SEGRO said it was “on track” for a strong year of rent roll growth in a trading update for the period covering 1 January to 17 October 2023.
The company said it had generated £58m of new contracted rent so far this year, due to active asset management and strong demand for its buildings.
SEGRO added it had made good progress on disposals in 2023, with more than £250m completed or exchanged in the year to date, and it was prioritising “profitable development opportunities” with £77m of potential rent from projects currently on site or expected to commence shortly at an anticipated yield on cost of 7.3%.
David Sleath (pictured), chief executive of SEGRO, said: “Occupier market conditions remain supportive with demand in line with longer-term trends and supply constrained in our chosen sub-markets. This is resulting in continued rental growth, further increasing the reversionary potential in our existing portfolio, which we are capturing through our asset management and leasing activity.
“We have made good progress with disposals in recent months, although the overall volume of investment market transactions remains subdued due to the evolving macro-economic environment. Reassuringly, investors continue to hold conviction over the attractiveness of the sector, with market evidence from indices and recent transactions pointing to relatively stable asset values in the third quarter.
“In the current environment it is important to remain disciplined in our use of capital. We are prioritising attractive development opportunities on the land we already own, increasingly funding such investment from the proceeds of selective disposals, alongside driving performance and income growth from our existing portfolio of high-quality assets.”
