Segro says business continued to perform well during first quarter

Property developer Segro told shareholders on Wednesday that the business "continued to perform well" during the first quarter.

The company secured £21m of new headline rent, down from £27.3m in the year ago period, alongside rent roll growth of £6.0m on existing space - thanks to the re-gearing of a number of leases in its Heathrow portfolio, which management labelled as "particularly strong".

Segro also secured new pre-lets, worth £11.1m, which while less than the £23.3m observed over the first three months of 2018 was well above the three-year quarterly average of £7.0m, the company said in a statement.

A total of 44 projects under construction were expected to generate £57m of annualised rent and were aleady 72% leased, versus Segro's record 73% of pre-letting reached in fiscal year 2018.

There were 1.0m square metres of space under development or approved for development a 31 March, up from 0.8m as of 31 December.

During the quarter, 100,000 square metres of developments were completed, which were capable of generating £3.8m of headline rent when fully let, with 75% of that space having already been let.

The developer's vacancy rent meanwhile decreased from 5.2% as of year-end 2018 to 4.4%, on the back of "strong" lettings of existing and recently-completed speculative space, together with the imapct of disposals and low take-backs.

During the quarter, Segro carried out £40.0m of net investments, split between £100m of development capex and land purchases, £10m of asset acquisitions and £70m of asset and land disposals.

Following an equity placing in February, net debt declined from £2.7bn at the end of the fourth quarter of 2018 to £2.2bn.