2014 2014 Full Y ll Year Results ults 25th February 2015 - - PowerPoint PPT Presentation

2014 2014 Full Y ll Year Results ults

25th February 2015

STRATEGI GIC PROGR GRESS I IS P PAYING NG DIVIDENDS

• Strategic repositioning programme largely complete
• Strong operational performance
• 23% increase in NAV
• Well placed to deliver in 2015 and beyond

0.3 pe penc nce inc ncreas ase i in t n the he final nal di divi vide dend t nd to 1 10.2p

2

Fin inancia ial R l Revie iew

Justin Read, Group Finance Director

SR Technics, North Feltham

FINANC NCIAL H HIGH GHLIGH GHTS

2014 2014 2013 2013 Cha hange nge EPRA PBT (£m) 129.7 134.1 (3.3)% EPRA EPS (pence) 17.2 17.7 (2.8)% Dividend per share (pence) 15.1 14.8 2.0% 31 D 31 Dec 2014 2014 31 D 31 Dec 2013 2013 Cha hange nge EPRA NAV per share1 384p 312p +23.1% Loan to value ratio (inc. JVs at share)2 40% 42%

• 2ppts

1 EPRA NAV per share excludes fair value of interest rate derivatives and deferred tax provisions, but includes trading property uplifts 2 Includes £119.9m deferred consideration from the creation of the SELP JV

4

EP EPRA I INCOME STATEM EMEN ENT Limited impact of 2013/2014 disposal activity on earnings

1 Net property rental income less administrative expenses, net interest expenses and taxation

2014 2014 £m 2013 2013 £m Gross rental income 215.1 273.8 Property operating expenses (40.5) (50.4) Net r rent ntal i inc ncome 174. 174.6 223. 223.4 Share of joint ventures’ EPRA profit1 46.3 26.3 Joint venture fee income 11.8 7.1 Administration expenses (28.3) (26.1) EPRA o

• pe

perating pr ng profit 204. 204.4 230. 230.7 EPRA net finance costs (74.7) (96.6) EPRA pr profit be before tax 129. 129.7 134. 134.1 Tax on EPRA profit 1.5% 2.0%

Int nto 2015… 2015…

• Based on current portfolio, 2015

JV fee income will be c£13m 5

2013 Disposals Acquisitions Completed developments Space taken back for development Like-for-like net rental income Surrender premiums & other Currency translation 2014

JVs at share £40.5m JVs at share £63.4m Group £174.6m Group £223.4m £(38.9)m £15.8m £6.2m £(2.9)m £3.3m £(4.7)m £(4.7)m

+2.4% exc. allocated central admin and property operating costs

DRIVE VERS OF F NET R RENTAL AL I INCOME CHAN ANGE Like for like net rental income +2.4%

£263.9m £238.0m 6

2013 Net take-up New developments Acquisitions Disposals 2014 (0.6)% 0.3%

VA VACANCY R RAT ATE R RECONCILIAT ATION Vacancy rate improvement to 6.3%

8.5% (0.3)% (1.6)% 6.3% 7

EUR URO C CUR URRENCY EXPOSUR URE A AND ND HE HEDGIN ING

• €1.29:£1 as at 31 December 2014
• € assets 90% hedged by € liabilities
• €164m (£127m) of residual exposure – 4% of Group NAV
• Illustrative NAV sensitivity vs €1.29:
• +5% (€1.35) = –c.£6m (c.0.8p per share)
• +10% (€1.42) = –c.£12m (c.1.6p per share)

Loan to Value (on look through basis) at €1.29:£1 is 40%, sensitivity vs €1.29:

• +5% (€1.35) LTV –0.6%-points
• +10% (€1.42) LTV –1.2%-points
• Average rate for 12 months to 31 December 2014 €1.24:£1
• € income 58% hedged by € expenditure (including interest)
• Net € income for the period €40m (£31m) – 24% of Group
• Illustrative annualised net income sensitivity versus €1.24:
• +5% (€1.30) = –c.£1.5m (c.0.2p per share)
• +10% (€1.36) = –c.£3.0m (c.0.4p per share)

