9th Jun 2020 17:14
(Alliance News) -Â Real estate investment trust SEGRO PLC on Tuesday unveiled plans to raise GBP650 million as it said leasing momentum has been positive.
Shares in SEGRO ended down 3.0% at 858.80 pence in London on Tuesday.
SEGRO plans to raise the funds via a share placing and retail offer, with the new equity to allow the firm to take advantage of investment opportunities across the UK and continental Europe through "further, mostly pre-let, development projects together with acquisitions of land and investment assets".
The shares under the placing and retail offer represent around 7% of SEGRO's share capital. The placing price will be decided at the close of the bookbuild.
Alongisde the fundraising plans, SEGRO said business is progressing well in 2020 despite Covid-19. None of the workforce has been furloughed and the company has not taken any government support, it highlighted.
"Leasing momentum has been positive and is ahead of the board's expectations set prior to the start of the pandemic. New lettings have been agreed on existing buildings, including those developed speculatively over the past year, and the company has continued to capture reversionary potential from its portfolio," the company said.
SEGRO said GBP20.9 million of headline rent has been contracted in the first five months of 2020. This includes pre-let agreements equating to GBP9.7 million of headline rent, including GBP4.0 million in April and May, with "significant further projects at advanced stages of negotiation or agreed subject to planning consent".
As at May 31, 82% of rent billed in respect of the second quarter of 2020 - including rent typically billed on a monthly basis in continental Europe - had been collected or is expected to be paid shortly.
SEGRO said it continues to target a payout ratio of 85% to 95% of adjusted profit after tax. Having paid a 2019 final dividend of 14.4p, the board currently intends to declare a 2020 interim dividend of 6.9p per share - up from 6.3p a year ago - reflecting its "usual practice" of setting the interim dividend at one-third of the previous full-year dividend.
"SEGRO's business continues to progress well, despite the uncertainty caused by the pandemic, with new lettings and pre-let development agreements at levels above our expectations at the beginning of the year. We are working constructively to support a small proportion of customers facing short-term cash flow challenges as a result of government lockdown measures," said David Sleath, chief executive.
"Our strong, primarily pre-let, development pipeline across the UK and Continental Europe reflects the demand from customers looking to grow," Sleath added. "Our list of additional near-term pre-lets, which is approximately double the size of a year ago, and our well-located land bank mean we are well-placed to make further progress in the months ahead."
By Lucy Heming;Â [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Segro