2017 HA 2017 HALF Y YEAR R RESULT LTS 25 JULY 2017 Strong - - PowerPoint PPT Presentation

2017 HA 2017 HALF Y YEAR R RESULT LTS

25 JULY 2017

• Strong financial results and robust balance sheet
• Driving performance through operational

excellence and disciplined capital allocation

• High quality pipeline of growth opportunities

Optim imis istic ic o

• utlo

look

B+S, Frankfurt

2

• Strong financial results and robust balance sheet
• Driving performance through operational

excellence and disciplined capital allocation

• High quality pipeline of growth opportunities

Optim imis istic ic o

• utlo

look

B+S, Frankfurt

3

Strong financial results and robust balance sheet

• Strong earnings growth

– Benefits of APP acquisition – Asset management gains capturing rent reversion – Development completions

+23% 23%

Adjusted pre-tax profit

+3. 3.2% 2%

Adjusted EPS, 9.7p

+3. 3.9% 9%

Like-for-like net rental income growth

• Robust balance sheet

– 4.9% portfolio value growth – £1.1 billion of financing, including rights issue and inaugural US private placement

+5. 5.4% 4%

EPRA NAV per share 504p

29% 29%

Loan to Value ratio (FY 2016: 33%)

• 2017 interim dividend increased by 5%

5. 5.25p 25p

Dividend per share (2016: 5.0p)

4

H1 2016 net rental income Disposals Acquisitions Like-for-like net rental income Completed developments Space taken back for development Other (incl surrender premiums) Currency translation H1 2017 net rental income JVs at share £32.3m JVs at share £27.3m Group £103.4m Group £88.6m £(11.2)m £10.6m £8.6m £(0.8)m £4.4m £(5.9)m £4.1m £120.9m £130.7m

3.9% growth in like-for-like net rental income

Proportionally consolidated net rental income (excluding joint venture fees1), H1 2016-17, £ million

Mainly 2016 disposals and disposals to part-fund APP acquisition Group: up: +3. 3.9% 9% UK: +5.9% CE: 0.0% Vacancy stable at 5.5% APP acquisition

5

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

23% increase in Adjusted PBT

Adjusted income statement

H1 2017 1 2017 £m H1 2016 1 2016 £m Gross rental income 127.3 110.7 Property operating expenses (23.9) (22.1) Net r rent ntal i inc ncome 103. 103.4 88. 88.6 Share of joint ventures’ adjusted profit1 22.1 25.5 Joint venture fee income 16.5 9.1 Administration expenses (17.5) (15.5) Adj djus usted o d ope perating ng pr profit 124. 124.5 107. 107.7 Net finance costs (33.3) (33.5) Adj djus usted pr d profit be before tax 91. 91.2 74. 74.2 Tax on adjusted profit 0.7% 1.1%

• APP performance fee generated non-

recurring profit of £3.2m

• FY 2017 JV fee income expected to

be c£24m

• On-going JV fee income c£16m pa
• Cost ratio of 22.9%

(H1 2016: 23.2%)

• 20.4% excl share based payments

(H1 2016: 21.5%)

• H1 2017 adjusted EPS based on

average 934m shares

• FY adjusted EPS expected to be

based on c966m shares (before impact of scrip dividend)

6

31 December 2016 H1 2017 Adjusted EPS 2016 Final Dividend Realised and unrealised gains Exchange rate and

• ther

Net impact of financing activity 30 June 2017

5.4% increase in EPRA NAV

Components of EPRA net asset value change, 31 December 2016 to 30 June 2017 (11)p 10p 33p 2p 504p 478p

(after applying bonus adjustment factor of 1.046 to reported 500p)

(8)p

7

£1.1bn of new financing raised to strengthen balance sheet further

Rights I Issue £557m net proceeds

166m new shares 1.046 bonus adjustment factor

Priv ivate P e Pla lacem emen ent Issue €650m of new debt

11yr average duration 1.9% average coupon To be drawn in August 2017

£216m cash consideration for APP

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 0% 20% 40% 60% 2012 2013 2014 2015 2016 H1 17 Average cost of debt LTV ratio LTV ratio Ave cost of debt