500 1,000 1,500 2,000 Other Euro liabilities Euro currency swaps Euro debt Euro gross assets 20 40 60 80 100 120 Euro income Euro costs Balance sheet, £m

31 December 2014

Income Statement, £m

Year to 31 December 2014

Assets 90% hedged Income 58% hedged

8

PRO RO-FORMA ACCOUNT NTING G NET R RENT NTAL I INCOME £5.7m lower after adjusting for major 2014 transaction activity

1 Annualised headline rental income (on a cash flow basis) after the expiry of rent-free periods

Group up £m JV JVs £m To Total £m 2014 ne net r rent ntal i inc ncome 174. 174.6 63. 63.4 238. 238.0 Inc ncrement ntal i impa pact of: Disposals since 1 January 2014 (19.3) (6.5) (25.8) Acquisitions since 1 January 2014 8.1 6.4 14.5 Developments completed and let during 2014 8.0 1.0 9.0 Receipt from Neckermann administrator (3.4) – (3.4) Pro-forma 2014 ne net r rent ntal i inc ncome 168. 168.0 64. 64.3 232. 232.3

Exclude udes:

• Full year impact of lower vacancy

rate and rent roll growth

• £4.2m of potential annual gross

rent1 from completed, speculative developments not yet let

• £17.1m of potential gross rent1 to

come from current development pipeline (of which £7.5m pre-let)

• Impact of any further disposals

(c£18m of rent from remaining non-core)

• Impact of foreign exchange

9

TOTAL C COST T RATI TIO Lower cost ratio due to more efficient portfolio; 12% reduction in total costs

Note: total costs include vacant property costs of £10.6m for 2014 (2013: £14.4m)

• Incl. joint ventures at share

2014 2014 £m 2013 2013 £m Cha hange nge % Gross r rent ntal inc ncome 289.7 322.3 (10.1) Property operating expenses 40.5 50.4 Administration expenses 28.3 26.1 JV operating and administration expenses 12.2 7.3 Less: JV fee income (excl. performance fees) (12.2) (5.4) To Total c costs 68. 68.8 78. 78.4 (12. 12.2) 2) To Total cost r ratio 23. 23.7% 7% 24. 24.3% 3%

• Gross rental income includes £3.4m

receipt from Neckermann administrator

• Property operating expenses reflect

lower cost of vacancy (by £3.8m)

• £2.3m increase in share based

payment costs and termination benefits

• Some re-allocation of costs from

property operating expenses to central administrative expenses Int nto 2015… 2015…

• Administrative expenses expected

to be flat in 2015 10

FINANCIAL P POSI OSITION ON 40% LTV target achieved

1 Based on gross debt, excluding commitment fees and amortised costs 2 Net rental income / EPRA net finance costs (before capitalisation) on an annualised basis 3 Includes £119.9m deferred consideration from the creation of the SELP JV

2014 2014 £m 2013 2013 £m Group o up onl nly Net borrowings (£m) 1,679 1,459 Group cash and undrawn facilities (£m) 429 982 Weighted average cost of debt1 (%) 4.4 4.5 Interest cover2 (times) 2.2 2.2 Inc ncludi uding J ng JVs at s sha hare Net borrowings (£m) 2,040 1,889 LTV ratio3 (%) 40 42 Average duration of debt (years) 6.9 7.6 Fixed rate debt as proportion of net debt (%) 80 71 Weighted average cost of debt1 (%) 4.2 4.2

• Net debt (incl JVs) increased £152m

reflecting net investment

• Secured/amended €668m of bank

facilities at reduced cost and extended maturity (€564m at share)

• Attractive marginal cost of Group

borrowings of 1.4% (€), 1.9% (£) Int nto 2015… 2015…

• £208m 2015 bond redemptions

part-funded by £120m deferred

• consideration. Minimal net impact
• n interest cost

11

2013 EPRA EPS Dividends paid Realised and unrealised gains US tax refund Other movements incl FX 2014

384p 312p 17.2p (14.8)p 69.9p 4.5p (5.1)p

MAI AIN D DRIVE VERS O OF E F EPRA N A NAV V GROWTH 23% increase in EPRA NAV per share reflects valuation rise and tax refund

