Last year was highly successful for industrial and logistics property firm Segro (SGRO), with a sharp uplift in the value of its portfolio together with active asset management and gains on developments combining to generate a 40% increase in NAV (net asset value), from 814p to £11.37 per share, lifting the stock as much as 6% to £13.55 in early trading.

Analysts at Numis, who had forecast NAV at 972p per share while the consensus was at 998p, described the company’s results as ‘outstanding’.


Segro’s portfolio increased in value by almost 29% last year to £18.38 billion including £1.5 billion of investment in new assets, development project and land deals.

Demand for space continues to be driven by long-term trends such as ecommerce and supply chain resilience, resulting in an average 13% uplift on rent reviews and renewals and record rental growth.

The firm has a development pipeline of 1.1 million square metres of projects either under construction or in advanced pre-let discussions, which would equate to £82 million of additional rental income.

Around 70% of these developments have already been pre-let, demonstrating the strength of demand and the dearth of supply of good-quality space to rent.


‘We enter 2022 with considerable confidence in the outlook for the business and its ability to deliver continued growth. The effects of the pandemic are ongoing but the world is adapting quickly with the lasting impacts on the way that we live and work strengthening occupier demand’, said chief executive David Sleath.

‘It has highlighted the importance of global supply chains facilitated by high-quality logistics space and we have positioned our business to take advantage of these structural tailwinds’, added Sleath.

While the firm isn’t immune to inflationary pressures, it has offset them with significant increases in rates on rent reviews and renewals, while around 40% of its rent roll contains indexation provisions allowing it to raise rents in line with retail prices. Increased material and construction costs on new developments have also been offset with higher rents.


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Issue Date: 18 Feb 2022