support biodiversity and outdoor amenities. Logistics assets can make a positive contribution to local communities by offering employment opportunities, green infrastructure for community use and support for local good causes.

ONS. 2. CBRE.

Near record demand and low availability are continuing to drive rental growth

Occupational demand remains at elevated levels

The trends discussed on the previous page continue to drive high occupier demand. Following two years of very strong annual take-up in excess of 42 million sq ft, leasing activity in 2022 was 38 million sq ft, remaining well ahead of the 10-year average annual take-up of 29 million sq ft. Demand was strong for all size bands with 139 deals completed in 2022 and 18 of those being for buildings over 500k sq ft (2021: 18). Businesses continue to invest in their supply chain and a further 11.9 million sq ft of space was under offer at the year end (2021: 9.1 million sq ft)3 .

Demand for space remains very diverse. Supply chain issues impact all companies and with the UK economy reopening and rebalancing through 2022, more companies have begun to adjust their networks accordingly. 3PLs were particularly active in 2022, accounting for 33% of take-up, while manufacturing (12%), omni-channel retailers (16%) and the food sector (11%, including food service and supermarkets) have also been prominent. Online retail accounted for 11% of take-up, down from 40% in 2021 with some market leaders having already made significant investments in their warehouse networks over the last few years. New entrants and companies from outside the traditional logistics sectors also continue to take space in the UK market. Other occupiers, which includes our 1 million sq ft letting to Iron Mountain Inc. at Rugby, accounted for 9% of take-up during the year3 .

Availability remains very low

Strong demand, low vacancy and rising rents (see below) have encouraged speculative development but much of this space has been rapidly taken up. UK completions totalled 33 million sq ft in 2022 but vacancy (buildings that are physically built, standing and capable of being utilised by an occupier immediately) stands at just 2.0% (2021: 1.6%). At the year end, speculatively developed space either completed and unlet or for delivery in the next 12 months totals 22 million sq ft. 70% of these buildings (by number) are in the 100k–250k sq ft size range with three larger than 500k sq ft3 .

Going into 2023, we expect occupiers to continue to sign new leases on modern buildings that meet technical requirements, can accommodate automation, meet stringent ESG standards, provide an attractive work environment and are mission critical to their businesses. Larger logistics buildings fulfil a strategic role – occupiers will often sign a long lease and invest significantly in operational fit-out; as such these are long-term commitments which tend to look beyond the prospect of a near-term recession. Economic conditions may, however, make some occupiers more cautious about taking space in the short term and we expect demand in 2023 to moderate across all size bands towards levels that would historically have still been considered strong.

All data from CBRE.

Another very strong year of leasing activity…

Near record demand and low availability are continuing to drive rental growth continued

Availability remains very low continued

We also expect levels of speculative development in the market to decline as a consequence of the current and expected near-term UK economic challenges. Savills, for example, suggests there is 3.6 million sq ft of space that has yet to sign a build contract and could therefore be delayed4 . In addition to this potential slow down, substantial barriers to new supply remain in place. These include the:

low availability and cost of suitable land, in the right locations and with sufficient power and labour supplies;
slow planning system and extensive infrastructure requirements before a building is constructed;
reduced availability and substantially increased cost of debt financing;
higher build costs, although we may see some reductions in 2023; and
buyer and seller pricing aspirations for land out of equilibrium (sellers not yet having adjusted to market correction).

Control of a significant land portfolio, largely through capital efficient option agreements, some with existing planning consents and which is capable of near-term development is particularly attractive in the current market. The fact that we have agreements in place which link our land purchase price to open market value (less a prescribed discount) means that we benefit from the overall reduction in land values across our future development pipeline. This is assisting in maintaining our guided 6–8% yield on cost range from development.

The logistics development industry has also changed markedly since the global financial crisis, with a decline in the importance of trader-developers and the growth of well-capitalised investordevelopers, who are incentivised to obtain the best possible terms for new leases, to protect the value of their existing investments. More recently, for those remaining trader-developers, a change in market dynamics and particularly the cost of finance and exit yield positioning means that, for some, the financial returns have become unviable and therefore this will naturally curtail supply over the short term. Today, the investor-developer community approaches development with a greater degree of sophistication than in the past, which therefore allows overall levels of supply to be moderated to match demand.

