SEGRO (LON:SGRO) used an investor presentation to argue that its standalone strategy can deliver significant value for shareholders, highlighting its industrial and logistics development pipeline, a growing European data center opportunity and what it described as a strong balance sheet capable of funding growth without an equity raise.
The presentation also served as a direct response to a proposal from Prologis, which SEGRO described as “opportunistic, one-sided and inadequate.” David, who led the presentation, said the approach came during a period of share price weakness and before expected value creation from SEGRO’s development pipeline and data center projects.
SEGRO Highlights Scarce Urban and Logistics Portfolio
The company said its operating platform, local market expertise and relationships with authorities and communities have supported strong like-for-like rental growth and helped it progress complex planning and development projects. David cited examples including Hayes near Heathrow, Park Royal, Interporto Bologna and Parc des Petits Carreaux.
SEGRO said its industrial and logistics land bank offers GBP 282 million of future income based on current rents, equivalent to almost 40% of its current rent roll. It also identified GBP 147 million of potential rent from land options. Together, the existing land bank and optioned land represent nearly GBP 430 million of potential additional income, according to the presentation.
David said the company expects to start construction on projects representing more than GBP 150 million of potential rent within the next two years. CBRE calculated the undiscounted value of the industrial and logistics pipeline at GBP 1.6 billion, using current rents and costs.
Data Center Pipeline Expands
Andrew Pilsworth, Managing Director of Data Centres and Strategic Partnerships at SEGRO, said European data center demand is growing rapidly, driven by cloud adoption and AI inference workloads. He said SEGRO is focused on core availability zones where proximity to cities, fiber infrastructure, power and planning are critical.
The company said it has built a powered land bank with more than 3.0 GVA of power capacity across key European markets, up 0.5 GVA since its previous update. Of that, 0.3 GVA is available to lease now, with a further 1.1 GVA available by 2033. SEGRO also has another 1.1 GVA of additional power that has not yet been modeled or valued by CBRE.
Pilsworth said SEGRO plans to unlock 14 data center sites over the next seven years, potentially delivering around GBP 460 million of additional rent and almost 700 MW of IT capacity. The company expects most planned sites to be delivered as fully fitted data centers through joint ventures, including projects with Pure Data Centres in West London and Paris.
CBRE estimated the undiscounted value upside from SEGRO’s data center pipeline at GBP 2.5 billion, before considering the additional 1.1 GVA of power not yet included in the valuation. Pilsworth said the pace of the pipeline depends on power, planning and leasing rather than capital availability.
CFO Says SEGRO Is Not Capital Constrained
Susanne Schroeter, CFO of SEGRO, said the company can deliver its strategy without raising equity while maintaining balance sheet discipline. She said SEGRO’s current and near-term development pipeline stands at GBP 90 million, which she described as the highest level ever.
SEGRO narrowed its 2026 capital expenditure guidance to GBP 500 million to GBP 550 million, at the top end of its earlier range. Schroeter said the company is funding growth through capital recycling, with GBP 308 million of disposals completed or exchanged year to date above book value.
Schroeter said SEGRO’s pro forma adjusted net asset value per share is GBP 9.05, reflecting asset value movements between Dec. 31 and June 30. The reviewed NTA per share is expected to be published with half-year results.
The CFO said SEGRO has three funding levers: a strong investment-grade balance sheet, capital recycling and third-party partnerships. She also highlighted a new U.K. Big Box joint venture, described as a GBP 1 billion structure seeded with sites at Radlett, Northampton and Coventry.
SEGRO said it sees more than GBP 1 billion of income upside on top of GBP 755 million of current passing rent. Schroeter said adjusted earnings per share are expected to rise from GBP 0.366 at the end of 2025 to GBP 0.50 by 2030, supported by rental growth, development completions, cost efficiencies and fee income.
Company Rejects Prologis Proposal
David argued that the Prologis proposal undervalues SEGRO by failing to reflect its current NAV, industrial and logistics pipeline, data center opportunity and other components of value. He said shareholders would be exchanging full ownership of SEGRO’s embedded upside for a smaller share of a larger company with different asset weightings.
He said SEGRO’s 3.0 GVA data center opportunity represents about five times the relative exposure of Prologis’ disclosed 5.6 GVA power bank when measured against market value.
SEGRO said CBRE attributed GBP 1.6 billion of value upside to its industrial and logistics pipeline and GBP 2.5 billion to its near- and mid-term data center pipeline. David also said other components, including cluster premiums and avoided transaction costs for an acquirer, amount to more than GBP 1.60 of value per share.
“SEGRO is a unique business,” David said, adding that the company has the capabilities and balance sheet to unlock value itself.
About SEGRO (LON:SGRO)
SEGRO is a UK Real Estate Investment Trust (REIT), and a leading owner, asset manager and developer of modern warehousing, industrial property and data centres across the UK and seven other European countries.
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