SEGRO produces strong annual figures

David Parsley

Segro

Industrial property giant SEGRO has revealed growth across the board in its annual figures for 2016.

To the year ending 31 December, SEGRO’s earnings per share rose 7.1% to 19.7p. The group stated the growth was underpinned by a 4% increase in like-for-like net rental income and a strong contribution from development completions.

The group also saw net asset value per share rise 8% to 500p, driven by a 4.8% like-for-like increase in the value of the portfolio, reflecting development gains, UK rental growth and asset management activities.

David Sleath, chief executive of SEGRO, said: “I am pleased to report another strong set of results. We have had a record year for development completions, delivering 422,000 sq m (4,542,408 sq ft) of new warehouse space, of which 80% is now let. We have a high quality pipeline of developments under construction and more under discussion, reflecting the continuing strength of occupier demand for, and short supply of, well located, modern urban and big box warehouses.”

SEGRO upped its dividend by 5.7% to 11.2p, compared to 10.6p in 2015.

The results also showed occupier demand remains strong from a broad range of business sectors, particularly from retailers adapting their supply chains to the rapid growth of internet retailing. Segro stated future earnings prospects were underpinned by the largely de-risked development programme, as projects under construction have the potential to generate £27m of new rent, of which 61% has been pre-let. A further £27m is available from conditional pre-let and potential speculative projects which are expected to start in the coming months.

“Our business is well positioned, notwithstanding the current degree of political and economic uncertainty,” added Sleath. “We have had an active start to 2017 and we continue to see opportunities to grow our business through further disciplined investment, matched by a prudent approach to financing.”

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