SEGRO plc (LON:SGRO) has announced a trading update, relating to the period to 31 August 2024, to coincide with the publication of the Tritax EuroBox Scheme document in connection with the Group’s Recommended Offer for Tritax EuroBox plc.
David Sleath, Chief Executive, said:
“Our business is performing well as we head into the final months of the year. The overall balance of supply and demand in our occupier markets remains favourable and we continue to make good progress in capturing the significant embedded reversion within our portfolio.
“We are seeing liquidity return to investment markets and we continue to identify attractive opportunities to deploy capital both through asset acquisitions and into our profitable development pipeline, utilising our exceptional land bank.
“Our prime urban and big box portfolio, market-leading operating platform and strong balance sheet position us well to deliver strong returns from our existing portfolio and capitalise on new opportunities, supporting attractive and compounding increases in both earnings and dividends. This provides us confidence in the outlook for the remainder of the year and beyond.”
KEY HIGHLIGHTS12:
- £58 million of new headline rent signed so far in 2024, ahead of the equivalent period last year and positioning SEGRO for another year of strong rent roll growth. This includes £21 million of uplifts from rent reviews, renewals and indexation, reflecting a 30 per cent average increase at lease events, and £17 million of pre-let signings.
- Portfolio continues to deliver strong operating metrics: customer retention remains high at 83 per cent and occupancy is broadly unchanged since 30 June 2024 at 94.3 per cent.
- Profitable development programme expected to add £48 million of future rent through projects currently onsite and in advanced negotiations (including a further data centre in Slough). 63 per cent of this is pre-let and the average yield on cost is 7.8 per cent.
- Driving portfolio outperformance through disciplined capital allocation. £239 million of acquisitions and £311 million of development capex year to date, offset by £500 million of disposals above book value. The Group maintains its expectation to invest c.£500 million of development capex during 2024 and has a further c.£200 million of asset disposals under offer.
- Balance sheet remains in a strong position to pursue further growth opportunities with LTV of 29 per cent3 and £2.1 billion of cash and undrawn committed facilities. A €500 million, 8-year bond was issued in September at an attractive 3.5 per cent coupon, demonstrating SEGRO’s ability to access capital markets in an agile manner, while keeping the cost of funding low (average cost of debt post the issuance is 2.6 per cent).
- Recommended all-share offer for Tritax EuroBox plc announced on 4 September 2024 and expected to close in Q4 2024.
1In this statement, space is stated at 100 per cent, whilst financial figures are stated reflecting SEGRO’s share of joint ventures. Operational and financial figures are stated for the period to, or at, 31 August unless otherwise indicated and the exchange rate applied is €1.19:£1.
2 Headline rent is annualised gross passing rent receivable once incentives such as rent-free periods have expired.
3 Based on values as at 30 June 2024, adjusted for acquisitions, disposals and other capital expenditure in July/ August.
Financial calendar
This update replaces our Q3 2024 Trading Update originally planned for 17 October 2024. The date for SEGRO’s full year results for the year ended 31 December 2024 (provisionally set for 14 February 2025) will remain under review pending the Recommended Offer for Tritax EuroBox plc.
This Trading Update, the most recent Annual Report and other information are available on the SEGRO website at www.segro.com/investors.
