Industrial property giant Segro posted a strong rise in profits, buoyed by high demand for data centre spaces and improving market conditions.
The company's shares remained stable in early morning trading, as reported by .
Segro's pre-tax profits surged by 14.9% to £470m in the year ending December 31, while its portfolio value increased 1.1% to £17.7bn.
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The real estate investment trust's rental income also rose by 7% to £628m, driven by 5.5% like-for-like rental growth.
David Sleath, Segro's chief executive, said: "We have created the largest data centre hub in Europe and are increasingly excited about the exceptional value creation opportunity from our pipeline of 2.3GW European data centre sites in core Availability Zones [clusters of data centers near densely populated financial hubs].
"We plan to pursue the most attractive risk-adjusted returns on each opportunity, including initially working with partners to develop fully-fitted data centres.
"Having seen conversations with occupiers pick up pace in recent weeks, we expect leasing and pre-letting activity to increase."
Segro anticipates that future demand will be fueled by persistent structural trends, including data and digitalization, urbanization, supply chain optimization, and sustainability. "Our business is therefore well-placed for further attractive, compounding growth in earnings and dividends in the years ahead, with significant additional value upside from our data centre pipeline."
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Last November, Segro made an unsuccessful bid to acquire rival firm Tritax, losing out to Canadian investment manager Brookfield, but managed to purchase about a third of Tritax Eurobox’s assets for 470m euros (£389m).
Despite a drop of more than 11 per cent in the past year, Segro’s share price has had a robust start to 2025 with a six per cent increase since January 1. Analysts at Peel Hunt commented: "Segro shares have derated, along with the sector, over the past six months. However, the REIT remains optimistic on future development and rent-led growth. We remain Add, with an 810p target price."
Analysts at Panmure Liberum rated the stock a ‘Buy’.
"At first glance we are very pleased with Segro’s results. [There’s] a strong base and we see right away upgrades [to our] measure of sustainable medium term earnings at revenue level but some worries on finance cost ahead."
Andrew Saunders, real estate analyst at Shore Capital, stated: "[The results] confirm our expected operational and development progress – with numbers consistent with our forecasts."