Segro shares rose today after the group revealed it got off to a strong start in 2023 and saw occupier demand rise while supply levels remained limited.
The real estate investment trust, which specialises in warehouses and other industrial properties, revealed its occupancy rate was 95.7 per cent in the first quarter, lower than the 96.7 per cent recorded in the same three months a year ago, but customer retention improved.
Shares in Segro, which is which is one of the UK’s largest commercial property groups, were up over 3 per cent or 24.00p to 795.80p this afternoon, having fallen over 40 per cent in the last year.
Specialism: Sergo specialises in warehouses and other industrial properties
Total new headline rent signed during the period was £25million, against £24million in the first quarter of last year.
The group’s net debt rose marginally, to £5.9billion, from £5.7billion.
David Sleath, the group’s boss, said: ‘2023 has started well for Segro. Occupier demand continues to be high and is coming from a range of customers, while supply remains limited across all our markets.’
He added: ‘Market data is showing signs of stabilisation in asset values, although investment activity remains subdued.
‘This is most evident in the UK where the indices show that values are broadly flat over the first quarter, but also in Continental Europe, as supported by a valuation exercise relating to the SELP portfolio which indicated only a small decline in values during the first three months of the year.
‘Despite wider uncertainty arising from recent events in the credit markets, we remain well positioned with significant liquidity, no near-term financing requirements and modest leverage.’
The company’s profits surged during the pandemic as a boom in online shopping drove up demand for its warehouses. The group’s profits for 2021 jumped 20 per cent to £356million, while the value of its portfolio increased by nearly 29 per cent to £18.4billion.
In January this year, Segro paid Royal London Asset Management £120million to snap up the Bath Road Shopping Park in Slough, Berkshire. The retail park is next to Slough Trading Estate and covers about 11.4 acres.
The group’s half-year results will be published on 27 July.
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