The UK’s largest listed property company SEGRO reported an 8.9% uplift in its net asset value (NAV) for 2019, alongside a 10.1% jump in its dividend.
In full-year results to the end of December 2019, the industrial property specialist revealed a NAV per share of 708p, up from 650p a year earlier. Meanwhile the full year dividend was up from 18.8p per share to 20.7p.
Adjusted pre-tax profit was up by 10.8% to £267.5m, and earnings per share was up 4.3% to 24.4p. SEGRO grew annual rent commitments during the year by £65.8m through new lettings, which was slightly down on the £66.4m in 2018.
The company said it was committing to a capital expenditure programme of more than £600m this year. It currently has £1.4bn of financing available.
The group said future earnings prospects were underpinned by 1.2m sq m of development projects currently under construction or in advanced pre-let discussions. This equates to an additional 15% of space and £70m of potential rent, 71% of which relates to pre-lets and lettings prior to completion.
[2019 marked another outstanding year for SEGRO. The group has established itself as the biggest listed property company, in part off the back of the structural shift in retail spend. The increase in demand for industrial and logistics space has grown rapidly over the past five years as online spend has increased to around 20% of all retail spend. SEGRO’s success is down to more than just this, however. The group has, for a number of years, been piecing together development land in key locations and is continuing to bring this forward at a steady and sensible rate, so as to dampen development risk. Its track record in securing pre-lets is testament to the strength of the management team. It has an extensive Greater London portfolio of assets that are seeing strong rental growth (9.2% year-on-year) and its “big box” development schemes are proving just as successful. SEGRO’s huge continental European portfolio is likely to benefit from the structural shifts in retail spend seen in the UK going forward, as e-commerce catches up in those countries. QuotedData published a research note on the industrial property market in December that outlined the characteristics of the sector and profiled all the major players, including SEGRO. To read it click here.]
David Sleath, chief executive of SEGRO, said: “We have started 2020 in a strong position. Our substantial, mostly pre-leased development pipeline, along with the ongoing results from the active asset management of our existing portfolio, should enable us to drive further sustainable, compound growth in rental income, earnings and dividends over the coming years.
“This year SEGRO celebrates its one hundred year anniversary. We will continue to take a long-term view, reflecting the interests of our financial stakeholders and our wider responsibilities, as we look to position the business for further success in its next century.”
SGRO : SEGRO posts 8.9% NAV uplift