Segro PLC on Thursday said rental growth continued in the past three months, as demand for space outpaced supply.

In the third quarter, the London-based industrial property investor signed £20 million of new headline rent, down 23% from £26 million a year before. Total headline rent grew 19% to £76 million for the nine months to September 30 from £64 million a year prior.

‘Occupier demand remains strong across all of our markets, driven by long-term structural trends, whilst supply remains limited and this should continue to support high levels of rental growth,’ Segro said.

The quarterly vacancy rate widened slightly to 3.3% from 3.2%.

So far in 2022, it has completed 419,100 square metres of new developments, down from 450,000 the year before, which Segro said will generate £20 million of headline rent with 92% already let, down from £25 million in rent and 93% let a year prior.

At the end of September, over 1.3 million square metres of space was under construction or in advanced discussions, up 30% from 998,000 a year ago, with Segro noting this could turn into £86 million of future headline rent, rising 26% from £68 million a year ago.

Further, Segro noted a near-term development pipeline of potential rent of £32 million, up 33% from £24 million.

The firm said it remains on course to invest around £700 million on its development pipeline in 2022.

Looking ahead, Segro expects the momentum of its performance to continue into the fourth quarter.

Segro shares rose 1.2% to 723.60 pence each in London on Thursday morning.

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