UK industrial and logistics valuations have “stabilised” and the UK is seeing its first increase in values since the cycle turned in 2022, according to SEGRO chief executive David Sleath.
In a trading update for the six months ended 30 June 2024, SEGRO reported an adjusted pre-tax profit of £227m – up 14.6% on the previous year – driven by a 7% increase in net rental income.
The company signed £48m of new headline rent commitments during the reporting period compared with £44m in H1 2023 and achieved a 28% average uplift in rent reviews and renewals.
Sleath said SEGRO was well-placed for further growth with the potential to increase passing rents by more then 50% over the next three years, supporting strong shareholder returns.
He continued: “SEGRO has continued to perform well during the first half of 2024, signing £48m of new rent. The balance of supply and demand for modern warehouse space remains supportive of further rental growth and development gains in the attractive European markets in which our portfolio is concentrated. Valuations have stabilised with the UK seeing its first increase since the cycle turned in 2022. The strength of our local networks, and balance sheet have enabled us to invest selectively in profitable new opportunities, putting to work some of the capital raised in February.
“In a sector that continues to benefit from long-term, attractive structural drivers, SEGRO is well-placed for further growth through a combination of active asset management of our irreplaceable, prime portfolio of existing assets and our profitable development programme, which includes a sizeable data centre pipeline. These factors, together with the competitive advantage of our market-leading operating platform, give us confidence that we will continue to deliver attractive and compounding increases in both earnings and dividends.”
