SEGRO’s chief executive says tariffs from the US should have a “limited” effect on its domestic-facing portfolio, but noted that it the broader economic impact is unclear.
In a trading update for the three months to 31 March, the REIT said it signed £13m of new rent, most in its existing portfolio. Development completions totalled almost 540,000 sq ft of new space with £2m of headline rent, all of which has been leased. The company has £58m of potential headline rent from development projects under construction or in advanced negotiation, a £7m increase from year end.
The company also established a £1bn joint venture with Pure DC to develop a £1bn, 56MW fully fitted data centre.
Chief executive David Sleath (pictured) said: “SEGRO has had a good start to the year, growing our rent roll through asset management to capture reversion and drive rents, expanding our active development pipeline and progressing our data centre strategy. Long-term structural trends continue to support demand for modern, well-located warehouses and data centres, meanwhile the supply of new space in our chosen sub-markets remains constrained due to lack of available land, power and restrictive planning policies.”
Sleath continued: “Our portfolio is heavily weighted to supporting domestic consumption, particularly the two-thirds located in Europe’s largest cities, and we therefore believe the direct impact of tariff policies on our portfolio will be limited. While it is too early to assess the effect they may have on broader economic activity, we remain on track for another year of strong growth in contracted rents and are confident in SEGRO’s ability to deliver attractive compound earnings and dividend growth, with significant additional value creation upside from our data centre pipeline.”
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