Annual Report
& Accounts 2023
Enabling
extraordinary
things
Contents
Overview
An ‘at a glance’ look at SEGRO: what we do, where we
do it, who we do it for and what drives performance.
2023 highlights 2
SEGRO overview 4
Investment case 5
Strategic Report
A deep dive into our business: the key external factors
that impact SEGRO, an overview of our business model,
strategy and KPIs, a review of our 2023 performance, and
some thoughts on the outlook for 2024 and beyond.
Strategic Report 6
Chief Executive’s statement 8
Market overview 12
Our business model 16
Our stakeholders 18
Our strategy 20
Responsible SEGRO 23
Key performance indicators 32
Performance review 36
Regional updates 44
Financial review 48
Managing risks 54
Viability statement 65
Non-inancial information and sustainability
statement
66
Streamlined energy and carbon reporting 67
Climate-related inancial disclosures 68
Governance
An overview of our corporate governance structure,
policies and practices as well as the key activities
undertaken by the Board and its Committees.
Governance Report 76
Chair’s introduction to governance 78
Application of UK Corporate Governance Code 80
Board of Directors 81
Key activities of the Board 84
Governance Framework 89
Section 172(1) Statement 90
Stakeholder engagement from the Board's
perspective
90
Internal Board evaluation 93
Nomination Committee Report 95
Audit Committee Report 100
Directors’ Remuneration Report 107
Directors’ Remuneration Policy – summary 126
Directors’ Report 131
Statement of Directors’ responsibilities 133
Financial Statements
Independent Auditors’ Report to the members of
SEGRO plc
134
Group income statement 142
Group statement of comprehensive income 142
Balance sheets 143
Statements of changes in equity 144
Cash low statements 146
Notes to the Financial Statements 147
Five-year inancial results 193
Further Information
Further information 194
Shareholder information 195
Glossary of terms 196
The Directors present the Annual Report for the
year ended 31 December 2023, which includes the
Strategic Report, Governance Report and audited
Financial Statements for the year. References to 'SEGRO',
the 'Group', the 'Company', 'we' or 'our' are to SEGRO plc
and/or its subsidiaries, or any of them as the context may
require. Pages 107 to 130 inclusive comprise the Directors'
Remuneration Report and pages 131 to 132 inclusive
comprise the Directors' Report. These have been drawn
up and presented in accordance with English company
law and the liabilities of the Directors, in connection with
these sections, and shall be subject to the limitations and
restrictions provided by such law. The Annual Report
contains forward-looking statements. For further
information see page 198.
Our portfolio includes both urban and big box warehouses*.
Urban warehouses Big box warehouses
66%
asset type by value
32%
asset type by value
Urban warehouses are located in,
or close to, population centres and
business districts and provide lexible
space suitable for a wide-range of
activities. They are used by a variety
of businesses who need rapid
access to end customers, as well
as labour. They are generally
situated close to main roads
and public transport.
Big box warehouses are typically used
for storage and processing of goods
for regional, national and international
distribution and are much larger than
urban warehouses. They are often
located far from the end customer but
are situated on major transport routes
(mainly motorways, ports, rail freight
terminals and airports) to allow
rapid transit.
*Other 2% – includes oices and retail uses such as trade counters, car showrooms
and self storage facilities
Responsible SEGRO as a key part of our future success
How this works for our business
Responsible SEGRO is embedded into the day-to-day running of our business and
all of our decision making. This helps us to ensure that our business remains it for
the future and delivers long-term beneits for all of our stakeholders.
What we do
Responsible SEGRO
For more information on
Responsible SEGRO
go to page 23
SEGRO.com
For more information on
SEGRO's activities and performance
please visit our website:
www.segro.com
Scan the QR code to watch our video
and learn more about our business
www.segro.com/ara23/what-we-do
See the full case study
on page 22
See the full case study
on page 27
See the full case study
on page 30
See the full case study
on page 38
See the full case study
on page 46
We create the space
that enables extraordinary
things to happen.
How our governance activities enable
extraordinary things
A focused and active Board –
key milestones during 2023
84
How the Board lives our
Purpose and Values
86
Space for
talent
Space for
innovation
Space for
community
Space for
collaboration
Space for
growth
Scan the QR code to
see our video on
talent
www.segro.com/
ara23/space-for-talent
Scan the QR code to
see our video on
innovation
www.segro.com/ara23/
space-for-innovation
Scan the QR code to
see our video on
community
www.segro.com/ara23/
space-for-community
Scan the QR code to
see our video on
collaboration
www.segro.com/ara23/
space-for-collaboration
Scan the QR code to
see our video on
growth
www.segro.com/ara23/
space-for-growth
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
1
Our 2023 highlights
Responsible SEGRO is part of everything we do
Delivering value
for all of our
stakeholders.
A strong operating performance and
excellent progress with our Responsible
SEGRO targets.
New headline rent contracted
£88m
2022: £98m
202 3
2022
2021
£88m
£98m
£95m
625,700 sq m
2022: 639,200 sq m
Development completions
Net investment
£575m
2022: £1.3bn
2022: £98m
Uplift from rent reviews and renewals
31%
2022: 23%
202 3
2022
2021
31%
23%
13%
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
2
Responsible SEGRO is part of everything we do
Visibility of customer emissions
81%
2022: 68%
Increase in solar capacity
34%
2022: 24%
Reduction in absolute corporate and customer emissions
7%
2022: 3%
Employee engagement
89%
2022: 91%
Customer satisfaction
86%
2022: 85%
Employee volunteering days
707
2022: 387
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
3
Where we do it and who we do it for
Our market-leading
operating platform
supports our customers
across Europe, using
local insights and data to
identify emerging trends.
Our portfolio is located in densely populated andsupply-
constrained cities, as well as key transportation corridors
and logistics hubs acrosseightEuropean countries.
Our prime portfolio supports key European markets and industries
The composition of our portfolio has been driven
by a deep understanding of our customers’ needs,
aswellasour in-depth analysis of key regional
characteristics, such as population density and
infrastructure networks. Our teams on the ground
in each of our key regions supplement their local
knowledge with our real-time locationscoring
data tool, which incorporates thousands of data
pointsacross an ever-evolving European market.
Geographical split by value (SEGRO share)
1.
2.
3.
4.
5.
6.
1 Greater London 34%
2 Thames Valley 18%
3 National Logistics 11%
4 Southern Europe 20%
5 Northern Europe 12%
6 Central Europe 5%
A diverse and growing customer base
Our warehouses are used by a diverse customer base, spanning a wide range of industries.
Our top 20 customers
Transport and logistics 23%
Retail (physical, online and hybrid) 20%
Food and general manufacturing 16%
Technology, media and telecoms 11%
Post and parcel delivery 9%
Wholesale distribution 8%
Services and utilities 6%
Other 7%
Urban
warehouses
Big box
warehouses
1 Amazon
2 Deutsche Post DHL
3 Royal Mail
4 Fedex
5 British Airways
6 Global Technical Realty
7 Worldwide Flight Services
8 Virtus
9 GXO
10 Equinix
11 Geodis
12 La Poste (DPD)
13 Iron Mountain
14 CEVA
15 Maersk
16 Netlix
17 Leroy Merlin
18 Cyrus One
19 Ocado
20 Tesco Group
Scan the QR code to watch our video and
see some of the extraordinary things that happen
in the spaces we create.
www.segro.com/ara23/extraordinary
SEGRO Logistics Park East Midlands Gateway
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
4
Investment case
SEGRO is structurally
advantaged to
outperform.
Active in a sector where demand is fuelled by
supportive structural drivers but competing supply
is restricted. Our prime portfolio, sizeable land bank,
market-leading operating platform and strong
balance sheet create a compelling competitive
advantage. We have the potential to more than
double our rent roll through the active asset
management of our portfolio and building out our
land bank. Added to this, our continued focus on
Responsible SEGRO ensures we are creating
long-term value for all of our stakeholders.
Supportive structural trends
We are focused on the industrial and logistics sector
where there are long-term structural trends driving
occupier demand from a diverse range of sectors
34
dierent sectors supported
Market-leading pan-European operating platform
Our teams on the ground in each market build close
relationships with our customers and other business partners,
helping us to drive value and create new opportunities
19
oices in 8 countries
Restricted land availability limits supply response
Biased towards urban warehousing where there are
signiicant barriers to entry due to land supply and
increasingly challenging planning regimes
66%
of our portfolio is in supply
constrained urban areas
Exceptional land bank for development
Our extensive land bank is a rare and valuable asset and an
important source of growth, both in terms of the physical
assets that it allows us to develop and the rental income
that those buildings generate
£392m
of potential rent from our land bank
Strong balance sheet
A balance sheet with modest leverage
and a diverse, long-duration debt proile
that provides us with plenty of irepower
34%
Loan to value ratio
Prime portfolio of existing assets
One of the most modern and sustainable pan-European
portfolios focused on the most attractive European markets
£20.7bn
Assets under Management
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
5
Strategic report
In this section:
We describe how our market
hasbeen inluenced by macro
issues such as inlation, and the
structural drivers that continue to
drive demand for warehouse space.
We also show how our business
model creates value for all of our
stakeholders, how our strategy
drives our performance and how
our responsibility that goes beyond
the space we own continues to
dierentiate us.
Market overview
Our business performance is driven by both
cyclical and structural factors. The investment
market remains cyclical but the occupier
market continues to be supported by long-term
structural trends, which are resulting in resilient
levels of occupier demand.
Our business model
At the heart of how we do business lies a deep
understanding of our customers’ needs. We rely
on dierent inputs, which combine to give us our
competitive advantage and our ability to create
superior value for all of our stakeholders.
Our prime portfolio and market-
leading operating platform
combine to create a strong
competitive advantage, and
position us to create value through
the cycle for all our stakeholders.
David Sleath, Chief Executive
Our strategy
Our clear and consistent strategy is central
to our ambition of becoming the best
property company.
Responsible SEGRO
Responsible SEGRO lies at the heart of our
strategy. Itfocuses on three priorities which
we have identiied as enabling us to make the
greatest business, environmental and social
contribution: Championing low-carbon growth;
Investing in our local communities and
environments; and Nurturing talent.
Find out more on page 12
Find out more on page 16
Find out more on page 20
Find out more about
Responsible SEGRO on page 23
Quick links
Market overview 12
Our strategy 20
Responsible SEGRO 23
KPIs 32
Performance review 36
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
6
A Q&A with our CEO
Our long-standing
disciplined approach to
portfolio management
means that SEGRO has
oneof the best and most
modern pan-European
industrial and logistics
portfolios.
David Sleath, Chief Executive
David Sleath covers the
following topics:
– SEGRO's performace in 2023
– Enduring structural tailwinds
beneiting the industrial and
logistics sector
– How the users of industrial space
have changed over the past decade
– Three things that are
underappreciated about SEGRO
– Priorities for 2024
Scan here to see the video.
www.segro.com/ara23/David-Sleath
To ind out more
about SEGRO visit
www.segro.com
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
7
Chief Executive’s statement
SEGRO has delivered a strong operational
performance during 2023, throughout
a period of ongoing geopolitical and
macroeconomic uncertainty. We have
continued to focus on delivering excellent
customer service; actively asset managing
our portfolio; reducing our carbon footprint;
and tactically adapting our capital allocation
to relect current inancial conditions.
