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SEGRO pre-tax profits up 25% on back of eComm boom
20 February 2018
The property developer’s adjusted pre-tax profit was up 25.7% in its results for the year ended 31 December 2017.
It said its future earning prospects were underpinned by 1.2 million sq m of spec builds under construction or in advanced pre-let discussions, equivalent to almost one-fifth of our current portfolio. The current development pipeline is capable of generating £43 million of rent, equating to a yield on cost of nearly 8 per cent, over half of which has been secured through pre-lets and lettings prior to completion,
David Sleath, chief executive, said: “Occupier demand in early 2018 is strong across all our markets and supply of modern warehouse space remains constrained. The prospects for rental growth, particularly in the UK, remain good, and rental values are improving in our Continental Europe urban warehouse portfolio. Investor appetite for prime warehouses remains unsated, attracted by the occupational market fundamentals.
“The structural drivers of demand in our sector (urbanisation, growth of the digital economy and e-commerce) are likely to underpin occupier demand for some time to come and these, coupled with our modern, well-located assets, our current development pipeline and our land bank all offer significant opportunities for future growth.”