0

Bank of America Merrill Lynch Real Estate Conference

27 March 2012

1

Overview

2

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

3

Industrial – an attractive asset class

0

2

4

6

8

10

12

14

16

1986-1995 1996-2004 2005-2010

Industrial Office Retail All Property

0

1

2

3

4

5

6

7

8

9

10

1986-1995 1996-2004 2005-2010

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 2010)

IPD Total Returns % from 1986 to 2010(annualised to 2010)

IPD Income Returns % by Economic Cycle(annualised to 2010)

0

1

2

3

4

5

6

7

8

9

Industrial Office Retail All Property

IPD Income Returns % from 1986 to 2010(annualised to 2010)

4

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

5

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

0

5

10

15

20

25

30

35

Older

industrial

Modern

industrial

Other high

value uses

Airport

(landside)

Data

centres

Airport

(airside)

Suburban

Offices

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

6

A clear strategy to create an income-focused REIT

7

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

operationalteam

Diversified

customer base

Disciplined Capital

Allocation

Operational Excellence

• Right Portfolio Shape• Active Portfolio Management• Right Capital Structure

• Leasing, Customer & Asset nManagement• Development• Operational Efficiency

8

Disciplined capital allocation

� Critical mass in strongest European markets

� Prime, modern assets

� Low vacancy, sustainable

portfolio

� Modest land holdings

� 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

9

Challenges with existing portfolio

*Based on December 2011 valuations with JVs @ 100%

9%

16%

75%

Core

Smaller non-core industrial holdings and land

Large non strategic assets

Split of current portfolio

� Large, long-term development sites

� Sub-urban office parks

� Older & more secondary industrial estates

� Investments in smaller/weaker markets

� Sub-scale investments in certain locations

Mid-long term upside inadequate

to justify short-term dilutionand/or

causes cost inefficiency

10

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

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

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

Reduce financial leverage over time and introduce third-party capital

� 40% mid-term LTV target

Retain focus on operational excellence and drive further improvements

2

3

4

1

11

Early progress with strategic priorities

� New organisation structure announced and implemented

� COO and CIO roles created

� Non-core disposals

� £111m smaller, secondary estates sold in 2011

� £80m divestment of five estates to Ignis in February 2012

� Guidance: £300-500m disposals in 2012

� Acquisition of UK Logistics Fund in partnership with Moorfield

� £314m portfolio of prime logistics warehouses

12

FY2011 Performance

13

Operational excellence created strong earnings momentum for FY 2011

Leasing,

Customer and Asset

Management

� £38.4m of new annualised rental income from existing space and pre-lets

� Transactional rental values 1.7% above December 2010 ERVs

� Lease incentives of 11%

� Retention rate up to 74%, takebacks down 28% to £21.0m

� Vacancy rate 9.1%

� 14 developments completed; £9m annualised rental income

� 20 developments under construction or contracted – 78% pre-let

� Current pipeline £117m capex and £19m annualised rental income

� Total costs down by 15% year on year (£15m)

� Cost ratio reduced to 24.3%

� New management and operating structure to drive further efficiencies in 2012

and beyond

Development

Operational

Efficiency

14

Key financial highlights

3.514.314.8Dividend per share (pence)

Change

%

20102011

4650LTV (%)

4.52,203.22,303.4Net borrowings (£m)

(9.6)376340EPRA NAV per share¹ (pence)

7.617.118.4EPRA EPS (pence)

8.8127.3138.5EPRA PBT (£m)

Change

%

20102011

1. EPRA NAV per share and excluding fair value of interest rate derivatives but including trading property uplifts

15

Strong operating performance delivered 8.8% EPRA PBT growth

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.

16

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.

17

FY 2011 EPRA PBT bridge (£m)

5.84.0

138.55.2

7.1127.3 (10.9)

EPRA PBT 2010 Net rental income JV management fee Share of JV EPRA PBT Administrative expenses Net finance cost EPRA PBT 2011

18

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

19

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

20

FY 2011 core and non-core valuation movements*

-200

-150

-100

-50

0

50

Core Non-Core

Valu

ati

on

mo

ve

men

t (£

m)

(187.0)(33.6)Non-Core

(54.6)19.9Core

(241.6)(13.7)Total

H2 2011 (£m)H1 2011 (£m)Property assets

*Valuation movement relates to the total portfolio (completed properties, land and development).

Joint ventures shown at share.