Our market-leading operating platform,
with in-house property expertise in all of
our local markets, ensures we keep close
to our customers, develop local stakeholder
relationships and provides us with critical
insights to help identify attractive opportunities
and optimise performance from our portfolio.
This platform has enabled us to deliver
another set of strong operating metrics,
which led to continued growth in both
Adjusted earnings and dividends.
Highlights of the year included:
– £88 million of new rent contracted, close
to our 2022 record year which beneited
from exceptional occupier demand
during the pandemic;
– Signiicant success capturing rental
reversion, with a 31 per cent uplift in rent from
reviews and renewals, whilst maintaining high
levels of customer retention at 81 per cent,
illustrating that our customers are prepared
to pay higher rents to occupy the best-
located, modern and sustainable space.
This helped us to deliver like-for-like net
rental income growth of 6.5 per cent;
– Development completions delivering
£50 million of potential headline rent,
92 per cent of which have been, or
are designed to be, certiied at least
BREEAM ‘Excellent’ (or local equivalent);
– Outperforming our carbon-reduction
targets with a further reduction in the
average carbon intensity in our development
programme and signiicant progress in
gaining visibility of, and inluencing, the
carbon emissions of our customers;
– Good progress with our Community
Investment Plans, providing tangible
economic and social beneits for
thousands of people in the communities
closest to our assets.
Financially we are pleased to report a
5.5 per cent increase in Adjusted earnings per
share and we are therefore recommending a
5.7 per cent increase in the total distribution
to our shareholders to 27.8 pence for 2023
(2022: 26.3 pence) through payment of a
19.1 pence per share inal dividend.
Adjusted net asset value per share was down
6.1 per cent to 907 pence (31 December 2022:
966 pence), relecting a 4.0 per cent
like-for-like portfolio valuation decline
(2022: 11.0 per cent decline), as a result of
interest rate-driven yield expansion. This was
partly oset by rental value (ERV) growth of
6.0 per cent, resulting from asset management
initiatives and by development proits.
I would like to thank everyone at SEGRO for
their contributions to our 2023 performance.
In what have been more challenging market
conditions, these results are a testament to
the successful reshaping of our portfolio
and balance sheet over the past decade;
the strong relationships that we have built
with our customers; and the continued focus
of our team on delivering beneits for all of
our stakeholders.
A year of continued occupier demand
in the industrial and logistics sector
During 2023, occupier demand in the
industrial and logistics sector normalised
close to pre-pandemic levels of take-up,
proving resilient in the face of cost
challenges (rising input costs, wage
inlation and higher interest rates) and
macroeconomic headwinds faced both
by consumers and businesses.
We believe this level of activity demonstrates
the enduring strength of the structural
tailwinds which have been driving occupier
demand over recent years and will continue
to do so. These include the explosion of
data and the digitalisation of businesses
and society, including continued growth
in e-commerce volumes and of demand for
data centres; supply chain optimisation to
drive cost savings, improve customer service
and provide greater resilience; increased
focus on sustainability; and urbanisation –
We continue
to create the
space that
delivers growth.
Delivering increased dividends
27.8p
0.0 27.8
202 3
2022
2021
27.8p
26.3p
24.3p
the long-term trend for urban population
growth which creates greater demand for
warehouse space, whilst reducing the
supply of available land.
These trends highlight both the changing
nature of our customer base, and a
fundamental change in the way industrial
logistic space is used. Today it represents
part of the critical infrastructure of
businesses providing a range of goods
and services which are essential to the
smooth running of the economy and
supporting our day-to-day lives.
For users of industrial and logistics space,
location is critical to the success of their
operations. They are increasingly seeking
modern, lexible and highly sustainable
space to improve operational eiciency
and to attract talent in a competitive labour
market. Beyond the typical users such as
manufacturers, retailers and third-party
logistics operators, modern warehouse
space is used by data centres, digital content
producers, healthcare and life sciences as
well as a huge array of other businesses that
provide essential goods and services to our
towns and cities. Our buildings are essential
to support the growth, productivity and
competitiveness of our economies.
New supply to meet this broad demand is
restricted by the low levels of land available
for new development across Europe, especially
in the major cities in which we operate, where
public policy and restrictive planning regimes
give housing preference over industrial usage
and severely limit the release of green belt
land. In the immediate-term, inancial market
conditions are also restricting the supply of
new space, with tighter (and more expensive)
capital availability resulting in a reduction of
speculative construction starts and less
competition. This should play in the favour
of market participants such as SEGRO who
have prime portfolios, focus on total returns
over a multi-year period and are supported
by strong balance sheets.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
8
Financial highlights
1
Adjusted proit
2
before tax
£409m +6.0%
2022: £386m
1 Proportionally consolidated igures and metrics:
SEGRO owns assets both wholly itself and through
stakes in 50-50 joint ventures. In the Financial
Statements, the proit from joint ventures is stated
as a single igure in the Income Statement and the
net asset value of joint ventures is stated as a
single equity igure on the Balance Sheet; Note 7 to
the Financial Statements provides the component
parts of these igures. In operational terms, SEGRO
does not distinguish between assets held in joint
ventures from those assets which are wholly-
owned. Therefore, unless speciically stated, in the
Strategic Report, performance metrics and
inancial igures are stated relecting SEGRO’s
wholly-owned assets and its share of joint venture
assets (known commonly as a ‘proportionally
consolidated’ basis). Where the Strategic Report
refers to the area of a property, it is stated at 100
per cent of the space, irrespective of whether the
property is wholly-owned or held in a joint venture.
2 EPRA and Adjusted metrics: The Financial
Statements are prepared under IFRS. SEGRO
management monitors a number of adjusted
performance indicators in assessing and
managing the performance of the business
which they believe relect the underlying recurring
performance of the property rental business which
is the Group’s core operating activity. These
include those deined by EPRA as part of their
mission to establish consistency of calculation
across the European listed real estate sector.
Pages 162-163 contain more information about
the adjustments and the reconciliation of these
to IFRS equivalents. SEGRO discloses EPRA
alternative metrics on pages 186-192.
Adjusted NAV per share is in line with EPRA NTA.
3 Percentage valuation movement during the period
based on the dierence between opening and
closing valuations for all properties including
buildings under construction and land, adjusting
for capital expenditure, acquisitions and disposals.
More details are provided on page 36 and Table 3
in the Supplementary Notes.
Adjusted earnings per share
2
32.7p +5.5%
2022: 31.0p
Adjusted NAV per share
2
907p
2022: 966p
Portfolio value
3
£17.8bn -4.0%
2022: £17.9bn
IFRS loss before tax
£263m
2022: £1,967m loss before tax
IFRS earnings per share
(20.7)p
2022: (159.7)p
IFRS NAV per share
886p
2022: 938p
Loan to value ratio
34%
2022: 32%
As a result of continuing occupier demand
and limited new supply, market vacancy rates
remain low by any historical standard in our
key markets at four to six per cent. Average
country-level vacancy rates, which are above
this range in Spain and Poland, hide signiicant
disparities in regional supply and, importantly,
the quality of available stock. Not all
warehouse space is equal: there are older
buildings and estates in secondary locations
that do not compete directly with the quality
of space provided by SEGRO.
Laser-focused strategy execution
We have long followed a clear and consistent
strategy comprised of Disciplined capital
allocation and Operational excellence,
underpinned by an Eicient inancial and
corporate structure and a commitment
to making a signiicant social and
environmental contribution through
our Responsible SEGRO approach.
In a higher interest rate and inlationary
environment, taking a disciplined and
thoughtful approach to capital allocation has
never been more important. Recognising that
capital is more scarce and more expensive for
all market participants, we increased our return
requirements for all investment opportunities,
focusing our eorts on those projects with the
best risk-adjusted returns. With development,
we have continued to favour pre-let projects,
remaining prudent in only bringing forward
speculative schemes in markets with the
tightest supply and the deepest demand.
In some cases, we have sold selective land
plots to key customers to develop themselves.
During 2023, we sought to match a substantial
proportion of our development expenditure
with sales proceeds, and we were pleased
to complete total sales of £356 million
signiicantly ahead of book value.
As a result, our balance sheet remains in
great shape, with moderate leverage and no
near-term reinancing requirements, helping
to ensure we have an eicient capital structure
with capacity to continue investing in the
most attractive investment opportunities
as we move forward in 2024.
Operational excellence has also remained
a key focus: delivering superior customer
service; actively managing our portfolio to
capture reversion; creating value through
asset management initiatives and executing
on our development pipeline eiciently
and sustainably. Our operating results, once
again, show the beneits of this strategy in
action, despite the more challenging
macroeconomic environment.
2023 saw the retirement of our long-standing
Chief Operating Oicer, Andy Gulliford. Andy
made a tremendous contribution to SEGRO
since he joined the business in 2004 and
particularly since becoming our COO in 2011.
Following Andy’s retirement, we took the
opportunity to change our organisational
structure to relect the increased scale and
footprint of our business. The new structure
provided opportunities to promote great
talent from within the business, whilst
ensuring that the leadership team has
the right experience and capabilities to
deliver SEGRO’s strategic priorities and
secure its ambitious plans for future
growth. The main changes were:
– We have consolidated our six regional
business units into two property businesses,
each under a separate Managing Director –
the UK and Continental Europe – enabling
us to drive performance and consistency
across the two businesses.
– We have appointed a Group Customer
and Operations Director to further drive a
high-level customer experience across the
Group, and to ensure greater consistency of
execution of several operational functions
such as sustainability, health & safety
and procurement.
– We also appointed a Chief of Sta
to support the work of the Executive
Committee, to drive progress around our
core strategic priorities, including digital
transformation, and new growth initiatives
across the business in areas such as data
centres and renewable energy.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
9
I am very pleased that we were able to ill
these roles from our internal pool of talent,
and I am very much enjoying the fresh
perspective and additional debate that
our new and expanded Executive
Committee oers.
Responsible SEGRO remains a key priority and
we continue to work hard towards achieving
the challenging targets that we have set
ourselves. Reducing our own carbon footprint,
increasing our solar capacity and the energy
eiciency of our buildings remains a key focus
for all of our stakeholders and it is of growing
relevance to property occupiers and investors,
felt through both rental and capital values.
We made good progress in 2023 towards
our mid-term carbon reduction goals, but
we still have some way to go to become a
net-zero enterprise.
Our Community Investment Plans are gaining
traction and are having a real impact on the
communities near our assets, embedding
our buildings as local centres of economic
success, helping to create opportunities for
local people and improving the environment
and local amenities for local residents.
Finally, our success in developing and
promoting colleagues across the Group
shows the importance of Nurturing talent.
We continue to strive to ensure that SEGRO
provides a fulilling and rewarding place to
work, oers an inclusive environment and
equal opportunities for all. We are working
hard towards becoming a more diverse and
representative organisation and although we
are gender diverse at a Group level, we are
not satisied with the current levels of gender
and ethnic diversity in more senior roles
and recognise that we still have some way
to go. For this reason, we have set ourselves
stretching targets to improve diversity in
senior leadership roles to 40 per cent women
by 2025 and 15 per cent ethnic minorities
by 2027 (currently 33 and 5 per cent).
