Segro Regulatory News (SGRO)

29 April 2014

SEGRO plc

Interim Management Statement

CONTINUING DELIVERY OF STRATEGIC OBJECTIVES ANDACCELERATION OF DEVELOPMENT PROGRAMME

SEGRO plc ("SEGRO" or the "Group") today publishes its Interim Management Statement for the period to 28 April 20141.

Commenting on the first quarter, David Sleath, Chief Executive, said:

"We have had a busy and productive first quarter, making further progress against our strategic objectives whilst also seeing a continued improvement in both occupational and investment market conditions.

"Occupier demand for new space continues to improve in most markets and this has been reflected in increased rental commitments, particularly for pre-let developments, compared with the first quarter of 2013. We have taken advantage of the stronger market conditions to accelerate our development programme, adding more than 50 per cent to both the number of projects and space to be built since the start of the year.

"Investor demand for well-located, prime industrial and logistics assets has continued to strengthen, which is translating into further yield compression. The IPD Monthly Index has already indicated 3.2 per cent capital growth in UK industrial property for the first quarter and transactional evidence points towards improving values for prime assets in Continental Europe.

"We are confident that we will continue to make progress in the coming months and our expectations for the full year are unchanged."

Driving operational excellence (Appendix 1)

· Occupier demand improving: Increasing business confidence and the continued supply shortage of prime industrial and logistics stock in the best locations has resulted in growing occupier demand for both refurbished and new space and has driven a significant expansion of our development programme.

· Contracted rental income significantly ahead of last year: We contracted £9.0 million of rental income during the first quarter (1Q 2013: £4.7 million), including leasing 95,000 sq m of standing stock. The most notable letting within this was 38,300 sq m to Great Bear Distribution at our Logistics Property Partnership joint venture asset in Sheffield, previously one of the Group's largest voids.

· Pre-lets and growing occupier demand drive material acceleration of development programme: Within the £9.0 million of contracted rental income, we signed new pre-lets of £5.4 million (1Q 2013: nil) including a 22,000 sq m distribution warehouse for a major international retailer at Rugby and a 10,400 sq m data centre on the Slough Trading Estate. We have also committed to new speculative development in high-demand locations, including 14,650 sq m of light industrial and warehouse space at Park Royal in London, as well as 6,600 sq m of office space on the Slough Trading Estate.

· Take-backs in line with expectations: The strong lettings and pre-lets were partially offset by £4.7 million (Q1 2013: £6.4 million) of take-backs, equating to 111,000 sq m of which 62,700 sq m were in France. This included 15,800 sq m of space (£0.7 million of annualised rent) returned by Mory Ducros, a French logistics company which entered administration towards the end of 2013.

· Vacancy rate and rent at risk: As stated at the time of our full year results announcement in February, the profile of rent at risk from lease expiry and break options in 2014 is skewed towards the first half. Accordingly, as anticipated, vacancy rose to 9.0 per cent (31 December 2013: 8.5 per cent), reflecting larger take-backs in France and Germany. The Mory Ducros take-back added 0.2 percentage points to the vacancy rate and we expect that they will return a further 26,342 sq m (£1.3 million of annualised rent) in the second quarter, which equates to approximately 0.4 percentage points of vacancy. We expect the vacancy rate to have fallen from the current level by the end of the year.

Delivering profitable growth from development

· £27 million of potential rent from the current pipeline: We had 377,300 sq m of new space under development as at 31 March 2014 across 29 projects which were 58 per cent pre-let by ERV (31 December 2013: 245,000 sq m, 18 projects, 60 per cent pre-let). Capital expenditure in the first quarter was approximately £28 million and the future cost to complete on the pipeline will be around £139 million, of which around £123 million will be spent in the remainder of 2014. This equates to potential future annualised rent of £27 million (31 December 2013: £17 million), reflecting a projected yield on total development cost of 9.5 per cent (31 December 2013: 9.6 per cent).

Further progress with portfolio reshaping programme (Appendices 2 and 3)

· £231 million of acquisitions announced or completed in the first quarter, including a €472 million portfolio (SEGRO share: £195 million) of big box logistics assets in Continental Europe within our SELP joint venture and a £35 million big box logistics warehouse at Magna Park in Lutterworth, near Rugby, as part of a property swap.

· £94 million of disposals completed in the first quarter, in line with 31 December 2013 book values, including £4 million of non-core land and £90 million of standing assets at an average topped-up initial yield of 8.0 per cent.

Debt and financing strategy

· Stable net debt and LTV: Net debt (including our share of debt in joint ventures) at 31 March 2014 reduced to £1.84 billion, from £1.89 billion as at 31 December 2013. Look-through LTV, based on 31 December 2013 book values, was stable at 42 per cent. Incorporating our share of the €472 million portfolio announced in early February, our pro forma LTV would rise to 44 per cent.

· Bank facilities renewed and extended: As announced on 15 April 2014, we have secured €460 million (£380 million) of new and amended committed bank facilities, reducing the pricing and level of commitment fees, and extending the average maturity of our unsecured bank facilities.

Interim results announcement

Results for the half year to 30 June 2014 will be published on 31 July 2014.

1 In this statement, unless otherwise indicated, space is stated at 100 per cent, whilst financial figures are stated reflecting SEGRO's share of joint ventures. Financial figures are stated for the quarter to, or at, 31 March unless otherwise indicated.Appendices

1. Summary of key leasing data for the quarter to 31 March 20141

1. All figures include joint ventures at share and exclude lettings and take-backs on the Neckermann campus, except where stated

2. Annualised rental income, after the expiry of any rent-free periods

3. Annualised rental income

2. Acquisitions exchanged or completed during the quarter to 31 March 2014

1. Yield excludes land acquisitions

2. Within SELP joint venture

3. Exchanged during the quarter; completion expected in 2Q 2014

3. Disposals completed during the quarter to 31 March 2014

1. Including the benefit of top-ups

2. Within LPP joint venture, SEGRO share

3. Yield excludes land disposals

CONFERENCE CALL FOR INVESTORS AND ANALYSTS

There will be a conference call at 08.00 hours (UK time) today on the following number:

Telephone: +44 (0) 20 3059 8125

Password: SEGRO plc Q1 IMS

An audio recording of the conference call can be accessed through the Company's website at www.segro.com/investors later today.

CONTACT DETAILS FOR INVESTOR / ANALYST AND MEDIA ENQUIRIES:

This IMS, the most recent Annual Report and other information are available on the SEGRO website at http://www.segro.com/investors.

Neither the content of SEGRO's website nor any other website accessible by hyperlinks from SEGRO's website are incorporated in, or form part of, this announcement.

Forward-looking statements: This announcement may contain certain forward-looking statements with respect to SEGRO's expectations and plans, strategy, management objectives, future developments and 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. Certain statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Any forward-looking statements made by or on behalf of SEGRO speak only as of the date they are made. SEGRO does not undertake to update forward-looking statements to reflect any changes in SEGRO's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Nothing in this announcement should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance.

About SEGRO

SEGRO is a UK Real Estate Investment Trust ('REIT'), and a leading owner, asset manager and developer of modern warehousing and light industrial property, as well as of higher value uses such as offices and data centres. We own or manage 5.3 million square metres of space in £5.2 billion of assets (at 31 December 2013; our share totals £4.1 billion), serving 1,250 customers from a range of industry sectors. Our properties are located around major conurbations and at key transportation hubs across eight European countries, principally in the UK, France, Germany and Poland.

For further information see www.SEGRO.com.