SEGRO added £20m to its annual rent roll over the third quarter as the REIT continued its focus on development.
In a trading update this morning, the industrial REIT said £8m of prelets had been signed, lower than Q3 2021’s £9m. Total rent added was also higher in Q3 2021, at £26m. However, the 22% uplift from rent reviews and renewals was considerably higher than 2021’s 13%.
The total increase over the first nine months of 2022 was £76m, a marked increase on the £64m added over the same period last year.
Chief executive David Sleath said: “SEGRO has performed well throughout the third quarter of 2022, delivering excellent operational results, with momentum continuing into the final quarter.”
He added that, despite CBRE’s UK Monthly Property Index showing a 10% decline in industrial values during Q3,”occupier demand remains strong across all of our markets”.
Sleath said: “Increases in interest rates and the volatile macro-economic environment have reduced volumes in the investment markets, causing asset prices to soften in the third quarter. However, we remain focused on the fundamentals of our business – owning, managing and developing the highest-quality buildings while maintaining low leverage and a strong balance sheet, thereby supporting the delivery of attractive growth in earnings and dividends for our shareholders.”
SEGRO said it would continue to push through its development programme, and expected development capex for 2022 to be around £700m. Acquisitions during Q3 were £424m.
New prelets signed during the quarter helped to expand the development pipeline, it said. SEGRO now has 13m sq ft under construction or in advanced discussions, equivalent to £118m of new rent.
Just over 4m sq ft has been completed so far this year, a slight drop from the same period last year.
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