Chief Executive’s statement continued
Positioning our business
for long-term success
Last year we launched a new and bolder
ambition, to be the best property company.
We focused on this ambition at our Group
Conference in September, while getting the
whole company together for the irst time
since the pandemic. We discussed how, by
challenging ourselves to search for excellence
in every aspect of our business, we can drive
SEGRO to achieve even more success in the
decade ahead than we have in the past ten
years. This ambition will drive us to keep one
eye on the continuously changing horizon,
think outside the box, innovate, search for
new ways of serving our customers, challenge
market norms and seek to remain one step
ahead of the competition in our markets.
There are a number of areas that we
are prioritising to help us achieve this:
– We remain focused on developing
outstanding customer relationships, built
upon a consistent, high-level experience
through every aspect of the customers’
journey with us. The more we can create
genuine long-term partnerships with our
customers, the better we can anticipate
future trends, identify new opportunities
and help them achieve their goals.
– In parallel, we are sourcing and analysing
data to gain valuable insights into our
markets to enhance decision-making
and keep us one step ahead of our
peers. Our focus on strategic active
asset management has helped to shape,
and drive value from, our prime portfolio,
but we want to harness these insights to
ensure we maximise long-term performance
and create exceptional opportunities for
growth. We are also dedicating time to
investigate potential ways of accelerating
this growth, such as new business
areas, strategic partnerships and
other opportunities to create value.
– We are creating a culture of continuous
change and improvement in our processes,
our ways of working and our digital and
technological capabilities to help us
become more eicient as a business,
allowing us to improve productivity and
maximise the talents of our employees.
Our spaces can be
adapted to a variety
of dierent uses, which
means we are not overly
exposed to a particular
sector and also that
we can capitalise on
growth opportunities in
non-traditional industrial
and logistics occupiers,
such as data centres
and life sciences.
David Sleath, Chief Executive
2
3
2 SEGRO Logistics Centre Tilburg
3 SEGRO Park Le Thillay
1 SEGRO Park Greenford North
1
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
10
– We cannot be the best property company
without a strong social responsibility
and a compelling oering to our wider
stakeholders. Our focus on Championing
low-carbon growth, Investing in our local
communities and environments and
Nurturing talent are parts of our DNA,
increasingly embedded within our
day-to-day activities and other
strategic priorities.
Together, we believe that these priorities
will ensure that we continue to deliver on our
Purpose of creating the space that enables
extraordinary things to happen, and fulil our
ambition to be the best property company.
Outlook
SEGRO has one of the highest quality, best
located and most modern pan-European
industrial warehouse portfolios, with a
diverse customer base. Our strategic focus
is to ensure that our properties are located
in the most supply constrained locations
and are of a standard that makes them highly
appealing to occupiers - and are therefore
able to generate superior long-term rental
growth and overall performance.
As we progress through 2024, whilst
macroeconomic and geopolitical uncertainty
remain elevated, we note that inlation has
fallen sharply over recent months and capital
market pricing is now implying that interest
rates have peaked. If sustained, this provides a
positive backdrop for a recovery of investment
market sentiment as the year progresses.
Take-up levels are in line with or higher
than pre-pandemic levels across our
markets, supported by the key structural
drivers of occupier demand which remain
very much in evidence: data and digitalisation,
supply chain optimisation, sustainability
and urbanisation.
This gives us conidence in the outlook
for continued rental growth in line with our
medium-term guidance of two to six per cent
per annum, particularly as supply remains
restricted in the near-term due to low levels
of vacancy and limited capital availability for
developers; and in the longer-term as public
policy, particularly in urban areas, continues
to favour housing over industrial usage and
severely restricts the use of greenbelt land.
£137 million of our future income growth
is underpinned by rent reversion within our
existing portfolio, approximately 20 per cent
of our current rent roll. Most of this reversion
is in the UK and will be captured by the
ive-yearly open market rent review process,
whilst we will continue to beneit from
index-linked uplifts on over half of our
leases (mostly in Continental Europe).
Further, our high-quality land bank, with
the potential to add over £390 million of
rental income, provides us with the ability
to meet occupier demand through further
development. Projects within this land bank,
as well as redevelopment opportunities within
our existing portfolio such as on the Slough
Trading Estate, combine to give the potential
for 1.2 GW of new data centre capacity across
24 sites. Our strong balance sheet provides
inancial lexibility to invest at a time when
construction costs are moderating, and
supply of new competing product remains
low. Development therefore continues to
oer a proitable growth opportunity, as
demonstrated with improving development
yields of seven to eight per cent.
Overall, we believe the present market
environment oers an attractive opportunity
for proitable mid-term investment, including
the ability to grow passing rents by more than
50 per cent over the next three years. SEGRO
is therefore well-placed to deliver attractive
returns and continued growth in earnings
and dividends.
David Sleath
Chief Executive
See more on our strategy on page 20
Read more about our risk management
on page 54
Find out more about
Responsible SEGRO on page 23
Our new Executive Committee members
Introducing our new Executive Committee members who join David Sleath (CEO), Soumen
Das (CFO) and Margaret Murphy (Group HR Director) to drive our strategy and lead the
day-to-day running of our business.
1 James Craddock,
Managing Director, UK
James leads SEGRO's property business across
the UK. James has been at SEGRO for nine
years. Prior to this role he led our Thames Valley
Business Unit and before that ran our Park
Royal portfolio in West London.
2 Paul Dunne,
Group Customer and Operations Director
Paul represents the voice of our customer in
our Executive Committee. Alongside this he is
responsible for setting standards, developing
strategy and ensuring consistency across
Group Operations, including driving our
sustainability agenda. Paul has been at
SEGRO for three years. In his previous roles
he managed and transformed supply chains
for multi-national companies, including in the
retail, FMCG and automotive sectors.
3 Marco Simonetti,
Managing Director, Continental Europe
Marco leads SEGRO's property business
across our seven Continental European
markets. Marco has been at SEGRO for 16 years.
Prior to this role Marco headed up our Southern
European Business Unit and before that ran our
Italian portfolio.
4 Andrew Pilsworth,
Chief of Sta
Andrew works closely with our CEO and other
Executive Committee members in developing
and implementing strategic initiatives and
leading a variety of cross-border business
propositions. Andrew has worked at SEGRO
for 14 years. In his prior role he led our
National Logistics Business Unit and, before
that, worked in Finance roles, including as
our Director of Finance.
3
4
2
1
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Annual Report & Accounts 2023
11
Market overview
The performance of real estate businesses
are inluenced both by occupier markets and
investment markets.
Overview
The occupier market is driven by simple supply and
demand dynamics for our warehouses. If there is
high demand but limited supply, vacancy rates will
be low and the shortage of supply will drive rents higher.
Outside factors that drive the market
Supply and demand can be driven by cyclical
factors such as the macroeconomic environment, for
example economic growth, but also structural factors which
can drive continued demand throughout the economic
cycle.
How this inluences our performance
The occupier market aects our ability to grow rents
and therefore deliver growth in earnings and dividends.
Where these two interconnect is ultimately down to the
importance of cashlow in the real estate sector, i.e. the
rental income expected to be recevied from the buildings.
If occupier markets are strong and rental income is growing,
investors may be prepared to accept a lower return (yield)
than they would in an environment where the occupier
market is poor and the rental income is potentially riskier.
The occupier market therefore generally impacts the
investment market but the same is not true in reverse.
This was the case during 2023 where we have seen
resilience in our occupier markets, driven by structural
drivers which helped to oset macroeconomic weakness,
but investment markets have been weaker driven by
uncertainty around inlation and interest rates.
Overview
The investment market is inluenced by the relative
attractiveness of real estate as an asset class versus other
potential investments, for example cash, corporate and
government bonds and equities. Real estate is typically
seen as having some bond-type characteristics, long-term
and relatively low-risk income streams (as leases on
commercial property are signed for multiple years)
but with the potential for that income to grow.
Outside factors that drive the market
If interest rates increase and government bond yields (the
‘risk-free rate’) are higher this can lead to investors wanting
a higher return from their real estate investments (the
yield). If yields increase asset values typically fall (absent
any other changes).
How this inluences our performance
The investment market therefore has an impact on the
value of our assets and the total returns from our portfolio.
The
occupier
market
The
investment
market
These
markets are
interconnected
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
12
Cyclical
factors
Factors often linked to the economic
cycle that inluence supply and
demand, and therefore impact
assetvalues and rental levels.
Economic outlook
Description
Economic outlook is an important driver of
occupier demand for space. A supportive
economic outlook encourages businesses
to grow and therefore to secure extra space.
In a recession, customer insolvencies and
commercial property vacancy rates have
historically increased.
Macroeconomic uncertainty continued
during 2023. Falling energy prices helped
reduce inlation but GDP growth was low
at less than one per cent (UK: 0.5 per cent,
Eurozone 0.5 per cent). It is expected to
improve during 2024 but growth will
likely remain low (IMF expects UK and
Eurozone GDP growth of 0.6 and
0.9 per cent respectively).
Occupier demand in 2023 remained
resilient in the face of the uncertain
macroeconomic environment, supported
by the structural drivers at play in our sector.
However, market take-up levels returned
closer to pre-pandemic averages as some
customers chose to delay their expansion
plans in the light of the uncertainty around
the future strength of consumer demand
and also higher funding costs.
How SEGRO responded
We brought forward a lower amount of
speculative development during 2023,
focusing the majority of our new activity
on signing pre-lets on land that we already
own. Most of our competitors did the same
which meant that speculative construction
starts fell signiicantly. Market vacancy rates
are therefore likely to stay low given the
resilience of take-up, which bodes well
for future rental growth.
Interest rate environment
Description
In response to elevated levels of inlation,
central banks repeatedly increased interest
rates during 2023, reaching levels not seen
in over a decade (Eurozone 4.0 per cent,
UK 5.25 per cent). The margin between
government bond yields (the ‘risk free
benchmark’) and property yields, that helps
to determine the attractiveness of property
assets to investors, has therefore reduced.
Uncertainty around the trajectory for rates
also impacted property investment markets
and resulted in low investment volumes. As
a result industrial real estate yields moved
out further and were between 4.3 and 6.3
per cent in our markets at the end of 2023.
Higher interest rates also result in a higher
cost of debt which can make investments
inanced through debt (for example
development) less proitable and on a
corporate level can impact earnings growth.
How SEGRO responded
Market yield movements are largely
outside of our control but we have
focused our portfolio on the markets
where we believe demand will be strongest
and supply will remain limited. This should
drive greater rental growth and long-term
outperformance. The yield on our portfolio
increased 50 basis points during 2023
(from 4.8 to 5.3 per cent) but six per cent
estimated rental value growth helped to
oset the impact of the yield movement.
We adjusted the hurdle rates on our
investment decisions to ensure we
focused on the most proitable development
opportunities and increased disposals
to part fund capex rather than issuing
new debt.
