Â鶹ӳ»­

Segro, the UK-based logistics company, expects demand for industrial space to weaken in the months ahead while property values will decline further until the debt markets stabilise. 'While we have made good progress with our own letting and development programme, we are cautious about the outlook both for occupier markets and investment markets,’ the company said in an interim statement for the three-month period to end-September.

The company said it had 'significantly reduced' its development starts and is now focusing on areas of highest market demand. However, it said it would ‘continue to pursue opportunities to generate cash from disposals where acceptable prices can be achieved.’

Segro's property portfolio fell 10.4% in value during the first half of the year. Segro's next valuation will not be until 31 December, but the company pointed out that the Investment Property Databank (IPD) indicates that capital values of UK industrial properties have declined by 6.1% over the third quarter of 2008. 'Due to the relative scarcity of transactions in the market, the IPD index may not be fully reflective of the true market,' the company said.

Segro's overall vacancy rate was 9.5% at end September, a slight increase from the 9.3% seen at end June. Segro chief executive Ian Coull said: 'Our carefully planned development programme which has been concentrated in attractive markets, coupled with our active approach to asset and customer management, has enabled us to continue delivering excellent letting results. Nonetheless we are cautious about the near term outlook for our markets and for property values.'

Coull added that he believes there will be some 'very attractive' investment opportunities in the coming years. 'We are managing the business in a cautious and disciplined manner to ensure that Segro is well-placed to take full advantage of such opportunities.'