Segro completes fundraising as it eyes bigger piece of online shopping boom

Segro said it had seen “strong demand” in the share placing both from existing shareholers as well as from potential new investors. As a result, it increased the fundraising target from £650m to £680m, which it met. 

The property group said that “well established structural trends in adoption of technology and e-commerce are accelerating” and as a result would be looking to invest more than £1bn in capital into “profitable development activity and further land acquisitions” during the remainder of 2020 and 2021.

Segro, which on Monday completed the £203m acquisition of Perivale Park in West London, said some of the equity raised would also be used to take advantage of “additional investment opportunities” in Europe.

Chief executive David Sleath said: “The Covid-19 pandemic has accelerated the adoption of technology and e-commerce across society. Alongside a renewed focus by many occupiers on the critical importance of best-in-class logistics supply chains, this is likely to help drive strong occupier and investor demand for modern, high-quality warehouses.

“Segro’s business continues to progress well, despite the uncertainty caused by the pandemic, with new lettings and pre-let development agreements at levels above our expectations at the beginning of the year. We are working constructively to support a small proportion of customers facing short-term cash flow challenges as a result of government lockdown measures.

“Our strong, primarily pre-let, development pipeline across the UK and Continental Europe reflects the demand from customers looking to grow. Our list of additional near-term pre-lets, which is approximately double the size of a year ago, and our well-located land bank mean we are well-placed to make further progress in the months ahead.”