Segro increases fundraising by £30m to meet demand

Segro has increased the size of its fundraising by £30m because of strong demand for new shares issued to finance its expansion plans.

The commercial property investor and developer said on Tuesday evening it would raise £650m to take advantage of development and acquisition opportunities in the UK and Europe.

The FTSE 100 company has increased the size of its share placing to £680m, representing 7.5% of its equity capital. It will sell the new shares for 820p each, compared with a closing price of 858.80p, after a bookbuild process to gauge investor demand. It is offering the shares to existing and new shareholders and institutional and retail investors.

"In light of the strong demand received both from existing investors and potential new holders, the board has decided to increase the size of the raise from approximately £650 million to £680 million," Segro said. "The company is pleased by the strong support it has received from new and existing shareholders, including a number of its existing retail shareholders via the retail offer."

Announcing the share offer, Segro said new lettings and pre-let development agreements were tracking ahead of expectations before the Covid-19 pandemic. It said the Covid-19 crisis had speeded up trends for the adoption of new technology and e-commerce, with a knock-on effect for demand for its urban warehouse portfolio.

Segro snapped up a warehouse site in west London on 8 June for £202.5m from Federated Hermes. It said the acquisition was a rare chance to buy a large facility with quick, easy access to central London.