SEGRO’s rent roll rises as market turns

The chief executive of SEGRO has said the company’s “irreplaceable” portfolio has positioned it for growth as the market turns. Over the six months to 30 June, the company signed £48m of new rent, with an average 28% uplift in rent reviews and renewals. Net rental income rose by 7% year-on-year to £306m, and the company has a further £49m of potential rent from development projects under construction or in advanced negotiations. Adjusted pretax profit for the half-year came in at £227m, up by almost 15%. The portfolio valuation was flat at £17.8bn, with a “positive performance” in the UK offset by a “small decline” in continental Europe. Chief executive David Sleath said: “The balance of supply and demand for modern warehouse space remains supportive of further rental growth and development gains in the attractive European markets in which our portfolio is concentrated. “Valuations have stabilised with the UK seeing its first increase since the cycle turned in 2022. The strength of our local networks, and balance sheet have enabled us to invest selectively in profitable new opportunities, putting to work some of the capital raised in February.” SEGRO said asset values “appear to be at an inflection point in the UK and bottoming out in continental Europe”. That, it added, “will present further, exciting opportunities for SEGRO to drive future returns”. Sleath continued: “In a sector that continues to benefit from long-term, attractive structural drivers, SEGRO is well-placed for further growth through a combination of active asset management of our irreplaceable, prime portfolio of existing assets and our profitable development programme, which includes a sizeable data centre pipeline. These factors, together with the competitive advantage of our market-leading operating platform, give us confidence that we will continue to deliver attractive and compounding increases in both earnings and dividends.”