19th Feb 2016 07:44
LONDON (Alliance News) - Industrial property investor SEGRO PLC Friday reported a slight drop in revenue for 2015 due to a poor performance in Germany, but raised its dividend for the year on the back of an increase in pretax profit.
SEGRO said its revenue was down to GBP248.5 million, from GBP290.0 million in 2014, after its revenue from Germany dropped to GBP17.7 million from GBP55.8 million the previous year.
However, the group saw growth in all other regions, with its portfolio capital value increasing by 13% in the UK. SEGRO saw a rise in like-for-like net rental income growth across its portfolio of 4.2%, as well as an improvement in vacancy rates by 4.8%. Due to this, its pretax profit for the year was up at GBP686.5 million for the year, from GBP654.4 million.
SEGRO raised its final dividend by 3.9% to 10.60 pence, from 10.20 pence.
It said it would be looking to gain additional scale in UK big box logistics warehousing, having struck a deal with Roxhill Development earlier this week, and to establish itself in its newer markets of Italy and Spain, as well as expanding further into Germany.
SEGRO added its current construction programme and medium term development projects are capable of delivering annual rental income of approximately GBP109.0 million, equivalent to 38% of its current income stream, over the next five years.
Over 2016, the group said it expects capital values to be driven more by rental growth than yield compression in the UK, although it said it sees potential for yields to fall further in continental Europe. As a result, SEGRO said it expects capital growth rates to slow over the year, although it does not expect capital values to fall.
"The outlook for occupational demand remains encouraging and the new year has started well, with a healthy pipeline of lettings and new development opportunities," said Chief Executive David Sleath.
"Whilst there are a number of broader economic and geopolitical uncertainties, we are confident that our portfolio is well positioned to be able to deliver growth and outperform the wider property market," Sleath added.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Segro