Segro sets sights on multi-storey warehouses in London

The only way is up for London warehouses, the boss of property developer Segro forecast on Friday, as he warned industrial land is running low.

David Sleath said: “I think we are going to see a lot more talk about taller buildings. There’s no reason why we couldn’t see plans for two, three or four-storey warehouses this year.”

He added that sheds in London are typically on one floor and around 32 feet high. That could rise to 98 feet, following a trend in Asia for multi-storey properties.

The potential shift comes amid competition for land from housebuilders.

Segro also flagged that demand for space from retailers has held up since the Brexit vote.

Rental income in 2016 increased to £250.7 million from £232.7 million, boosted by contract wins with retailers such as Amazon.

Pre-tax profit fell to £426.4 million from £686.5 million, owing to much smaller rises in property values than in previous years.

Sleath welcomed the fact business rates have “not been too penalised” in the out-of-town industrial sector, unlike in London, where many firms will be slapped with huge rises from April.

The shares were up 16p to 499p.