SEGRO saw the value of its portfolio decrease by 1.4% in the six-month period ended 30 June, but its profit rose 2.6%.
The UK’s largest listed property company said the dip in value was “due to outward yield shift” and reported that its adjusted NAV per share was down 3% to 937p. However, its adjusted pre-tax profit rose to £198m from £193m in the first half of 2022 and it reported like-for-like rental growth of 5.1%, noting that it had generated £44m of new headline rent commitments during the reporting period. Its interim dividend increased by 7.4% to 8.7p.
David Sleath, chief executive of SEGRO, said: “SEGRO has performed well during the first six months of 2023, delivering rental growth from our standing portfolio and from our largely pre-let development programme. We have made great progress in capturing reversion, delivering an average rental uplift of 20% at lease events during the period in addition to contracted indexation, whilst customer retention has increased significantly to 85%.
“The structural drivers of occupier demand remain evident across the UK and Europe, whilst supply remains constrained in our chosen markets, helping to drive rental growth in line with our expectations.
“Valuations have been relatively stable in the first half of this year, following the deep valuation correction in the latter part of 2022. The increased volume of transactions in the last quarter indicates that investors see value at the current levels of pricing for prime industrial and logistics assets, given the positive long-term outlook for our sector.
“We have significant opportunities to drive rent and create value both within our standing portfolio and through the execution of our profitable development programme. These factors give us confidence in our ability to deliver attractive growth and returns into the years ahead.”
