Pre-tax losses narrow at Segro as rents rise

Property firm Segro struck an upbeat tone on Friday, after pre-tax losses narrowed and rental income improved.

The blue chip real estate investment trust, a specialist in warehouses and industrial properties, said adjusted pre-tax profits in the year to December rose 6% to £409m, while earnings per share increased 5.5% to 32.7p.

Pre-tax losses narrowed to £263m from £2bn a year previously.

Rental income jumped nearly 13% to £587m, which Segro attributed to development completions and strong underlying rental growth of 6.5%.

Adjusted net asset value per share fell 6% to 907p, after the portfolio valuation fell by 4%.

However, Segro said it was now "well placed for further attractive growth" as asset valuations start to bottom out and rents continue to grow.

It expects to increase passing rates by more than 50% over the next three years.

David Sleath, chief executive, said: "Segro delivered a strong operating performance in 2023, despite the weaker macroeconomic backdrop.

"Last year, tighter monetary conditions resulted in a modest, yield-driven valuation decline. However, we are reassured by continued rental growth across our markets. Market expectations for lower interest rates, if sustained, provide a positive backdrop for a recovery of investment market sentiment as the year progresses.

"In the next three years we expect to increase our passing rents by more than 50% through capturing embedded reversion, leasing vacant units and developing new space."

Segro lifted the full-year dividend by 5.7%, to 27.8p.