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SEGRO commits £334m to UK logistics property market

SEGRO commits £334m to UK logistics property market

SEGRO is to create a £334m warehouse development war chest as it plunges deeper into the UK big shed scene.

SEGRO has announced a rights issue raising £573m, of which £334m is to fund a two-year development programme.

The war chest is likely to kick-start development on Midlands sites it now owns or controls thanks to its agreement last year with developer Roxhill.

This is the second time SEGRO has beefed up its development funding. Last September it raised £325m via a placing and has already invested or allocated to specific projects 75% of the £450m of capital which was identified at the time.

SEGRO will use the balance of today’s rights issue to buy out Aviva Investor’s stake in the Airports Property Partnership (APP), which concentrates on providing warehouse floorspace in the super-tight West London market.

APP comprises a £1.1bn portfolio of airside and landside assets at and around London’s major airports, of which 87% are located at Heathrow, the UK’s only hub airport. SEGRO has owned 50% of the asset in a JV with Aviva Investors since 2010 and, has concluded that it would be better to own it outright.

Chief executive David Sleath said: “The new capital we are seeking to raise will allow us to further progress the implementation of our development and income growth strategy, taking advantage of a very favourable occupier market backdrop.”

The announcement did not list the sites likely to benefit from the new development funding.

In February 2016, SEGRO and Roxhall created a partnership to develop  more than 10 million sq ft of big box logistics warehousing over 10 years in the South East and Midlands, adding significant scale to SEGRO’s UK big box logistics portfolio.

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