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  • SEGRO announces a strong set of operating, financial and portfolio performance metrics, and another record year of development, the majority of which has already been leased.
  • Adjusted pre-tax profit, up 24.4 per cent, reflects our development success and our focus on customer and portfolio management, which delivered high customer retention rates, like-for-like rental growth and a low vacancy rate.
  • Adjusted EPS of 23.4 pence, including 1.2 pence net impact from a performance fee from SELP. Excluding the (non-recurring) performance fee, the adjusted EPS would be 22.2 pence, an increase of 11.6 per cent compared to 2017 (19.9 pence). IFRS EPS of 105.4 pence (2017: 98.5 pence) also includes the impact of the 10.7 per cent increase (2017: 13.6 per cent increase) in the value of our portfolio.
  • EPRA NAV per share up 16.9 per cent to 650 pence (31 December 2017: 556 pence).
  • Future earnings prospects underpinned by 1.3 million sq m of development projects under construction or in advanced pre-let discussions. The projects under construction are all due to complete in 2019 and are expected to generate £46 million of rent, almost three quarters of which has been secured through pre-lets and lettings prior to completion. Our land bank and land under our control provide significant potential for further growth.
  • 2018 full year dividend increased by 13.3 per cent to 18.8 pence (2017 dividend: 16.6 pence). Final dividend increased by 16.7 per cent to 13.25 pence (2017: 11.35 pence).

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

“2018 has been a successful year for SEGRO. The extensive development activity that has been our focus over the past few years, the success of which has been underpinned by the structural themes of e-commerce and urbanisation driving occupier demand, means we now have portfolio of very high quality and well-located warehouses. The combination of this prime portfolio and our active approach to asset management has enabled us to grow rents and maintain high occupancy across our markets.

Development completions and pre-leasing levels in 2018 both exceeded a record previous year and, with customers already signed up to almost three quarters of our developments under construction, we believe that our significant longer-term pipeline and land bank have substantial potential that will continue to deliver attractive development returns and future income growth.”


Strong investor demand and asset management have driven valuation gains across the portfolio

  • Portfolio capital value growth of 10.7 per cent (2017: 13.6 per cent) driven by a 12.0 per cent increase in the like-for-like value of our UK portfolio (2017: 15.8 per cent) and 5.1 per cent in Continental Europe (2017: 6.2 per cent). The increase reflects the benefits of active management of our portfolio, modest further yield compression and improving rental values, enhanced by gains from our development activity.
  • Estimated rental values (ERVs) increased by 3.4 per cent (2017: 3.1 per cent). Rental values in our UK portfolio increased by 4.7 per cent (2017: 3.9 per cent) and by 0.7 per cent in Continental Europe (2017: 1.2 per cent).

Active asset management and high levels of development have led to strong operational performance

  • 24.1 per cent increase in annualised new rent contracted in the period to £66.4 million (2017: £53.5 million), of which £41.5 million (2017: £28.6 million) is from new development pre-let agreements and lettings of speculative space prior to completion.
  • 3.1 per cent like-for-like net rental income growth (4.1 per cent in the UK, 1.0 percent in Continental Europe) aided by an 8.8 per cent uplift on rent reviews and renewals, mainly from capturing reversionary potential accumulated in recent years in the UK portfolio.
  • Vacancy rate remains low at 5.2 per cent (31 December 2017: 4.0 per cent), the increase due to completion of speculative developments during the period. The vacancy rate on the standing portfolio is stable at 3.4 per cent. Our focus on customer service continues to drive operational performance with customer retention increasing to 89 per cent (2017: 81 per cent) of rent at risk from expiry or customer break.

Capital allocation focused on accretive development programme which will continue to deliver value in 2019

  • Net investment of £327 million in 2018 including £688 million invested in development capex, infrastructure and land, £81 million of asset acquisitions, offset by £442 million of asset and land disposals (including sales of assets to our SELP joint venture).
  • Total development capex for 2019, including infrastructure and land acquisitions, expected to exceed £600 million.
  • £46 million of potential rent from current development pipeline, of which almost three quarters has been secured. The entire current pipeline is due to complete in 2019.
  • Further ‘near-term’ pre-let projects associated with £23 million of rent are at advanced stages of negotiation.

Balance sheet is in good health

  • SEGRO continues to be conservatively financed. The average cost of debt has reduced to 1.9 per cent (2017: 2.1 per cent), the long average debt maturity has been retained at 10.2 years (2017: 10.8 years) and look-through LTV ratio has reduced to 29 per cent (31 December 2017: 30 per cent).
  • £423 million of new debt for SEGRO and SELP was signed during the year, further strengthening the balance sheet. SEGRO has over £1.2 billion of cash and available facilities at its disposal.

Figures quoted on pages 1 to 14 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 2018 2017 Change per cent
Adjusted1 profit before tax (£m) 241.5 194.2 24.4
IFRS profit before tax (£m) 1,099.2 976.3 12.6
Adjusted2 earnings per share (pence) 23.4 19.9 17.6
IFRS earnings per share (pence) 105.4 98.5 7.0
Dividend per share (pence) 18.8 16.6 13.3
Balance sheet metrics 31 Dec 2018 31 Dec 2017 Change
per cent
Portfolio valuation (SEGRO share, £m) 9,425 8,039 10.75
EPRA3 4 net asset value per share (pence, diluted) 650 556 16.9
IFRS net asset value per share (pence, diluted) 644 554 16.2
Group net borrowings (£m) 2,177 1,954 -
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.
2 A reconciliation between Adjusted earnings per share and IFRS earnings per share is shown in Note 11(i).
3 A reconciliation between EPRA net asset value per share and IFRS net asset value per share is shown in Note 11(ii).
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.


SEGRO management will host a conference call at 08:00 (UK time).

A conference call facility will be available at 08:00 (UK time) on the following number:

Dial-in: +44 (0)844 571 8892
Access code: 8299014

An audio recording of the conference call will be available until 22 February 2019 on:

UK & International: +44 (0)3333 009785
Access code: 8299014#

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

2018 final dividend ex-div date 21 March 2019
2018 final dividend record date 22 March 2019
2018 final dividend scrip dividend price announced 28 March 2019
2018 final dividend payment date 2 May 2019
2019 First Quarter Trading Update 17 April 2019
Half Year 2019 Results 23 July 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 (75 million square feet) valued at £11 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 eight 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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