17th Apr 2019 08:21
LONDON (Alliance News) - SEGRO PLC on Wednesday said new headline rent in its first quarter was down from 2018 due to a reduction in new pre-lets.
Headline rent is defined as the annualised gross passing rent receivable after rent-free periods expire.
The real estate investment trust secured GBP21.2 million of new headline rent in the period from January 1 to March 31, representing a 22% decline from its GBP27.3 million of new headline rent in the first quarter of 2018.
Rent roll growth was strong, multiplying to GBP6.0 million from GBP500,000 but the company secured new pre-lets of only GBP11.1 million versus GBP23.3 million the year prior. This GBP11.1 million figure was still above the three-year quarterly average run rate of GBP7 million, however.
SEGRO's vacancy rate fell to 4.4% on March 31 from 5.2% on December 31, resulting from lettings of existing and recently completed speculative space, as well as disposals and low take-backs.
In total, 100,000 square metres of space was under development or had been approved for development on March 31, representing a potential GBP3.8 million of headline rent, of which GBP2.8 million has thus far been secured.
As at March 31, 1.0 million square metres of space was under development or else approved for development compared to 800,000 square metres on December 31. This represents a possible annualised headline rent of GBP57 million of which 72% has been leased, compared to a possible rent of GBP46 million of which 73% was leased at the end of 2018.
Net investment in the first quarter of 2019 was GBP40 million and the company raised GBP451 million of new equity in a placing to fund its development pipeline. At the end of March, SEGRO's net debt, including its share of debt from joint ventures, totalled GBP2.2 billion, falling from GBP2.7 billion on December 31 due to proceeds from the placing.
SEGRO Chief Executive David Sleath said: "The new equity raised in February provides the capacity to pursue further growth opportunities and we have a number of additional pre-let development projects at advanced stages of negotiation. Whilst we remain mindful of macroeconomic and political risks, we believe that our high quality portfolio of assets in prime locations across the UK and Continental Europe positions us well to continue to benefit from the structural drivers of e-commerce and urbanisation."
Shares in SEGRO were down 0.9% at 675.80 pence on Wednesday morning.
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