Segro to Raise $827 Million as Virus Boosts Warehouse Demand

(Bloomberg) -- Segro Plc is raising 650 million pounds ($827 million) in a bet the coronavirus pandemic will boost online shopping and demand for the U.K. landlord’s warehouses.

The proceeds of the share placing will fund new developments in the U.K. and Europe as retailers look for new warehouses to serve online orders, according to a statement Tuesday. The capital raise, which includes a placing and a retail offer, represents about 7% of the company’s share capital.

“The Covid-19 pandemic has accelerated the adoption of technology and e-commerce across society,” Chief Executive Officer David Sleath said in the statement. “This is likely to help drive strong occupier and investor demand for modern, high-quality warehouses.”

Demand for warehouses was already booming before the pandemic, propelling Segro to become the most valuable commercial landlord listed in the U.K. Now the virus has prompted late adopters to shop online, pushing major retailers including Amazon.com Inc. to boost their warehouse footprints.

The company plans to invest more than 1 billion pounds into development and land acquisitions through 2021, according to the statement. Segro has already spent 184 million pounds on land this year, a figure that will double once pending deals are completed.

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