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Segro PLC on Thursday reported an increase in net assets for the first half, and it lifted its dividend citing robust demand and estimated rental value growth.
The London-based industrial property investor posted a pretax profit of £1.36 billion, down 3.5% from £1.41 billion a year before. The decrease can be attributed to higher finance costs, which more than doubled to £218 million from £99 million.
Segro's total property value stood at £20.47 billion as at June 30, up 42% from £14.45 billion on the same date a year before.
Net asset value per share amounted to 1,212 pence as at June 30, up 35% from 897p.
The FTSE-100 listed firm said the rise in NAV was driven by the increase in its portfolio valuation, asset management initiatives, good demand, estimated rental value growth, and profitable development activity.
‘Our prime portfolio of modern, sustainable warehouses focused on key urban markets and logistics corridors across the UK and Europe is in high demand from a diverse range of customers. This strong demand combined with low levels of supply in our key markets, particularly in the urban locations where two-thirds of our assets are located, has helped us to increase rents, capture reversion and indexation, and expand our development programme resulting in inflation-beating earnings growth,’ Chief Executive David Sleath said.
Segro increased its interim dividend by 9.5% to 8.1 pence from 7.4p a year before.
Going forward, Segro plans to take a ‘disciplined approach’ to allocate capital to development and investment activity. It expects to invest at least £700 million on development capital expenditure in 2022.
‘We are confident that by continuing to follow our well-proven strategy of disciplined capital allocation and operational excellence, with responsible Segro at its core, we will be able to navigate the more challenging current macroeconomic environment and drive further sustainable compound growth in rental income, earnings and dividends over the coming years,’ Sleath continued.
Shares in Segro were trading up 0.6% at 1,041.05p in London on Thursday morning.
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