Segro cheers strong demand for warehouse space as it benefits from online shopping boom

Segro has seen high demand for warehouse space

(segro)

Segro boosted rental income in the first quarter, as the warehouse landlord benefits from the boom in online shopping accelerated by the Covid-19 crisis.

Chief executive David Sleath said 2021 has started well for the FTSE 100 sheds firm, with “continued strong occupier demand”.

Segro is among landlords that have seen high demand for storage and distribution space during the pandemic as retailers try and cope with more online orders.

It saw £18 million of new headline rent signed during the first quarter, up from £14.3 million a year earlier. That will add to its existing rental income which stood at £394.7 million (including from joint ventures) at the end of last year.

The company did see a small increase in the vacancy rate to 4.4%, from 3.9% as at December, but this was largely driven by taking back space for refurbishment in parts of its London and Paris portfolios.

Segro added that there is £87 million of potential new headline rent from 1.3 million sqm of new space under construction or that firms are in advanced discussions to sign for.

Sleath said: “Our sector continues to benefit from highly supportive and structural tailwinds and we therefore remain confident in the outlook for the business as well as our ability to drive further sustainable growth in rental income, earnings and dividends over the coming years.”

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