Warehousing firm Segro flags supply and cost pressures from Ukraine crisis

The FTSE 100 firm said contracted rental income, which excludes space taken back for redevelopment, grew about 39% to 25 million pounds ($32.69 million) for the three months ended March 31. ($1 = 0.7648 pounds)

Warehousing firm Segro said on Thursday that Russia's invasion of Ukraine added to its construction supply chain and inflationary woes, and could put upward pressure on rents.

London-headquartered Segro, which operates in Britain and seven other European countries, said the constraints would further "tighten the supply-demand imbalance" for its industrial assets - properties typically used for goods manufacturing and distribution. Demand has remained robust, leading to a strong start to the year, the company said.

The commercial real estate firm operates 90 million square feet of warehouse space — the equivalent of more than 1,500 soccer fields. Warehousing companies have benefited from cut-throat competition among rapid delivery firms as retailers rearrange supply chains to bank on centrally located fulfillment centers and smaller urban distribution centers.

"We have secured future opportunities for growth in some of our most supply-constrained urban markets through the acquisition of land, as well as income-producing assets with medium-term redevelopment potential," said Segro Chief Executive Officer David Sleath. The FTSE 100 firm said contracted rental income, which excludes space taken back for redevelopment, grew about 39% to 25 million pounds ($32.69 million) for the three months ended March 31.

($1 = 0.7648 pounds)