• 2021 adj pre-tax profit jumps 20% to 356 mln stg
  • Key metric of EPRA Net Tangible Assets surges 40%
  • Cautious about fast-growing q-commerce tenants

Feb 18 (Reuters) – British warehousing group Segro (SGRO.L) said on Friday the growing popularity of rapid delivery e-commerce- known as “q-commerce” – was driving strong demand for warehouse space in European cities as its annual profit jumped 20%.

An e-commerce boom that gathered pace during the pandemic is helping warehouse companies like Segro to remain relatively resilient in the face of rising inflation which has driven up costs for many businesses.

Segro said demand had increased with the rise of rapid e-commerce, where companies like Deliveroo (ROO.L), Getir and Gorillas use smaller warehouse spaces to deliver groceries and other items within minutes.

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“The penetration rates (for rapid e-commerce) are really ramping up, and there has been a kind of structural shift,” Segro Chief Operating Officer Andy Gulliford said in an interview with Reuters.

“Some countries culturally were not that excited about, say, grocery retail online, and that has changed.”

Segro, which operates 90 million square feet of warehouse space — the equivalent of more than 1,500 soccer fields — is also cautious about the fast-growing sector, also called q-commerce, where “q” stands for quick.

“We are conscious that not all of them (q-commerce firms) will be successful … so we are being careful who we take into the space,” Gulliford said.

Victoria Scholar, head of investment at Interactive Investor said, “The rise of q-commerce “looks set to provide a major tailwind for Segro over the coming year.”

In a sign of rising interest in the rapid delivery business, U.S. private equity giant Blackstone (BX.N) this week said it was leading a nearly $24 billion recapitalisation of Mileway, Europe’s largest operator of urban warehouses. read more

London-headquartered Segro, which operates in Britain and seven other European countries, said adjusted pre-tax profit jumped 20% to 356 million pounds ($485 million) in 2021, while a measure that reflects the value of its buildings, called EPRA Net Tangible Assets, surged 40%.

($1 = 0.7342 pounds)

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Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sriraj Kalluvila and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.