12

(£100m) £0m £100m £200m £300m £400m £500m £600m Greater London Thames Valley & National Logistics Northern Europe Southern Europe Central Europe Total

18.4% 15.6% (0.9)% 2.6% 5.9% 12.9%

PORTFOLIO V VALUE CHANGE NGE A AND ERV GR GROWTH BY GE GEOGR GRAPHY1 12.9% portfolio valuation movement (UK +17.1%; Continental Europe +2.2%)

1 Percentage change relates to completed properties, including JVs at share

ERV gr growth 3. 3.0% 0% 3. 3.4% 4% (0.8)% (2.6)% 0. 0.4% 4% 1. 1.8% 8% UK: 3. 3.2% 2% Cont

• nt. Eur

urope pe: ( (1.3%)

Slough Trading Estate +15.5% UK big box logistics +23.4% SELP (big box logistics) +3.3% SEGRO (light industrial) +1.8% 13

• Results reflect successful implementation of strategy
• Improved operating metrics, strong NAV growth
• Final dividend increased to reflect confidence in medium-term outlook
• Introduction of optional scrip dividend to provide shareholder choice

FINAN ANCIAL AL S SUMMAR ARY

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Del eliveri ering o ng on t n the s he strategy gy — bui buildi ding ng for t the f he fut uture ure

Sonoko, Strykow 15

STRA RATEGIC P PRO ROGRE RESS – THREE Y E YEA EARS O ON

£1.6bn of disposals at blended topped-up initial yield of 7.5%

£1.6bn

£0.9bn of acquisitions in our core markets at 7.0% topped up initial yield £0.4bn of capex on new development at average yield on TDC of >9%

£1.3bn

Disciplined capital allocation

Cost ratio reduced from 24.5%, assisted by £19m reduction in total costs

23.7%

Vacancy rate improved to 6.3% (2011: 9.1%); residual/long-term land bank 0.7% total portfolio (2011: 3.3%)

6.3%

Operational excellence

Continental Europe big box logistics JV established – grown from €1bn to €1.7bn in 12 months

SELP

Group net debt cut by 27% (>£0.6bn); LTV at 40% from peak of 52%

40%

Efficient capital structure

16

MARKE RKET E ENVIRO RONMENT RE REMAINS F FAVOURA RABLE

90 95 100 105 110 115 120 125 130 2008 2010 2012 2014 2016 Eur urope pean n real G GDP gr growth (2008= 2008=100) 100) Germany France UK Poland Euro Area 0% 2% 4% 6% 8% 10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Prim ime in industria ial y l yie ield lds London Paris Dusseldorf Warsaw UK 10yr Germany 10yr 0.0 1.0 2.0 3.0 4.0 5.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 UK lo logis istic ics a availa ilabilit ility (m m sq m) m) New / Early Marketed Second hand

Supply conditions remain tight2

1 OECD / 2 CBRE / 3 ONS / 4 CBRE, Bloomberg – Data correct as at 24 February 2015 0% 2% 4% 6% 8% 10% 12% 14% 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 2013 Q3 2014 Q1 2014 Q3 UK i inte ternet t sal ales as as % o

• f to

f total tal retai tail s sal ales

Economic environment improving1 Structural changes in retail supply chain3 Strong investor appetite for logistics warehouses4

Forecast

17

Su Support

• rtive inv

nvestment nt a and nd

• ccupatio

ional m l market ket c condit itio ions

 Accretive acquisitions

• Building scale in key markets
• Modern, sustainable properties
• Off-market transactions

Dis Discip iplin lined c cap apit ital allo al allocat atio ion  Improving existing assets

• Strong customer relationships
• Expert asset management
• Like-for-like rental growth