Savills, Big Shed Breakfast webinar, November 2022.

250–500k sq ft Source: CBRE.

...expectations for rental growth remain very strong

Source: IPF Research (industrial consensus rental value growth forecasts).

…availability remains at very low levels

Strong demand and limited available space have pushed rents to new highs across all UK regions. Outside of the South East, headline prime rents are typically between £8 and £9 psf. Headline rents have increased by between 75 pence and £1.25 psf through 2022. In the South East headline rents are £10.75 (Q4 2021: £9.75) in prime big box logistics markets such as along the M1 corridor. Inner London urban rents are significantly higher at around £26.50 psf but units tend to be smaller, and often have shorter lease terms3 .

UK real estate leases often create a lag in capturing market rental growth across an investment portfolio due to the common nature of five-yearly rent reviews. Market rental growth is, however, reflected in the further increase in our portfolio rental reversion to 19.1% at 31 December 2022 (2021: 11%). Active asset management and development lettings provide a faster transmission and here we have been able to add £28.4 million of annual contracted rent in 2022, helped by achieving rents above appraised ERVs at developments such as Biggleswade and Aston Clinton.

Capital market backdrop slows investment activity

Capital market conditions adjusted rapidly through 2022 and investors reconsidered pricing in light of elevated inflation, a higher cost of capital and a weaker growth outlook. Debt markets repriced as costs increased and lenders lowered loan to value ratios for new loans to maintain adequate interest cover. Balance sheets and available liquidity are once again important metrics, and we continue to benefit from a low LTV of 31.2% and available liquidity in excess of £500 million.

...macroeconomic factors leading to rapid H2 adjustment in investment marketing pricing

Source: Property Data (investment volume data relates to distribution warehouse transactions greater than £5 million), CBRE.

Logistics transaction volumes have slowed since Q1 2022 with total investment volumes for the year of £6.7 billion (2021: £11.2 billion)5 . Prime market yields softened rapidly through the second half of 2022 to 5.0% as at 31 December 2022 (2021: 3.5%)2 . The speed at which pricing adjusted is unprecedented with the equivalent 150bps movement seen in the second half of 2022 taking more than 12 months to materialise in 2007. While investors have been understandably hesitant to transact in a volatile and rapidly adjusting market, it is notable that liquidity remains evident with several deals completing towards the end of the year and more transactions being progressed currently.

The health of the logistics occupier market and the scope for continued rental growth remains an attractive feature of our sub-sector. While the near-term outlook for capital values will continue to be impacted by the macro-drivers that currently dominate, in the medium term, we believe logistics real estate remains a compelling area for investment. The structural tailwinds supporting the occupier market remain in place, supply chain evolution is still in its early stages of development and investment capital remains committed to an asset class that is core to the global economy.

Property Data.

Building on our advantage

We own, manage and develop logistics real estate in strategic locations across the UK, let to customers that include some of the world's largest companies. In doing so, we look to deliver attractive total returns for Shareholders.

Our advantages

Focused approach

Our Manager is focused solely on the UK logistics market, giving it in-depth knowledge and understanding of the sector and strong, long-standing relationships with market participants. This gives us privileged access to opportunities, often off-market, enabling us to secure better returns for Shareholders.

Agile and entrepreneurial culture

Our Manager's culture is agile and entrepreneurial, allowing us to move rapidly to secure the best opportunities and leverage the huge opportunity available to us, as demand for quality logistics warehouses exceeds supply.

Combined investment and development platform

Combining our investment portfolio and our development platform within the same Group gives us significant advantages. For example, we can draw on customer insights from our asset management work to inform our development programme, while our development operation enables us to support new space requirements for existing customers.

How we create value

High-quality portfolio

We have an in-depth portfolio of large-scale, high-quality buildings, in key logistics locations close to transport networks, where occupier demand is strong.

Strong customer relationships

We work closely with our customers to understand their businesses. This ensures we can deliver solutions that address their individual supply chain and property needs, informs our decision making and often leads to working with customers again in the future at other sites.

Active management

We actively manage our properties and portfolio, for example by adding extensions, improving our assets' environmental performance, securing lease renewals and agreeing rent reviews. This increases income and capital values.

