Segro Regulatory News (SGRO)

INTERIM MANAGEMENT STATEMENT FOR THE PERIOD 1 JULY TO 24 OCTOBER 2012

Further operational progress achieved in the third quarter with a slight improvement in vacancy, 10 developments completed and three new pre-let developments signed

Against a challenging macro-economic backdrop, we have made further operational progress during the third quarter, with net absorption of existing space generating new annualised rental income of £2.6 million (Q3 2011: £0.3 million), a further £5.5 million (Q3 2011: £5.3 million) of new annualised rental income from the take-up of developments completed in the period and a slight reduction in the vacancy rate to 9.0 per cent (30 June 2012: 9.1 per cent). Further, we have signed three new pre-let development contracts which will produce £1.8 million (Q3 2011: £4.1 million) of annualised rental income when delivered in 2013.

We have continued to see reasonable enquiries for new and existing space in most of our core markets although, with many customers continuing to take longer than normal to commit, the amount of new rent contracted in the period was at a similar level to the first two quarters of the year. Against this, the "take-backs" in the period were significantly down on the first two quarters and on the equivalent period last year. Overall rental levels have generally been stable, with average headline rents continuing to be above the December 2011 valuers' ERVs and with rent free incentives remaining under 10 per cent of headline rents.

This has been an active quarter for our development programme. Since the start of July we have completed 10 developments, of which 71 per cent of these are already let. In the UK, this included a 9,900 sq m facility for DB Schenker at the APP Portal site, Heathrow, on a 15 year lease, and a 5,600 sq m pre-let data centre and 3,100 sq m speculative scheme, both on the Slough Trading Estate. We also completed three pre-let logistics developments in Poland; 32,100 sq m for Decathlon, 12,200 sq m for Flexlink and 7,600 sq m for OPEK. In Germany, we completed three pre-let and speculative developments, totalling 37,800 sq m, and in La Courneuve, Paris, we completed an 8,200 sq m light industrial speculative development across four buildings, of which 45 per cent is already let.

In the year-to-date, 161,500 sq m of new developments have been completed, providing expected rental income of £10.9 million when fully let.

We have also signed three new pre-let developments in the period, totalling 35,500 sq m. In the UK, this included a 6,500 sq m pre-let industrial facility for a freight-forwarder in North Feltham, which is due to complete in Q4 2013. We also approved a 1,500 sq m speculative development adjacent to this site. In Poland, we signed two pre-let logistics facilities in Strykow and Tychy, totalling 29,000 sq m, which are both due to complete in Q2 2013. In addition, we approved a further two new speculative schemes; a 14,500 sq m industrial facility at the Origin site, Park Royal, and an 11,900 sq m logistics facility near Dusseldorf, which is the second phase of this development.

Across the Group, we have 15 developments contracted or under construction, representing £14.8 million of future annualised rental income and £85.3 million of future capital expenditure. The development pipeline is 78 per cent pre-let.

The 9.0 per cent vacancy rate excludes any impact from Neckermann, which made a preliminary filing for insolvency on 18 July 2012 and which contributes approximately £12 million per annum to rental income. Formal insolvency proceedings were commenced on 1 October 2012. We continue to receive monthly rental payments through bank guarantees and expect 2012 rental obligations will continue to be covered through these guarantees. We will take-back c.8,000 sq m of space later this month and we expect Neckermann to vacate the rest of the 309,000 sq m facility by 1 February 2013. In anticipation of this, we are seeking alternative customers for parts of the site, as well as considering longer-term options.

In line with our strategy to increase our presence in the logistics property market, we completed the acquisition of a portfolio of 13 prime logistics buildings in Paris and Lyon from Foncière des Regions on 19 September 2012 and these have been successfully integrated into our business. This £130 million portfolio, together with the UKLF portfolio which we acquired in a joint venture earlier in the year, both significantly strengthen our logistics platform in core markets and provide the opportunity to add value over time.

As stated at the time of our interim results, having already achieved our full year disposal target, we do not expect a similar pace of disposals to continue over the balance of the year. In the year-to-date, we have completed £505 million of non-core asset disposals.

Investment market appetite remains strong for high quality industrial assets in the strongest locations in the UK, France, Germany and Poland, and the values of such assets appear to be holding up well. However, demand for secondary assets in less attractive locations continues to be more limited.

As at 30 September 2012, net borrowings were unchanged from 30 June 2012 at £2.0 billion. Reflecting the well diversified nature of our funding arrangements, our weighted average maturity of gross borrowings is 8.7 years, with no significant debt maturities before 2014.

*Includes two large pre-let developments signed in the first half of 2011, to Alcatel-Lucent and Esprinet at Vimercate in Italy, representing £5.9 million of annualised rental income.

1. Income contracted includes income from the long term letting of existing space and any pre-let developments signed in the period for completion in later periods. It does not include pre-let developments completed in the period.

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

CONFERENCE CALL FOR INVESTORS AND ANALYSTS

There will be a conference call at 08.30 hours (UK time) today on the following number:

Telephone: +44 (0) 20 7136 6283

Access code: 9419282#

The call will also be available via the below webcast link both during and after the event:

http://www.media-server.com/m/p/2rq4rmx4

The web-link can also be accessed through our website at www.segro.com/investors

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 Europe's leading owner-manager and developer of industrial property. We serve over 1,400 customers across a range of industry sectors and geographies. Our portfolio comprises £4.8 billion of assets (as at 30 June 2012) concentrated in and around major conurbations and transportation hubs such as airports, ports and motorway intersections.

For further information see www.SEGRO.com.

SEGRO is a Real Estate Investment Trust (REIT) and is listed on the London Stock Exchange.