Operat atio ional e al excelle llence

CREATING NG V VALUE AND DRIVING NG I INC NCOME GR GROWTH

 Developing new assets

• 458 hectare land bank
• In-house development resource
• Modern, flexible buildings de-risked

through pre-lets Ope Operationa nal ex excel ellen ence & e & Dis Discip iplin lined c cap apit ital allo al allocat atio ion 18

IMPR PROVING E EXISTING A ASSE SSETS Driving UK value growth through intensive asset management

Gain

• n sale

(5%) Development (12%) Asset management (28%) Market yield shift (55%)

• Approx. 40% of the 2014 UK valuation surplus

generated through asset management and development

• Reflects like-for-like rental growth, improved vacancy

rate, longer lease lengths

• UK properties developed (completed and under

construction) during the year generated a capital value return of 27%

• Property disposal proceeds 6% above December 2013

book value

• Estimated weighted market yield improvement for

SEGRO portfolio of 57bp vs 85bp achieved UK estimated realised and unrealised valuation gains, 2014 19

Key po y portfolio dat data AUM UM £1,229m Val alue ue ( (at at s shar hare) £1,229m Val alue ue m move vement nt1 +15.5% Ave verage age leas ase l lengt ngth2 7.7 years Vac acanc ancy y rat ate 5.2% (-140bp) Equi quival valent nt yi yield 6.6% (-80 bps)

1 For completed properties only 2 To first break 3 Thames Valley & National Logistics Business Unit

Highl ghlight ghts

• +5% like for like rental growth for TVNL3 as a whole; 89% retention

rate

• Net lettings of £0.6m of existing space (7,300 sq m)
• 22,200 sq m of completed development, 89% let
• 32,400 sq m of new development under construction, representing

£5.4 m of potential rent, 28% pre-let

• Simplified Planning Zone agreement renewed for further 10 years
• Rental valu

al values +3% dur during t ng the he year, and m nd more expe pected i d in 2 n 2015; yields ds cont ntinui nuing t ng to t tight ghten

SLOUGH TR TRADING E ESTATE TE

Slough Trading Estate New Leigh Road Bridge

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Key po y portfolio dat data AUM UM £2,396m Val alue ue ( (at at s shar hare) £1,819m Val alue ue m move vement nt1 +18.4% Ave verage age leas ase l lengt ngth2 7.5 years Vac acanc ancy y rat ate 7.8% (-90bp) Equi quival valent nt yi yield 6.1% (-90 bps)

1 For completed properties only 2 To first break

Highl ghlight ghts

• Like for like rental growth of 5%
• Net lettings of £1.5m of existing space (9,400 sq m)
• Completion of 14,650 sq m first phase of Origin, 76% let
• 26,600 sq m of developments under construction; c24,000 sq m to be

added in 2015 for pre-lets to John Lewis and DHL

• Land bank expanded with purchase of 12 hectare Nestle site in Hayes,

near Heathrow Airport, M4 and M25 motorways

• Rental valu

al values +3% reflecting s ng strong de ng demand f nd for ur urba ban l n logi gistics spa pace; expe pect f fur urthe her rent ntal gr growth a h and t nd tight ghteni ning ng of y yields ds, pa particul ularly f for ne new bui build

GREATER L LON ONDON ON

Origin, Park Royal Stockley Close, Heathrow View 406, Edmonton

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Key po y portfolio dat data AUM UM £683m Val alue ue ( (at at s shar hare) £551m Val alue ue m move vement nt1 +23.4% Ave verage age l leas ase2 7.3 years Vac acanc ancy y rat ate 0.6% (-670bp) Equi quival valent nt yi yield 6.0% (-50 bps)

1 For completed properties only 2 To first break

Highl ghlight ghts f for the he pe period

• Took full control of LPP joint venture for £175m and acquired £84m of

new assets; part-funded by £153m sales of “less core” properties

• Completed 22,000 sq m pre-let development for major fashion retailer

in Rugby – will build 22,000 sq m warehouse speculatively

• Leased up both large vacancies at Sheffield (now sold) and Corby
• Portfolio highly concentrated around London and in logistics “golden

triangle”

