SEGRO (LON:SGRO) reported what management described as a “very strong year” in 2025, pointing to record leasing activity, like-for-like rental growth, and improving occupier sentiment that has carried into early 2026. Presenting full-year results, Chief Executive David Sleath said momentum strengthened in the second half of 2025 and has continued this year, with “strong” inquiry levels and an active pipeline for both existing space and pre-lets.
Record leasing and reversion drive like-for-like growth
SEGRO signed a record £99 million of new headline rent in 2025, including £33 million of development signings. Within the existing portfolio, the company delivered £37 million of reversion uplifts from lease renewals and rent reviews, contributing to 6% like-for-like net rental income growth.
Financial results: EPS and dividend up 6%, NAV per share up 2%
Chief Financial Officer Susanne Schröter said adjusted earnings per share rose 6.1%, driven by higher net rental income and cost discipline. The board declared a full-year dividend of £0.311, also up 6.1% year-over-year.
Net rental income increased 8.6%, reflecting four main factors:
- 6% like-for-like rental growth in both the U.K. and continental Europe
- £31 million contribution from development completions
- Neutral net impact from acquisitions and disposals due to sales in 2025 and the full-year effect of 2024 disposals
- Other items including takebacks for redevelopment, surrender premiums, and FX effects
Portfolio valuation grew 1% on a like-for-like basis, which the company said was the first year since the start of 2022 that both the U.K. and continental Europe delivered positive valuation movements. Adjusted NAV per share increased 2%. Equivalent yield on the portfolio was 5.5%.
SEGRO ended 2025 with loan-to-value of 31% and net debt to EBITDA of 8.4x, down from 8.6x. Schröter highlighted an average debt maturity of 6 years and around £1.9 billion of undrawn revolving credit facilities and term loans. A £650 million bond maturing in March is planned to be refinanced through an undrawn term loan signed in the second half of 2025, with any remainder drawn from the RCF.
UK and continental Europe: improving activity, selective development
In the U.K., James Craddock said 2025 was the strongest year for logistics take-up since the pandemic at around 33 million sq ft. However, pre-let activity remained low, with take-up driven by customers’ immediate needs. SEGRO’s U.K. occupancy rose 50 basis points to 93.1%, supported by a development deal at SEGRO Smart Park Derby and leasing one of two speculative sheds at SEGRO Park Coventry.
Craddock said West London markets—Heathrow, Park Royal, and Slough—remain a key strength, representing a large share of SEGRO’s U.K. exposure and benefiting from deep customer relationships. He added that inquiry levels have improved materially over the past two to three months across both logistics and urban assets, with retailers, food, e-commerce, and general distribution particularly active.
In continental Europe, Marco Simonetti said 2025 leasing activity outperformed the pre-pandemic average, with Q4 the strongest quarter in three years. SEGRO signed over 180 deals and reached 98% occupancy across the region, with some countries fully occupied. Simonetti highlighted several lettings above 30,000 square meters, including ID Logistics in the south of France, JD.com in Germany, GXO in Milan, and H&M in Poland.
On development, Simonetti said the second half of 2025 was SEGRO’s best ever in continental Europe, with nine large pre-lets totaling over 300,000 square meters. He also said speculative projects in Germany, Spain, and Poland were at high occupancy before completion, and that in Warsaw SEGRO had fully let space before starting construction.
Capital allocation: development prioritized, disposals expected to rise
SEGRO invested £413 million into development in 2025, including £387 million of development capex (including infrastructure) and £26 million of land acquisitions. Investment was lower than originally expected due to a slower pre-let market in the first half, leading to lower completions: the company delivered space equivalent to £29 million of headline rent. Management said delivered space was more than 90% leased by year-end.
Schröter guided to £450 million to £550 million of development capex in 2026, depending on the pace of new project starts. Guidance includes around £150 million of infrastructure investment for U.K. logistics parks and power upgrades supporting the data center pipeline.
SEGRO said it expects disposals in 2026 to be at or above the upper end of its longer-term run rate of 1% to 2% of portfolio value, as it recycles capital into higher risk-adjusted return opportunities. Management noted that 2025 disposals were fewer than 2024, but included targeted sales above book value of smaller, non-core assets.
Data centers: expanding strategy toward “fully fitted” projects
A major portion of the call focused on data centers, which SEGRO described as an “exceptional opportunity.” Sleath said demand growth is being driven by cloud adoption and AI inference workloads, with hyperscalers preferring capacity near major population centers and financial hubs within established and emerging European availability zones. SEGRO said it is avoiding secondary and tertiary locations, focusing instead on supply-constrained markets that overlap with its prime industrial footprint.
SEGRO said its powered land bank across key European availability zones now totals more than 2.5 GW. This includes 0.5 GW of operational capacity (mainly in Slough), a “clear route” to another 1.1 GW that can be pre-leased over the next three years, and a further 900 MW of power supply in process for medium-term growth, plus additional longer-term opportunities.
Management highlighted the simplified planning zone (SPZ) in Slough as a competitive advantage, stating it was renewed at the end of 2024 and runs for 10 years. The company also said it has not lost a place in grid connection queues and has been able to lock in positions early, including planning for upgrades at Uxbridge Moor Power Station.
In 2025, SEGRO said it strengthened its in-house data center and energy team, formed a joint venture with Pure Data Centres to access technical expertise for fully fitted assets, completed a powered shell for Iron Mountain on the Slough Trading Estate, secured a building permit for its first French data center, and submitted a planning application for a Park Royal JV project expected to be determined in the first half of the year.
While SEGRO expects to deploy capital across powered shells, fully fitted data centers, and powered land sales, management said it is increasingly focused on fully fitted projects on certain sites, which it believes can generate development profits of up to three times those of equivalent powered shells. SEGRO emphasized it will not invest in servers, racks, or compute capacity, and plans to proceed on the basis of pre-lets to major hyperscalers before construction, targeting long-term net leases and using JV structures and project-level financing to limit cash equity requirements.
Schröter said the approach “would not require an equity raise” under the currently envisaged strategy, with equity contributions supported by SEGRO’s contribution of powered land and capex funded through joint venture project debt. Sleath added SEGRO expects to bring forward one or two data centers per year for the next several years and intends to actively recycle capital from stabilized assets over time.
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.
