Broker snap: Reasons to remain cautious at Segro

30th Mar 2011 12:58

After five "Golden Years" between 2005-10, property company Segro is now facing a period of intensive asset management challenges, according to Credit Suisse."We envisage Segro's efforts to reduce its high vacancy level (12% at group level) will increasingly prompt leasing deals that undermine its own estimated rental value," said analyst Steve Bramley-Jackson.He also highlights that logistics represents just 6% of the UK portfolio at a time when investment and occupational demand is strong.The broker also has some regional allocation concerns, saying that some weakening economies run the risk of being counter-productive. 2011 and 2012 earnings per share estimates are cut by 4% and 6%, respectively.A 'neutral' rating is kept, but the target price is upped to 344p, from 318p.BC