Segro Plc, Britain's largest listed industrial property developer, shook off wider Brexit concerns on Friday, raising £325 million (€387.5m) to develop new logistics warehouses as "e-retailing" grows across Europe.
Property was one of the sectors hardest hit by Britain’s June 23rd referendum to leave the European Union, with companies that own offices and retail blocks seeing their stocks plunge and investors pulling money from commercial funds.
Segro’s share placement took place at a 4.4 per cent discount to the company’s Thursday closing price of 455.2 pence. One of its bookrunners had earlier said investors were buying at discounts of 4.4 to 5.5 per cent.
Both current and new investors bought shares, a company spokeswoman said, adding this was indicative of a strong appetite to fund warehouse development.
Warehouses
Some types of commercial property have continued to do well despite fears over the impact of Brexit on the British economy and the financial services industry in London.
Segro has seen demand for warehouses continue to rise, with retailing and delivery companies needing more space as they expand their door-to-door services to cater for an increasing number of people going online to buy everything from clothes to air conditioners.
Over the last 10 years, the retail sector has accounted for over 40 per cent of all the warehouse space rented, according to property consultant Savills Plc.
According to a CBRE index that focuses on the modern warehousing property industry in the UK, total returns for logistics in the first six months outperformed industrial and property sectors collectively.
Segro, which operates mainly in the UK, France, Germany and Poland, said it had not seen any impact on occupational demand since the vote and that it had signed pre-let deals that will generate annualised rents of £6 million since June-end.
Recent data showed British consumer morale improved last month after suffering in July.The Brexit vote is expected to considerably reduce commercial property development in the UK, as investors forego riskier projects in an uncertain market.
– Reuters
