SEGRO posted a 9.6% drop in its NAV in 2011 after taking a larger-than-expected hit to the value of its non-core portfolio.
The industrial REIT’s NAV fell to 340p a share following a £187m or 13% decline in the £1.6bn of non-core assets that it is aiming to sell.
The value of its UK and continental Europe portfolio fell by £255m to £5.1bn as the core portfolio, to be retained by SEGRO, fell in value by only 0.4%.
In Germany, a 10.9% valuation decline was attributed to two large non-strategic assets, as was the 15.4% fall in Benelu and other markets.
The group said it was making “good early progress” in relation to the strategic portfolio reshaping announced at the end of last year, completing £110m of sales in 2011.
Operationally, SEGRO had a strong year, contracting £38.4m of new rental income, with lettings completed 1.7% above December 2010’s estimated rental values.
The group’s vacancy rate reduced to 9.1% at 31 December 2011, down from 11.4% at 30 June 2011 and 12% at 31 December 2010. This reflects a marked improvement in tenant retention from 63% in 2010 to 74%.
The former Brixton portfolio vacancy reduced from 18.6% to 13.4%.
SEGRO delivered an 8.8% increase in underlying pretax profit to £138.5m and earnings per share rose by 7.6% to 18.4p a share.
The full-year dividend rose by 3.5% to 14.8p a share.