• Rent

ntal v value ues impr proving, ng, r reflecting go ng good d de demand a nd and l nd limited d suppl upply; yields ds cont ntinui nuing t ng to t tight ghten

UK L LOGI GISTICS

22

Key po y portfolio dat data AUM UM £1,308m (€1,687m) Val alue ue ( (at at s shar hare) £654m Val alue ue m move vement nt1 +3.3% Ave verage age l leas ase2 4.7 years Vac acanc ancy y rat ate 4.0% (-180bp) Equi quival valent nt yi yield 7.5% (-20 bps)

1 For completed properties only 2 To first break

Highl ghlight ghts f for the he pe period

• SELP portfolio €1.7bn from acquisitions, development and valuation

uplift, building scale without over-burdening SEGRO’s balance sheet

• Established presence in Marseille (163,000 sq m)
• Increased exposure to German regional logistics markets from 14% of

portfolio to 32%

• 64,200 sq m of developments completed; 35,500 sq m in the pipeline
• Yields

ds l likely t to tight ghten n due due t to s strong i ng inv nvestor de demand a nd and i nd impa pact o

• f

QE; stab able le r rental al valu values

CON ONTINENTAL E EUROPE OPE LOG OGISTICS – SE SELP P POR ORTFOL OLIO

ASICS Phase I, Krefeld Komfort, Strykow

23

Key po y portfolio dat data AUM UM £451m Val alue ue ( (at at s shar hare) £451m Val alue ue m move vement nt1 +1.8% Ave verage age l leas ase2 4.6 years Vac acanc ancy y rat ate 11.7% (+510bp) Equi quival valent nt yi yield 7.8% (-20 bps)

1 For completed properties only 2 To first break

Highl ghlight ghts f for the he pe period

• 46,700 sq m of development completed, 58% let – primary driver of

increased vacancy rate

• Particular strength in Paris – 5% vacancy rate, reflecting resilient

demand and lack of quality supply

• Creating 32,600 sq m of modern light industrial assets in Dusseldorf
• Light industrial provision is a “unique selling point” for SEGRO in

Continental Europe

• Rent

ntal value ues s strengt ngthe heni ning ng; y yields ds s stabl ble reflecting i ng immatur urity o

• f

the he asset c class

CONTINENTAL E L EUROPE E LI LIGHT I INDUSTRIAL

Blanc Mesnil, Paris Rhine Park, Dusseldorf

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DEVELOPI OPING N NEW ASSE SSETS £80m of potential rent from land bank

Cur urrent nt pi pipe peline ne ( (241,400 sq m q m) £108m estimated development cost (exc. land) Annual rent of £17m (44% pre-let) 8.6% estimated yield on total development cost1 Fut Futur ure pi pipe peline ne ( (1.6m sq sq m) m) £504m estimated development costs £63m of potential annual rent 9.4% estimated yield on TDC1 12.5% estimated yield on new money Long-term land £37m (130 ha) Current pipeline £111m (66 ha) Future pipeline £166m (328 ha)

Current land & development holdings by value

(31 December 2014)

1 Total development cost including land value at commencement of development

Current land bank

(31 December 2014)

25

DEVELOPI OPING N NEW ASSE SSETS Strong potential to generate new income over the next five years

• £120m of land purchases during 2014 and 2015

to date (incl. exchanged)

• Focused on existing core markets e.g. in London

(Heathrow), Slough (by Trading Estate) and Dusseldorf (next to Rhine Park development)

£0m £5m £10m £15m £20m £25m £30m 2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019e + Future pipeline (indicative) Committed speculative Pre-let

Fully-let annualised gross rental income by year of development completion - indicative1

(31 December 2014)

1 Including joint ventures at share, excluding rent-free periods

26

50 100 150 200 250 300 350 400 31-Dec-14 Expiry of rent- free Reversion to ERV 2014 development completions still to let Potential (completed properties) Current pipeline (44% pre-let) Future pipeline Potential (total) 263.9 28.2 (2.9) 17.1 62.8

