Segro, the European warehouse and light industrial property owner, reported a rise in adjusted pre-tax profits of 23% in the first six months of the year, boosted by the acquisition of the Airport Property Partnership (APP) portfolio as well as new developments.
Commenting on the results, CEO David Sleath conceded that political and economic uncertainty has increased in the UK following the recent general elections, but said the company’s strong set of H1 results were underpinned by active development and asset management as well as further portfolio valuation growth.
‘We are also encouraged by the continued leasing momentum across our portfolio. Furthermore, business confidence in Continental Europe has picked up in recent months and there is no sign of any slowdown in the growth of internet retailing which is an important driver of demand for modern warehouse space across our markets, both in big boxes used for logistics and smaller, urban warehouses used for last mile delivery. With few signs of any meaningful new supply of speculatively developed space and investor appetite for good quality warehouse assets remaining strong, our business is well-placed to continue outperforming the wider market.’
The value of the portfolio rose 4.6% to £7.2 bn (€8 bn) as at 30 June, boosted by valuation gains of 5.3% in the UK and 3.9% in Continental Europe.
Sleath said future earnings growth was underpinned by the company's largely de-risked and fully funded development programme. The current development pipeline is capable of generating an additional £46 mln of rent, £31 mlo of which has been secured through pre-lets. In addition, near-term projects associated with a further £14 mln of potential rent are at advanced stages of discussion.
