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(Sharecast News) - Property investment and development firm Segro said on Thursday that it had delivered a "strong operational performance" during the first quarter, with 23m of new headline rent contracted, including 12m of development lettings.
Segro said momentum had continued across its business, despite the "uncertain geopolitical environment", as the group reported a 38% uplift on rent reviews, renewals and regears in the UK, while customer retention remained strong at 83% and occupancy was stable at 94.8% as the group reduced vacancy in its London portfolio and completed speculatively developed urban space in Germany.
The FTSE 100-listed firm stated development completions during the period totalled 40,000 square metres of new space, with 4m of headline rent, 37% of which has been leased, a lower level than usual due to the mix of projects, while development projects under construction or in advanced negotiations came to 73m of potential rent, 67% of which was associated with pre-lets, and offered an "attractive" 7.6% development yield.
Segro reiterated its 450-550m development capex guidance for FY26 and also its balance sheet remained strong with a loan-to-value ratio of 31% and 1.5bn of cash and undrawn committed facilities.
Chief executive David Sleath said: "Structural trends continue to drive occupier demand for modern and well-located, industrial, logistics and data centre space, at a time when speculative space under construction across our markets remains low.
"We expect these favourable supply-demand dynamics to support further market rental growth and create new development opportunities on SEGRO's exceptional land bank. Through disciplined capital allocation, active asset management and development execution, Segro is well-placed to deliver further compound growth in earnings and dividends."
As of 0810 BST, Segro shares were down 0.84% at 707.60p.
Reporting by Iain Gilbert at Sharecast.com
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