15th Feb 2019 14:24
LONDON (Alliance News) - SEGRO PLC on Friday said it completed its GBP451 million fundraising through the issue of 71.0 million shares at a price of 635.0 pence each.
The warehouse investor's placing was conducted by joint bookrunners UBS AG London Branch and Bank of America Merrill Lynch International. The placing price was a 2.0% discount to the stocks closing price on Thursday.
Shares in SEGRO were up 0.3% on Friday at 650.20p, 2.4% above the placing price.
The issued shares represent 7.0% of SEGRO's issued share capital and following admission it will have 1.08 billion share in issue.
Earlier on Friday, SEGRO said the money from the placing will allow it to take advantage of new development opportunities, more of which are already pre-let, "while maintaining a strong balance sheet".
SEGRO has identified development projects which require GBP429 million to complete, of which GBP221 million has already been committed to its current pipeline.
An additional GBP218 million is associated with its potential project pipeline, and the company expects to add more development projects to its pipeline in the coming months.
"Since 2016, we have deployed over GBP1.5 billion into development across the UK and Continental Europe which has generated a cumulative capital value uplift of over 20% and GBP90 million of new annualised headline rent. Occupier and investment market conditions remain supportive, and we continue to experience strong demand for new warehousing," said SEGRO Chief Executive David Sleath.
"We are on course to invest over GBP600 million in further development projects and additional land purchases this year. We believe using new equity alongside our existing debt facilities and the proceeds from normal course portfolio recycling will ensure that we can continue to deliver the attractive returns from development while retaining a strong balance sheet," Sleath added.
SEGRO also said that for 2018 it had contracted GBP66.4 million of new headline rent, up 24% from GBP53.5 million in 2017.
Its pretax profit was GBP1.10 billion, up 13% from GBP976.3 million the year before.
Revenue was GBP369.0 million, rising from GBP334.7 million with gross rental income up at GBP297.7 million from GBP272.9 million.
Net rental income was GBP247.6 million, up from GBP220.7 million, due to a net benefit from development completions, particularly in Greater London and across southern Europe, and investment activity.
The company's realised and unrealised property gain was GBP852.6 million, down from GBP889.0 million in 2017.
SEGRO's EPRA vacancy rate was 5.2% versus 4.0% in 2017. Its EPRA net asset value per share was up 17% at 650 pence on December 31 from 556p the year prior.
Analysts, according to company-compiled consensus, had expected net asset value per share at 641p.
At present, SEGRO has pre-let 73% of its current pipeline, which is set to complete in 2019.
"Development completions and pre-leasing levels in 2018 both exceeded a record previous year and, with customers already signed up to almost three quarters of our developments under construction, we believe that our significant longer-term pipeline and land bank have substantial potential that will continue to deliver attractive development returns and future income growth," said Sleath.
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