Segro profits jump on strong demand for warehouse space

Segro, the UK property group that specialises in warehouses, said it is on track to spend £600m on new developments this year to take advantage of growing demand.

The company has benefited from the shift to online retail, which has increased demand for its warehouse space in the UK and continental Europe.

It raised £450m of fresh equity in February to fund the development pipeline.

Reporting first-half results on Wednesday, Segro said that it expected demand for its space to remain strong.

“Rental growth will likely be strongest in urban warehousing, where the supportive trends of the technological revolution (including e-commerce) and urbanisation combine,” the company said in a statement.

Segro said that its adjusted pre-tax profits had grown by a fifth in the first half to £132m, while net asset value grew 4 per cent to 665p per share.

The dividend was increased by 14 per cent to 6.3p per share.

Chief executive David Sleath said: “We expect the development programme to generate further significant and profitable new rental income over [the] coming years. This addition to the top-line, combined with the compounding effect of rental growth through our asset management of the existing portfolio, should enable us to drive both sustainable earnings and further dividend growth.”


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