Attractive leases to market leaders

Our buildings are let on long, full repairing and insuring leases with upward-only rent reviews, to a well-diversified base of occupiers who are typically market leaders in their fields. At 31 December 2022, our weighted average unexpired lease term was 12.6 years and our top 10 customers accounted for 50% of the contracted rent roll.

Long-term outperformance through development

We have the UK's largest logistics-focused land platform, which enables us to develop properties that deliver a target yield on cost of 6–8%. This provides us the opportunity to deliver long-term outperformance to Shareholders and high-quality buildings to customers.

"We have a high-quality portfolio delivering resilient income that leaves us well positioned for the future and potentially more uncertain economic conditions."

STRATEGIC REPORT

The value we create

High-quality buildings for our customers

We create high-quality buildings that play a central role in supporting our customers' business needs and growth ambitions.

Long-term income and capital growth for our Shareholders

We generate attractive long-term income and capital growth for our Shareholders. In 2022, we paid dividends totalling 7.0 pence per share and added £28.4 million to our contracted rent roll through our developments and active management of our portfolio.

Economic and social value for society and communities

Our buildings benefit local communities and society more generally. They have strong ESG credentials, with 98% having an EPC rating of A–C and new assets being built to net zero carbon in construction, helping to minimise their environmental impact. They also support significant employment in their local areas both during construction and once in operation.

How we generate returns

We generate returns through the rent we receive from our tenants and from profits associated with our portfolio. We have a low and transparent cost base, with an EPRA Cost Ratio in 2022 of 15.7%, efficiently converting the rent we receive into income for Shareholders.

We recycle capital, selling assets which we believe have delivered their full potential in our ownership and redeploying the proceeds into higher-returning opportunities.

Engaging with our stakeholders

By considering the Company's purpose and vision, together with its strategic priorities, we aim to balance stakeholders' different perspectives. For more information on the impact of key decisions of the Board on our stakeholders, please refer to "Key decisions of the Board" on pages 82 and 83.

Section 172 statement

The Directors have had regard for the matters set out in Section 172(1) (a)–(f) of the Companies Act 2006 when performing their duty under Section 172. The Directors consider that they have acted in good faith in the way that would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have considered (amongst other matters):

the likely consequences of any decision in the long term;
interest of the Manager and its employees, as the Company does not have any employees;
the need to foster the Company's business relationships with suppliers, customers and others;
the impact of the Company's operations on the community and environment;
the Company's reputation for high standards of business conduct; and
the need to act fairly as between members of the Company.

The table on the right indicates where the relevant information is in this Annual Report that demonstrates how we act in accordance with the requirements of Section 172.

Further information on how we have engaged with our key stakeholders and considered their interests during the last reporting period can be found on pages 23 and 24 and 76.

Our stakeholders

The Manager and its employees
Our Shareholders
Our suppliers
Our customers
Our lenders
Government, regulators and local councils
Our communities

X Read more on pages 23 and 24 and 82 and 83

The Manager and its employees

What they care about

The long-term success of the Company is of key importance to the Manager. In order to achieve this, as well as establishing and maintaining lasting relationships, the Manager takes a keen interest in the wellbeing and satisfaction of its employees. Being able to attract and retain high-calibre talent and then support those individuals in their professional development is a high priority for the Manager. The Board and the Manager maintain a positive and transparent relationship to ensure alignment of values and business objectives.

How we engage

Quarterly reporting to the Board
External Board evaluations
Informal meetings
Professional and executive development programmes
Employee surveys, social events and ESG initiatives

Topics

Employee satisfaction and resourcing
Remote working, staff health and wellbeing, development and progression
Business updates

Outcomes

Updated software and systems for remote working
Implementation of a Working from Home Policy of the Manager during and post Covid-19
Employee social events

Further information

X Page 82 in Key Decisions of the Board 2022
X Pages 84 and 85 in Division of Responsibilities
X Management Engagement Committee Report on pages 98 to 100

Our Shareholders

What they care about

Delivering sustainable, profitable growth over the longer term. Our investors take a keen interest in strong corporate governance, as well as a transparent reporting framework and the ESG initiatives of the Company.

