SEGRO PLC (LSE:SGRO), the FTSE 100 warehouse specialist, reported what it described as a strong operational result for 2022 with profits up 8.4%.
This was driven by a record level of rent roll growth, active asset management and strong leasing performance, according to CEO David Sleath.
“Our strategy over the past decade has focused on cultivating a unique portfolio located in the most supply-constrained European urban and logistics markets, backed by a strong balance sheet to enable SEGRO to outperform through the property cycle," he added.
The company's warehouses are in high demand from a diverse range of occupiers, investors were told.
Despite macroeconomic conditions impacting the sector, the company has a prime portfolio, excellent land bank, development expertise, customer focus and balance sheet capacity that will allow it to deliver attractive returns and further growth in the years ahead, according to Sleath.
SEGRO's adjusted pre-tax profit for the year was £386mln, an 8.4% increase from the prior year.
Adjusted EPS also increased by 6.5% to 31.0p. However, the adjusted net asset value per share decreased by 15.0% to 966p due to a portfolio valuation decline of 11.0%.
Net rental income increased by 18.9% to £522mln driven by strong like-for-like rental growth of 6.7% and development completions. The company's portfolio delivered a record £98mln of new headline rent commitments during the period, including £41mln of new pre-let agreements and a 23% average uplift on rent reviews and renewals.
SEGRO has continued its momentum in the development pipeline, with 915,600 square metres of projects under construction or in advanced pre-let discussions, equating to £86mln of potential rent, of which 75% has been or is expected to be pre-let, supporting growth in earnings over the year ahead and into 2024.
The company has also made significant progress with its Responsible SEGRO strategic priorities, de-risking and investing in the future of its business.
Looking ahead, the company believes there is a significant volume of capital ready to be deployed into the industrial and logistics sector due to its attractive fundamentals.
SEGRO will continue to respond tactically to changes in market conditions, but its long-term strategic focus is to ensure that its properties are of the highest quality and the most sought after, able to generate superior long-term growth and therefore command a valuation premium.
The company's 2022 full-year dividend increased by 8.2% to 26.3p.