SEGRO posted an adjusted pre-tax profit of £409m – up 6% on the previous year – for the year ended 31 December 2023.
In the reporting period, the developer generated new headline rent commitments of £88m (2022: £98m) and a 12.5% increase in net rental income to £587m (2022: £522m), driven by development completions and strong like-for-like rental growth of 6.5%.
Its adjusted NAV per share was down 6.1% to 907p (31 December 2022: 966p), reflecting a 4.0% like-for-like portfolio valuation decline (2022: 11.0% decline), as a result of interest-rate driven yield expansion.
SEGRO said this was partly offset by rental value (ERV) growth of 6.0%, asset management initiatives and development profits. Its full year divided increased 5.7% to 27.8p.
David Sleath, chief executive of SEGRO, said: “SEGRO delivered a strong operating performance in 2023, despite the weaker macroeconomic backdrop. Significant rental uplifts on the standing portfolio and our profitable development programme have driven further growth in both earnings and dividends. Last year, tighter monetary conditions resulted in a modest, yield-driven valuation decline; however, we are reassured by continued rental growth across our markets. Market expectations for lower interest rates, if sustained, provide a positive backdrop for a recovery of investment market sentiment as the year progresses.
“In the next three years we expect to increase our passing rents by more than 50% through capturing embedded reversion, leasing vacant units and developing new space. Looking beyond this our exceptional land bank, continuing occupier demand and constrained supply, offer significant additional opportunities for profitable growth.”