LTV ratio and average cost of debt

(incl share of JVs, 2012-H1 2017)

£341m for future development capex

• 75% allocated to identified projects

Repay £200m 2018 bonds early

• 5.5% coupon bonds repaid in June

Repay £320m APP secured debt

• 2.5% average cost, repaid in July

8

1 Based on gross debt, excluding commitment fees and amortised costs 2 Pro forma for repayment of APP secured debt and drawing of US private placement debt 3 Marginal borrowing costs after commitment fee

Including joint ventures at share 30 J 30 June 2017 2017 31 D 31 December 2016 2016 Weighted average cost of debt1 (%) 3.12 3.4 Average maturity of debt (years) 7.82 6.2 Fixed rate debt as proportion of net debt (%) 70 80 Net borrowings (£m) 2,086 2,091 LTV ratio (%) 29 33

• £644m of cash and available facilities
• Attractive marginal cost of Group

bank borrowings of c1.4% (UK) and 1.1% (CE)3

• H1 2017: £215m capex on

development and infrastructure

• FY 2017: £350m+ estimated

development capex (and further c£50m of infrastructure capex)

Robust financial position

Balance sheet and gearing metrics (look-through basis), 31 December 2016 – 30 June 2017

9

Strong financial results and robust balance sheet

• Strong earnings growth
• Robust balance sheet
• 2017 interim dividend increased by 5%

Geodis, Paris

10

• Strong financial results and robust balance sheet
• Driving performance through operational

excellence and disciplined capital allocation

• High quality pipeline of growth opportunities

Optim imis istic ic o

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look

B+S, Frankfurt

11

UK logistics supply continues to fall short of demand

(UK logistics take up and average availability; source: JLL)

Favourable market conditions

3.4% 1.6% 1.0% 2.4% 0.6% 3.4% 2.0% 1.4% 1.3% 0.9% 0.0% 1.0% 2.0% 3.0% 4.0% Poland Germany France UK Italy Historic (2013-16) Forecast (2017-18)

Economic growth outlook is supportive

(GDP average annual growth rates 2013-18; source: OECD)

0.0% 5.0% 10.0% 15.0% 20.0% Italy Poland Europe ave France Germany UK 2017 2016 2015

Online sales continue to gain market share

(Online purchases as share of total retail sales; source: Centre for Retail Research)

Supply of speculative development remains low

(Speculative UK big box warehouse completions; source: JLL)

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 In dvpt Completions, m sq m 0.0 0.5 1.0 1.5 2.0 2.5 0.0 1.0 2.0 3.0 2011 2012 2013 2014 2015 2016 1H17

• No. of years’ supply

Take-up / availability, m sq m Average availability Take-up

• No. of years' supply

Take-up for H2 2016 and H1 2017

12

Driving performance: operational excellence and disciplined capital allocation

Leasing ng and A nd Asset Mana nage gement nt Dis Disposals als Acqui quisitions ns

• £28m contracted headline rent,

+28% from H1 2016

• 15% uplift on UK rent reviews

and renewals

• Low vacancy rate of 5.5%, 92%

customer retention

• £550m of asset acquisitions

50% interest in APP portfolio Ave topped-up NIY of 4.2% (5.2% excl Cargo Area)

• £34m of land acquisitions

Primarily land for immediate development in Germany, Italy and Spain

• £207m of asset disposals

Part consideration for APP £150m Non-strategic German light industrial £47m

• Former Northfields industrial estate

sold to residential developer

• Average yield of 4.4% (3.1% incl

land) Dev evel elopmen ents

• 79,000 sq m new space completed:

£5m of potential rent, 91% secured

• £18m new pre-lets signed; £3m

potential from new speculative development starts

• 920,000 sq m under construction

Amazon, Munich APP portfolio Nelson Trade Park Completed development Acquired Sold

13

£0m £50m £100m £150m £200m £250m £300m £350m £400m Total Greater London Thames Valley & National Logistics Northern Europe Southern Europe Central Europe

+5.7% +5.2% 2.3% +3.7% +0.1% +4.6%

1 Percentage change relates to completed properties, including JVs at share. 2 Includes big box warehouses part of the Greater London portfolio

