Segro signs its largest ever pre-let with Asics in Germany

Thu Oct 24, 2013 2:53am EDT

LONDON Oct 24 (Reuters) - British industrial property developer Segro said it had signed its largest ever pre-let deal by space with Japanese sports brand Asics, and kept its full-year outlook unchanged due to an improving occupier market.

The company said on Thursday it would construct a new 72,000 square metre European distribution centre for Asics in Krefeld, west Germany, which the sportswear manufacturer would occupy on a 10-year lease. The scheme is due to be completed in 2015.

It said the agreement was among six new pre-let deals it had signed with retailers and postal courier firms during the period July 1 to Oct. 23. These brought the total number of developments it had underway to 18, representing 14 million pounds ($22.6 million) a year of future rental income.

"These latest pre-let agreements are part of the continuing trend we are seeing from a range of companies who require quick and direct access to major urban conurbations," Chief Executive David Sleath said.

"This demand is partly being fuelled by the increase in e-commerce related activity and subsequent changes to traditional supply-chain models," he said.

Segro, which has been selling off sites in a bid to buy and develop more modern warehouses near major transport hubs as part of a plan it launched in 2011, said in a third-quarter update it had sold 408 million pounds of properties since July 1.

It said net debt as of Sept 30. had fallen to 1.9 billion pounds from 2.4 billion at the end of June and that it had about 1 billion pounds in cash and undrawn facilities. Its vacancy rate rose to 9.1 percent, from 8.9 percent at the end of June.

Shares in Segro closed at 336.7 pence on Wednesday, valuing the company at 2.51 billion pounds.