21

Solid balance sheet

� No significant debt maturities before 2014

� £456m of funds available from cash balances and undrawn facilities

� Weighted average cost of debt now 4.8%

� 74% of net borrowings at fixed rates

� Net borrowings of £2.3bn; adjusted gearing of 89% and LTV of 50%

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

SEGRO debt maturity profile

Average duration of debt 8.8 years

0

100

200

300

400

500

600

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

Year

Bonds and Notes Bank Debt drawn Cash Undrawn facilities

£m

22

£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

23

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)

24

Summary

� A clear strategy to become a leading income-focused REIT

� Early progress with portfolio reshaping

� Strong FY 2011 operating results due to portfolio quality and

operational focus

� Further momentum to come from mainly pre-let development programme

� A solid balance sheet position and favourable debt maturity profile

� Target to reduce LTV to 40%

25

APPENDICES

26

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

27

Increased retention levels have contributed to the significant reduction in takebacks

£m

an

nu

ali

sed

ren

tal

inco

me l

ost

£16.2m£20.2m

£4.8m

£9.1m

0

5

10

15

20

25

30

35

2010 2011

UK Continental Europe

• Low level of insolvencies (£4.0m versus £7.2m in 2010)

• £41m of income at risk from potential break or expiry in 2012, down from £50m at June 2011

Down 28% in 2011

£29.3m

£21.0m

28

Significant further improvement in Group vacancy from 12% to 9.1% – the lowest level since 2007

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

% v

acan

t b

y r

en

tal va

lue

• UK 10.2%, Continental Europe 6.4% (2011)

• Target for Brixton portfolio of 15% by end of 2012 already delivered (2011: 13.4%)

29

FY 2011 Group vacancy bridge

(0.5)%(2.6)%

(0.4)%

12.0%

(12.7)%

9.1%

1.9% (0.1)%

11.5%

Vacancy rate as at

31 December 2010

Space returned Development

completions

Disposals Space made

redundant

Other (ERV

changes)

Development

lettings

Space let Vacancy rate as at

31 December 2011

30

Gliwice, Poland

Selig UK, SloughGeopost, Enfield

14 developments completed in 2011 –£9.0m of rent p.a

• 2 projects for logistics customers across 35,600 sq m

completed January & December 2011

• 3,500 sq m completed September 2011

• 15,900 sq m for logistics customer completed September 2011

• 7,000 sq m completed December 2011

Tychy, Poland

31

Significant earnings momentum from current development programme

• 20 active projects, 78% pre-let

• £19m of annualised rental income and £117m of remaining capex

� 9,900 sq m at APP Portal, expected

completion September 2012

� 5,600 sq m at Slough, expected

completion February 2012

� 33,400 sq m at Vimercate, expected

completion December 2013

� 5,500 sq m at Slough, expected completion May

2012

Data centre operator

Alcatel Lonza

DB Schenker

32

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

*Total development cost

49 hectares

363 hectares

33

Our current development pipeline is 78% pre-let

UK

Speculative developments

3,100n/aGalvin Road, STE

1,200Family BargainsFarnham Road, STE

42,100*Total

2,800Under offer – data centre

Galvin 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

7,600OPEKLodz, Poland

11,200Esprinet (72%) /speculative

Vimercate, Italy

CONTINENTAL EUROPE

Speculative developments

8,200n/aParis, France

12,200Various – 50% letBerlin, Germany

11,300Wir Packens (80%) /speculative

Krefeld, Germany

162,400Total

12,200n/aDusseldorf, Germany

Contracted projects

1,200EurocashPoznan, Poland

14,300Pro Tex (30%)

/speculative

Frankfurt, Germany

18,900ZabkaTychy, Poland

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 £117m of capex

*Includes APP Portal contracted projects at Group share

34

1.211.30.36.50.94.8Net absorption (£m)

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

8.47.68.28.18.67.5True equivalent yield (%)

7.06.17.97.56.45.7Net initial yield (%)

-

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)

Vacancy (%)

Portfolio value (£m)(completed properties)

Performance of core versus non-core

35

Large non-strategic assets

Pegasus Park (Brussels)

Neckermann site

(Frankfurt)

Vimercate

(Milan)

IQ Farnborough

(Farnborough)

Total value: £515m

Total headline rent: £45m

Data as at 31 December 2011

MPM site(Munich)

Thales site(Crawley)

36

� 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 12.8%; 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

37

FY 2011 net rental income bridge (£m)

271.2

0.30.7

1.62.1

5.3

282.1

(6.5)

(9.3)

(5.1)

Net rental

income 2010

Development

(lettings net of

takebacks)

Like-for-like rent Currency

translation

Acquisitions Other income Disposals to

APP

Disposals

(excluding to

APP)

Lease

surrenders

(premium net of

rent lost)

Net rental

income 2011

38

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

39

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.

40

Bank of America Merrill Lynch Real Estate Conference

27 March 2012