(Alliance News) - Segro PLC on Monday said rental collection in the year to date has continued to progress well as it announced the GBP133 million acquisition of a 13-acre urban warehouse estate in London.
The FTSE 100 real estate investment trust said rent collection in the UK for the fourth quarter of 2020 is currently at 85%, adding that it has agreed deferrals for 13% of rent expected to be received by the end of the year. While rents in continental Europe are typically paid monthly, rent collections for the second and third quarter are both at 98%.
Across the group, 96% and 95% of rents have been collected for the second and third quarters respectively. Of the remaining GBP98 million, GBP6 million is expected to be received by the end of 2020 with the remainder expected in 2021.
Segro highlighted that the total value of contracts signed in the nine months to September 30 was GBP49.6 million, up from GBP48.6 million year-on-year.
It noted that so far in 2020, it has completed 695,800 square metres of new developments, capable of generating GBP38.0 million of headline rent, 80% of which has already been leased. For comparison, in the first nine months of 2019, it completed 765,900 square metres of new developments, generating GBP33.7 million of rent.
The company added that it has GBP70 million of potential new headline rent from 1 million square metres of new space under construction or in advanced discussions.
Net debt as at September 30 was GBP2.7 billion, up from GBP2.5 billion at the same time in 2019.
Full year results for 2020 will be published February 19, 2021.
Separately, London-based Segro said it has acquired Electra Park, a 13-acre urban warehouse estate in Canning Town, London from Schroders PLC for GBP133 million.
Electra Park provides 21,200 square metres of lettable space across 10 units of which nine are let, with the final unit currently under offer. The weighted average unexpired lease term on the let space is 4.3 years to break and 6.4 years to expiry.
The estate generates a topped-up passing rent of GBP3.4 million, reflecting a low average in-place rent of around GBP14 per square foot with an estimated rental value of GBP21 per square foot, the company explained.
The net initial yield upon acquisition is 2.3%, rising to 2.6% once the vacant unit - currently under discussion - is let.
"This acquisition is an exciting opportunity for Segro to consolidate its leading London footprint and is a strong fit with its well established prime urban warehouse portfolio. It is in an area that is currently undergoing significant redevelopment and modernisation. This should further improve the already attractive supply/demand dynamics and create the potential for strong rental growth," said Alan Holland, business unit director for Segro's Greater London portfolio
Shares in Segro were trading 1.6% lower at 922.60 pence each on Wednesday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Schroders (SDR)
Segro (SGRO)