Link to strategy:
Operational excellence, Disciplined capital
allocation
Link to risk:
Macroeconomic (1) and major event (3)
Link to strategy:
Eicient capital and corporate structure,
Disciplined capital allocation
Link to risk:
Financing (7), portfolio strategy (2)
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Annual Report & Accounts 2023
13
Market overview continued
Geopolitical environment
Description
A stable geopolitical environment is
important for businesses as it provides
certainty and conidence when planning
for the future.
The geopolitical environment remained
uncertain during 2023 with continued
impacts from the Russian invasion
of Ukraine and also conlict in the
Middle East.
Despite this, supply chain issues were
largely resolved during the course of 2023 as
alternative solutions were found. This helped
to reduce the cost of the major raw materials
used in our development programme (steel,
cement, timber etc) and brought stability
to construction cost inlation.
There are a number of other geopolitical
situations across the globe that have the
potential to cause further disruption and
we will continue to keep a close eye on
these. This uncertainty is likely to increase
the focus of our customers on supply chain
resilience (see structural drivers).
How SEGRO responded
We continued to work closely with our
construction partners to manage the
situation during 2023. The moderation of
construction costs (and in some markets
we have seen reductions) whilst rents have
continued to grow has helped to improve the
development yields for our pipeline.
Competitive supply
Description
The relatively short construction time for
warehousing means that the availability of
new, speculatively developed buildings can
sometimes create excess supply, leading
to increased vacancy and weaker rents.
Occupier demand was resilient during 2023
but take-up has returned to pre-pandemic
averages across all of our markets. This
combined with the completion of a relatively
high number of development schemes has
meant that vacancy levels increased across
some markets from record low levels.
They remain below longer-term averages,
however, and the resilience of occupier
demand meant that there continued to
be suicient tension between supply and
demand for strong market rental growth.
In addition, SEGRO's portfolio is located
in mostly supply constrained areas where
there is lack of land and vacancy rates in
our chosen sub-markets have therefore
remained lower than market averages.
Increased build and inance costs as
well as economic uncertainty meant
that speculative construction starts fell
signiicantly in 2023 (34 per cent in the UK
according to Savills) so new supply should
reduce and vacancy rates are likely to stay
low if occupier demand remains resilient.
How SEGRO responded
We took a cautious approach to speculative
development during 2023 and focused our
eorts on mostly pre-let schemes. Rental
growth was strong across our portfolio,
particularly on the Continent where less
new supply has been delivered.
Link to strategy:
Operational excellence
Link to risk:
Major event (3) and development (6)
Link to strategy:
Operational excellence,
Disciplined capital allocation
Link to risk:
Operational delivery (10)
Digitalisation of society
Description
Digital technologies are changing the
way that we live, work and behave. Entire
industries are adapting and new ones are
emerging as digital adoption accelerates.
One of the most signiicant impacts of
digitalisation on industrial assets is the rise
in e-commerce, with consumers wanting
to receive an increasing array of goods
and services more lexibly. The pandemic
accelerated this need, and e-commerce
penetration rates are signiicantly above
pre-pandemic trend levels. Most European
markets are forecast to reach online sales
penetration levels of close to or above
20 per cent by 2027. Distribution networks
will need to be reconigured to facilitate
this growth in a cost eective and
sustainable manner.
Increased demand for data centres
to store and process the huge amounts
of data generated by both individuals
and businesses is another aspect of
digitalisation and this has been further
strengthened by the rise of Artiicial
Intelligence during 2023 and resulted in
increased demand for data centre space.
How SEGRO responded
Our unique combination of big box and
urban warehouses is ideally suited for
businesses looking to adapt to an omni
channel model so we continue to target
retailers and third-party logistics operators
for pre-lets. During 2023 we also expanded
our data centre pipeline through the
acquisition of a retail park in Slough and
have identiied several plots within our
UK and Continental European land bank
suitable for data centre development.
Link to strategy:
Operational excellence,
Disciplined capital allocation
Link to risk:
Portfolio strategy (2)
Structural
drivers
Changes in the way that an
industryormarket functions
canresult in longer-term or
evenpermanent change.
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Annual Report & Accounts 2023
14
Supply chain eiciency and resilience
Description
Manufacturers, retailers (both traditional
and online) and distributors require eicient,
reliable distribution networks and supply
chains to compete eectively in meeting
customer demands and reducing costs.
By investing in modern, well-located
warehouse facilities they can better
serve their customers and gain access
to labour pools to sta their facilities.
These businesses frequently need larger
buildings in central locations with space
and power to support automation, as
well as smaller buildings close to the
consumer to support the ‘last-mile’
of the distribution journey.
The disruption to supply chains caused by
the pandemic and the Russian invasion of
Ukraine has highlighted the importance of
supply chain resilience, leading businesses
to hold more inventory, source more locally
and have multiple suppliers.
Trade routes into Europe are changing with
fewer imports from Asia via Eastern Europe
and the increased importance of European
ports in northern Germany, southern
France and Italy.
How SEGRO responded
There is increased demand for modern,
well-located warehousing for supply
chain eiciency and future resilience.
Our pan-European portfolio has assets
located on key transportation routes and
in major logistics hubs and is well-placed to
beneit from additional demand generated
by the transformation of trade routes.
We are actively targeting these
customer types for pre-lets.
Urbanisation
Description
The populations of most major European
cities continue to grow, leading to increased
housing requirements as well as increased
demand for goods and services, and for
warehouse space from which to supply
them, including for ‘last-mile’ deliveries.
Land previously used for industrial purposes
in and around major towns and cities can
also be used to construct new residential
and other types of properties required to
meet the demand of the larger urban
population. As a result, land available to
meet the need for increased warehouse
demand is being eroded, leading to
higher land prices and increased rents
for well-located urban industrial properties.
Planning can also be more challenging in
urban areas, particularly in our Inner City
portfolios in London and Paris, due to a
policy bias towards residential development.
How SEGRO responded
Two-thirds of our portfolio is in urban
locations so we are well-positioned to
beneit from this trend. We continue to think
creatively to identify new opportunities and
during 2023 started on our irst underground
logistics development in central Paris.
Although we are currently undertaking less
speculative development, we progressed
several of our urban schemes through the
planning process so that we can act quickly
to bring these forward once approved,
subject to market conditions.
Link to strategy:
Operational excellence,
Disciplined capital allocation
Link to risk:
Portfolio strategy (2)
Link to strategy:
Operational excellence,
Disciplined capital allocation
Link to risk:
Portfolio strategy (2), Development (6)
Climate change and the need for eicient,
sustainable buildings
Description
The world is facing a climate crisis and
governments, business and consumers
across the world are making commitments
and changing their behaviour to help tackle
this massive challenge and limit global
temperature rise to less than 1.5 degrees.
As a result of this there is increasing
focus on the impact of buildings on the
environment. Our customers also want
to minimise their carbon footprint and
reduce overall occupancy costs. It is
therefore important that landlords and
developers own and create buildings
that are sustainable and use natural
resources eiciently.
Major European conurbations are also
looking to reduce traic emissions which
means it will be even more important for
businesses to be located in the properties
that help them reach their customers
by low-carbon means.
How SEGRO responded
We have continued to make good progress
in our reduction of carbon emissions
through both our development programme
and our corporate and customer emissions.
During 2023, 99 per cent of our development
completions were BREEAM 'Very Good'
or higher and we took back an increased
amount of older space in London to
refurbish to high levels of sustainability
and improve operating eiciency.
We also installed 15 MW of new solar
capacity on our rooftops to provide our
customers with renewable energy and
reduce their carbon footprints.
Link to strategy:
Operational excellence,
Disciplined capital allocation
Link to risk:
Portfolio strategy (2), Development (6)
Find out more about
Responsible SEGRO on page 23
1 SEGRO Logistics Park Oberhausen
2 SEGRO Park Greenford North
1
2
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
15
Our business model
2.
Acquisitions
6.
Asset
recycling
1.
Market
analysis
4.
Active asset
management
3.
Development
5.
Portfolio
review
A deep understanding of our customers’ needs and the markets
in which we operate lies at the heart of how we do business.
The direction provided by our strategy and supported by our
strong culture, help us deliver on our Purpose and create
long-term value for all of our stakeholders.
What we need to enable extraordinary things to happen
Our Purpose
We create the space that enables
extraordinary things to happen. We are
both a creator of exceptional buildings
and an enabler for our stakeholders,
particularly our customers, employees
and local communities, to achieve
extraordinary things.
Our Ambition
To be the best property company
includes: driving long-term
outperformance from our portfolio;
delivering outstanding customer
service; providing our employees
with rewarding and fulilling careers;
and continually challenging ourselves
to innovate and keep one step ahead
of the competition in everything
that we do. Ultimately, we want
to be the partner of choice for
all of our stakeholders.
Our Culture and Values
We have a special company culture
that permeates throughout SEGRO
based upon a care for our stakeholders
and each other, and we have a mutual
desire to create a successful business
that we are proud of.
Our Values (and Purpose) were
co-created with input from the entire
workforce, have stood the test of time
and underpin everything that we do.
They are our core beliefs that guide our
decision making, large and small and
inform the ways in which we work
together to make things happen:
– Say it like it is
– Stand side by side
– If the door is closed...
– Keep one eye on the horizon
– Does it make the boat go faster?
Find out more about our Values
on page 31
Read How the Board Manages and
Monitors Our Purpose and Culture
on page 87
What we do to enable
extraordinary things to happen
1. Market analysis
We consider long-term trends and
our customers’ needs when deciding
where and what to invest in.
2. Acquisitions
We buy assets and land in key strategic
markets and source opportunities
o-market where possible.
3. Development
We build prime, lexible, sustainable
warehouses in key locations.
4. Active asset management
We actively manage our assets to
strike a balance between occupancy
and rental growth, whilst looking for
opportunities to create further value
through refurbishment, redevelopment
and repositioning of our assets
(including potential alternative uses).
5. Portfolio review
We undertake a detailed analysis
of our portfolio every year to ensure
we understand the risk-return proile
of every asset.
6. Asset recycling
We dispose of assets where we have
optimised returns or see better uses
of capital.
Scan the QR code to see our
video on what SEGRO Values
mean for employees
www.segro.com/ara23/
our-values
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
16
Our strategy
We have been following a clear and
consistent strategy for over a decade.
This strategy has four key pillars:
– Taking a Disciplined approach
to capital allocation to maximise
long-term return potential.
– A relentless focus on Operational
excellence.
– Maintaining an Eicient capital
and corporate structure to
underpin the property level returns.
– Embedding Responsible SEGRO
into the way we run our business
day-to-day to ensure our business
remains it for the future.
Our governance
To ensure we are able to consistently
deliver for our own stakeholders,
we have a strong governance
framework which sets us up for
long-term success.
Guided by our strategy
The value we create by enabling extraordinary things to happen
Employees
We employ 460 people across eight
countries with a diverse range of skills
We want our People to have fulilling
and rewarding careers.
Employee engagement
89%
2022: 91%
Customers
We have 1,416 customers from a
wide-range of sectors. We pride
ourselves on the strength of these
relationships and look to form
mutually beneicial partnerships.
Customer satisfaction
86%
2022: 85%
Suppliers
We have 2,842 suppliers across the
group (including our construction
partners) and look to work with those
whose aims complement our own.
