- Record New Headline Rent: GBP 99 million new headline rent signed in 2025, including GBP 33 million in development signings.
- Strong Financial Growth: 6% like-for-like net rental income growth, 6.1% adjusted EPS increase, and a 36% uplift on rent reviews.
- Portfolio Occupancy: U.K. occupancy rose to 94.9%, driven by Continental Europe, with 50 bps improvement in U.K. logistics markets.
- Data Center Expansion: 2.5 gigawatts of power-enabled land secured, with development yields of 7-8% and GBP 346 million land bank potential.
- CapEx and Reversionary Potential: GBP 413 million invested in 2025 developments, GBP 152 million reversionary growth potential, and GBP 450-550 million 2026 CapEx guidance.
Operational Highlights
Susanne Schroeter, CFO, highlighted that 2025 was defined by strong operational execution, balance sheet discipline, and improving momentum in key markets. The U.K. business saw 33 million square feet of logistics occupational activity, with vacancy rates nudging down. The company's U.K. occupancy improved by 50 basis points to 93.1%. In Continental Europe, leasing activity outperformed the pre-pandemic average, with a strong performance in existing portfolios and development pipelines.
Portfolio Valuation and Balance Sheet
The portfolio valuation grew by 1% on a like-for-like basis, with ERV growth of 2.3% across the group. The balance sheet remains strong, with loan-to-value at 31% and net debt-to-EBITDA at 8.4x. The company's development pipeline represents GBP 62 million of potential rent, with 47% already leased.
Growth Prospects
SEGRO is well-positioned to benefit from the growth in data centers, with a portfolio of powered land across key European availability zones, totaling over 2.5 gigawatts. The company has made progress on its data center strategy, including securing planning approvals and initiating infrastructure works. Analysts estimate next year's revenue growth at 5.8%. The company's growth prospects are driven by its high-quality reversionary potential, upside from industrial and logistics development, and the data center opportunity.
Valuation
Using the current P/E Ratio of 25.75, it appears that the market has priced in a certain level of growth. The Dividend Yield of 3.67% is attractive, and the company's ability to deliver a growing dividend is supported by its strong financial performance. The EV/EBITDA ratio of 33.02 suggests that the company's valuation is sensitive to changes in its operating performance.