Shares in property group SEGRO PLC (LON:SGRO) were falling in a rising market early doors as the company announced plans to raise £340mln.
The shares were off just over 1% at 450p as the company said it would place up to 74.8mln shares, equivalent to around 9.9% of the shares currently in issue.
The funds raised have been earmarked for development of the company’s pipeline of pre-let opportunities.
The company said an investment of £199mln to complete the current development pipeline would generate £32mln of rent when fully let, and 76% of the space has already been let or has been agreed to be let.
The company has identified an additional potential investment of £140mln on development projects associated with pre-let agreements that are expected to commence in the next six to 12 months, while other pre-let developments likely to be added in the coming months in respect of land already controlled by SEGRO.
The company also highlighted a further potential £117mln of investment in speculative urban warehouse development projects, most of which management expects to commence in the next six to 12 months, subject to continuing favourable occupier markets
Occupier demand for modern warehouse space in Europe's main urban industrial and big box logistics markets is so far proving resilient in the aftermath of the UK's referendum on its membership of the European Union, SEGRO said.
The company, once known as Slough Estates, said supply of modern warehouse space remains constrained, particularly in the Greater London, South East and Midlands regions of the UK, and in major continental European cities and logistics hubs.
In an accompanying trading update, chief executive David Sleath said occupational demand for modern, well-located warehouse space has continued to be strong over the past two months.
“Although it is too early to assess the longer term impact of the UK vote to leave the EU, it has not yet had a material impact on our operating business: our vacancy rate remains low and we have seen further net absorption of existing space. In addition, since 30 June 2016, we have signed unconditional pre-let agreements for 188,600 sq m [square metres] of space across Europe, which will generate £6.0 million of new annualised headline rent and the pipeline of near-term opportunities remains encouraging,” Sleath added.