Supplier spend in 2023
£887m
2022: £941m
Communities
As a long-term investor we are
committed to ensuring the local
people and communities beneit
from our involvement.
Volunteering days
707
2022: 387
Investors
We forge strong relationships with our
shareholders as well as our banks and
bondholders who provide equity and
debt funding.
Total shareholder return
20%
2022: (46)%
Environment
We pay close attention to our use of
carbon and other resources to protect
the planet for future generations and
ensure SEGRO's long-term success.
Corporate and customer emissions
(7)%
2022: (3)%
See Stakeholder Engagement
on page 18
Find out more about our strategy
on page 20, risk management on
page 54 and Performance review
on page 36
See Governance on page 76
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Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
17
We have identiied key stakeholders who we
have an impact on – employees, customers,
communities, suppliers, investors and
the environment.
Underpinning these stakeholder relationships
is a culture which promotes high standards of
business ethics, is focused on a long-term
sustainable strategy and which recognises
our responsibilities to the environment.
Our full s172 (1) statement
can be found on page 90,
within the governance section
of this Annual Report.
Our stakeholders
Employees Customers Communities
We have 460 employees across 19 dierent
oices. Our people deliver our strategy in
line with our Purpose, Values and Behaviours.
The strength of our operating platform,
and therefore the success of our business,
depends on the talent, engagement
and motivation of our people.
We have 1,416 customers across eight
countries and aim to build outstanding
customer relationships. A deep
understanding of their needs lies at the
heart of how we do business and the space
that we provide enables them to deliver an
extraordinary range of goods and services
and is crucial to their own success.
Our relationship with our local communities
means that we are good neighbours and
support each other. We need the support
of local communities to gain approvals for
our developments. We deliver long-term
economic and social beneits in the
communities where we operate.
What matters to them
– An inclusive and supportive workplace
that is free from bias.
– Working for a company whose values
match their own.
– Rewarding careers that enable them
to thrive and fulil their potential.
– Competitive compensation and beneits.
What matters to them
– High quality, sustainable, well-located
space that enables them to serve their
customers and is safe to work in.
– Excellent customer service and a
high-level of consistent experience.
– Support with their business goals
and challenges.
– Connection with other businesses and
insights into peers and market trends.
What matters to them
– Local environment and quality of life.
– Air quality.
– Sustainable designs that mitigate
noise and traic congestion.
– Training and employment opportunities.
– Investment into the local economy.
– Enhancement of biodiversity.
How we engage with them
– Weekly business updates.
– Quarterly employee brieings.
– Annual employee survey (Your Say).
– Employee groups on topics such as
Culture, Wellbeing and Inclusion.
– Annual reviews of individual
performance and development needs.
– Training and development programmes
and coaching.
How we engage with them
– Regular contact with our property
and asset management teams.
– Annual customer satisfaction survey.
– Regular customer Forums to discuss
emerging trends.
– Partnering on our community projects.
How we engage with them
– Early consultation on new developments.
– Creating partnerships with local
authorities, charities and education
providers to deliver our Community
Investment Plans (CIPs).
– Long-term participation in community
groups and local advisory boards.
2023 engagement highlights
– Our irst Group Conference since 2018
bringing 411 of our People together to
discuss our ambition, culture and
strategic priorities.
– Maintained a top quartile colleague
engagement score (97 per cent took part).
– Engagement around leadership changes.
2023 engagement highlights
– Record level of responses (347) to
our customer satisfaction survey.
– Introduction of new customer onboarding
and senior stakeholder interviews.
– Expansion of our customer insight
programme to include senior stakeholders
– Health & Safety and Wellbeing training.
2023 engagement highlights
– Successful consultation on SEGRO Park
Hackney Wick.
– Launch of a new CIP in Amsterdam.
– Signiicant outcomes from our existing
CIPs, including a record number of
volunteering days (707) on projects
beneiting our local communities.
Priorities for 2024
– Equip our new leadership teams to
inspire others to deliver on our strategy.
– Enhance our employee experience
with a focus on lexible policies and
supporting career ambitions.
– Actively working towards a more
diverse leadership team.
Priorities for 2024
– Detailed mapping of the SEGRO
customer journey to identify opportunities
to improve and collaborate more closely.
– Launch customer intelligence platform
to centralise customer data and
improve collaboration.
– Connect customers through our Futures
Forum and other dedicated events.
Priorities for 2024
– Successfully renegotiate the Slough
Trading Estate Single Planning Zone.
– Expand our UK CIP to new regions
and launch plans in Italy and Spain.
– Maximise the impact of our CIP by
inspiring more customers and
suppliers to participate.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
18
2
1
1 SmartParc SEGRO Derby
2 Slough Trading Estate
Suppliers Investors Environment
We work with a diverse range of suppliers,
2,842 of them across the group. They
include our construction partners,
professional advisers and everyone
involved in SEGRO's supply chain. Close
collaboration with our suppliers is key to
helping us reduce our carbon emissions.
Our investors provide the capital through
equity or debt which inances SEGRO's
business and its future growth.
Shareholders, both institutional and retail,
are the owners of our business. They are
also the inancial institutions who provide
debt and our joint venture partners.
The regions in which we operate and local
areas impacted by the development and
ongoing operations of our assets, We pay
close attention to our use of carbon and
other resources to protect the planet for
future generations and ensure SEGRO's
long-term success.
What matters to them
– Clearly deined expectations and
standards (e.g. ethics, modern slavery)
– Positive collaboration with aligned
values and objectives.
– Advice on best practices and
training support.
– Prompt and eicient payment of invoices.
What matters to them
– Clearly articulated long-term strategy.
– Financial performance, returns and
dividend growth.
– Strong balance sheet.
– Risk management and eicient
use of capital.
– Leading ESG performance.
What matters to them
– Reduction of the carbon emissions
generated by our operations and
particularly our development programme.
– Maximising the eiciency and minimising
the resource usage of our assets.
– Protection and enhancement of
biodiversity in our local areas.
How we engage with them
– Comprehensive supplier assurance
process to ensure our supply chain is
maintained to a high standard.
– Regular service review sessions.
– Support with Health & Safety.
– Collaboration on our Responsible
SEGRO ambitions and CIP projects.
How we engage with them
– Our extensive Investor Relations
programme ensures we relect our
investors views in our decision making.
– This includes: meetings, roadshows,
conferences and asset tours; regulatory
reporting; and our Annual General
Meeting.
How we engage with them
– Ambitious carbon-reduction targets.
– Addition of solar panels where feasible.
– Scenario analysis to understand the
potential impact of climate change
and mitigate risks.
– Consideration of carbon and biodiversity
impacts of our development projects.
2023 engagement highlights
– Enhanced supplier due-diligence process.
– Research into a potential supplier
diversity programme.
– Formation of Contractor Forums in the UK
to discuss Health & Safety best practices.
– Involvement of 59 suppliers in our
volunteering programme.
2023 engagement highlights
– 239 investor meetings, including
15 of our top 20 shareholders.
– Asset tours for both institutional
and retail shareholders.
– Areas of focus included the outlook
for asset values and rental growth.
2023 engagement highlights
– Reductions in our carbon emissions
– Signiicant increase in visibility of
our customer energy usage (now at
81 per cent).
– Addition of 15 MW of solar capacity.
Priorities for 2024
– Develop and roll-out our supplier
diversity programme.
– Embed social value within tender process.
– Continue to drive the involvement of our
suppliers in our CIP projects.
Priorities for 2024
– Continue to take an open and transparent
approach to inancial communication.
– Engage proactively with our top
shareholders and potential new investors.
Priorities for 2024
– Continue to outperform on our carbon
reduction pathway and refresh our
milestones for 2025 and beyond.
– Replace gas with low-carbon alternatives.
– Increase automisation of energy
data collection.
– Increase our solar capacity.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
19
Our strategy drives both our day-to-day
decision making as well as our long-term
strategic thinking.
We have been following this simple but
eective strategy for over a decade and its
four key pillars provide a clear focus as we
work towards our ambition of being the best
property company .
We are Disciplined in our approach
to capital allocation. We take the local
knowledge provided by our teams on the
ground in all our key markets and supplement
it with valuable data-informed insights. This
ensures that we focus on the highest quality
assets in the strongest markets and adapt our
approach to capital deployment depending
on our assessment of the property cycle.
This should result in a portfolio that generates
attractive returns; provides above-average
growth (both in terms of rent and capital
values) when market conditions are positive
and proves to be resilient in a downturn.
We strive for Operational excellence in
everything that we do: our market-leading
operating platform helps us to develop
outstanding customer (as well as other
stakeholder) relationships; execute on
our development programme and other
operational activity to the highest standards
(including taking a zero-tolerance approach
to health and safety); and create exceptional
opportunities for growth, using the market
intelligence that it provides.
Our operational activity is supported by
an Eicient capital and corporate structure
that provides a lean overhead structure,
leverages technological developments
to transform processes and applies
appropriate inancial leverage.
At the heart of our strategy lies
Responsible SEGRO, because it is woven
through everything that we do; from the
asset management of our portfolio, to the
planning and execution of our development
programme, to the way we treat our People.
It provides us with clear focus areas - carbon,
communities and talent - to help us to balance
the priorities of all of our stakeholders and also
between short and long-term beneits.
We take a proactive approach to risk
management (for more information on
how we manage risk see pages 54 to 64) to
ensure that we are positioning our business to
respond to potential threats. We also regularly
carry out ESG materiality assessments to
ensure we understand the wider priorities
of our stakeholders, as well as to highlight
potential opportunities.
Following this strategy, combined with our
day-to-day insights, governance and risk
management processes, helps us to adapt
to suit changing market conditions (allowing
us to respond quickly if needed) and also to
ensure that we are positioning the business
for long-term success. This should translate
into not only sustainable, attractive returns for
all our shareholders, but also signiicant value
for all other stakeholders.
Our strategy
A clear and consistent strategy that has been key to our success
in delivering on our Purpose of creating the space that enables
extraordinary things to happen, and which creates signiicant
value for all of our stakeholders.
See our Market overview
on page 12
Find out more about
Responsible SEGRO on page 23
See Key performance
indicators on page 32
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Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
20
Disciplined capital allocation Operational excellence Eicient capital and
corporate structure
Responsible SEGRO
Using our in-depth knowledge of our
customers and the trends impacting their
businesses, to pick markets and assets that
create the right portfolio shape, actively
manage its composition and adapt our
capital deployment according to our
assessment of the property cycle.
Leveraging our operating platform
to optimise performance through
dedicated customer service, expert
asset management, development
and operational eiciency.
Underpin the property level returns from
our portfolio with a lean overhead structure,
the best technology-enabled processes
and an eicient capital structure and
appropriate inancial leverage.
Embedded in the way that we manage our
business day-to-day are our Responsible
SEGRO strategic priorities. They inluence
the way we manage our portfolio, how we
create new space, and the investments that
we make into our business to make sure that
it is it for the future.