DRIVING NG I INC NCOME GR GROWTH Existing assets and potential investment

293.4 373.3 Annualised gross cash passing rent1, £ millions

1 Including JVs at share; excludes rental value of vacant properties of £24m Note: Remaining non-core assets represent £18m of gross rental income

4.2 27

DELIVERING O G ON N THE STR TRATE TEGY — BUIL BUILDIN ING F FOR THE HE F FUTUR URE

• Occupier demand likely to remain strong, particularly in the UK
• Investment markets remain positive
• Disposals of non-core/mature assets to fund development capex and

acquisition opportunities of standing assets and land in our core markets

Stockley Close, Heathrow Origin, Park Royal June 2014 December 2014 June 2014 December 2014

28

Q&A Q&A

Origin, Park Royal 29

Appendi ppendix I I

Portfolio lio a and f nd fina inanc ncia ial da l data

CWS-Boco, Lodz 30

EPRA RA P PERF RFORM RMANCE MEASURE RES

2014 2014 2013 2013 £m £m EPRA profit after tax 127.8 17.2p 131.4 17.7p EPRA NAV 2,844.7 384p 2,312.6 312p EPRA NNNAV 2,514.6 339p 2,086.8 282p EPRA net initial yield 5.4% 6.3% EPRA topped-up net initial yield 6.0% 6.9% EPRA vacancy rate 6.3% 8.5% EPRA cost ratio (including vacant property costs) 23.7% 24.3% EPRA cost ratio (excluding vacant property costs) 20.1% 19.8%

31

EP EPRA I INCOME STATEM EMEN ENT JVs proportionally consolidated

2014 2014 2013 2013 Group £m JVs £m Total £m Group £m JVs £m Total £m Gross rental income 215.1 74.6 289.7 273.8 48.5 322.3 Property operating expenses (40.5) (11.2) (51.7) (50.4) (8.0) (58.4) Net r rent ntal i inc ncome 174. 174.6 63. 63.4 238. 238.0 223. 223.4 40. 40.5 263. 263.9 JV management fee income 11.8 – 11.8 7.1

• 7.1

Administration expenses (28.3) (0.7) (29.0) (26.1) (0.4) (26.5) EPRA o

• pe

perating pr ng profit 158. 158.1 62. 62.7 220. 220.8 204. 204.4 40. 40.1 244. 244.5 EPRA net finance costs (74.7) (15.8) (90.5) (96.6) (13.9) (110.5) EPRA pr profit be before tax 83. 83.4 46. 46.9 130. 130.3 107. 107.8 26. 26.2 134. 134.0 Tax on EPRA profit (1.9) (0.6) (2.5) (2.7) 0.1 (2.6) EPRA pr profit a after tax 81. 81.5 46. 46.3 127. 127.8 105. 105.1 26. 26.3 131. 131.4

32

EPRA A BAL ALAN ANCE S SHEET JVs proportionally consolidated

2014 2014 2013 2013 Group £m JVs £m Total £m Group £m JVs £m Total £m Investment properties 3,477.0 1,230.8 4, 4,707. 707.8 2,910.0 1,079.6 3, 3,989. 989.6 Trading properties 77.8 13.1 90. 90.9 138.7 12.8 151. 151.5 Owner-occupied properties – – – 4.1 – 4. 4.1 To Total pr prope perties 3, 3,554. 554.8 1, 1,243. 243.9 4, 4,798. 798.7 3, 3,052. 052.8 1, 1,092. 092.4 4, 4,145. 145.2 Investment in joint ventures 855.5 (855.5) – 635.7 (635.7)

• Other net assets/(liabilities)

157.7 (27.2) 130. 130.5 115.3 (27.3) 88. 88.0 Net debt (1,679.2) (361.2) (2, 2,040. 040.4) 4) (1,459.1) (429.4) (1, 1,888. 888.5) 5) Net as asset valu value1 2, 2,888. 888.8 – 2, 2,888. 888.8 2, 2,344. 344.7

