Unlike many shopping centre landlords, whose rental income has collapsed to between 30-50% of normal, logistics landlords have still been collecting the vast majority of quarterly rent payments, with many tenants looking for additional floorspace for immediate occupation and long-term growth once the crisis is over.
Segro reported 71% of tenants had paid on time.
However, Segro chief executive David Sleath said some tenants were facing problems: “We are currently working, on a case by case basis, with customers across the Group representing approximately a quarter of our total headline rent regarding appropriate relief, primarily through reprofiling the timing of rental payments,” he said.
Talks with tenants accounts for about 25% of rent due. For comparison, this time last year 96% of rent had been paid on time.
Segro, one of the UK’s most expansionist logistics landlords and developers, has followed US warehouse giant Prologis with a declaration of faith in supply chain property.
Sleath said: “Whilst current global events are unprecedented, we anticipate that the structural trends that have been driving occupier demand for high-quality, well located warehouse space will remain intact and may even be strengthened by the crisis, as the importance of logistics supply chains has been thrown into sharp focus in recent weeks.”
“Trading in the early part of 2020, prior to onset of the Covid-19 situation, was encouraging, with rent roll growth tracking ahead of our expectations due to new lettings and pre-lets,” said Sleath.