SEGRO is to spend more than £500m on development this year, the company has forecast in a strong set of half-year results.
The warehouse specialist said its strategy continues to focus on development, having made net capital investments of £251m in the first half.
However, only £56m of that capital was spent on assets and investment acquisitions. £280m was spent on new land and development capex – offset by £85m of disposals.
SEGRO has more than 10m sq ft of development projects under construction or in advanced prelet discussions, which it said were capable of generating £54m of rent.
In total, SEGRO’s landbank can support close to 24m sq ft of development over the next five years.
It reported a 45% increase in new rent contracted to £39.8m, of which £30.4m was from new development prelet agreements of lettings on speculatively developed space.
With loan-to-value ratios down one percentage point to 29% and the cost of debt at 2%, SEGRO said it is “well-positioned” to accelerate its development programme.
Total portfolio valuation was up by 5.9% to £8.8bn and EPRA NAV per share rose by 8.5% to 603p over the past six months.
Chief executive David Sleath said: “The structural drivers of occupier demand – particularly e-commerce and urbanisation – remain strongly in evidence across our markets and whilst we remain alert to a number of macroeconomic and political risks, we have a strong pipeline of activity and remain confident about our prospects.”
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