London-listed industrial landlord Segro PLC logged 43% year-over-year growth in contracted headline rent for the nine months ended Sept. 30 to £52.0 million.
In a trading update, CEO David Sleath attributed the company's strong asset sales and leasing performance, for both new and existing space, to the structural trends of e-commerce and urbanization that "continue to underpin occupier and investor demand for prime warehouse space, notwithstanding near-term economic and political uncertainty in the U.K."
The real estate investment trust sold £106.2 million worth of land and assets during the third quarter.
The disposals, reflecting a 5.7% net initial yield, included part of the site of the former Nestlé factory in Hayes, West London, that is approved for residential development. Segro retains the portion that is zoned for industrial development, with plans to start building urban warehouses in 2019.
Of the £106.2 million in total gross proceeds from the sales, £60.5 million was generated from the sale of U.K. land, with £24.6 million and £21.1 million coming from the sale of big-box warehouse assets in continental Europe and the U.K., respectively.
Additionally, during the three-month period ended Sept. 30, Segro closed the off-market purchase of a recently completed, speculatively developed big-box warehouse in the Netherlands for £22 million. Segro's share of the purchase price amounted to £11 million.
The REIT also invested £25 million in its land bank, about half of which is associated with development projects in London; Bologna, Italy; and Lyon, France, expected to commence soon.