Relevant market trends
– Economic outlook
– Interest rate environment
– Competitive supply
– All four structural drivers (digitalisation,
urbanisation, supply chain optimisation
and sustainability)
Relevant market trends
– Geopolitical situation
– Competitive supply
– All four structural drivers (digitalisation,
urbanisation, supply chain optimisation
and sustainability)
Relevant market trends
– Economic outlook
– Competitive supply
– Interest rate environment
Relevant market trends
– Urbanisation
– Climate change and the need for eicient,
sustainable buildings
Relevant risks
– Macroeconomic impact on market cycle
– Portfolio strategy and execution
– Major event/business disruption
– Legal, political and regulatory
– Development and construction execution
Relevant risks
– Portfolio strategy and execution
– Major event/business disruption
– Health and safety
– Development and construction execution
– Legal, political and regulatory
– People and talent
– Operational delivery
Relevant risks
– Macroeconomic impact on market cycle
– Portfolio strategy and execution
– Financing strategy
– Legal, political and regulatory
– People and talent
– Operational delivery
Relevant risks
– Health and safety
– Environmental sustainability
and climate change
– People and talent
2023 achievements
– Continuing to invest in our existing
markets where we see superior rental
growth potential.
– Prioritising investment into our
development programme, building on
land that we already own and favouring
lower-risk pre-let developments.
– Selective disposals of £356 million of
assets to help fund investment in a higher
interest rate environment.
2023 achievements
– Providing excellent customer service
– Capturing the signiicant reversionary
potential in the portfolio at lease events,
yet maintaining high levels of occupancy
and customer retention.
– Successful execution of our development
programme and improvement of our
development yields.
– Delivering strong rental growth across
all of our markets.
2023 achievements
– Maintaining a modest level of leverage,
despite further declines in portfolio value.
– Restructuring the Executive Committee
and our business units to improve
eiciency and collaboration across
our business.
– Digitalising our processes to
improve productivity.
2023 achievements
– Signiicant reductions in both
our embodied and customer
and corporate carbon emissions.
– Tangible outcomes from our Community
Investment Plans that are changing lives
in our local communities.
– Setting new diversity targets.
Find out more on Disciplined capital
allocation in the Performance review
on page 39
Read more on Operational excellence
in the Performance review
on page 42
Find out more on Eicient capital and
corporate structure in the inance review
on page 48
Find out more about
Responsible SEGRO
on page 23
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
21
A postcard from Amsterdam
Our strong company culture encourages
collaboration, care for one another and a
desire to never stand still. In September,
SEGRO came together in Amsterdam for
our irst Group Conference since 2018.
The conference was hosted by our new
Executive Committee, who led a discussion
on what our ambition ’to be the best
property company’ means and how,
by challenging ourselves to search for
excellence in every aspect of our business,
we can drive SEGRO to enable more
extraordinary things in the decade ahead.
We also used the event as an opportunity to
talk about the ways of working that support
our Values and will help us to maintain our
strong culture as our business grows.
Creating opportunities such as this,
for people from across the Group
to come together to share ideas and
develop their networks, is crucial to
the success of our business and the
talent that makes it special.
Scan the QR code to see our
video on our people
Or visit: www.segro.com/ara23/
space-for-talent
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
22
Responsible SEGRO
We are
committed to
being a force
for societal and
environmental
good.
Responsible SEGRO demonstrates how our
environmental and social contributions are
embedded within our business strategy,
and are fundamental to how we enable
extraordinary things to happen.
Read about our ESG commitments
in our Responsible SEGRO Report:
www.segro.com/responsible-segro/
reports-downloads
Our commitment to being a force for societal
and environmental good has been at the heart
of how our business operates since it was
founded. It has been instrumental in the
success of the Company over the past
103 years and will be just as important for
the next 100 years. This commitment is led
by our Board but lived by SEGRO colleagues
every day. It is about doing the right thing and
making a positive impact wherever we operate.
We have long-held commitments to
leadership in health and safety, stakeholder
engagement, corporate governance and
being a good corporate citizen.
Our Responsible SEGRO framework helps
us to articulate our sustainability goals
and address our stakeholders’ most
material concerns. Within this we have
focused in on three enduring strategic
priorities, which were determined
through engagement with our stakeholders.
These priorities cover the areas where we
believe we can make the greatest business,
environmental and social contribution.
They are:
Championing low-carbon growth
Investing in our local communities and
environments
Nurturing talent
For each of these areas we have established
challenging targets that are linked to six
non-inancial KPIs and to the annual bonus
for all employees.
We report a summary of our progress with
these during 2023 in the following section and
discuss our priorities for 2024 – more detailed
information (along with full datasets) can be
found in our 2023 Responsible SEGRO Report.
We intend to set additional, more speciic,
supporting targets as necessary and expect
our actions and approach to evolve over time
to relect our achievement, technological
change and the priorities of our stakeholders
and wider society.
Alignment with the UN SDGs
We have reviewed the United Nations
Sustainable Development Goals against
our Responsible SEGRO strategic priorities
to understand which goals are particularly
signiicant to our business. Elements of our
business are aligned with all of the goals but
we believe we are able to make the greatest
contribution to six of them:
Championing low-carbon growth
We are committed to reducing the
embodied carbon in our development
programme as well as reducing the
carbon-intensity of our properties. We
want to play our part in tackling climate
change and have ambitious net-zero goals.
Investing in our local communities
and environments
We have a strong track-record of supporting
local communities and employment
(including training) is one of the areas that
our Community Investment Plans (CIPs)
focus on. We want to play our part in
reducing inequalities and ensuring more
people have the right skills to access
meaningful work.
Nurturing talent
We want our people to have rewarding and
fulilling careers and are committed to fair
pay throughout our operations and also
our supply chain, and to ensuring that our
spaces provide safe working environments
and promote health and wellbeing for all.
Scan the QR code to hear our Group
Customer & Operations Director talk about
the importance of Responsible SEGRO
www.segro.com/ara23/responsible-segro
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
23
Responsible SEGRO continued
Nurturing talent
Number of employees
460
Gender split of workforce
Male
Female
51%
49%
'Your Say' Engagement Score
89%
Voluntary Employee Turnover
6.4%
Training hours
5,936
Number of promotions (by gender)
Male
Female
19
17
ESG reporting and ratings
We monitor our performance across various
Environmental, Social and Governance (ESG)
indices and review trends to ensure our
approach and the information we disclose
meets the needs of our stakeholders.
The below is as at 31 December 2023.
There are a number of dierent frameworks
that we use to report on our wider ESG
metrics, including:
– Global Reporting Initiative (GRI)
– Task Force on Climate-related Financial
Disclosures project (TCFD)
– EPRA sustainable Best Practice Reporting
(EPRA sBPR): Gold
– Workforce Disclosure Initiative: 80 per cent
– National Equality Standard
– Parker Review
– FTSE Women Leaders
There are also various agencies who review
and assess our ESG reporting and
performance, including:
– MSCI: AAA
– Carbon Disclosure Project (CDP): A-
– Global Real Estate Sustainability
Benchmark (GRESB):
• Standing investments: three-star
• Development: four-star
• Public disclosure: A
– FTSE4GOOD - 3.2 (2.9 sub-sector average)
Investing in our local communities
and environments
Number of community investment plans
12
Charitable giving
£2.5m
Employee volunteering days across
44 projects in our local communities
707
Unemployed people supported (347 of
whom who are now in employment)
1,303
Students engaged with through our
schools programmes and mentoring
8,032
Key numbers
Championing low-carbon growth
Average embodied carbon intensity of our
developments
13% reduction versus 2020 baseline
Absolute corporate and customer carbon
emissions
19% reduction versus 2020 baseline
Corporate and customer carbon intensity
10% reduction versus 2022
Visibility of customer energy data
81%
Developments completed
rated BREEAM 'Excellent' or higher
92%
Solar capacity installed
59MW
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
24
Our material issues
Priority Material Issues
Material Issues
Championing low-carbon growth
Driving a pathway to net-zero through eective energy management (including embodied
carbon), and by enabling a transition to renewable energy for SEGRO and our customers.
Ensuring environmental compliance, today and in anticipation of future regulatory
changes, and ongoing certiication against relevant standards.
Understanding the need and opportunity for climate adaptation, and building resilience
to climate change, for SEGRO and our customers.
Identifying and executing business and diversiication strategies in the renewables
sector, that build on our unique positioning and strengths.
Understanding our biodiversity impacts and supporting urban greening.
Responsible water management.
Nurturing talent
Attracting, developing and nurturing talent for rewarding careers.
Ensuring the safety and health of our employees, our suppliers and those who
use our facilities.
Promoting diversity, equity and inclusion, including and beyond succession planning
and compliance.
Investing in our local communities and environments
Implementing smart technology that makes lives better, and protects the environment.
Leading in the development and implementation of ethical building standards.
Engaging with and investing in local communities for mutual positive impact.
Operating in the context of sound governance (see pages 76-133)
Ensuring sound and ethical business conduct, including through the eective
management of our supply chain, and in our customer base (to the extent that
this is possible).
Ensuring ongoing and increasing ESG disclosure and transparency.
Protecting and upholding human rights (including Modern Slavery) within SEGRO
and amongst customers and suppliers.
Protecting and preserving our reputation, by doing the right thing and anticipating
stakeholder concerns.
Promoting and preserving a positive and caring culture, which is mindful of economic
equality and hardship.
Being mindful of cyber security and the ethical use of information and data.
Responsible SEGRO materiality assessment
We regularly review our materiality
assessment to ensure that our strategic
priorities and the targets within them are
appropriate and relect our stakeholders’
expectations. Our last review was in
2022 and followed guidelines by the
Global Reporting Initiative (GRI) and the
Sustainability Accounting Standards Board
(SASB), now part of the IFRS Foundation.
The 2022 process included a review of
benchmarks and standards, peer reporting
and aligned with internal risk management
processes. The aim was to identify those
issues (both risks and opportunities) that
are most important to the Company and its
primary stakeholders, to ensure that they are
considered within our Responsible SEGRO
strategic priorities, and to inform the structure
of our sustainability reporting. Emerging
issues were also identiied and considered.
This process identiied 18 material
issues, considered through four lenses
– environmental, societal, economic and
governance – but with recognition that
the issues may well be inter-dependent.
We reined these to eight priority material
issues (PMIs) to focus on the areas which
are both important to our stakeholders and
where we intend to focus our immediate
eorts. We recognise this represents their
relative importance at a point in time and
is based on the views of a small number
of informed participants.
Each issue identiied has been allocated
to the relevant team within SEGRO for further
attention has been embedded into business
processes. All inancially material PMIs are
governed by the SEGRO business risk process
(see page 54). These issues are remain aligned
with our current Responsible SEGRO priorities.
During 2024 we intend to refresh this work
and will consider the concept of double
materiality, i.e. looking at the impact SEGRO's
activities have externally, as well as the
inancial impact of sustainability and
climate issues on SEGRO.
Materiality assessment
four-step process
Our deinition of materiality is informed
by the Global Reporting Initiative:
these are topics that “represent the
organisation’s most signiicant impacts
on the economy, environment and
people, including impacts on their
human rights”.
1.
Understanding
the organisation’s
context
2.
Identifying actual
and potential impacts
3.
Assessing
signiicance
of impacts
4.