ERV gr growth 0. 0.8% 8% 0. 0.9% 9% 0. 0.9% 9% 0. 0.6% 6% 0. 0.6% 6% 0. 0.0% 0% UK: 0. 0.9% 9% Cont ntine nent ntal Eur urope pe: 0 0.4%

UK UK +5. 5.5% 5% Slough Trading Estate +7.1% Park Royal +8.8% Heathrow +3.0% UK big box logistics2 +1.9% Cont ntine nent ntal E Eur urope pe +2. 2.3% 3% SELP +1.1% SEGRO wholly-owned +4.1%

Portfolio value change driven by improving yields and asset management1

14

• Strong financial results and robust balance sheet
• Driving performance through operational

excellence and disciplined capital allocation

• High quality pipeline of growth opportunities

Optim imis istic ic o

• utlo

look

B+S, Frankfurt

15

High quality pipeline of growth opportunities

• Income growth potential through active

asset management of existing portfolio

• Significant growth from current

development pipeline

• Optionality over future development

through land bank and options

Azymut, Strykow

16

Growth from the existing portfolio

Reversion capture Index-linked uplifts Further vacancy reduction

• £2.7m potential reversion from general UK rent reviews in H2

2017 (£13m in total)

• £6.2m (55%) of Heathrow Cargo Area 2019 peppercorn rent

reversions secured or under negotiation (£11m in total)

• c40% of portfolio (c£140m of headline rent) contains indexation

provisions

• Almost all Continental Europe leases
• c10% of UK leases (most with cap and collar)
• c£5.5m (25%) of vacancy is in five UK buildings
• 2 big box warehouses in Midlands
• 3 urban warehouses in London

0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 H1 2017 Speculative Pre-let Let at 30 June 2017

Rapid leasing of speculative space

(Letting status of development completions in 2012-17, %) 17

Current development pipeline: £46m of rent, 40 projects, 1m sq m of space

Yoox pre-let, Milan FedEx pre-let, Paris SEGRO Park Rainham, East London Martorelles, Barcelona Amazon pre-let, Rome Premier Inn, Slough Trading Estate

18

Significant development opportunities within SEGRO’s control

Cur urrent nt de developm pment nt pi pipe peline ne

• 920,400 sq m of space
• Current book value £431m; £231m

£231m c cost to c

• com
• mplete
• £46m potential gross rent; £31m (68%)

secured through pre-lets

• Projected 7.7% yield on total cost

Near Near term term dev devel elopmen

• pment pr

proj

• jects

ects

• 243,000 sq m of space
• £146m po

potent ntial al cape apex

• £14m potential gross rent
• 63% rent related to potential pre-lets
• Projected 7.6% yield on total cost

Fut utur ure de developm pment nt pi pipe peline ne1

• 2.3m sq m of space
• c£1.

£1.1b 1bn po potent ntial al c cape apex

• £113m potential gross rent
• Projected c8% yield on total cost

Land unde nd under opt ption

• 750,000 sq m of space
• c£50m potential gross rent
• Expected blended yield of c7% on total

cost, including land

1 Excludes near-term projects and potential developments on land held under option.

1 2 3 4

Capi pital de depl ployment nt ahe head o d of expe pectations ns at t the he time o

• f 2016 e

equi quity pl placing a ng and 2 nd 2017 r right ghts i issue ue

19

318 25 46 14 384 388.8 Annualised gross cash passing rent1, £ million

(as at 30 June 2017)

1 Including JVs at share 2 Near-term development opportunities include pre-let agreements subject to final conditions such as planning permission, and speculative developments subject to final approval, which are expected to commence within the next 12 months 3 Total rent potential of £127m from near-term development opportunities and Future pipeline 4 Estimated. Excludes rent from development projects identified for sale on completion and from projects identified as “Near-term opportunities”

41

Passing rent at 30 Jun 17 Rent in rent-free

Reversion and vacant space

Current development pipeline (68% let) Near-term development

• pportunities2,3

(63% pre-lets) Future pipeline2 Land held under

• ption

Total Potential

Substantial opportunity to grow rental income

1134 504 £126m potential from current activity £163m from land bank and land options 607

