A commercial property giant says investment activity in the sector could be returning to normal as it posted high enquiry and rental levels. However, UK-based Segro also said weaknesses in the credit and real estate investment markets had hit UK commercial property development values.
In the UK and Europe, Segro is responsible for over 340,000 sq m of developments currently under construction, with just under half of them already pre-let or sold. Segro chief executive officer Ian Coull said:
“We are seeing some signs of investment activity returning generally and will, ourselves, be seeking to test the market in the coming months with a view to possible renewed recycling of capital – both in the UK and Europe.
“Despite the continuing negativity of sentiment in investment markets, occupier demand has held up well across all our key markets, with further healthy letting volumes achieved.
“Our balance sheet remains strong. Segro remains primed and well placed to use the current dynamic market conditions to drive value over the longer term.”
He added the firm would
“remain vigilant”
in managing risk exposure and had adopted a cautious approach on speculative developments in the UK and in Western Europe.
The firm’s first interim management statement of 2008 also revealed the it has invested c.£200 million in previously announced acquisitions and in its development pipeline, leaving the group with net debt of c.£2,010 million.
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