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  • SEGRO reports strong operating, financial and portfolio performance metrics, with significant pre-let development commitments underpinning future income growth.
  • Adjusted pre-tax profit up 21 per cent reflecting development completions, rental growth captured through asset management and reduced interest expenses due to active management of the capital structure. IFRS profit before tax of £570.9 million, which includes valuation gains, increased 43.8 per cent (H1 2017: £397.1 million).
  • Adjusted EPS increased 11 per cent to 10.8 pence (H1 2017: 9.7 pence) while IFRS EPS increased 34 per cent to 55.4 pence (H1 2017: 41.3 pence) which incorporates valuation gains on the investment portfolio and an increased number of shares compared to the prior year.
  • EPRA NAV per share increased 8.5 per cent to 603 pence (31 December 2017: 556 pence), driven by a 5.9 per cent increase in the value of the portfolio, due to development and asset management gains, further yield compression and ERV growth across the portfolio.
  • Future earnings potential underpinned by over 1 million sq m of development projects under construction or in advanced pre-let discussions. The current development pipeline is capable of generating £54 million of rent, reflecting a yield on cost of over 7 per cent, of which £38 million (71 per cent) has been secured through pre-lets or lettings prior to practical completion. In particular, we are developing over 250,000 sq m of new space at our flagship SEGRO Logistics Park East Midlands Gateway, all secured during the past six months.
  • Interim dividend increased by 5.7 per cent to 5.55 pence (2017 interim dividend: 5.25 pence), in line with our dividend policy.

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

“Our modern, well-located portfolio, together with our focus on customer service and continued healthy occupier demand across our markets, are reflected in strong occupancy and customer retention rates, a record volume of pre-let agreements and a further expansion of our development activity. Meanwhile, occupier demand and supply are well balanced across our markets and investor appetite for good quality warehouse assets remains unsated.

”The structural drivers of occupier demand — particularly e-commerce and urbanisation — remain strongly in evidence across our markets and whilst we remain alert to a number of macroeconomic and political risks, we have a strong pipeline of activity and remain confident about our prospects.”


Strong development and asset management activity, supported by positive market conditions

  • 45 per cent increase in new rent contracted in the period to £39.8 million (H1 2017: £27.5 million), of which £30.4 million (H1 2017: £18.4 million) is from new development pre-let agreements and lettings of speculatively developed space prior to completion.
  • 2.3 per cent like-for-like net rental income growth, including 2.9 per cent in the UK and 1.0 per cent in Continental Europe, aided by an 8.7 per cent uplift on rent reviews and renewals in the UK portfolio, capturing reversionary potential accumulated in recent years.
  • Portfolio occupancy remains high with a vacancy rate of 4.8 per cent (31 December 2017: 4.0 per cent), as does retention of rent at risk at 91 per cent.

Valuation gains across the portfolio reflecting asset management successes and ongoing investor demand

  • Portfolio capital value growth of 5.9 per cent (UK 6.7 per cent, Continental Europe 4.2 per cent) from asset management initiatives and market-driven yield compression, rental value growth (2.3 per cent UK; 0.6 per cent Continental Europe) and development gains.

Capital allocation focused on accretive development programme

  • Net capital investment of £251 million involving £56 million of asset and investment acquisitions, £280 million in new land and development capital expenditure, offset by £85 million of proceeds from disposals.
  • £54 million of potential rent from current development pipeline, of which 71 per cent has been secured through pre-lets. Completions in the second half of 2018 potentially generate £17 million of rent, of which £12 million has been secured.
  • £12 million of rent secured at SEGRO Logistics Park East Midlands Gateway, where 250,000 sq m of new warehouse space is under construction.
  • Further ‘near-term’ pre-let projects associated with £17 million of rent are at advanced stages of discussion.
  • Total development capex for full year expected to exceed £500 million (of which £100 million relates to land acquisitions completed in the first half and infrastructure), reflecting big box warehouse pre-lets ahead of expectations, particularly in Italy and the Midlands region of the UK where we have seen strong demand from online retailers including Amazon, Zalando and Shop Direct.

Balance sheet well positioned to support further acceleration in development

  • Gearing maintained at low levels, with look-through LTV of 29 per cent (31 December 2017: 30 per cent) and a low average cost of debt of 2.0 per cent (31 December 2017: 2.1 per cent)


Income statement metrics 6 months to
30 Jun 2018
6 months to
30 Jun 2017
per cent
Adjusted1 profit before tax (£m) 110.6 91.2 21.3
IFRS profit before tax (£m) 570.9 397.1 43.8
Adjusted2 earnings per share (pence) 10.8 9.7 11.3
IFRS earnings per share (pence) 55.4 41.3 34.1
Dividend per share (pence) 5.55 5.25 5.7


Balance sheet metrics             30 Jun 2018            31 Dec 2017 Change
per cent
Portfolio valuation (SEGRO share, £m) 8,777 8,039 5.95
EPRA3 4 net asset value per share (pence, diluted) 603 556 8.5
IFRS net asset value per share (pence, diluted) 598 554 7.9
Group net borrowings (£m) 2,115 1,954 8.2
Loan to value ratio including joint ventures at share (per cent) 29 30 -


1 A reconciliation between Adjusted profit before tax and IFRS profit before tax is shown in Note 2 to the condensed financial information.
2 A reconciliation between Adjusted earnings per share and IFRS earnings per share is shown in Note 11 to the condensed financial information.
3 A reconciliation between EPRA net asset value per share and IFRS net asset value per share is shown in Note 11 to the condensed financial information.
4 Calculations for EPRA performance measures are shown in the Supplementary Notes to the condensed financial information.
5 Percentage valuation movement during the period based on the difference between opening and closing valuations for all properties including 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 and Soumen Das, Chief Financial Officer.


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 08:30 (UK time) on the following number:
Dial-in: +44 (0)800 279 7204
Access code: SEGRO Half Year Results


A video interview with David Sleath, Chief Executive, discussing the results is now available to view on, together with this announcement, the HY 2018 Property Analysis Report and other information about SEGRO.


2018 interim dividend ex-div date 16 August 2018
2018 interim dividend record date 17 August 2018
2018 interim dividend scrip dividend price announced 23 August 2018
Last date for scrip dividend elections 7 September 2018
2018 interim dividend payment date 28 September 2018
2018 Third Quarter Trading Update 17 October 2018
 Full Year 2018 Results 15 February 2019



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 7 million square metres of space (74 million square feet) valued at over £10 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: 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 Financial Conduct Authority's Disclosure Guidance and Transparency Rules), 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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