Slough: SEGRO posts 23% rise in pre-tax profits

A £557 million rights issue has created significant capacity for growth. Three quarters of the proceeds are already deployed or allocated to specific investment opportunities, including taking full ownership of the APP portfolio of industrial property at and around London’s airports.

Segro said its future earnings prospects were underpinned by a largely de-risked and fully funded development programme. The current development pipeline is capable of generating £46m of rent, £31m of which has been secured through pre-lets. In addition, near-term projects associated with a further £14m of potential rent are at advanced stages of discussion.

David Sleath, chief executive, said: “SEGRO has delivered another strong set of results in H1 2017, underpinned by active development and asset management as well as further portfolio valuation growth.

“Whilst political and economic uncertainty has increased in the UK, we are encouraged by the continued leasing momentum across our portfolio. Furthermore, business confidence in continental Europe has picked up in recent months and there is no sign of any slowdown in the growth of internet retailing which is an important driver of demand for modern warehouse space across our markets, both in big boxes used for logistics and smaller, urban warehouses used for last mile delivery.

“With few signs of any meaningful new supply of speculatively developed space and investor appetite for good quality warehouse assets remaining strong, our business is well-placed to continue outperforming the wider market.”

Source: CoStar