20

• Supply-demand dynamics remain

supportive

• Investor demand for warehouses remains

strong

• Future earnings prospects underpinned by

asset management and development

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look

B+S, Frankfurt

Outlook

21

2017 HALF YEAR RESULTS

Q& Q&A

APPE PPENDIX IX I

PORTFOLIO AND FINANCIAL DATA

30 J 30 June 2017 2017 30 J 30 June 2016 2016 31 D 31 December 2016 2016 £m £p per share £m £p per share2 £m £p per share2 EPRA1 Earnings 90.5 9.7 73.4 9.4 (9.8) 152.6 18.8 (19.7) EPRA NAV 5,053.5 504 3,593.8 454 (475) 4,162.1 478 (500) EPRA NNNAV 4,728.8 472 3,285.5 415 (435) 3,822.6 439 (459) EPRA net initial yield 4.7% 4.9% 4.8% EPRA topped-up net initial yield 5.0% 5.4% 5.3% EPRA vacancy rate 5.5% 4.8% 5.7% EPRA1 cost ratio (including vacant property costs) 22.9% 23.2% 23.0% EPRA1 cost ratio (excluding vacant property costs) 20.7% 20.4% 20.8%

1 For the periods presented, EPRA EPS is the same as Adjusted EPS. 2 Per share metrics in parentheses are as reported before application of the rights issue bonus adjustment factor.

EPRA performance measures

24

H1 2017 1 2017 H1 2016 1 2016 Group £m JVs £m Total £m Group £m JVs £m Total £m Gross rental income 127.3 37.3 164.6 110.7 38.3 149.0 Property operating expenses (23.9) (10.0) (33.9) (22.1) (6.0) (28.1) Net r rent ntal i inc ncome 103. 103.4 27. 27.3 130. 130.7 88. 88.6 32. 32.3 120. 120.9 JV management fee income 16.5 – 16.5 9.1 – 9.1 Administration expenses (17.5) (0.4) (17.9) (15.5) (0.1) (15.6) Adj djus usted o d ope perating ng pr profit 102. 102.4 26. 26.9 129. 129.3 82. 82.2 32. 32.2 114. 114.4 Net finance costs (33.3) (3.4) (36.7) (33.5) (6.2) (39.7) Adj djus usted pr d profit be before tax 69. 69.1 23. 23.5 92. 92.6 48. 48.7 26. 26.0 74. 74.7 Tax and non-controlling interests (0.7) (1.4) (2.1) (0.8) (0.5) (1.3) Adj djus usted pr d profit after tax 68. 68.4 22. 22.1 90. 90.5 47. 47.9 25. 25.5 73. 73.4

Adjusted income statement (JVs proportionally consolidated)

25

30 J 30 June 2017 2017 31 D 31 December 2016 2016 Group £m JVs £m Total £m Group £m JVs £m Total £m Investment properties 6,097.2 1,153.9 7, 7,251. 251.1 4,714.4 1,605.0 6, 6,319. 319.4 Trading properties 25.4 0.5 25. 25.9 25.4 0.6 26. 26.0 To Total pr prope perties 6, 6,122. 122.6 1, 1,154. 154.4 7, 7,277. 277.0 4, 4,739. 739.8 1, 1,605. 605.6 6, 6,345. 345.4 Investment in joint ventures 761.3 (761.3) – 1,066.2 (1,066.2) – Other net liabilities (88.2) (48.5) (136. 136.7) (25.5) (46.8) (72. 72.3) Net debt (1,741.6) (344.6) (2, 2,086. 086.2) (1,598.4) (492.6) (2, 2,091. 091.0) Net as asset valu value1 5, 5,054. 054.1 – 5, 5,054. 054.1 4, 4,182. 182.1 – 4, 4,182. 182.1 EPRA adjustments (0.6) (20.0) EPR EPRA NA NAV 5, 5,053. 053.5 4, 4,162. 162.1

1 After minority interests

Balance sheet (JVs proportionally consolidated)

26

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

Group up £m JV JVs £m To Total £m H1 2 2017 ne net r rent ntal i inc ncome 103. 103.4 27. 27.3 130. 130.7 Hal alf year ar impac act of: Disposals since 1 January 2017 (3.9) (4.0) (7.9) — APP fees within JV net rental income – 4.9 4.9 Acquisitions since 1 January 2017 8.7 0.4 9.1 Developments completed and let during H1 2017 1.2 0.4 1.6 One-off items (0.4) – (0.4) Pro f forma H1 2 2017 ne net r rent ntal i inc ncome 109. 109.0 29. 29.0 138. 138.0

Pro forma H1 2017 accounting net rental income

27

1 Total costs include vacant property costs of £3.6m for H1 2017 (H1 2016: £4.2m) 2 Includes JV property management fee income of £9.0m and management fees of £1.0m (H1 2016: £8.2m and £0.6m respectively)

• Incl. joint ventures at share

H1 2017 1 2017 £m H1 2016 1 2016 £m Gross r rent ntal inc ncome (less reimbursed costs) 163.6 148.4 Property operating expenses 23.9 22.1 Administration expenses 17.5 15.5 JV operating expenses 6.1 5.7 JV management fees (10.0) (8.8) To Total c costs1 37. 37.5 34. 34.5 Of which share based payments 4.2 2.6 Total costs excluding share based payments2 33.3 31.9 To Total cost r ratio 22. 22.9% 9% 23. 23.2% 2% Total cost ratio excluding share based payments 20.4% 21.5%

EPRA Cost Ratio

Total cost ratio, 2016-17 (proportionally consolidated)

28

31 December 2016 Long-term lettings Short-term take-backs New developments Acquisitions Disposals Other 30 June 2017

Speculative development1 1.3% Speculative development1 1.6%

0.6% (0.3)%

5.7 .7%

(0.2)% 0.1%

1 Speculative developments completed in preceding two years

Existing standing assets 4.1% Existing standing assets 4.2%

(0.1)%

5.5 .5%

EPRA Vacancy Rate

(0.3)% Vacancy rate reconciliation, 31 December 2016 to 30 June 2017

29

H1 2017 1 2017 H1 2016 1 2016 Group £m JVs £m To Total £m £m Group £m JVs £m To Total £m £m Acquisitions 1,143.6 15.5 1,159.1 65.5 39.8 105.3 Development1 184.0 31.0 215.0 97.1 17.6 114.7 Completed properties2 7.9 2.0 9.9 9.8 2.0 11.8 Other3 5.0 1.6 6.6 10.2 2.1 12.3 TO TOTA TAL 1,340.5 50.1 1,390.6 182.6 61.5 244.1

1 Includes wholly-owned capitalised interest of £2.5 million (H1 2016: £2.4 million) and share of JV capitalised interest of £0.3 million (H1 2016: £0.5 million). 2 Completed properties are those not deemed under development during the year. Incorporates minor refurbishment (not deemed to be directly ERV enhancing), and infrastructure expenditure and major refurbishment and fit-out of existing buildings (which are considered ERV enhancing) 3 Tenant incentives, letting fees and rental guarantees

• Approximately 50% of completed

properties capex is directly linked to generating rents

• c£5m of maintenance capex within

“Completed properties”

EPRA capital expenditure analysis

30

30 J 30 June 2017 2017 £m £m Weight ghted a d average ge cost o

• f gr

gross de debt bt, %1 31 D 31 December 2016 2016 £m £m Weight ghted a d average ge cost o

• f gr

gross de debt bt, %1 Group gross borrowings 1,805 3.5 1,630 3.9 Group cash & equivalents (63) – (32) – Group ne up net bo borrowings ngs 1, 1,742 742 – 1, 1,598 598 – Share of joint venture net borrowings 344 1.4 493 1.7 SEGRO ne net bo borrowings ngs i inc ncludi uding j ng joint nt v vent ntur ures at s sha hare 2, 2,086 086 3. 3.1 2, 2,091 091 3. 3.4 To Total pr prope perties ( (inc ncludi uding ng SEGRO s sha hare o

