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Q1 2022 Trading update

SEGRO plc (“SEGRO” or the “Group”) today publishes a trading update for the period from 1 January 2022 to 20 April 20221.

David Sleath, Chief Executive, said:

“Our business has had a strong start to the year with continued demand from a broad range of customers enabling us to capture further rental growth through rent reviews and the re-letting of space. We have significantly increased our largely pre-let development pipeline and have secured future opportunities for growth in some of our most supply-constrained urban markets through the acquisition of land, as well as income-producing assets with medium-term redevelopment potential.

“We continue to monitor the tragic events unfolding in Ukraine, offering humanitarian support through the efforts of our Polish team and via donations to relevant relief agencies. There have been no direct effects of the invasion on our business, however it has added to construction supply chain and inflationary pressures and we are working closely with our construction partners so as to minimise the impact on our development programme. At the same time, we expect these pressures will further tighten the supply-demand imbalance for industrial assets and place further upward pressure on rents across our portfolio.

“The industrial sector continues to benefit from highly supportive and long-term structural tailwinds, which are leading to sustained strong occupier and investor demand, despite the challenges that the world is facing. We are alert to ongoing geopolitical and macro-economic risks but remain confident in the outlook for our business in 2022 and beyond.”

Financial calendar
The 2022 half year results will be published on Thursday 28 July 2022.

OPERATING SUMMARY & KEY METRICS

ACTIVE ASSET MANAGEMENT CAPTURING RENTAL GROWTH AND GROWING THE RENT ROLL (see Appendix 1):

Good progress in capturing accumulated reversion in the portfolio through rent reviews and renewals and continued strong lettings performance.

  Q1 2022 Q1 2021
Total new headline rent2 signed during the period (£m) 25 18
Pre-lets signed during the period (£m) 11 11
Uplift on rent reviews and renewals (%) 23 12
Vacancy rate (%) 3.3 4.4
Customer retention (%) 79 82

FURTHER ACQUISITIONS TO SECURE POTENTIAL FUTURE GROWTH:

Capital investment continues to focus on development and acquisition of assets with opportunities for future growth, as well as sourcing land and assets with short-term income and redevelopment potential to extend our development pipeline. Development capex for 2022, including infrastructure, expected to be c.£700 million.

  Q1 2022 Q1 2021
Development capex (£m) 151 143
Acquisitions3 (£m) 175 37
Disposals3 (£m) 73 -

EXECUTING AND GROWING OUR DEVELOPMENT PIPELINE:

Development programme has grown significantly since year end with 1.4 million sq m of space, equivalent to £108 million of new rent, under construction or in advanced discussions.

  Q1 2022 Q1 2021
Development completions:    
–Space completed (sq m, at 100%) 121,900 14,200
– Potential rent (£m, at share) (Rent secured,%) 3 (100) 1 (86)
Current development pipeline potential rent (£m) (Rent secured, %) 73 (63) 67 (71)
Near-term development pipeline potential rent (£m) 35  

BALANCE SHEET POSITIONED TO SUPPORT FURTHER DEVELOPMENT-LED GROWTH

Issuance of €1.15 billion Green bonds during the period at a blended coupon of 1.5 per cent helped to strengthen the balance sheet and maintain low average cost of debt.

  31 Mar 2022 31 Dec 2021
Net debt (£bn) 4.4 4.2
Cost of debt (%) 1.6 1.5
LTV4(%) 24 23
Cash and available facilities (£bn) 1.9 1.1

1 In this statement, space is stated at 100 per cent, whilst financial figures are stated reflecting SEGRO’s share of joint ventures. Financial figures are stated for the period to, or at, 31 March unless otherwise indicated. The exchange rate applied is €1.19:£1 as at 31 March 2022.
2 Headline rent is annualised gross passing rent receivable once incentives such as rent free periods have expired.
3 Includes both assets and land
4 Based on values at 31 December 2021, adjusted for acquisitions, disposals and other capital expenditure during the first quarter.

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2021 Full Year Results

For the results for the 12 months ending 31 December 2021

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David Sleath video

Our CEO, David Sleath, discusses our 2021 Full Year Results

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Downloads & Contact

To download our most recent financial publications

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