Slough: Online retailers help Segro post strong results
The listed company, which owns or manages over 6m sq m of space, said its net asset value per share rose by 8% to 500p, driven by a 4.8% like-for-like increase in the value of the portfolio following development gains and a rise in UK rents.
Adjusted earnings per share were up 7.1% to 19.7p after a 4% rise in like-for-like net rental income, and a continued low vacancy rate at 5.7%.
Chief executive David Sleath said a record number of completions also contributed to higher earnings and delivered 422,000 sq m of new warehouse space, of which 80% was now let.
"Our business is well positioned, notwithstanding the current degree of political and economic uncertainty. We have had an active start to 2017 and we continue to see opportunities to grow our business through further disciplined investment, matched by a prudent approach to financing," he said.
The industrial sector has outperformed both offices and retail over the last year while proving relatively resilient to turbulence in the market following the EU referendum, thanks to continued demand for modern urban and big box warehouses.
Retailers scrambling to keep up with the rapid growth of internet retailing and strengthen their supply chains have been one of the biggest sources of demand.
Segro said the 4% like-for-like rise in net rental income during the year included 6% growth in the UK and a 0.7% fall in continental Europe.
It also secured £45m of new rent, 14% ahead of prior year, of which £23m came from new development pre-let agreements and lettings of speculatively developed space ahead of completion.
The company stated that future earnings prospects were underpinned by the largely de-risked development programme. Developments currently under construction have the potential to generate £27m of new rent, of which 61% has been pre-let.
A further £27m is available from conditional pre-let and potential speculative projects which are expected to start in the coming months.
Capital expenditure on developments in 2017 is expected to exceed £300m.
Source: CoStar
