SEGRO has posted record rental growth and a healthy boost to the bottom line in its 2021 results, as chief executive David Sleath said the company is ready to face an increasingly competitive market as it expands.
Adjusted pretax profit for the year was £356m, up by a fifth on 2020. Adjusted NAV per share rose by 40% to 1,137p, driven by a 29% valuation gain. The value of the group’s portfolio jumped by £4.1bn to £18.3bn.
Sleath described the year as “highly successful”. “Investor and occupier supply-demand dynamics in the industrial and logistics sector remain very favourable, led by the long-term trends of digitalisation, supply chain resilience and an increasing focus on sustainability,” he said.
“Our established and experienced pan-European operating platform remains focused on delivering excellence in customer service, which, when combined with the strong relationships and reputation that we have with our stakeholders, provides us with a distinct advantage in an increasingly competitive sector.”
The industrial giant is aiming to double its £518m annual passing rent to more than £1bn in the next five years or so.
SEGRO’s development pipeline stands at 11.8m sq ft of projects under construction or in advanced prelet discussions, which represents roughly £82m of potential rent.
Over the course of the year the group generated £95m in new headline rent commitments, including £49m of prelet agreements.
“Against a backdrop of strong demand from an increasingly diverse range of businesses, combined with historically low vacancy rates across Europe, we expect rental growth to continue across our markets,” the results statement said.
“We believe that the growth rate will be highest where developable land is in short supply, for example in urban markets such as London and Paris. This acute supply-demand imbalance delivered record rental growth during 2021, resulting in significant accumulated rental reversion in the portfolio which we will be working hard to capture during 2022 and the coming years.”
It added: “The unique supply-demand dynamics of the industrial sector have attracted increasing competition from both investors and developers, but we are confident in our ability to source profitable new opportunities to grow.”
To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews
