KEY MESSAGES
- Strong 7.8 per cent like-for-like net rental income growth from our existing portfolio as we continue to capture embedded rent reversion, supporting 6.5 per cent earnings and 6.6 per cent dividend growth per share.
- Improving development prospects, with a pick-up in the near-term development pipeline and encouraging levels of demand for our speculatively developed urban space.
- Significant progress in building our data centre platform, progressing plans for our 2.3GW+ land-enabled power bank and signing a joint venture to develop our first fully fitted data centre.
Commenting on the results, David Sleath, Chief Executive, said:
“Our modern, sustainable portfolio, located in Europe’s most attractive and supply-constrained markets, has continued to perform well through the first half of the year, driven by leasing, asset management and the capture of reversion. We have a further £172 million of rent available through rent reviews, renewals and the lease up of vacant space, which will continue to support attractive underlying earnings growth.
“Our high quality, well-located land bank and options provide further opportunity to create value and grow income through development, with over £500 million of potential rent. Whilst occupier decision making remains protracted, we are encouraged by the pick-up in our near-term pre-let development pipeline and the active conversations that we are having with customers.
“SEGRO has consistently delivered attractive and compounding increases in both earnings and dividends through the cycle. We are confident in our ability to continue to do this due to the embedded growth potential of our existing portfolio, combined with the potential rent from building out our development pipeline. Our ability to develop fully fitted data centres offers significant additional value creation upside beyond this.”
HIGHLIGHTS1:
- Strong 7.8 per cent growth in like-for-like net rental income from the existing portfolio, driven by a 55 per cent uplift from UK rent reviews and renewals (Group: 33 per cent, Continental Europe: 6 per cent).
- £31 million of new headline rent signed during the period (H1 2024: £48 million), reflecting the performance of the existing portfolio and a lower level of big box pre-let signings (H1 2025: £3 million, H1 2024: £17 million).
- Adjusted pre-tax profit of £252 million up 11 per cent compared with the prior year (H1 2024: £227 million). Adjusted EPS is 18.1 pence, up 6.5 per cent (H1 2024: 17.0 pence); the differential growth rate is due to the higher average share count versus H1 2024.
- Adjusted NAV per share of 910 pence (31 December 2024: 907 pence), the first increase since mid-2022. The portfolio value increased 0.5 per cent to £18.5 billion (H1 2024: 0.0 per cent change) and rental values (ERV) grew by 1.0 per cent during H1 2025 (H1 2024: 1.4 per cent).
- Development completions added £19 million of potential new headline rent, delivered at a yield on cost of 7.7 per cent. 92 per cent of this has been leased and all has been, or is expected to be, certified BREEAM ‘Excellent’ (or local equivalent) or higher.
- A further £50 million of potential rent from development projects under construction or in advanced negotiations, 49 per cent of which has been or is currently expected to be pre-let. Expected development yield for these projects is 7.3 per cent.
- Formation of a 50:50 joint venture with Pure DC Group to develop our first fully fitted data centre project. We are on track to submit planning for this scheme in H2 2025 and continue to advance plans for our 2.3GW+ land-enabled power bank, mostly located in key European Availability Zones.
- Net investment of £388 million: £243 million of acquisitions, including SELP’s completion on a portfolio of Continental European big box assets (formerly owned by Tritax EuroBox) and a further £180 million invested into development capex. Disposals totalled £35 million and were all above book value.
- Balance sheet remains strong with a LTV of 31 per cent and £1.9 billion of cash and undrawn committed facilities, positioning the Group to pursue further growth opportunities.
- Interim dividend increased by 6.6 per cent to 9.7 pence (2024: 9.1 pence).
1. Figures quoted refer to SEGRO’s share, except for land (hectares) and space (square metres) which are quoted at 100 per cent, unless otherwise stated. Please refer to the Presentation of Financial Information statement in the Financial Review for further details.