How we engage

Regular market updates on strategy and performance
Virtual meetings with the Board and the Manager to aid understanding and decision making
Investor roadshows, site visits and investor seminars
Quarterly update reports to the Board from Investor Relations
Annual General Meeting
Meetings held between Shareholders and key personnel from the Board and Manager

Topics

Strategic plans and long-term value and returns
Governance
Environmental and social performance

Outcomes

Engagement with key representatives to ensure our purpose and strategy remain in line with expectations
Focus on recycling assets into higher returning development and investment opportunities

Further information

X Pages 20 and 21 in the Business Model
X Pages 79 to 81 in Board Leadership and Company Purpose

Our suppliers

What they care about

Our suppliers care about having collaborative and transparent working relationships with us, including responsive communication and being able to deliver to their service level agreements at a competitive fee.

How we engage

Invited key suppliers to attend Board and Committee meetings
Informal, one-to-one virtual meetings
Review of supplier performance by the Management Engagement Committee
Externally facilitated adviser reports

Topics

Service levels and annual performance
Fee structure
Relationship management
Processes and procedures

Outcomes

• Continued good, and in some cases, exceptional, levels of service

Further information

X Pages 82 and 83 in Key Decisions of the Board 2022
X Management Engagement Committee Report pages 98 to 101

Our customers

What they care about

Quality assets, including buildings with strong ESG ratings that enable their business to succeed, and a knowledgeable and committed landlord that supports their strategy, with a current focus on fulfilling their rapidly growing e-commerce sales. Our customers want efficient supply chain logistics and attractive price labour pools.

How we engage

Regular face-to-face meetings both virtual and onsite, when able
Charitable engagement which in turn helps bring environmental and social benefits to the communities we operate in
Joining UK GBC and Better Building Partnership Working Groups promoting market leadership in zero carbon, engagement and biodiversity
Demonstrating leadership by continuing the Sustainable Logistics Alliance with Prologis which published a new white paper on measuring social value in the logistics sector
Review of published data, such as annual accounts, trading updates and analysts' reports to identify mutually beneficial opportunities
Greater discussion over cash flow and rental collection in the current climate
Stakeholder surveys
Ensuring buildings comply with the necessary safety regulations and insurance
Commissioned supply chain analysis to understand our customer needs

Topics

ESG initiatives
Treasury management
Supporting e-commerce initiatives
Operational efficiencies and resilience

Outcomes

Strengthening of business relationships
Development of a dedicated Occupier Hub
Asset management and ESG initiatives

Further information

X Manager's Report pages 39 to 47
X ESG section pages 32 to 38
X Pages 82 and 83 in Key Decisions of the Board 2022

Section 172

Section 172 matter	by reference
Long term	X Market Review pages 16 to 19
	X Our Business Model pages 20 and 21
	X Manager's Report pages 39 to 47
	X Key Board Decisions pages 82 and 83
Investors	X Strategic Report pages 1 to 69
	X Key Board Decisions pages 82 and 83
	X Governance Report pages 70 to 106
Employees	X For information on the Manager's employees please refer to pages 23, 37, 82, 83 and 99
Community and environment	X Strategic Report pages 1 to 69
	X Manager's Report pages 39 to 47
	X Key Board Decisions pages 82 and 83
Suppliers	X Strategic Report pages 1 to 69
	X Manager's Report pages 39 to 47
	X Key Board Decisions pages 82 and 83
High business	X Our Business Model pages 20 and 21
conduct	X Stakeholder Engagement pages 22 to 24
	X Strategic Report pages 1 to 69

"We continued to successfully deliver our strategy and raised the funding to accelerate our development programme, against a backdrop of a highly attractive occupational market."

Aligned to long-term structural growth

We have a clear and compelling strategy designed to capture the significant opportunities our market creates, underpinned by a disciplined approach to capital allocation and a commitment to ESG, which is intrinsic to each element of our strategy.

