Segro to raise £450m to fund spending spree

Warehouse specialist Segro has announced plans to raise £450 million through a share placing to bankroll its development pipeline.

The move will allow it to take advantage of new opportunities as it continues to benefit from the rise in demand from food delivery firms and online retailers.

Segro plans to deploy £600 million this year on further development projects and additional land purchases.

Its future pipeline will cost around £430 million.

we believe that our significant longer-term pipeline and land bank have substantial potential that will continue to deliver attractive development returns and future income growth

Chief executive David Sleath said: “Since 2016, we have deployed over £1.5 billion into development across the UK and Continental Europe, which has generated a cumulative capital value uplift of over 20% and £90 million of new annualised headline rent.

“Occupier and investment market conditions remain supportive and we continue to experience strong demand for new warehousing.”

The warehouse investor also raised its final dividend for 2018 by 17% to 13.25p per share. This took its final dividend for the year to 18.8p per share from 16.6p.

Full year figures also show that adjusted pre-tax profit rose 24% to £241.5 million, while revenue came in at £369 million, rising from £334.7 million.

Segro also said for 2018 it had contracted £66.4 million of new headline rent, up 24% from £53.5 million in 2017.

“Development completions and pre-leasing levels in 2018 both exceeded a record previous year and, with customers already signed up to almost three quarters of our developments under construction, we believe that our significant longer-term pipeline and land bank have substantial potential that will continue to deliver attractive development returns and future income growth,” said Mr Sleath.

Shares in Segro were up 0.1% at 648.6p on Friday morning.