Segro PLC asset value jumps 10% as businesses clamour for warehouse space
Segro’s focus has been on urban warehousing with £556mln of net spending in this area over the year
PLC’s () asset value jumped more than 10% in 2020 as a boom in online trading and e-commerce sparked by COVID-19 lockdowns sent industrial property values soaring.
“The pandemic has reinforced the importance of efficient and resilient distribution networks to facilitate the provision of a wide variety of goods and services, leading to increased demand for warehouse space,” said David Sleath, chief executive.
‘s net capital investment in new properties of £1.3bn over the year was a record, the FTSE 100 property owner said, with the spending spree funded by more than £1bn raised through share issues and additional debt.
“2020 saw a record level of investment for Segro as we seek to capitalise on these favourable trends, giving us confidence in our ability to drive further growth in rental income, earnings and dividends over the coming years,” Sleath said.
Demand for prime industrial properties came from a wide occupier base, he added, but Segro’s focus has been on urban warehousing with spending in this area over the year of more than £556mln.
Two warehouse parks were acquired in London, one in Slough near its HQ while Segro also acquired a 75% stake in a French warehouse owner.
Rent collections also remained strong over the year, with 98% collected over the 12 months while new contracts worth £78mln boosted the annual rental total by 19%.
Net asset value at the end of 2020 was 814p, a rise of 16%, with the value of the portfolio up by 10.3% to £13bn. The increase in the portfolio’s value was driven by asset management, development activity and yield compression, added the company.
Underlying profits rose by 11% to £296.5mln while the dividend for the year increased 6.8% to 22.1p.
Segro’s loan-to-value ratio was 24% at the year-end.
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