No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Shares in Segro fell on Wednesday despite the property investor and developer reporting an "encouraging" performance in the first half and setting targets for over 1bn of incremental rental income growth potential by 2030.
The company also announced a second joint venture with Pure Data Centres Group to develop a fully fitted data centre in Paris, targeting a pre-let with a "global hyperscaler".
The news comes just weeks after Prologis publicly unveiled a 12.6bn proposal to take over Segro, which the warehouse-focused REIT rejected, calling it "opportunistic, one-sided and inadequate".
In a presentation to institutional investors and research analysts on Wednesday, Segro laid out plans for "superior value creation", highlighting the substantial embedded value in its industrial and logistics development pipeline.
In particular, the company said it has a "powerful platform" to capitalise on the fast-growing data centre market in Europe, with 3.0GVA power bank and a pipeline offering 460m of income potential.
As of the end of 2025, the portfolio offered 220m of incremental rental income upside, with potential for an additional 900m of rental income from developments in the industrial, logistics and data centre markets. As a result, the company expects to hit an adjusted earnings per share target of 50p by 2030, up from 36.6p in 2025.
"Our data centre pipeline is well placed to accelerate rapidly as hyperscaler demand remains focused on Europe's key Availability Zones, where land with power certainty and planning consents is extremely constrained. Together, these opportunities give us confidence in delivering superior value for shareholders through our clear income and value growth strategy," said Segro boss David Sleath.
"By contrast, combining with Prologis would materially dilute SEGRO shareholders' exposure to its industrials, logistics and data centre development upside opportunity, exchanging full ownership of SEGRO's unique and irreplicable portfolio for a materially lower shareholding in a different, more US-focused portfolio."
In a trading update, the company said it secured 53m in new headline rent during the first six months of 2026, up from 31m the year before, with 24m of new pre-lets signed, resulting in a record pipeline of projects under construction and in advanced negotiations. As a result, the capex guidance for 2026 has been narrowed to 500m-550m, at the top end of the previous guidance range.
Regarding the Paris JV, Segro said its cash equity contribution is expected to be 60m over the total construction period, with the project anticipated to deliver an attractive yield on cost, "creating significant income and value prospects for the joint venture partners".
Segro shares were down 2.2% at 861.4p by 1029 BST.
See the latest RNS on Investegate.