• 2,

2,344. 344.7 EPRA adjustments (44. 44.1) 1) (32. 32.1) 1) EPRA ne net a assets 2, 2,844. 844.7 2, 2,312. 312.6

1 After minority interests

33

EPRA A CAP APITAL AL EXPENDITURE AN ANAL ALYSIS JVs proportionally consolidated

2014 2014 2013 2013 Group £m JVs £m To Total £m £m Group £m JVs £m To Total £m £m Acquisitions 437.1 234.0 671. 671.1 184.1 418.3 602. 602.4 Development1 136.3 21.0 157. 157.3 104.3 6.3 110. 110.6 Completed properties2 21.7 4.1 25. 25.8 16.4 0.2 16. 16.6 Other3 8.4 4.7 13. 13.1 20.0 4.3 24. 24.3 TO TOTA TAL 603. 603.5 263. 263.8 867. 867.3 324. 324.8 429. 429.1 753. 753.9

1 Includes wholly-owned capitalised interest of £4.4 million (2013: £2.5 million) and share of JV capitalised interest of £0.4 million (2013: £0.2 million). Includes cost of Leigh Road Bridge of £5.8m (2013: £0.8m) 2 Completed properties are those not deemed under development during the year. Incorporates minor refurbishment and infrastructure spend (not deemed to be directly ERV-enhancing), and major refurbishment and fit-out of existing buildings (which are considered ERV enhancing) 3 Tenant incentives, letting fees and rental guarantees

• Acquisitions include LPP purchase at

100% and acquisition costs

• Approximately 60% of completed

properties capex is directly linked to generating rents

• c£10m of maintenance capex

within “Completed properties”

• Leigh Road bridge construction

within Development capex (£10m total cost; £3m in 2015) 34

‘LOOK OOK-THROUGH’ L LOAN TO VA VALUE R RAT ATIO

31 D 31 December 2014 2014 £m Weight ghted a d average ge cost o

• f

gr gross de debt bt, %1 Group gross borrowings 1,703.0 4.4 Group cash & equivalents (23.8) Group ne up net bo borrowings ngs 1, 1,679. 679.2 SELP deferred consideration (119.9) 5.02 Share of JV net borrowings 361.2 3.2 Total properties 4,798.7 Loan t n to v value ue r ratio 40. 40.0% 0%

1 Excluding commitment fees and amortised costs 2 Coupon on deferred consideration for the purpose of EPRA earnings (cash rate of 7%)

35

DEBT M T MATU TURITY PROFILE As at 31 December 2014, £ millions

100 200 300 400 500 600 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 … 2035 SEGRO Bonds SEGRO Bank Debt JV debt at share SEGRO cash SEGRO Undrawn 36

LAND HOLD LDINGS B BY V VALUE, E, £ M MILLI LLIONS

0% 1% 2% 3% 4% 5% 6% 7% 50 100 150 200 250 300 350 400 FY 2011 H1 2012 FY 2012 H1 2013 FY 2013 H1 2014 FY 2014 Future development pipeline (schemes not yet commenced) Long-term and residual land bank As % of portfolio (right hand scale) 37

SE SEGRO CON ONTINENTAL E EUROPE OPE ASSE SSETS U UNDER MANAGEMENT € millions, as at 31 December 2014

100 200 300 400 500 600 700 800 France Germany Poland Other European Big box logistics Smaller warehouses and higher value uses

• Big box logistics assets held within

SELP joint venture

• Seeking scale benefits in each major

market at €500-750m AUM

• Other European countries include

Belgium, Netherlands, Czech Republic and Italy (mainly Energy Park, Milan) 38

Appendi ppendix I II

Supple upplement ntary market da data

CWS-Boco, Lodz 39

EU EUROPEAN INDUSTRIAL INVES ESTMEN ENT V VOLUMES ES

5,000 10,000 15,000 20,000 25,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 UK Germany France CEE Rest of Europe 5,000 10,000 15,000 20,000 25,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 Q2 Q3 Q4 European industrial investment volumes