Our strategy
High-quality assets attracting world leading companies	Direct and active management	Insight driven development and innovation
Delivering high-quality, resilient and growing income We continue to build a portfolio that will perform well through the economic cycle, providing resilient long-term income even during challenging times. As part of this, we weight our customer exposure towards defensive and high-growth sectors. We monitor the market for opportunities to acquire assets and add value through active asset management.	Protecting, adding and realising value We actively and directly manage our existing property portfolio, developing long-term relationships with our customers and realising opportunities to add value and generate secure and increasing income. When we believe an asset has reached its full potential within our ownership, we look to crystallise this value through disposals, recycling capital into higher returning development and investment opportunities.	Creating value and capturing occupier demand We tailor the development pipeline to meet demand, at an attractive 6–8% yield on cost target. In doing so, we utilise customer insights from our investment portfolio and implement innovations in areas such as ESG and power. Most of our development is on a demand driven pre-let basis, significantly de-risking the process and ensuring we only deploy significant amounts of the Group's capital when we are confident the returns are appropriate.
X Read more on pages 40 and 41	X Read more on pages 42 and 43	X Read more on pages 43 to 47
Progress 2022 Continued to maintain the portfolio quality striking a balance between Foundation and Value Add assets. Given the changing investment market in the second half of 2022, we did not dispose of any assets but continue to evaluate opportunities to do so.	Progress 2022 Through a combination of lease extensions, renewals and embedded rent reviews, we added £5.1 million to contracted annual rent, achieving a 7.6% increase across 34.2% of the portfolio.	Progress 2022 We achieved 2.9 million sq ft of development starts and added £23.3 million to our contracted rent roll, which will underpin future earnings growth and dividend progression.
Future focus Monitor customers' credit quality in the face of a potential UK recession. Evaluate the weighting of the investment portfolio between Foundation and Value Add assets, geographic regions and building sizes.	Future focus Settle any outstanding open market rent reviews, progress lease extensions and renewal discussions, make further selective asset disposals and continue to evaluate opportunities for asset acquisitions.	Future focus Maintain our long-term development guidance of 2–3 million sq ft per annum, representing £200–250 million of annual capex, at a target yield on cost of 6% to 8%.

"The successful implementation of our strategy is reflected in the strong operational performance we have delivered."

opportunities

Our strategy Underpinned by a disciplined approach to capital allocation and emphasis on ESG

Underpinning our strategy is a disciplined approach to capital, where we aim to maximise returns to Shareholders while minimising risk. By evaluating the Group's existing assets and identifying ways to maximise and then realise value, we will effectively recycle capital to support the Group's objectives, using debt appropriately and potentially raising additional capital when it is in Shareholders' interests.

The Group's commitment to ESG forms an intrinsic and overarching part of our strategy.

Measuring our performance

Our objective is to deliver attractive, low-risk returns to Shareholders, by successfully implementing the Group's strategy. Set out below are the key performance indicators we use to track our progress. For a more detailed explanation of performance, please refer to the Manager's Report.

5. Adjusted earnings per share 6. Weighted average unexpired lease term ("WAULT")

12.6 years

Relevance to strategy The WAULT is a key measure of the quality of our portfolio. Long lease terms underpin the security of our income stream.

2021: 13.0 years

7. GRESB score 8. Total

83/100 and

4 Green

2021: 81/100 and 4 Green

Star rating

Relevance to strategy The GRESB score reflects the ESG performance of our assets and how well we are managing ESG risks and opportunities. Sustainable assets protect us against climate change and help our customers to operate efficiently.

We were also awarded the GRESB 2022 Leader for Development in the European and Global Industrial Sectors award.

Expense Ratio

0.76%

Relevance to strategy This is a key measure of our operational performance. Keeping costs low supports our ability to pay dividends.

2021: 0.79%

See note 13.

7.79p 2021: 8.23p

See note 13.

Excluding additional development management income, Adjusted EPS was 7.51p (2021: 7.38p).

Relevance to strategy The Adjusted EPS reflects our ability to generate earnings from our portfolio, which ultimately underpins our dividend payments.

EPRA NTA is calculated in accordance with the Best Practices Recommendations of the European Public Real Estate Association ("EPRA"). We use these alternative metrics as they provide a transparent and consistent basis to enable comparison between European property companies.

successfully manage risk.

our Shareholders through our portfolio and to deliver a secure and growing income stream.

"While we delivered strong operational performance, particularly in capturing future income, rapid repricing of logistics assets has resulted in significantly lower total returns for the year."

5. Adjusted earnings per share

See note 13.

1. Total

-15.9%

Relevance to strategy TAR calculates the change in the EPRA Net Tangible Assets ("EPRA NTA") over the period plus dividends paid. It measures the ultimate outcome of our strategy, which is to deliver value to our Shareholders through our portfolio and to deliver a secure and growing income stream.

2021: 30.5%

Accounting Return ("TAR") See Notes to the EPRA and Other Key Performance Indicators.