• f

joint nt v vent ntur ures) 7, 7,277 277 6, 6,345 345 ‘Look-thr hrough ugh’ ’ lo loan an t to valu value rat atio io 29% 29% 33% 33%

1 Figures exclude commitment fees and amortised costs

Look-through loan-to-value ratio

31

Debt maturity profile at 30 June 2017 (pro forma), £m

100 200 300 400 500 600 700 800 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 JV undrawn at share SEGRO undrawn JV debt at share SEGRO PP notes SEGRO bonds Debt maturity by type and year, £ millions

(as at 30 June 2017, pro forma for repayment of APP secured debt and drawing of US private placement debt due in August 2017) 32

• €1.14:£1 as at 30 June 2017
• € assets 68% hedged by € liabilities
• €741m (£650m) of residual exposure – 13% of Group NAV
• Illustrative NAV sensitivity vs €1.14:
• + 5% (€1.20) = - c.£31m (-c.3.1p per share)
• 5% (€1.08) = + c.£34m (+c.3.4p per share)

Loan to Value (on look-through basis) at €1.14:£1 is 29%, sensitivity vs €1.14:

• +5% (€1.20) LTV -0.6%-points
• 5% (€1.08) LTV +0.6%-points
• Average rate for 6 months to 30 June 2017 €1.16:£1
• € income 37% hedged by € expenditure (including interest)
• Net € income for the period €37m (£32m) – 35% of Group
• Illustrative annualised net income sensitivity versus €1.16:
• + 5% (€1.22) = –c£1.5m (c0.2p per share)
• 5% (€1.10) = +c1.7m (c0.2p per share)

Balance sheet, £m

30 June 20171

Assets 68% hedged

Euro currency exposure and hedging

500 1,000 1,500 2,000 2,500 Other euro liabilities Euro currency swaps Euro debt Euro gross assets 10 20 30 40 50 60 Euro income Euro costs Income Statement, £m

6 months to 30 June 2017

Income 37% hedged

1 Pro forma for repayment of APP secured debt (in July 2017) and drawing of US private placement (in August 2017). 33

• €3.9bn AUM at 30 June 2017

(£3.4bn)

• SELP joint venture focuses on big

box logistics assets

• Other European countries comprise:
• The Netherlands, Belgium and Austria

— supported by our platform in Germany

• Italy and Spain — supported by our

platform in France

• Czech Republic and Hungary —

supported by our platform in Poland

200 400 600 800 1,000 1,200 1,400 Germany France Poland Other European Assets under management, €m SELP SEGRO wholly-owned 1,207 1,008 810 907

SEGRO Continental Europe assets under management

34

Current development pipeline

Current development pipeline

(as at 30 June 2017)

920, 920,400 400

sq m

£46m £46m

ERV

£31m £31m

rent secured (68%)

£231 £231m

cost to complete

7. 7.7% 7%

Yield on cost

Amazon, Rome

Current development projects, asset type by ERV

(30 June 2017)

Urban warehouses 21% Logistics 60%

Gross rent from development completions, £m

(as at 30 June 2017, including joint ventures at share)

21.4 8.0 2.0 7.9 4.4 2.4 0.0 10.0 20.0 30.0 40.0 50.0 H2 2017 H1 2018 H2 2018 H1 2019 Pre-let Speculative 35

All figures include joint ventures at share. 1 Future development pipeline including near-term projects but excluding land under option. 2 Excludes near-term projects and potential developments on land held under option.

Germany 18% UK 41% Italy/Spain 14% Poland 9%

Geographic split of land bank, by potential ERV1

(30 June 2017)

Development land bank

(30 June 2017)

Fut Futur ure pip ipelin line ( (2.3 .3m sq sq m m2)

• £1.1bn estimated development

costs2

• £113m of potential annual

rent2

• 8% estimated yield on TDC1
• 10% estimated yield on new

money1

Future development pipeline

And…l nd…land and he held unde d under opt ption

• 750,000 sq m
• £50m of potential annual rent
• Estimated blended yield of 7%
• n total cost, incl land

Ne Near-term project cts

• 243,000 sq m
• c£14m of rent (63% related to

pre-lets)

