E-commerce boom to outlast pandemic, says warehousing specialist Segro

By Aby Jose Koilparambil

(Reuters) - UK real estate investment trust Segro said on Friday it expects a boom in online shopping to be sustained even after the COVID-19 pandemic as the warehousing specialist posted an 11% jump in annual profit.

Warehousing specialists globally benefited from massive shipments of products bought online during the pandemic, outperforming other commercial real estate companies including mall operators and office space providers, as people increasingly took to remote working and shopped online.

"We believe there has been a step-change in consumer behaviour," said Segro Chief Executive David Sleath, adding that its customers were already preparing to adapt businesses to respond to higher-than-expected levels of online sales.

Increased e-commerce penetration in Europe as retailers adapt their supply chains and seek more warehouse space to set up larger centrally-located fulfilment centres and smaller urban distribution centres has been benefiting Segro.

"Some of the factors that were considered as barriers to increased levels of online sales penetration, for example concerns about the quality of food bought online and reluctance to share financial information over the internet, have been overcome and habits have potentially changed irrevocably," said Sleath.

The FTSE 100 firm posted an adjusted pre-tax profit for the year ending Dec. 31, 2020 of 296.5 million pounds ($414 million) and declared a final dividend of 15.2 pence per share, up from a 14.4 pence payment a year earlier.

Shares in the company, which made a secondary listing in Paris in 2020, climbed as much as 1.5% on the London Stock Exchange in early trade.

The 101-year-old REIT, which manages big-box and urban warehouses among other assets, logged like-for-like net rental income growth of 2.1%, while adjusted net asset value per share rose 16.3% to 814 pence.

Segro said 1.2 million square metres of projects are under construction or in advanced pre-let talks equating to 81 million pounds of potential rent.

($1 = 0.7160 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Vinay Dwivedi and Emelia Sithole-Matarise)