“We haven’t got here by accident,” says SEGRO’s chief financial officer Soumen Das, fresh from delivering another set of healthy results for the industrial REIT.
It could come across as a slightly arrogant or smug comment, were it not for the evidence of performance by SEGRO.
The firm this morning reported a 29% increase in pretax profit to £216m for the six months ended 30 June, with £55m of new rental income added to its top line.
“We have built a business to perform through the up cycle and be resilient through the down cycle so it can outperform through the whole cycle,” says Das.
That strategy has seen the REIT refinance much of its debt to ensure it has the longest maturity in the market – some 8.5 years – and fixing the cost of that debt at a low 1.9%.
Couple that with its confidence that occupier markets will remain strong – and the fact that more than 40% of its rents are CPI-linked, with the majority of the remaining exposed to upward-only rent reviews – and it’s no wonder the REIT is not overly worried about a looming recession.
Das says the business is seeing strong activity from occupiers and that while e-commerce activity may have dipped, it is still above pre-pandemic levels.
That aside, the wider retail market is still seeking space, and, adds Das, there has been a notable increase in manufacturing take-up as businesses around the country seek to ensure their own resilience in an increasingly risky world.
“We’re walking into H2 with confidence,” says Das. “We get that there’s a world out there that is pretty risky, but we’re managing that well.”
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