0

Kempen Conference

30 May 2012

1

SEGRO today – a strong platform for an income-focused REIT

� A leading European REIT � industrial specialist � an attractive asset class

� Strong market positions with excellent quality assets� UK: London & SE England� France/Germany/Poland

� High quality, diversified customer base� £333m of annualised rental income; 1,600 customers

� Experienced operational team� Leasing, customer & asset management, development� Local expertise in each key market

68%

32%

UK Continental Europe

* JVs included at 100%

54%

17%

21%

8%

Industrial Logistics

Offices & other business space Development & land

6.4Net initial yield (%)

7.8Net true equivalent yield (%)

340Adjusted NAV (per share) (pence)

50Gearing (loan to value ratio %)

8.2Weighted average lease term to expiry (years)

Key statistics at 31 December 2011

2

Industrial – an attractive asset class

0

2

4

6

8

10

12

14

16

1986-1995 1996-2004 2005-2011

Industrial Office Retail All Property

0

1

2

3

4

5

6

7

8

9

10

1986-1995 1996-2004 2005-2011

Industrial Office Retail All Property

0

2

4

6

8

10

12

Industrial Office Retail All Property

IPD Total Returns % by Economic Cycle(annualised to 2011)

IPD Total Returns % from 1986 to 2011(annualised to 2011)

IPD Income Returns % by Economic Cycle

(annualised to 2011)

0

1

2

3

4

5

6

7

8

9

Industrial Office Retail All Property

IPD Income Returns % from 1986 to 2011

(annualised to 2011)

3

Industrial and logistics focus –an attractive asset class

Logistics warehousingLogistics warehousing

Logistics

�Large distribution warehouses – typically

10,000 sq m and above

�International, national and regional

distribution

�Ports, airports and transportation corridors

Industrial

�Multi occupier estates with buildings in

various sizes

�Located in and around conurbations

�Light industrial and similar uses

�Urban logistics serving conurbations

Good yield with the potential for rental

growth & alternative use upgrade

Higher yield with limited cost leakage &

potential to scale up with 3rd party capital

4

Well-located industrial land provides potential to develop higher value uses

0

5

10

15

20

25

30

35

Olderindustrial

Modernindustrial

Other highvalue uses

Airport(landside)

Datacentres

Airport(airside)

SuburbanOffices

Illustrative rental levels – South East England(Rent per sq ft)

£6-7

£9-12

£9-15 £12.5-15.5 £16

£24-25

£23-30

5

A clear strategy to create an income-focused REIT

6

A strong platform to create a successful income-focused REIT

GOAL:

STRATEGY TO CREATE VALUE

FOR SHAREHOLDERS:

A STRONG PLATFORM

FOR SUCCESS:

High quality,

progressive, sustainable dividends

and NAV growth

Industrial and logistics

focus

Strong market positions

Experienced operational

team

Diversified customer

base

Disciplined

Capital Allocation

Operational

Excellence

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Disciplined capital allocation

� Critical mass in strongest European markets

� Prime, modern assets

� Low vacancy, sustainable portfolio

� Modest land holdings

� Low cost diversified funding

� Moderate gearing levels

- 40% LTV target

� Focused use of third-party capital

- Enhance risk-adjusted

returns

- Facilitate growth / achieve

competitive scale

Right portfolio shape Active portfolio management Right capital structure

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Four key strategic priorities to create a successful income-focused REIT

1. Re-shape the existing portfolio

� Divest assets which do not fit our strategic criteria

� Reduce land holdings and other non-income producing assets as a proportion of the total portfolio

2. Re-invest – grow AUM in a smaller number of markets through

development and acquisition

� Light industrial in the largest and most vibrant conurbations

� Logistics assets in major distribution markets

� Exploit opportunities to create higher value uses on industrial land

3. Reduce financial leverage over time and introduce third-party capital

� 40% mid-term LTV target

4. Retain focus on operational excellence and drive further improvements

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Early progress with strategic priorities