2. Dividend

3. EPRA NTA per share1

180.37p

Relevance to strategy The EPRA NTA reflects our ability to grow the portfolio and to add value to it throughout the lifecycle of

2021: 222.60p

our assets.

4. Loan to value ratio ("LTV") See Notes to the EPRA and Other Key Performance Indicators.

31.2% 2021: 23.5%

Relevance to strategy The LTV measures the prudence of our financing strategy, balancing the potential amplification of returns and portfolio diversification that come with using debt against the need to successfully manage risk.

See note 30.

See note 14.

7.00p

Relevance to strategy The dividend reflects our ability to deliver a low-risk but growing income stream from our portfolio and is a key

element of our TAR.

2021: 6.70p

7.79p

See note 13.

2021: 8.23p Excluding additional development management income, Adjusted EPS was 7.51p (2021: 7.38p).

2022	7.79p
2021	8.23p
2020	7.17p

Relevance to strategy

The Adjusted EPS reflects our ability to generate earnings from our portfolio, which ultimately underpins our dividend payments.

6. Weighted
average
unexpired
lease term
("WAULT")

12.6 years

Relevance to strategy The WAULT is a key measure of the quality of our portfolio. Long lease terms underpin the security of our income stream.

12.6 years 13.0 years 13.8 years

2022 2021 2020

2021: 13.0 years

7. GRESB score 8. Total

Expense Ratio

83/100 and 4 Green Star rating

2021: 81/100 and 4 Green Star rating

2022	83/100	2022	0.76%
2021	81/100	2021	0.79%
2020	72/100	2020	0.86%

Relevance to strategy

The GRESB score reflects the ESG performance of our assets and how well we are managing ESG risks and opportunities. Sustainable assets protect us against climate change and help our customers to operate efficiently.

We were also awarded the GRESB 2022 Leader for Development in the European and Global Industrial Sectors award.

2022 0.76%
2021 0.79%
2020 0.86%

0.76%

2021: 0.79%

Relevance to strategy

This is a key measure of our operational performance. Keeping costs low supports our ability to pay dividends.

Measuring our performance

The table below shows additional performance measures, calculated in accordance with the Best Practices Recommendations of the European Public Real Estate Association ("EPRA"). We provide these measures to aid comparison with other European real estate businesses.

For a full reconciliation of all EPRA performance indicators, please see Notes to the EPRA and Other Key Performance Indicators.

1. EPRA Earnings (diluted) See note 13.	2. EPRA Net Tangible Assets See note 30.	3. EPRA Net Reinstatement Value ("NRV") See note 30.	4. EPRA Net Disposal Value ("NDV") See note 30.
£144.8m/ 7.66p 2021: £131.2m/7.47p 2022 £144.8m/7.66p 2021 £131.2m/7.47p 2020 £105.5m/6.17p	£3.4bn/ 180.37p 2021: £4.2bn/222.60p 2022 £3.4bn/180.37p 2021 £4.2bn/222.60p 2020 £3.0bn/175.61p	£3.8bn/ 201.17p 2021: £4.5bn/242.84p 2022 £3.8bn/201.17p 2021 £4.5bn/242.84p 2020 £3.3bn/193.41p	£3.6bn/ 192.18p 2021: £4.1bn/219.27p 2022 £3.6bn/192.18p 2021 £4.1bn/219.27p 2020 £2.9bn/166.36p
Purpose A key measure of a company's underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.	Purpose Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax.	Purpose Assumes that entities never sell assets and aims to represent the value required to rebuild the entity.	Purpose Represents the Shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.

5. EPRA Net Initial Yield ("NIY") See Notes to the EPRA and Other Key Performance Indicators.

Purpose

This measure should make it easier for investors to judge for themselves how the valuations of two portfolios compare.

6. EPRA

Purpose

This measure should make it easier for investors to judge for themselves how the valuations of two portfolios compare.

"topped-up" NIY

7. EPRA Vacancy See Notes to the EPRA and Other Key Performance Indicators.

Purpose

A "pure" (%) measure of investment property space that is vacant, based on ERV. 8. EPRA Cost Ratio See Notes to the EPRA and Other Key Performance Indicators.

Purpose

operating costs.

A key measure to enable meaningful measurement of the changes in a company's