At around 1pm on 26 July something fundamental shifted in the world of U.K. property: Segro took over from Landsec as the largest listed property company.
It may not be permanent. It may even have changed by the time you are reading this. But at that point Segro’s market capitalisation rose to £6.78B while Landsec’s slipped to £6.77B.
Landsec had been the largest U.K. listed property company by market capitalisation for more than two decades. It has a much bigger portfolio, at £14.1B compared to Segro’s £8.8B. And it owns famous assets like the Piccadilly Lights and Bluewater shopping centre.
But the stock market currently puts a much higher value on the assets of Segro, which is a specialist in the white-hot industrial and logistics sector, as opposed to the out-of-favour worlds of London offices and large shopping malls.
Certainly in the near term the expectation is that Segro’s rents and values will show better growth than those of Landsec. Segro’s shares trade at a 10% premium to its net asset value, whereas Landsec’s shares trade at a discount of a third.
In the past year Segro’s share price has risen 28% to 666p and Landsec’s has fallen by 14% to 919p.
Segro said in half-year results on the morning of 26 July that the value of its assets had risen by 6% during the six months to 30 June, and that like-for-like net rental income had grown by 2.3%.
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