� New organisation structure announced and implemented

� COO and CIO roles created

� Non-core disposals

� £377m of non-core asset disposals so far in 2012 including;

- £80m disposal of five UK estates to Ignis in February 2012

- £90m disposal of IQ Farnborough announced in April 2012

- £205m disposal of four regional UK estates announced in May 2012

� Guidance: £300-500m disposals in 2012

� Acquisition of UK Logistics Fund in partnership with Moorfield

� £315m portfolio of prime logistics warehouses

10

£1.4bn* of non core assets

£816m

£96m

£515m

'Big six' assets Other industrial assets Other land holdings

* Based on December 2011 valuations

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The six large non-strategic assetsTotal value £515m; headline rent £45m at 31 Dec 2011

Pegasus Park, Brussels MPM/Siemens, Munich Neckermann, Frankfurt

Vimercate, MilanIQ Farnborough Thales, Crawley

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Operational Performance

13

Q1 2012 Interim Management Statement

SEGRO has made a good start to the year...

� £172m of non-core asset disposals YTD,

including the first of the six large non-

strategic assets

� £314.7m acquisition of UKLF using 3rd

party capital; consistent with our strategy

� Net borrowings unchanged at £2.3bn as

at 31 March 2012 (pre-Farnborough

disposal)

� Guidance reiterated for £300-500m of

disposals in 2012

� Contracted rental income of £5.5m,

consistent with £5.6m in Q1 2011

� Takebacks reduced to £6.2m from £8.1m

in Q1 2011

� 0.5% rise in Group vacancy rate in Q1

2012 to 9.6%, largely due to acquisitions

and disposals

� Development pipeline remains robust; 4

pre-lets signed in Poland

� Performing in line with expectations

Disciplined Capital AllocationContinued focus on Operational

Excellence

14

Q1 2012 vacancy increase to 9.6% largely attributable to acquisition and disposal activity

9.6%9.1%

11.4%12.0%

14.0%13.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

FY 2009 H1 2010 FY 2010 H1 2011 FY 2011 Q1 2012

% v

acan

t b

y r

en

tal

valu

e

• UK 11.5%, Continental Europe 5.2% (Q1 2012)

• Target for Brixton portfolio of 15% by end of 2012 already delivered in 2011

Group vacancy, stripping out the impact of the UKLF acquisition (16% vacant)

and Ignis disposal (fully let) in Q1 2012

9.3%

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Solid balance sheet

� No significant debt maturities before 2014

� £465m of funds available from cash balances and undrawn facilities

� Weighted average cost of debt now 4.7%

� 74% of net borrowings at fixed rates

� Net borrowings of £2.3bn; adjusted gearing of 88% and LTV of 50%

� SEGRO bonds rated A minus; reaffirmed by Fitch in December 2011

SEGRO debt maturity profile

Average duration of debt 8.6 years

0.0

100.0

200.0

300.0

400.0

500.0

600.0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+

Year

Bonds and Notes Bank Debt drawn Cash Undrawn facilities

£m

16

£954m of new Group and JV debt facilities arranged

SEGRO and Moorfield financing for UKLF JV

� £186.6m five-year facility

� Acquisition completed January 2012

� <4.25% p.a. all-in funding cost; 80% fixed for 5 years

SEGRO and Aviva Investors APP JV refinancing

� £400m five-year debt refinancing package

� Refinanced maturing facility, due March 2012

� c4.0% p.a. all-in funding cost on drawn debt

SEGRO Group refinancing

� €440m of revolving, multi-currency, five-year bank facilities

� Refinanced £270m syndicated facility, due to mature Jan 2013

� c2.75% p.a. funding cost on drawn debt under the facilities

November

2011

September

2011

January

2012

17

Well hedged against the Euro

2,004

566

1,030

105

Balance sheet as at 31 December 2011

Euro gross assets

Euro debt

Euro currency swaps

Other Euro liabilities

€m

illio

n

•€1.20:£1 as at 31 December 2011

•€ assets 85% hedged by € liabilities

•€303m (£252m) of residual exposure – 10% of Group NAV

113

79

Income statement year to 31 December 2011

Euro net income

Euro costs (incl €67m interest)

