ii view: warehouse owner Segro breaks records

Full-year results to 31 December

• Adjusted pre-tax profit up 8.3% to £509 million 
• Adjusted Net Asset Value (NAV) up 2% to 925p per share
• Final dividend of 21.4p per share
• Total 2025 dividend up 6.1% to 31.1p per share
• Net debt of £5.9 billion, up from £5 billion at end of 2024
• Occupancy rate up 0.9% to 94.9% 

Chief executive David Sleath said: 

"Segro delivered a strong performance in 2025. We signed a record level of new rent through the excellent asset management of our existing portfolio and the signing of several large pre-lets, particularly in the second half of the year. This momentum has continued into 2026.”

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ii round-up:

Property giant Segro (LSE:SGRO) today detailed a record annual gain in new rents as it flagged increased enquiry levels and active negotiations from tenants, ranging from industrial to logistics and data centre occupiers. 

Demand for new and existing space was responsible for £99 million of new headline rents, up from £91 million in 2024. A 6% gain in like-for-like net rental income helped push annual adjusted pre-tax profit up 8.3% to £509 million, the first time it's been above £500 million. A final dividend of 21.4p per share, payable to eligible shareholders on 8 May, takes the total payment for 2025 up 6.1% to 31.1p per share. 

Shares in the FTSE 100 company rose 2% in UK trading having come into these latest results up by a tenth so far in 2026. That’s similar to fellow industrial property provider Tritax Big Box Ord (LSE:BBOX). The FTSE 100 index is up 7% year-to-date. 

Segro owns or manages properties worth around £22 billion. These include modern large warehouses used by online retailers, industrial properties and fully fitted data centres.

An occupancy rate of 94.9% is up from 94% in 2024, with tenants retained rising to 82% from 80% a year ago. 

Development projects under construction or in advanced negotiations equate to £62 million of potential rent. 

Segro ambitions include the signing of one to two datacentre leases per year, with power available today of 300 Megawatts expected to rise to around 2.5 gigawatts come 2035.  

Broker UBS reiterated its ‘buy’ stance on the shares following the announcement.

ii view:

Started in 1920, property company Segro is now the UK’s biggest Real Estate Investment Trust (REIT) by stock market value. Segro owns or manages a portfolio of a 10.9 million square metres of space (117 million square feet). Group properties are located in and around major cities and at key transportation hubs in the UK and seven other European countries. 

Urban warehouses provide its biggest asset type at 55% as of late July. That’s followed by big box warehouses at 35%, data centres 8%, and other uses of industrial land at 2%. Geographically, the UK comes in at 63%, Germany and France at 11% each, with other European countries the balance of 15%. Group tenants include Amazon, Tesco, British Airways and Federal Express. 

For investors, an uncertain economic outlook in the UK and Europe includes concerns about stretched government finances and their potential impact on interest rates. An occupancy rate of 94.9% is still just below 2023’s 95%. Fellow REITs such as British Land Co (LSE:BLND) are now taking an interest in logistical properties, while a forecast dividend yield of around 3.9% compares to over 6% at fellow REITs Land Securities Group (LSE:LAND) and Primary Health Properties (LSE:PHP). 

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To the upside, exposure to expected growth in datacentres now sits alongside the structural themes of e-commerce and urbanisation. A current share price of around 811p is below the group’s estimated adjusted NAV of 925p per share as of late December. The annual dividend payment has risen for more than 10 consecutive years, while geographical diversity exists given a portfolio of European properties.

For now, and despite ongoing risks, this European property giant continues to remain worthy of its place in many diversified investor portfolios.  

Positives: 

• Diversity of both customer or tenant type and geographical location
• Progressive dividend payment

Negatives:

• Uncertain economic outlook
• Increased competition

The average rating of stock market analysts:

Buy