21 October 2025
If you are covering Segro’s latest financial results, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“Segro's leasing and development teams have been busy in the third quarter of 2025. The company signed £22m of new leases in the quarter, well ahead of the equivalent period last year. However, while that pushes the new rent year-to-date figure up substantially to £53m, that is still around 17% behind 2024 at this stage. Occupancy remains stable at 94% (which we would describe as neither especially good nor bad) and rent reversion continues to improve, with lease reviews, renewals and regears combining to increase rent by 37% on the properties where those conversations have taken place. This is ahead of the rate reported at the half year results, and combined with stable occupancy is likely to support a good like-for-like rent growth figure at year end.
“Segro's development pipeline continues to flow, signing £7m of pre-let deals (compared to £3m in H1'25). The company has plenty more to come, with £45m of future rent either under construction or in advanced negotiations. The argument in favour of development remains compelling, with an average development yield of over 7%, compared to the latest reported completed portfolio yield of 5.4%. That forecast development yield has come in substantially lower since it last reporter when it was 7.7%, but we understand this is due to the completion of a particularly attractive data centre project. That subsector of the market continues to be in high demand, and Segro plans to submit a planning application for its fully-fitted data centre JV in the coming weeks.
“The industrial/logistics market has settled down post-pandemic, but that isn't to say that demand has fallen particularly. Data Centres look likely to be the next leg of the strategy for industrial assets, and landlords (and investors) are looking for exposure to the sub-sector through any means possible. Segro is well-placed to take part in this new wave of demand, albeit traditional industrial and logistics is likely to remain the largest part of the company's portfolio for some time to come.”