• £146m of potential capex

36

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 100 200 300 400 500 600 2011 2012 2013 2014 2015 2016 H1 2017 Land bank value, £m Alternative use Future development pipeline Long-term and residual land bank As % of portfolio (right hand scale)

• £39m of land bank subject to conditional sale for

alternative (residential) use

• Additional opportunity from land held under option

Land bank provides optionality and opportunity for growth

37

APPE PPENDIX IX II

MARKET DATA

• 5,000

10,000 15,000 20,000 25,000 30,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H17 UK Germany France CEE Rest of Europe 5,000 10,000 15,000 20,000 25,000 30,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H17 Q1 Q2 Q3 Q4 European industrial investment volumes

By country, €m

European industrial investment volumes

By quarter, €m

Source: CBRE

European industrial investment volumes

39

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 2015 2016 1H17 Warsaw: 6.0% Paris: 5.0% Dusseldorf: 4.8% London: 4.5% UK 10yr bond: 1.3% Germany 10yr bond: 0.5%

Source: CBRE, Bloomberg (data correct at 30 June 2017)

Prime logistics yields vs 10 year bond yields

40

0.0 0.5 1.0 1.5 2.0 2.5 0.0 1.0 2.0 3.0 2011 2012 2013 2014 2015 2016 H1 2017

• No. of years’ supply

Take-up / availability, m sq m Average availability Take-up Available space as multiple of annual take-up

UK Big Box supply-demand dynamics1

(m sq m)

1 Source: JLL (logistics warehouses >100,000 sq ft, Grade A); take up reflects H2 2016 and H1 2017 2 Source: JLL

Speculative UK Big Box completions2

(m sq m)

0% 2% 4% 6% 8% 10% 12% 14% 0.0 1.0 2.0 3.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 In dvpt Completions, m sq m Construction Vacancy

Favourable demand-supply conditions: UK supply shortage

Take-up for H2 2016 and H1 2017

41

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 UK Germany France Belgium Neth. Poland Italy Spain Pre-let Speculative Logistics space under construction1

(m sq m)

1 Source: 1Q 2017, JLL 2 Source: CBRE

European industrial and logistics supply dynamics

0.0 0.5 1.0 1.5 2.0 2.5 0.0 1.0 2.0 3.0 4.0 5.0 2010 2011 2012 2013 2014 2015 2016 1H17

• No. of years’ supply

Take-up / availability, m sq m Average availability Take-up Available space as multiple of annual take-up

France logistics supply-demand dynamics2

(m sq m)

Take-up for H2 2016 and H1 2017

42

0.0 1.0 2.0 3.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H17 New Second hand Take-up of warehouse space >100,000 sq ft – UK1

(m sq m)

1 Source: JLL 2 Source: CBRE

0.0 1.0 2.0 3.0 4.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 1H17 0.0 2.0 4.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17 Net demand Lease renewals Take-up of warehouse space >5,000 sq m – France2

(m sq m)

Take-up of warehouse space – Poland1

(m sq m)

European industrial and logistics — take-up statistics

43

0.0 1.0 2.0 3.0 2010 2011 2012 2013 2014 2015 2016 H1 2017 New / Early Marketed Second hand Availability of Grade A warehouse space >100,000 sq ft– UK1

(m sq m)

1 Source: JLL 2 Source: CBRE

0.0 1.0 2.0 3.0 4.0 5.0 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017 0% 5% 10% 15% 0.0 0.5 1.0 1.5 2011 2012 2013 2014 2015 2016 1Q17 Pre-let Speculative Vacancy (RHS) Availability of warehouse space >5,000 sq m – France2

(m sq m)

Warehouse space under construction and vacancy rate – Poland1

(m sq m)

European industrial and logistics — availability statistics

44

1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 10yr ave Rolling annual Heathrow Airport cargo volumes

(million metric tonnes)

Source: Heathrow Airport

60 65 70 75 80 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 10yr ave Rolling annual Heathrow Airport passenger volumes

(millions)

Heathrow Airport cargo and passenger volumes

45

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.

Forward-looking statements

46