SEGRO reports lower vacancies as it unveils portfolio revamp
Segro has reported “a good level of enquiries” for its portfolio despite the uncertain economic climate, and a further fall in its vacancy rate to 10.2% as of 30 September, compared with 11.4% at the end of June.
The group says it secured £11.9m of new annualised rental income during the third quarter, from letting existing space and agreeing pre-lets. This compares with £9.5m in Q3 2010. Segro completed five pre-let developments during the quarter, generating £3.5m of annualised rental income. It has 22 developments contracted or under construction, totalling around £174m of capital expenditure and about £19m of annualised rental income, of which 76% is pre-let.
As part of its plans to reshape its portfolio, Segro has identified £640m of large, non-strategic assets, such as pure suburban offices and bespoke manufacturing campuses, and £1bn of other industrial and land holdings, that will be recycled in coming years. It plans to invest in light industrial and higher-value uses “around a few specified major conurbations in the UK and Continental Europe” and also in logistics around major ports, airports and transport corridors in the UK, France, Germany, Benelux, Poland and the Czech Republic.
Chief executive David Sleath today told Property Week that the group will consider selling off interests in its £1bn Slough trading estate following the success of its Airport Property Partnership joint venture with Aviva at Heathrow. At today’s investor day, the group confirmed it had lined up six large non-core assets for sale, starting with the IQ business park in Farnborough.