By country, €m

European industrial investment volumes

By quarter, €m

Source: CBRE

40

INV NVESTMENT NT MARKET Y YIELDS VS 10 10 YEAR B BOND YIELDS

0.0 2.0 4.0 6.0 8.0 10.0 12.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Warsaw: 7.0% Paris: 6.8% Dusseldorf: 6.0% London: 4.6% UK 10yr bond: 1.7% Germany 10yr bond: 0.4%

Source: CBRE, Bloomberg

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EUROPE OPEAN INDUSTRIAL A AND L LOG OGISTICS SU SUPPL PPLY OF OF NEW SP SPACE

0.0 0.5 1.0 1.5 2.0 2.5 3.0 UK Germany France Belgium Neth. Poland Pre-let Speculative 0.0 1.0 2.0 3.0 4.0 5.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 New / Early Marketed Secondhand Logistics space under construction1

(m sq m)

UK logistics availability2

(m sq m)

1 Source: 4Q 2014, JLL 2 Source: CBRE

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EUROPEA EAN I INDUSTRIAL L & L & LOGISTICS Take-up statistics

0.0 1.0 2.0 3.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 New Second hand Take-up – UK1

(m sq m)

1 Source: CBRE 2 Source: BNP Paribas Real Estate 3 Source: JLL

0.0 2.0 4.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Grade A Other Pre-let or owner occupied 0.0 1.0 2.0 3.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net demand Lease renewals 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Take-up – France2

(m sq m)

Take-up – Poland3

(m sq m)

Take-up – Germany2

(m sq m)

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EUROPEA EAN I INDUSTRIAL L & L & LOGISTICS Availability statistics

0.0 2.0 4.0 6.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 New / Early Marketed Second hand Availability – UK1

(m sq m)

1 Source: CBRE 2 Source: BNP Paribas Real Estate

0.0 2.0 4.0 6.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Grade A Other Space under construction 0.0 1.0 2.0 2009 2010 2011 2012 2013 2014 Completed Under construction Availability – France2

(m sq m)

Space completed or under construction – Poland1

(m sq m)

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STRUCTUR URAL C CHANGES IN IN RETAIL ILIN ING The rise of convenience retailing

1 Source: Forrester Research Online Retail Forecast, 2013-2018 (Western Europe) 2 Source: IGD

0% 2% 4% 6% 8% 10% 12% 14% 16% UK France Germany Netherlands Spain Italy 2013 2018

Online retail sales as a percentage of total retail sales by country1

— Expected to grow at a CAGR of 12% from 2013-2018

10 20 30 40 50 60 70 80 90 2013 2018

Method of purchasing UK food and groceries, £bn, 2013-20182

— Convenience stores show CAGR of 5%pa vs 3.8%pa for the market

Online Food discounters Small supermarkets Convenience stores Superstores & hypermarkets Other retailers

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HEATHROW AIRPOR ORT C CARGO & & P PASSE SSENGER V VOL OLUMES

1.0 1.1 1.2 1.3 1.4 1.5 1.6 Dec-05 Sep-06 Jun-07 Mar-08 Dec-08 Sep-09 Jun-10 Mar-11 Dec-11 Sep-12 Jun-13 Mar-14 Dec-14 10yr ave Rolling annual Heathrow Airport cargo volumes

(million metric tonnes)

Source: Heathrow Airport

60 65 70 75 80 Dec-05 Sep-06 Jun-07 Mar-08 Dec-08 Sep-09 Jun-10 Mar-11 Dec-11 Sep-12 Jun-13 Mar-14 Dec-14 10yr ave Rolling annual Heathrow Airport passenger volumes

(millions)

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FORWARD-LOOKING S G STATEMENT NTS

This presentation may contain certain forward-looking statements with respect to SEGRO’s expectations and plans, strategy, management’s objectives, future performance, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements and forecasts. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this presentation should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance.

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