SEGRO (LSE:SGRO) delivered a strong start to 2026, securing £23 million of new headline rent in the first quarter while maintaining high customer retention of 83% and portfolio occupancy of 94.8%. The company achieved significant rental uplifts on UK lease events and continued to take a disciplined approach to development. Projects currently underway or in advanced negotiation represent £73 million of potential rent, reflecting an expected yield of 7.6%. Management also reaffirmed its full-year development capital expenditure guidance.
Data Centre Expansion Gains Momentum
The group made further progress in its data centre strategy, including signing a pre-let agreement for a 30,000 square metre powered shell facility in Slough. It also secured planning permission for a 56MW fully fitted data centre in West London and continues to advance related power infrastructure upgrades. Alongside this, SEGRO recycled capital through £106 million of asset disposals completed above book value, with additional sales already agreed. The company reported a strong balance sheet, with a loan-to-value ratio of 31% and £1.5 billion in available liquidity, supporting its ongoing expansion plans despite geopolitical uncertainty.
Financial Outlook and Key Considerations
SEGRO’s outlook is supported by improving financial performance, including a rebound in revenue and profits, as well as manageable leverage levels. Technical indicators also point to a supportive trend in the stock. However, valuation remains moderate relative to other REITs, and there are some concerns around earnings volatility and a recent mismatch between cash flow and reported earnings. Despite these factors, recent guidance and a well-defined development pipeline provide a positive medium-term outlook, albeit with execution risks.
More about SEGRO plc
SEGRO plc is a UK-listed real estate investment trust specialising in the ownership, development, and management of modern industrial properties, warehouses, and data centres. Its portfolio, valued at approximately £22 billion, spans the UK and seven other European countries, focusing on key urban areas and major logistics and digital infrastructure hubs. The company serves a diverse customer base including retailers, manufacturers, logistics operators, and technology firms.
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