Segro Plc (SEGXF) Q1 2026 Earnings Call Transcript
SEGRO is a UK Real Estate Investment Trust (REIT), listed on the London Stock Exchange and Euronext Paris, and is a leading owner, manager and developer of modern warehouses, industrial property and data centres. It owns or manages 10.8 million square metres of space (116 million square feet) valued at £21.4 billion serving customers from a wide range of industry sectors. Its properties are located in and around major cities and at key transportation hubs in the UK and in seven other European countries. For over 100 years SEGRO has been creating the space that enables extraordinary things to happen. From modern big box warehouses, used primarily for regional, national and international distribution hubs, to urban warehousing, located close to major population centres and business districts, it provides high-quality assets that allow its customers to thrive. A commitment to be a force for societal and environmental good is integral to SEGRO's purpose and strategy. Its Responsible SEGRO framework focuses on three long-term priorities where the company believes it can make the greatest impact: Championing Low-Carbon Growth, Investing in Local Communities and Environments and Nurturing Talent. Striving for the highest standards of innovation, sustainable business practices and enabling economic and societal prosperity underpins SEGRO's ambition to be the best property company.
SEGRO delivered a strong 2025 with record rent, solid earnings growth, improving occupier demand, and an expanding data center strategy supported by a disciplined balance sheet.
⭐ Key Highlights
✔Positive Signals
- Record GBP 99 million of new headline rent signed in 2025.
- 6% like-for-like net rental income growth and 6% EPS/dividend growth.
- Occupier inquiry levels strong with improving deal momentum into 2026.
- Progress in data center strategy: powered land >2.5 GW and JV partnerships for fully fitted centers.
- Strong balance sheet with LTV at 31% and net debt/EBITDA at 8.4x; disciplined capital allocation.
✖Negative Signals
- Market uncertainty in 2026 due to geopolitics; outcomes still uncertain.
- Data center capex and timing uncertainties; reliance on JV structures and project debt.
- London urban vacancies remain a risk in the near term, though West London shows strength.
- Development pipeline requires pre-lets; slower pre-lets could impact near-term CapEx.
- Potentially higher disposals in 2026 subject to market conditions.
📊Financial Results
- Net rental income grew 8.6% in 2025.
- Adjusted profit before tax rose 8.3% year over year.
- Portfolio value up 1% on a like-for-like basis; ERV growth 2.3% (UK 3.1%, Spain 3.2%, Germany 2.4%).
- EPRA cost ratio improved; admin expenses reduced by EUR 3 million.
- Dividend maintained with full-year dividend of 31.1p, up 6.1% y/y.
🔮Future Guidance
- 2026 development capex guidance of EUR 450–550 million, depending on new projects.
- Like-for-like rental growth expected to remain strong; ERV growth guidance 2–4% for Big Box logistics and 3–6% for Urban assets over the medium term.
- Disposals expected at or above the upper end of the long-term 1–2% of portfolio run rate.
- Data center expansion: 1–2 new centers per year over the next several years, with a shift toward fully fitted projects funded via JV structures and project debt; no anticipated near-term equity raise.
💡Interesting Insights
- SEGRO expects to monetize growth primarily through development and active asset management, while using third-party capital selectively, including partnerships in data centers, to fund higher-return projects without materially increasing equity needs.
Detailed Analysis
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