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  • Strong results, financial position and momentum, with a high quality pipeline of growth opportunities.
  • Adjusted EPS up 7.1 per cent to 19.7 pence (2015: 18.4 pence) was underpinned by a 4.0 per cent increase in like-for-like net rental income, a continued low vacancy rate at 5.7 per cent and a strong contribution from development completions. IFRS EPS of 53.9 pence (2015: 91.7 pence), which includes the impact of unrealised capital gains on the portfolio, reflects continued capital growth but at a slower rate.
  • EPRA NAV per share up 8.0 per cent to 500 pence, driven by a 4.8 per cent like-for-like increase in the value of the portfolio, reflecting development gains, UK rental growth and asset management activities.
  • Occupier and investor demand for modern warehousing remains resilient. Occupier demand remains strong from a broad range of business sectors, particularly from retailers adapting their supply chains to the rapid growth of internet retailing. The result of the EU referendum has had little apparent impact on occupier and investor demand for well located, modern urban and big box warehouses.
  • Future earnings prospects underpinned by the largely de-risked development programme. Developments under construction have the potential to generate £27 million of new rent, of which 61 per cent has been pre-let. A further £27 million is available from conditional pre-let and potential speculative projects which are expected to start in the coming months.
  • Final dividend increased by 5.7 per cent to 11.2 pence (2015 final dividend: 10.6 pence).

Commenting on the results, David Sleath, Chief Executive, said:

“I am pleased to report another strong set of results. We have had a record year for development completions, delivering 422,000 sq m of new warehouse space, of which 80 per cent is now let. We have a high quality pipeline of developments under construction and more under discussion, reflecting the continuing strength of occupier demand for, and short supply of, well located, modern urban and big box warehouses.

“Our business is well positioned, notwithstanding the current degree of political and economic uncertainty. We have had an active start to 2017 and we continue to see opportunities to grow our business through further disciplined investment, matched by a prudent approach to financing.”

Healthy occupier demand and successful asset management reflected in strong operating performance

  • 4.0 per cent like-for-like growth in net rental income, including 6.0 per cent growth in the UK and a 0.7 per cent fall in Continental Europe. This reflects £2 million net absorption of standing stock, lower vacancy throughout the year and strong rental growth in the UK.
  • £45 million of new rent contracted (14 per cent ahead of prior year) including £23 million from new development pre-let agreements and lettings of speculatively developed space prior to completion.
  • Development capex expected to be in excess of £300 million in 2017. The committed development pipeline is 61 per cent pre-let and expected to deliver £27 million of headline rent and a 7.7 per cent yield when fully leased, with a further £27 million of potential rent from near-term development opportunities.

Capital growth rate reflects SEGRO’s active management of the portfolio

  • Portfolio capital value growth of 4.8 per cent, reflecting development gains, UK rental growth, an uplift in the value of two industrial sites to be sold for residential development and a slight improvement in valuation yields.
  • EPRA NAV per share increased by 8.0 per cent to 500 pence (31 December 2015: 463 pence), primarily the result of the improvement in the value of the portfolio.

Disciplined capital allocation focused on accretive development investment

  • £302 million of investment in profitable development pipeline. Developments completed and under construction generated a capital gain of 16 per cent during the year. The completed developments are 80 per cent let and added £24 million to the rent roll.
  • £155 million of investment in development land including the first sites from the partnership agreements with Roxhill and the Greater London Authority.
  • £90 million of investment in modern warehouse acquisitions at a blended 6.3 per cent yield, helping to build scale in Italy, Spain and the UK.
  • £325 million of new equity raised to fund development has been invested or committed to projects identified in September which have either completed or are under construction.
  • £565 million of disposals of assets not core to our strategy at a blended 5.9 per cent yield, including the Bath Road office portfolio, two budget hotels and a number of more mature, asset management-intensive light industrial estates in the UK and Germany.
  • Look-through LTV ratio of 33 per cent (31 December 2015: 38 per cent) reflects the impact of rising capital values and the equity raised in September 2016, offset by investment activity and exchange rate movements during the year.

