SEGRO PLC
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2026
STRONG H1 2026 PERFORMANCE SUPPORTED BY POSITIVE MOMENTUM IN OCCUPIER MARKETS
Headlines:
- 5.3 per cent like-for-like net rental income growth, underpinning 6.6 per cent earnings per share growth.
- £24 million of new pre-lets signed during the period, with a record level of development projects in the current and near-term pipeline.
- Further progress with data centre strategy: 0.5GVA added to strategic power bank, planning approval received for our first fully fitted data centre and pre-let conversations progressing well.
- Disciplined capital allocation to drive performance: £308 million of disposals completed or exchanged, above book value so far in 2026, development capex now expected to be £500-£550 million.
Commenting on the results David Sleath, Chief Executive of SEGRO, said:
“SEGRO has delivered a strong set of results in the first half of 2026. We secured £53 million of new headline rent and have a record pipeline of development projects under construction or in advanced negotiations, underpinned by improving occupier demand for high-quality, well-located industrial, logistics and data centre space.
“We remain focused on disciplined capital allocation, recycling assets above book value and investing in higher-return opportunities. This along with continued cost discipline and our focus on ensuring we have a capital-efficient corporate structure, is expected to support ongoing growth in earnings and dividends in the years ahead.”
Strong operational and financial performance
- £53 million of new headline rent secured (H1 2025: £31 million), including £27 million of leasing and reversion capture in the existing portfolio and £26 million of development signings (£24 million of which were new pre-lets).
- Earnings growth supported by 5.3 per cent like-for-like net rental income growth, with the UK delivering an average uplift on rent reviews and renewals of 44 per cent, and a reduction in our total cost ratio (excluding share based payments) to 17.4 per cent.
- Estimated Rental Value (ERV) growth of 2.3 per cent in the UK and 1.1 per cent in Continental Europe, overall Group at 1.8 per cent.
- Occupancy maintained within target range of 94-96 per cent at 94.5 per cent (FY 2025: 94.9 per cent).
- Development completions added £12 million of potential new headline rent, 58 per cent of which is already leased, delivered at an average development yield of 6.5 per cent.
- Adjusted pre-tax profit increased by 6.3 per cent to £268 million (H1 2025: £252 million) and Adjusted earnings per share increased by 6.6 per cent to 19.3 pence (H1 2025: 18.1 pence).
- Interim dividend increased by 4.5 per cent to 10.14 pence (H1 2025: 9.7 pence).
- EPRA NTA per share down 2.5 per cent to 902 pence (31 December 2025: 925 pence), consistent with the 905 pence proforma Adjusted NAV we announced in our H1 2026 Trading Update after adjusting for profits, dividends and currency movements in the period. The portfolio valuation decreased 1.2 per cent (H1 2025: 0.5 per cent increase) driven mostly by the application of higher yields by SEGRO’s incoming UK valuer.
Further progress with data centre strategy
- Added 0.5GVA to our power bank, taking the power bank to 3.0GVA of potential capacity across key European Availability Zones.
- Signed a powered shell pre-let on the Slough Trading Estate and secured planning for our first fully fitted data centre lease in Park Royal, London.
- Announced the formation of a second joint venture with Pure Data Centres Group (“Pure DC”) to build our first fully fitted data centre on the Continent in Paris.
Substantial growth opportunity
- SEGRO’s high-quality portfolio is focused in some of Europe’s most attractive, supply-constrained industrial, logistics and data centre markets. It is therefore well-positioned for growth as occupier activity levels continue to increase, supported by long-term structural drivers and limited availability of land and power.
- Existing portfolio offers £157 million of embedded income growth opportunity: £101 million of rent reversion (£24 million of which remains available to capture in 2026) and £56 million of rent available through letting vacant space.
- Record level of development projects in the current and near-term development pipelines: £90 million of potential rent, 75 per cent of which is associated with pre-lets, offering an attractive 7.4 per cent development yield.
- Significant data centre income and value creation opportunity from one of Europe’s largest banks of powered land (3.0GVA, 1.4GVA of which is targeted to lease over the next seven years), focused on established and emerging European Availability Zones.
- This underpins an expected Adjusted EPS progression from 36.6 pence in 2025 to c.50.0 pence by 2030.
Clear capital allocation priorities, self-funding development pipeline and increased use of strategic capital
- Development continues to offer the most attractive risk-adjusted returns for our capital: £213 million deployed so far in 2026 through £176 million of capex and £37 million of targeted land acquisitions.
- Development capex for 2026 expected to be £500 to £550 million, including c.£150 million of infrastructure spend.
- Portfolio performance and future growth supported through active capital recycling: we disposed of £213 million of assets and land above book value during H1 2026, with a further £95 million exchanged and due to complete later in 2026.
- Announced on 1 July 2026 that we have agreed heads of terms for a 50:50 UK big box joint venture with a major international capital partner. This will create a capital-efficient structure to develop three UK logistics parks, reduce land held on balance sheet and generate an attractive fee income stream. SEGRO will contribute a c.£1 billion seed portfolio of standing assets and land at a price in line with December book valuations.
Strong balance sheet and low average cost of debt
- Strong balance sheet with moderate leverage: Group LTV of 31 per cent at 30 June 2026 (31 December 2025: 31 per cent) and net debt:EBITDA reduced to 8.3 times (31 December 2025: 8.4 times).
- Average cost of debt 2.8 per cent at 30 June 2026 (31 December 2025: 2.6 per cent) after successfully refinancing all of our 2026 debt maturities at Group level and within SELP through term loans, our RCF and the issuance of a 5-year €500 million bond for our SELP JV at 3.875 per cent. Our SELP JV also issued a 7-year €650 million 4.0 per cent bond using the proceeds to partially repurchase a bond maturing in 2027.
OUTLOOK
Looking ahead, the structural drivers of demand across SEGRO’s markets are compelling, supported by the growth of major European cities and the continued need for digital connectivity, operational efficiency, and resilient supply chains. With occupiers continuing to prioritise prime locations and modern, sustainable space and with available land being in short supply, we are well positioned to benefit from the favourable supply-demand dynamics across our key markets, which should support further market rental growth and development activity.
Our unique, irreplicable portfolio, exceptional land bank, and one of the largest data centre pipelines in Europe results in a substantial embedded growth opportunity, including:
- £157 million of additional rental income from our standing portfolio via rent reversion (£101 million) and leasing vacant space (£56 million);
- £313 million of potential rent from delivering industrial and logistics projects on our land bank, with an average development yield of 7 to 8 per cent;
- £464 million of potential rent from delivering data centres using the 1.4GVA of power that we expect to lease in the next seven years, with a further 1.1GVA of longer-term opportunity.
We intend to remain disciplined in deploying capital, focusing investment into opportunities with attractive risk-adjusted returns and using selective disposals to drive portfolio performance and to help fund our investments. Cost discipline and balance sheet strength will continue to underpin this approach.