€m

illio

n

•Average rate for year to 31 December 2011 €1.15:£1

•€ income 70% hedged by € expenditure (including interest)

•Net € income for the period €34m (£30m) – 22% of Group

1,701

Annualised NAV sensitivity versus €1.20:

• +/- 10% (€1.32/€1.08) = +/- c£25m (c3.4p per share)

•Annualised net income sensitivity versus €1.15

•+/- 10% (€1.27/€1.03) = +/- c£3m (c0.4p per share)

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APPENDICES

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Significant improvement in retention reflects benefits of working closely with customers

% o

f cu

sto

mers

reta

ined

year

on

year*

55%

75%

63%69%

87%

74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UK Continental Europe Group

2010 2011

• Focus on customer satisfaction

• Proactive and commercial approach to upcoming lease events

• Reduced availability of modern space in most markets

*Leases renegotiated ahead of break or expiry

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Significant earnings momentum from current development programme

• 21 active projects, 75% pre-let

• £19m of annualised rental income and £107m of remaining capex

� 9,900 sq m at APP Portal, expected

completion Q3 2012

� 5,600 sq m at Slough, expected

completion Q3 2012

� 33,400 sq m at Vimercate, expected

completion

Q4 2013

� 5,500 sq m at Slough, expected

completion Q2 2012

Data centre operator

Alcatel Lonza

DB Schenker

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Land bank provides an attractive source of future developments

£170m

£82m

£171m

� Estimated development costs £600m

� Estimated rental value £78m

� Indicative yield on TDC** 9-10%

Current land holdings by value (£m)*

Residual land bank

Under construction

Potential projectsPotential projects

Largest development sites

Current BV (£m)

Hectares

5.714.2Poznan

Poland & Czech Rep

5.729.7Prague

6.917.7Warsaw

19.717.2Amsterdam (Schipol)

Netherlands

9.619.2Berlin

9.78.8DüsseldorfGermany

13.07.4Slough

32.08.5Park RoyalUK

229 hectares

* Based on December 2011 valuations with JVs at share** Total development cost

49 hectares

363 hectares

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Our current development pipeline is 75% pre-let

UK

Speculative developments

3,100n/aGalvin Road, STE

40,900*Total

2,80048% under offerGalvin Road, STE

8,500Rolls-RoyceAPP Portal at Heathrow, London

9,900DB Schenker APP Portal at Heathrow, London

Contracted projects

3,300Ragus SugarsYeovil Road, STE

5,500LonzaBath Road, STE

5,600Data centre operator

Ajax Avenue, STE

11,400Infinity STE

Pre-let projects under construction

Space to be built (sq m)

CustomerProject

5,200DB SchenkerGdansk, Poland

6,900DPDWroclaw, Poland

4,900DistributorStrykow, Poland

7,600OPEKLodz, Poland

11,200Esprinet (72%)/specVimercate, Italy

CONTINENTAL EUROPE

Speculative developments

8,200n/aParis, France

12,200Various - 50% letBerlin, Germany

11,300Wir Packens (80%)/specKrefeld, Germany

171,500Total

12,200Various - 10% let Dusseldorf, Germany

Contracted projects

12,200FlexlinkPoznan, Poland

14,300Pro Tex (30%)/specFrankfurt, Germany

31,300Sports retailerGliwice, Poland

34,000Alcatel-LucentVimercate, Italy

Pre-let projects under construction

Space to be built (sq m)

CustomerProject

£19m of annualised rental income and £107m of capex

*Includes APP Portal contracted projects at Group share

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1.211.30.36.50.94.8Net absorption (£m)

