Segro has said it is looking to ‘test the market’ in the coming months and may consider both buying and selling in the UK and Continental Europe.

The UK REIT said it remained cautious, but it continued to see good occupier demand as well as some signs of investment activity.

In an interim management statement, chief executive Ian Coull said: ‘We are seeing some signs of investment activity returning generally and will, ourselves, be seeking to test the market in the coming months with a view to possible renewed recycling of capital – both in the UK and in Continental Europe.

‘The broad market-driven trends we highlighted in early March have continued through to the end of April. Occupier demand has continued at good levels in all our markets, but continuing weakness in the credit and real estate investment markets has maintained downward pressure on UK commercial property values.’

In its first management statement of 2008, Segro said it had completed over 1.8m sq ft of lettings across its portfolio in 2008. It has also completed 1.2m sq ft of developments, with 70% let, and is on site with a further 3.7m sq ft, with 50% let or sold.

Coull said: ‘Despite the continuing negativity of sentiment in investment markets, occupier demand has held up well across all our key markets, with further healthy letting volumes achieved and our overall occupancy level sustained at over 90%.

'Nonetheless, we remain vigilant in managing our risk exposure and have adopted a more cautious approach to speculative developments, particularly in the UK and in Western Europe.

'In practice, however, this may not have a major effect on the level of our development activity in 2008, given the amount of pre-lettings we have in the UK and the strong demand we are continuing to experience in Central Europe. ‘

Segro will hold its annual general meeting tomorrow.