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SEGRO signals strong start to 2021
StockMarketWire.com
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SEGRO signed £18 million of new headline rent in the first quarter of 2021 and retention remained high at 82%, marking a strong start to the year.
The company saw a small increase in the vacancy rate to 4.4 per cent (31 December 2020: 3.9 per cent) largely driven by taking back space for refurbishment in the highly sought after London and Paris portfolios.
New headline rents on review and renewal were up more than 12 per cent on previous passing rent, as ongoing asset management continued to capture reversionary potential from the existing portfolio.
During the period between January and April, there was £11.3 million of new, unconditional pre-let agreements and lettings of speculative developments prior to completion. These included pre-lets in France, Italy and Poland and a further big box warehouse at SEGRO Logistics Park East Midlands Gateway in the UK.
New developments totalling 14,200 square meters were completed during the quarter, capable of generating £0.7 million (Q1 2020: £9.4 million) of headline rent. According to SEGRO, 86 per cent of this has been let.
The company said that during 2021 as a whole, it expects to complete over 800,000 square meters of new space (2020: 835,900 sq m), of which 82 per cent has been pre-leased.
David Sleath, chief executive, said: 'Our expanded, de-risked development programme now comprises 1.3 million square meters of new space either under construction or in advanced discussions. We have also been able to secure further land to extend our future development pipeline.
'Our sector continues to benefit from highly supportive and structural tailwinds and we therefore remain confident in the outlook for the business as well as our ability to drive further sustainable growth in rental income, earnings and dividends over the coming years.'
Investment acquisitions during the period totalled £17 million, consisting of two urban warehouse assets in France (one in Paris and one in Lyon), both of which were vacant on acquisition and will be redeveloped. There were no asset disposals.
Since the period-end, SEGRO has completed the acquisition of the remaining shares in Sofibus Patrimoine, such that it now owns 100 per cent of its share capital and it has been de-listed from Euronext Paris. Balance sheet positioned to support further development-led growth
Net debt (including the share of debt in joint ventures) at 31 March 2021 remained stable at £3.0 billion (31 December 2020: £3.1 billion). This equates to a pro forma look-through loan to value of 23 per cent (31 December 2020: 24 per cent).
The 2021 half year results will be published on Thursday 29 July 2021.
Story provided by StockMarketWire.com
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