Segro shares rise as demand for commercial property increases
Segro shares are rising as the group saw increased demand for commercial real estate while supply remained limited
- Segro specializes in warehouses and other industrial real estate
- The total new head lease signed during the period was £25 million in the first quarter
Segro shares surged today after the group revealed it had a strong start to 2023, seeing user demand soar while supply remained limited.
The real estate investment trust, which specializes in warehouses and other industrial properties, revealed that its first-quarter occupancy rate was 95.7 percent, lower than the 96.7 percent recorded in the same three months a year ago, but customer retention improved.
Shares in Segro, one of the UK’s largest commercial real estate groups, rose more than 3 percent or 24.00 pence to 795.80 pence this afternoon, after falling more than 40 percent in the past year.
Specialism: Sergo specializes in warehouses and other industrial real estate
Total new head rent signed during the period was £25 million, up from £24 million in the first quarter of last year.
Group net debt rose marginally from £5.7bn to £5.9bn.
David Sleath, the boss of the group, said: ‘2023 has started well for Segro. User demand remains strong and comes from a range of customers, while supply remains limited in all our markets.”
He added: “Market data shows signs of stabilization in asset values, although investment activity remains subdued.
This is most evident in the UK, where indices show first-quarter values have remained broadly flat, but also in Continental Europe, as supported by a valuation exercise on the SELP portfolio, which showed only a small fall in value. reported during the first quarter. three months of the year.
“Despite increased uncertainty due to recent credit market events, we remain well positioned with significant liquidity, no short-term funding needs and modest leverage.”
The company’s profits soared during the pandemic as an explosion of online shopping boosted demand for its warehouses. The group’s profit for 2021 rose 20 per cent to £356 million, while the value of the portfolio increased by almost 29 per cent to £18.4 billion.
In January this year, Segro paid Royal London Asset Management £120 million to refurbish the Bath Road Shopping Park in Slough, Berkshire. The retail park is located next to Slough Trading Estate and covers approximately 11.4 hectares.
The group’s semi-annual figures will be published on 27 July.