Prioritising the
most signiicant
impacts for reporting
Find out more on materiality: www.segro.com/responsible-segro/reports-downloads
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
25
Championing low-carbon growth
SEGRO’s pathway to net-zero
SEGRO’s carbon emission reduction targets
focus on the most material aspects for the
company, namely our corporate and customer
emissions and embodied carbon from our
development programme, representing
over 85 per cent of SEGRO’s value chain
emissions.
We have made signiicant progress in
transitioning to low or zero-carbon energy
sources and materials in recent years and
we are committed to continuing this progress
and accelerating it wherever possible.
Our carbon reduction targets were set
and approved under the international
Science-Based Targets Initiative (SBTi).
The SBTi methodology identiied a pathway
for companies to reduce the emissions
within their value chains to align with
reaching net-zero in eligible 1.5C
pathways by 2050 or sooner.
SEGRO’s carbon reduction targets are
based primarily on an absolute reduction
in emissions and comprise the following
key actions:
– Purchase certiied renewable electricity for
SEGRO’s own (Scope 2) use and for those
customers for whom we procure energy
on their behalf (Scope 3).
– Most of our customers are responsible for
procuring their own energy. In these cases,
we encourage them to agree to our green
leases and procure certiied renewable
electricity where possible and conirm
this to us.
– Remove gas-powered heating in units
which become vacant or through
negotiation with customers occupying
premises heated with gas.
– Install solar panels to generate clean energy
for our customers to use and, where the
grid connectivity allows, install additional
capacity to sell to the grid.
SEGRO’s pathway to net-zero
Invest in onsite
renewables
Improve carbon
and energy
eiciency of
portfolio
Certiied green
energy for
customers
Address residual
carbon
Oset
remaining
carbon
1
Corporate and
Customer
Carbon
emissions
400,000 tC0
2
e
Illustrative footprint
to 2030 ‘As is’
Other
80,000 tC0
2
e
Embodied
Carbon
emissions
210,000 tC0
2
e
Reduce
embodied carbon
Build low-carbon
spaces
Supporting customers to run low-carbon spaces
Remaining
Remaining
Remaining
If we do nothing
Life cycle assessments
Joint supplier innovation
Renewable electricity taris
Solar generation &
battery storage
Gas removals
EPC Ratings
BREEAM certiications
1 We are aware that osetting more than 10 per cent is currently not part of the permitted net-zero pathway as set
out by the SBTi. We are committed to inding solutions and use the term as a placeholder for residual emissions.
– Improve the energy eiciency of our units
through construction and refurbishment
by targeting at least BREEAM 'Excellent'
certiication and an Energy Performance
Certiicate of B-grade or better.
– Reduce embodied carbon emissions in our
developments by working with our partners
to procure and utilise low-carbon materials
and designs.
– Oset residual emissions as a last resort,
and as far as possible, identify osetting
schemes within our operating geographies
with clearly measurable, long-term impacts.
The results since 2020 (our baseline year) are
encouraging. We have reduced our corporate
and customer emissions by 19 per cent and
the average embodied carbon intensity of
our development programme has fallen by
13 per cent, meaning that we are tracking
ahead of our near- to mid-term SBTi Standard
Net Zero trajectory on both of these key
metrics (see charts to the right). In addition,
our installed solar capacity has more than
doubled over the same timeframe.
Since 2021, the science-based target
framework landscape has evolved and,
during 2023, the SBTi developed a new
Standard, speciically designed for the
Real Estate industry, At the time of writing
this SBTi Building Standard is in its pilot
phase, with further guidance under
preparation. We will evaluate the new
Standard once this has been published,
which is expected during 2024, and consider
any changes to our targets or approach as
part of this work. We intend to publish any
new targets in our 2024 Annual Report
and Accounts.
In addition to delivering absolute reductions,
we have also invested in an emissions
forecasting and modelling tool, which is
expected to support the creation of new
net- zero commitments and target dates
at a local market as well as a corporate level.
Until then, we continue to pursue a
collaborative approach to working with
stakeholders throughout our value chain
to reduce our carbon footprint as swiftly
as we can.
Corporate and customer emissions
(000s tonnes of COe)
350
300
250
200
150
2020 2022 2024 2026 2028 2030
2030 target:
42% reduction
2023 achieved:
254k tCO
2
e
2023 target:
273k tCO
2
e
Embodied carbon intensity of developments
(kg COe per sq m of lettable area)
450
425
400
375
350
325
300
2020 2022 2024 2026 2028 2030
2030 target:
20% reduction
2023 achieved:
348 kgCO
2
e per sq m
2023 target:
376 kgCO
2
e per sq m
Responsible SEGRO continued
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
26
Scan the QR code to see
our video on innovation
www.segro.com/ara23/
space-for-innovation
Putting the green in Greenford
Enabling extraordinary things to happen is
not limited to the new space that we create.
Whilst most of our portfolio consists of
modern and sustainable space, we have
opportunities in supply-constrained cities
such as London and Paris to redevelop and
refurbish some older assets and create
signiicant value.
During 2023 we completed the refurbishment
of a unit in SEGRO Park Greenford, one of our
West London estates, however this was no
ordinary refurbishment. Having spotted the
increased importance that our customers are
placing on the sustainability of the space they
use, we decided to use this opportunity to
raise the bar in terms of what can be achieved
from a refurbishment.
We moved the EPC rating from a C to A+ and
were awarded BREEAM ‘Outstanding’
certiication, achieving the highest score ever
lodged by the Building Research
Establishment for a refurbished industrial unit.
This newly modernised, sustainable space
will now become home to a new business
and will deliver a signiicant reduction in
carbon footprint for both our customer
and SEGRO.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
27
The world is facing a climate crisis and as an
owner, manager and developer of buildings,
we have a signiicant part to play in tackling
the challenge of limiting global temperature
rise to 1.5°C. It is also an area of increasing
focus with our customers who wish to
minimise their own carbon footprints.
Our approach to carbon management
is dictated by our own carbon footprint:
we focus on the emissions that are most
material to us. More than three-quarters of
our emissions come from our customers and
our development programme so it is in these
areas we have focused our eorts and set
ambitious science-based targets.
Corporate and customer emissions: almost
all of these emissions are generated by the
activity of the customers using our buildings
(our corporate emissions account for less than
two per cent) and we are aiming to reduce this
by 42 per cent (from a 2020 baseline). We are
driving reductions in these emissions through:
– delivering energy eicient buildings (new
build and via refurbishment);
– photovoltaic and renewable energy rollout;
– replacing gas use with eicient electrical
heating systems;
– procuring zero-carbon electricity;
– encouraging our customers to also change
their electricity taris.
Our increasing visibility of customer energy
use is strengthening and targeting our eorts.
Embodied carbon emissions: 31 per cent
of our emissions were generated by our
development programme in 2023 and
we are aiming to reduce the embodied
carbon intensity of it by 20 per cent by 2030.
Our Mandatory Sustainability Policy commits
us to carry out embodied carbon calculations
for projects over 5,000 sq m. We will continue
to adopt the latest techniques to reduce
embodied carbon within our developments,
including the use of low-carbon materials
and considering the use of alternative,
lower-carbon layouts and building
techniques. We target BREEAM 'Excellent'
certiication (or local equivalent) or higher
for all new developments.
Beyond our approach to carbon we also think
carefully about the impact of our operations
on other natural resources and the local
environment. Biodiversity remains a key focus
and our development projects aim to have
a positive impact on our local communities.
Although our use of water is not material,
we are careful in our use of it and design in
features that help our customers use it more
eiciently. Finally, the vast majority of our
waste is created by our construction and
demolition projects, we work carefully with
our construction partners to minimise this,
for example through recycling as much
as possible.
Championing low-carbon growth continued
Key targets and achievements
Average embodied carbon intensity
348 kgCO
2
e per sq m
2022: 353 kgCO
2
e per sq m
Corporate and customer carbon emissions
254,168 tCO
2
e
2022: 272,218 tCO
2
e
Corporate and customer carbon intensity
20.2 kgCO
2
e per sq m
2022: 22.5 kgCOe per sq m
Visibility of customer energy data
81%
2022: 68%
Solar capacity
59MW
2022: 44 MW
Our emissions
a.
b.
c.
a. Corporate and
customer emissions
(including upstream
fuel and energy
emissions)
57%
b. Embodied carbon
from developments:
31%
c. Other procurement-
related emissions:
12%
Scan the QR code to hear our Director
of Sustainability talk about our progress
with Championing low-carbon growth
www.segro.com/ara23/low-carbon
Key achievements during 2023:
– 7 per cent reduction in corporate
and customer emissions, putting
us a year-ahead of plan.
– Continued reductions in our embodied
carbon intensity, putting us three years
ahead of plan.
– 19 per cent increase in the visibility
we have of our customer energy data.
– 92 per cent of our development
completions were rated BREEAM
'Excellent' or higher.
– Our irst BREEAM 'Outstanding'
refurbishment in our London portfolio.
– A record 15 MW increase in our
solar capacity.
Our priorities for 2024:
– Continuing to drive reductions
in our carbon emissions.
– Reassessing our net-zero pathway
in the light of new guidance (see page 26).
– Moving away from gas to eicient
low-carbon heat sources.
– Increasing the automation of the
retrieval of our customers’ energy data.
– Further investment into emission
modelling and forecasting to support
the local delivery of emission reductions
opportunities.
– Progressing our large scale solar
installation strategy.
Average embodied carbon intensity
-13% since 2020
2030 target of -20%
Absolute corporate and customer emissions
-19% since 2020
2030 target of -42%
Read more in our Responsible SEGRO Report:
www.segro.com/responsible-segro/
reports-downloads
Responsible SEGRO continued
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
28
The impact of our CIPs during 2023
Young people engaged
8,032
Unemployed people supported
1,303
Local community projects
44
Investing in our local communities and environments
Key targets and achievements
Number of Community Investment Plans
12
including one new plan launched in 2023
Charitable giving in 2023
£2.5m
2022: £2.5m
Employee volunteering days
707
2022: 387
Scan the QR code to hear our Partnership
Development Director talk about our
progress with Investing in our local
communities and environments
www.segro.com/ara23/communities
Enabling extraordinary things to happen
also applies to the spaces and communities
around our assets. This is a core part of our
strategy and something we are incredibly
passionate about.
We do this by creating Community Investment
Plans (CIPs) to provide the framework to invest
in projects that help improve the lives of local
people. Our teams in each market tailor their
plans to suit the needs of their own local
community, partnering with organisations
that have knowledge and insight of the most
pressing challenges our local communities
face, as well as the expertise to ensure we
deliver an impactful and outcome-driven
programme. Our Community Investment
Plans focus on the following areas:
Education & employment: working with local
education establishments to help prepare
young people for the world of work, as well
as helping people from disadvantaged or
marginalised backgrounds into employment
or better jobs.
Environment: delivering environmental
projects that improve the biodiversity of
the local area and the health and wellbeing
of the local community.
Economy: enabling our local economies
to thrive by connecting local businesses with
our suppliers, customers and other partners
to deliver projects that help to enhance
productivity and innovation.
