- Segro announced in the first quarter it contracted £16.3m of new rent (Q1 2016: £8.6m), including £10.6m of pre-lets (Q1 2016: £3.6m).

The vacancy rate remained low at 5.6% (31 December 2016: 5.7%), mainly reflecting the impact of acquisitions and disposals (+0.3%), offset by development lettings (-0.3%) and by net take-up of existing space (-0.1%).

32,500 sq m of speculative developments were completed in the first quarter, capable of generating headline rent of £1.6m (SEGRO share) when fully let, of which 40% was secured at 31 March 2017. No pre-let developments were completed in the period.

During the first quarter, the company approved or commenced the development of 291,200 sq m of space, most of which were projects categorised in the near-term development pipeline at the end of 2016.

These projects represented £13.6m of potential headline rent, of which 76% is pre-let, and include a 46,000 sq m extension to the Leroy Merlin facility in Milan and a 46,600 sq m facility for a discount supermarket chain in Lyon.

In addition, the company agreed to construct a 46,300 sq m warehouse near Milan, also for a discount supermarket chain, which was not in the near-term pipeline at 31 December 2016.

At 31 March 2017, 799,200 sq m of new space was approved or under development, of which 68% (by headline rent) is pre-let (31 December 2016: 540,480 sq m, 61% pre-let). These projects equate to potential headline rent of £39m (31 December 2016: £26.6m), reflecting a projected yield on total development cost of approximately 8%.

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