22nd Apr 2021 09:38
(Alliance News) - Segro PLC on Thursday said the signing of new rental and pre-let agreements in the opening months of 2021 were up from the previous year.
The FTSE 100-listed real estate investment trust focused on industrial properties said it had signed GBP18 million of new headline rent in its first quarter, up 26% from GBP14.3 million in 2020.
Headline rent is annualised gross passing rent receivable once incentives such as rent-free periods have expired.
The signing of new pre-let agreements saw a similar improvement, almost doubling to GBP11.3 million in the first quarter, up from GBP5.7 million the previous year.
A figure of GBP87 million of potential new headline rent from new space under construction or in advanced discussions was also confirmed. The amount would equate to potential future headline rent of GBP67 million, a rise of 24% from GBP54 million in 2020.
Segro has benefited from high demand for storage and distribution space during the pandemic as retailers try to cope with a greater number of online orders.
The company did see a small increase in the vacancy rate to 4.4%, from 3.9% as at year end; however this was largely driven by taking back space for refurbishment in parts of its London and Paris portfolios.
Segro described its debt position as "stable", having fallen slightly to GBP3.0 billion at year-end compared to GBP3.1 billion the previous year.
"2021 has started well for SEGRO, with our ongoing active asset management strategy and continued strong occupier demand enabling us to sign GBP18 million of new headline rent during the quarter by capturing reversionary potential on the existing portfolio, alongside securing new pre-lets on developments," said Chief Executive David Sleath.
"Our expanded, de-risked development programme now comprises 1.3 million square metres 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."
Segro shares were up 1.7% at 1,011.00 pence in London.
By Will Paige; [email protected]
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