(2011)

(13.0)(0.4)(16.3)0.9(10.5)(0.8)Valuation movement (%)

(2011)

8.47.68.28.18.67.5True equivalent yield (%)

(2011)

7.06.17.97.56.45.7Net initial yield (%)

(2011)

-

12.4

767.6

Non-core

6.0

9.5

2,586.3

Core

UK

3.1

4.0

814.4

Core

Continental Europe

4.9

9.6

515.4

Non-core

9.1

8.2

3,400.7

Core

Group

4.9

11.2

1,283.0

Non-core

Pre-lets signed (£m)

(2011)

Vacancy at 31 Dec 2011 (%)

Portfolio value at 31 Dec 2011

(£m) (completed properties)

FY 2011 performance of core vs. non-core

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� 50/50 JV partnership with Moorfield Real Estate Fund

� 14 prime logistics warehouses, located predominantly in the Midlands and South

� Excellent customer base, including Tesco, Sainsbury’s, Royal Mail, DHL, GKN, Booker

� High-quality income stream – c £18m in 2011; average 13 years to lease expiry

� 9.4% cash running yield on SEGRO share of equity investment, rising to 12.7%; 6.3% ungeared net initial yield rising to 7.7%

� Potential to add further value through active asset management

UKLF acquisition significantly increases our presence in logistics

Sainsbury’s, Hoddesdon

Booker, Booker, Hatfield

In line with strategy to grow logistics with third-party capital

Royal Mail, Birmingham

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FY 2011 EPRA profit before tax summary

10.816.6Share of joint ventures’ EPRA profit after tax1

(62.5)(54.9)Property operating expenses

282.1271.2Net rental income

1.95.9Joint venture management fee

(39.2)(32.1)Administration expenses

255.6261.6EPRA operating profit

127.3138.5EPRA profit before tax

(128.3)(123.1)Net finance costs (excluding fair value movements on derivatives)

344.6326.1Gross rental income

2010£m

2011£m

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

26

Good progress with cost reduction

24.3%

28.1%

29.9%30.4%

20

25

30

35

2008 2009 2010 2011

(18.1)39.232.1Administration expenses

(12.2)62.554.9Property operating costs

Movement

(%)

2010

(£m)

2011

(£m)

To

tal

co

st

rati

o*

(%)

*Total costs as a percentage of gross rental income. Total costs include property operating expenses

(net of service charge income and management fees) and recurring administration expenses.

27

FY 2011 EPRA pro forma profit before tax: JVs proportionally consolidated

(65.2)(57.7)Property operating expenses

303.2301.4Net rental income

1.02.6Joint venture management fee

(39.2)(32.1)Administration expenses

265.0271.9EPRA operating profit

127.3138.5EPRA profit before tax

(137.9)

0.2

(133.6)

0.2

Net finance costs (excluding fair value movements on derivatives)

Joint venture tax

368.4359.1Gross rental income

2010£m

2011£m

28

FY 2011 cash flow summary

23.4(8.1)Net settlement of derivatives

(193.5)(15.9)Investment in joint ventures

397.079.9Investment property sales (including joint ventures)

(82.8)(107.4)Dividends paid

(61.1)(187.1)Capital expenditure (excluding trading properties)

193.7(106.5)Net funds flow

4.17.9Other items

106.6124.2Free cash flow

(6.0)(4.9)Tax paid

8.810.4Dividends received (net)

(141.1)(120.3)Net finance costs

244.9239.0Cash flow from operations

2010£m

2011£m

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FY 2011 EPRA NAV per share bridge (pence)

376

(3)(15)

(35)

19 (1) (1)

340

EPRA NAV per share

as 31 Dec 2010

EPRA PBT Exchange rate

movement

Other Unrecognised

valuation movement

on trading properties

Dividends Realised and

unrealised valuation

movement (including

JVs)

EPRA NAV per share

as 31 Dec 2011

30

Forward-looking statements

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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