The chief executive of industrial REIT SEGRO remains steadfastly confident that the business will navigate the impeding recession as it posts another set of strong results.
The REIT saw pre-tax profits increase by 29% in the six months ended 30 June to £216m with its adjusted NAV per sq ft up by 10% to 1,249p.
During the period, SEGRO added £55m of new rental income, up from £38m in the same period in 2021, including £28m of new pre-let agreements, and a 24 % average reletting spread on rent reviews and renewals.
The group said its development pipeline continues to grow, with 1.3m sq m of projects under construction or in pre-let discussion which would together add some £118m of rental income to the business. Around 70% of that space is pre-let.
Chief executive David Sleath said: SEGRO has delivered both operationally and financially in the first half of 2022. Our prime portfolio of modern, sustainable warehouses focused on key urban markets and logistics corridors across the UK and Europe is in high demand from a diverse range of customers.
“This strong demand combined with low levels of supply in our key markets, particularly in the urban locations where two-thirds of our assets are located, has helped us to increase rents, capture reversion and indexation, and expand our development programme – resulting in inflation-beating earnings growth.”
He added: “We are confident that by continuing to follow our well-proven strategy of disciplined capital allocation and operational excellence, with Responsible SEGRO at its core, we will be able to navigate the more challenging current macroeconomic environment and drive further sustainable compound growth in rental income, earnings and dividends over the coming years.”
SEGRO said it was well positioned for further development-led growth with £2.1bn of new financing, with 94% of its debt fixed of capped, and access to more than £2bn of available liquidity.
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