22nd Oct 2015 07:00
LONDON (Alliance News) - Industrial property investor SEGRO PLC Thursday said it remains optimistic about its operating performance and said its UK portfolio is benefiting from the continuation of favourable market conditions.
"Occupational conditions continue to be favourable, particularly in our UK portfolio, and we remain optimistic about our full year operating performance. We have seen further net absorption of existing space contributing to an improvement in our vacancy rate, and continued strengthening in overall rental terms," it said in a statement.
The UK real estate investment trust said it contracted GBP10.6 million of new rent in the third quarter ended October 21, compared to only GBP6.5 million a year earlier. Within that GBP10.6 million, GBP2.3 million was generated from its existing space compared to GBP1.9 million a year earlier, making the quarter its "strongest" since 2012, it said.
That brought total contracted rent for the nine month period ended Spetember 30 to GBP25.7 million compared to GBP22.1 million a year earlier.
Its vacancy rate also improved in the period to 6.6% from 7.4% at the end of June, meaning it has less vacant properties. That was due to the increase in tenants in its existing space and from lettings of its recently completed developments.
SEGRO said rents are improving in the UK, especially in London and the south-east region. Since the start of 2015, SEGRO said new rents in the UK have been 3% higher in the period compared to a year ago.
SEGRO said it has two big projects currently under development in Rugby and in Paris which will lead to potential rents worth around GBP22.0 million a year to the company.
Net debt at the end of September stood at GBP2.20 billion, up from GBP2.10 billion at the end of June.
By Joshua Warner; [email protected]; @JoshAlliance
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