A surge in demand for warehouse space driven by e-commerce during the Covid-19 pandemic helped UK real estate investment trust Segro report a healthy rise in annual profits.
The company has benefited from the move to online shopping as consumers shift to alternative ways to buy goods during lockdowns which saw all but essential stores closed.
“The pandemic has reinforced the importance of efficient and resilient distribution networks to facilitate the provision of a wide variety of goods and services, leading to increased demand for warehouse space,” said chief executive officer David Sleath.
Like-for-like net rental income grew 2.1%, while adjusted net asset value per share rose 16.3% to 814 pence.
Adjusted pre-tax profit for the year to December 31 rose 10.8% to £296.5m. A final dividend of 15.2 pence per share was declared, up from 14.4p a year earlier.
Segro said it expects total development capital expenditure for 2021, including on infrastructure, to exceed £700m.
Looking ahead, Segro said the “prevalent structural drivers, which have been accelerated by the pandemic, will continue to drive both occupier and investor demand” for its portfolio of properties “for the foreseeable future”, but warned it was still wary of potential macroeconomic headwinds such as the pandemic and Brexit.
“Market rental growth has continued, driven by increased occupier demand and a shortage of modern warehouse space, particularly in our urban markets,” the company added.
