(Alliance News) - 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 GBP20 million of new headline rent, down 23% from GBP26 million a year before. Total headline rent grew 19% to GBP76 million for the nine months to September 30 from GBP64 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 GBP20 million of headline rent with 92% already let, down from GBP25 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 GBP86 million of future headline rent, rising 26% from GBP68 million a year ago.
Further, Segro noted a near-term development pipeline of potential rent of GBP32 million, up 33% from GBP24 million.
The firm said it remains on course to invest around GBP700 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.
By Tom Budszus; tombudszus@alliancenews.com
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Segro (SGRO)