1 Figures quoted on pages 1 to 13 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.

Income statement metrics                      31 December 2016  31 December 2015 Change per cent
Adjusted1 profit before tax (£m) 154.5 138.6 11.5
IFRS profit before tax (£m) 426.4 686.5 (37.9)
Adjusted2 earnings per share (pence, basic) 19.7 18.4 7.1
IFRS earnings per share (pence, basic) 53.9 91.7 (41.2)
Dividend per share (pence) 16.4 15.6 5.1
Balance sheet metrics 31 December 2016 31 December 2015 Change per cent
Portfolio valuation (SEGRO share, £m) 6,345 5,773 4.85
EPRA3 4 net asset value per share (pence, diluted) 500 463 8.0
IFRS net asset value per share (pence, diluted) 502 468 7.3
Group net borrowings (£m) 1,598 1,807 (11.6)
Loan to value ratio including joint ventures at share (per cent)6 33 38

1 A reconciliation between Adjusted profit before tax and IFRS profit before tax is shown in Note 2 to the condensed financial statements.
2 A reconciliation between Adjusted earnings per share and IFRS earnings per share is shown in Note 11 to the condensed financial statements.
3 A reconciliation between EPRA NAV per share and IFRS net asset value per share is shown in Note 11 to the condensed financial statements.
4 Calculations for EPRA performance measures are shown in the Supplementary Notes to the condensed financial statements.
5 Percentage valuation movement during the period based on the difference between opening and closing valuations for the portfolio as a whole (comprising completed properties, buildings under construction and land), adjusting for capital expenditure, acquisitions and disposals.

View the full press release in PDF format.

Full details of our holdings can be found in the SEGRO Property Analysis Report.

Watch a video interview with David Sleath, Chief Executive.


A live webcast of the results presentation will be available from 09.00 (UK time) at:

The webcast will be available for replay at SEGRO’s website at: by the close of business.

A conference call facility will be available at 09:00 (UK time) on the following number:
Dial-in: +44 (0) 20 3059 8125
Access code: SEGRO plc
An audio recording of the conference call will be available until 24 February 2017 on:
UK & International:   +44 (0) 121 260 4861
USA:     +1 844 230 8058
Access code: 5137421#

A video interview with David Sleath, Chief Executive, discussing the results is now available to view on, together with this announcement, the 2016 Property Analysis Report and other information about SEGRO.

2016 final dividend record date 24 March 2017
2016 final dividend scrip dividend price announced 30 March 2017
Last date for scrip dividend elections 10 April 2017
2017 First Quarter Trading Update 19 April 2017
Annual General Meeting 20 April 2017
2016 final dividend payment date 4 May 2017
2017 Interim Results 25 July 2017


SEGRO is a UK Real Estate Investment Trust (REIT), and a leading owner, manager and developer of modern warehouses and light industrial property. It owns or manages over six million square metres of space valued at £8 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 nine other European countries.

Forward-Looking Statements: Forward-Looking Statements: This announcement contains certain forward-looking statements with respect to SEGRO’s expectations and plans, strategy, management objectives, future developments and performances, costs, revenues and other trend information. These statements are subject to assumptions, risk and uncertainty. Many of these assumptions, risks and uncertainties relate to factors that are beyond SEGRO’s ability to control or estimate precisely and which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Certain statements have been made with reference to forecast process changes, economic conditions and the current regulatory environment. Any forward-looking statements made by or on behalf of SEGRO are based upon the knowledge and information available to Directors on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and SEGRO’s shareholders are cautioned not to place undue reliance on the forward-looking statements. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Conduct Authority), SEGRO does not undertake to update forward-looking statements to reflect any changes in events, conditions or circumstances on which any such statement is based. Past share performance cannot be relied on as a guide to future performance. Nothing in this announcement should be construed as a profit forecast.

Neither the content of SEGRO’s website nor any other website accessible by hyperlinks from SEGRO’s website are incorporated in, or form part of, this announcement.

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