Segro eyes speculative developments in Europe

UK REIT Segro is gearing up to develop speculative projects in select locations in Continental Europe. In its home market in the UK, Segro is already working on some speculative development at Slough Estate but it also sees opportunities in France, Germany and Poland, according to Andrew Gulliford, managing director Continental Europe.

The company already owns a significant land bank which was acquired before the crisis, Gulliford noted: 'Our approach to speculative development is to move forward in a sensible way where there is a real imbalance between supply and demand. We have a significant land bank in Dusseldorf and Berlin and are building a 12,000 m² development near the new airport in Berlin which will be our first speculative project there. We’re also working on a 3,000 m² development in Lodz in Poland that is pure speculative, as well as two projects in Gliwice and Tychy that have pre-let levels ranging between 40% and 70%. It's not huge, but it’s a good start. And our land bank is pretty good, we don't have to dash out and buy more land.'

Gulliford is particularly upbeat about prospects for Germany and Poland. ‘Our vacancy levels in Poland have dropped to 5% while the market average is still 15%. Poland is fantastic across the board, in fact the regions are performing better than the capital.' In Germany Segro focuses primarily on the Rhine-Ruhr region around Dusseldorf, Berlin, Hamburg and Frankfurt and Gulliford sees growth opportunities there as well. ‘Germany is doing well. We’re seeing an increase in enquiries across the country. France by contrast is a two-tier market. Paris is doing well, but the regions are pretty difficult.'

The full interview appears in the August/September issue of PropertyEU Magazine. Click on the link below to subscribe