LONDON (ShareCast) - - Disposals of 408m pounds during Q3
- Six new pre-let developments signed
- Net down 21 per cent, but vacancy rate up from 8.9 to 9.1 per cent

FTSE 250 industrial property group Segro continued its portfolio restructuring during the third quarter and said its expectations for the full year remained unchanged.

As broker Morgan Stanley reaffirmed, its overweight stance on the shares, Segro sold £408m of warehouse space for an average 6.3% premium to book value as investor appetite drove strong demand.

This took disposals since the start of the financial year to £560m, recycling its assets with £126m of acquisitions in the same period.

Acquisitions included £82m in the three months to October 23rd, as it also signed six new pre-let developments, including its largest to date, totalling 117,000 square metres.

The shortage of available new space in key markets and good levels of occupier demand enabled it to secure £4.5m of income from these deals, whilst leasing of existing space in the third quarter will generate £3.4m of new annualised rental income compared to take-backs of £3.5m.

Chief Executive David Sleath said: "We have made further progress during the third quarter, following a strong first half, and our expectations for the full year remain unchanged.

"Investor interest in logistics assets continues to grow but we have been able to acquire some high quality assets at attractive yields, predominantly via off-market transactions.

“Our disposal programme is running ahead of target, reducing our financial leverage and providing us with the flexibility to take advantage of development and acquisition opportunities as they arise."

The London-headquartered company completed a €1bn logistics joint venture with Canadian pension fund, PSP Investment, focused on continental Europe that it has dubbed the Segro European Logistics Partnership (SELP).

This, and a forthcoming disposal, imposed slightly on Segro's vacancy rate, which increased marginally from 8.9% at the end of the previous quarter to 9.1%.

Including the funds available through SELP, net debt was trimmed 21% to £1.9bn.

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