Volunteering is vital to the success of our
CIPs and there is no limit to the number
of days employees can donate. In 2023
436 employees (95 per cent of our workforce)
supported our projects, including as part of
our annual Day of Giving. We have also had
a tremendous response from our customers
and suppliers, 143 of whom supported our
community work during the year, helping to
maximise the reach of these programmes.
Alongside our CIPs, our buildings also play
an important role in supporting our local
communities. Our estates provide valuable
space for charity partners such as City
Harvest, Slough Foodbank and the Felix
Project to re-distribute food that would
otherwise be wasted.
Key achievements during 2023:
– Launch of a new CIP in Amsterdam.
– Record levels of volunteering from SEGRO
employees and many of our customers
and suppliers also donated their time
to support our projects.
– Tremendous outcomes from our
education programme, during 2023
we engaged with 8,032 students.
– Launch of national employment
programme with LandAid, inspired by our
pilot in 2023. 1,303 unemployed people
beneited from training support, and
347 are now in employment as a result.
– 44 projects were delivered to enhance
the environment, biodiversity or the health
and wellbeing of our local communities.
– Launched our irst jointly funded project
with Heathrow Airport.
Our priorities for 2024:
– Expand UK CIP into other areas of
London, Hertfordshire, Derbyshire and
also expand our French and German
CIPs into new regions.
– Launch new CIPs in Italy and Spain.
– Continue to drive the involvement of
our customers, suppliers and other
stakeholders to maximise the positive
outcomes for our local communities.
– Implement a social value measure.
– Embed social value into SEGRO's
tendering process.
Read more in our Responsible SEGRO Report:
www.segro.com/responsible-segro/
reports-downloads
1 Employment mentoring
programme with East London
Business Alliance, UK
2 SEGRO Academy school
competition, Poland
2
1
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
29
Scan the QR code to see
our video on innovation
www.segro.com/ara23/
space-for-community
Spreading the joy in Paris
Enabling extraordinary things to happen
applies to the spaces and communities
around our estates as much as it does to
the assets themselves. Our Community
Investment Plans (CIPs) create frameworks
that fund projects that aim to improve the
lives and prospects for thousands of people
living in our local communities.
One of the projects that our Paris CIP
supports is Café Joyeux, France’s leading
café for the inclusion of people with
intellectual disability through training and
recruitment. We have been an ambassador
since 2021 and have provided the inancial
support to train and recruit seven Café
Joyeux team members so far. We buy all
our coee from there and oer Café Joyeux
“Welcome Packs” to all our new customers
in France, helping to spread the word of their
fantastic work. During 2023, eight colleagues
from our French team volunteered to work
in their cafés as part of our Annual Day
of Giving programme.
Café Joyeux is a fantastic example of how,
by bringing together our local communities,
customers and other business partners
we can maximise the reach of these
programmes and make a meaningful
impact on people’s lives.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
30
Nurturing talent
Key targets and achievements
‘Your Say’ engagement scores
89% (top quartile)
2021: 91%
% of women in senior leadership roles
33%
2025 target of 40%
% of ethnic minorities in senior leadership roles
5%
2027 target of 15%
Scan the QR code to hear our
Group HR Director talk about
our progress with Nurturing talent
www.segro.com/ara23/talent
The 460 individuals that we employ across eight
countries are vital to the success of SEGRO, and
we are committed to attracting and retaining a
diverse range of talented individuals in our
business. Creating the space for extraordinary
things to happen applies as much to the careers
and work lives of our people as it does to our
assets. Our priorities include:
Celebrating our strong culture: our
employees tell us that they enjoy working at
SEGRO and value their working environment,
which encourages collaboration and care for
one another. We have a clear Purpose and
Values and have developed Behaviours that
will help us to maintain this culture as our
business grows.
Building fulilling and rewarding careers:
we want our people to thrive in their roles
and oer extensive training and development
opportunities as well as secondments.
Building a diverse workforce: we are
committed to building an inclusive workplace
where everyone is treated with fairness
and respect. We have set ourselves targets
to increase the representation of women
and those identifying as being from an
ethnic minority group within our leadership
population and also our leadership pipeline.
We are also committed to attracting people
from non-property backgrounds into our sector.
We have appropriate support, training and
facilities for employees who are disabled or
become disabled whilst in our employment.
Following the highest standards of business
conduct: our Code of Business Conduct and
Ethics sets out the high standards expected
of all our people in their daily work.
Health & Safety and Wellbeing: we want our
people to work in a healthy, safe and secure
environment so have a comprehensive health
and safety training programme and initiatives
to support employee Wellbeing.
Key achievements during 2023:
– Invested in building capability for the future
through: the reshaping of our leadership
team; investing in new capabilities to help
drive our strategic priorities; and the
extension of our Management Academy
to all people leaders.
– Engaged employees on our ambition
to be the best property company at our
Leadership Forum and Group Conference.
– Launched our internal Behaviours, which
bring to life our established Values for
leaders and colleagues.
– Established clear diversity goals, with
a supporting action plan.
UK Gender and Ethnicity Pay Gap progression
During 2023 our Pay Gaps improved but our
Bonus Gaps increased. This was due to the
variable element of LTIPs and share-based
payments inluencing the gap in favour of
male colleagues, whom we have more of
in senior roles. Our reported Pay Gaps are
a direct result of our employee proile
and do not represent pay discrimination.
As part of our salary reviews we undertake
checks to ensure employees are paid equally
for doing equivalent jobs across our business.
Key to closing the Gender Pay Gap is
increasing the number of women in
senior roles in the coming years.
2023 2022
Gender pay gap (mean) 32.9% 43.3%
Gender bonus gap (mean) 73.6% 68.9%
Ethnicity pay gap (mean) 24.1% 25.7%
Ethnicity bonus gap (mean) 70.0% 22.6%
Read more in our Responsible SEGRO Report:
www.segro.com/responsible-segro/
reports-downloads
Our priorities for 2024:
– Continue on our journey to build a SEGRO
that is totally inclusive: evolving and
communicating our equality diversity and
inclusion strategy and actively working
towards a more diverse leadership team.
– Enhance our employee experience
with a focus on more lexible policies
and supporting our colleagues
career ambitions.
– Embed our Behaviours, supporting
our colleagues and leaders to live
them every day.
– Further investment in the development
of our leadership teams and colleagues.
Our Values
– Say it like it is
We always give honest feedback, keep
our promises and keep messaging clear
and simple.
– Stand side by side
We work together and put the interests
of our business ahead of our own. We go
out of our way to support each other and
share knowledge across the business.
– If the door is closed...
If one route is closed to us, we always
ind another way. We challenge ourselves
to think dierently and search for new
ways to succeed.
– Keep one eye on the horizon
We constantly look ahead to ensure
we are successful in the future. we do
this in part by taking an active interest
in our customers and their customers.
– Does it make the boat go faster?
We keep things simple and continue to
look for improvements to how we work.
Rewarding careers: to help us retain the
best people we oer generous compensation
packages that include variable compensation,
share award and savings schemes and health
insurance.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
31
We measure our success by tracking Key
Performance Indicators (KPIs) that relect our
strategic, operational and inancial progress
and performance. They drive the internal
management of the business, and some
are used to determine how management
and employees are remunerated.
Financial
All our inancial KPIs are based on
proportionally consolidated metrics
incorporating our share of joint ventures
andassociates.
Key performance indicators
1. The TPR has been calculated independently
by MSCI Real Estate in order to provide a
consistent comparison with an appropriate
MSCI benchmark. It is calculated as the
change in capital value, less any capital
expenditure incurred, plus net income,
expressed as a percentage of capital
employed over the period concerned for
standing investments held throughout the
year, excluding land.
Total shareholder return (TSR) (%)
20.3%
Description
TSR measures the change in our share price
over the year, assuming that dividends paid
are reinvested. This relects our commitment
to delivering enhanced returns for our
shareholders through executing our strategy
over the medium term. TSR is a key metric
used in setting the long-term incentive plan
remuneration for both the Executive
Directors and senior managers.
Our performance
TSR was 20.3 per cent, compared with 12.9
per cent for the FTSE 350 Real Estate index.
This relects a combination of the 26.9 pence
dividend (18.2 pence 2022 inal dividend and
8.7 pence 2023 interim dividend) paid during
the year, and an increase in the share price
from 763.6 pence at 31 December 2022 to
886.4 pence at 31 December 2023.
202 3
2022
2021
20.3%
(45.8)%
55.0%
Total property return (TPR) (%)
1
(0.5)%
Description
TPR is the ungeared combined income and
capital return from our portfolio of standing
investments held throughout the year. It is an
important measure of the success of our
strategy in terms of asset selection and
management. MSCI Real Estate prepares the
calculation, as well as providing benchmark
TPR data for similar properties in their wider
universe. We aim to outperform the
benchmark over the long term. Details
on how TPR impacts short- and long-term
incentives are provided on pages 126 to 128.
Our performance
The TPR of the Group’s standing assets
held throughout 2023 was -0.5 per cent
(2022: -10.3 per cent). The UK portfolio
generated a TPR of +0.3 per cent, behind the
benchmark calculated by MSCI Real Estate
UK All Industrial Quarterly of +4.1 per cent.
The TPR of our Continental Europe portfolio
was -1.9 per cent. Benchmark data for
Continental Europe will be received later
in the year.
202 3
2022
2021
(0.5)%
(10.3)%
33.0%
Total accounting return (TAR) (%)
(3.3)%
Description
TAR is the growth in Adjusted NAV per
share plus dividends paid, expressed as
a percentage of Adjusted NAV per share at
31 December 2022. It measures the return on
capital and is a key metric used in setting the
long-term incentive plan remuneration for
both the Executive Directors and senior
managers.
Our performance
The TAR for the Group was -3.3 per cent
(2022: -12.8 per cent). This performance
relects a combination of the 59 pence
decrease in Adjusted NAV from 966 pence
at December 2022 to 907 pence at
31 December 2023 and the 26.9 pence
dividend (18.2 pence 2022 inal dividend
and 8.7 pence 2023 interim dividend) paid
during the year.
202 3
2022
2
021
(3.3)%
(12.8)%
43.0%
Linked to remuneration Yes
Link to strategy: All strategic pillars
Linked to remuneration Yes
Link to strategy: Disciplined capital allocation
Linked to remuneration Yes
Link to strategy: All strategic pillars
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
32
Adjusted earnings per share (EPS) pence
32.7p
Description
Our Adjusted EPS relects earnings from
our operating business: rental income less
operating, administrative and inancing
costs and tax. It is the primary determinant
of the level of the annual dividend. IFRS EPS
includes the impact of realised and unrealised
changes in the valuation of our assets, which
can often mask the underlying operating
performance. The reconciliation between
Basic EPS and Adjusted EPS can be found
in Note 12(i) on page 161.
Our performance
Adjusted EPS increased by 5.5 per cent to
32.7 pence during the year, relecting higher
rental income from our standing assets
and new income from acquisitions and
developments, partially oset by higher
inancing costs.
202 3
2022
2021
32.7p
31.0p
28.0p
Rent roll growth (£m)
£65m
Description
The headline annualised rent contracted
during the year less income lost from
takebacks. There are two elements: to
grow income from our standing assets
by reducing vacancy and increasing rents
from lease renewals and rent reviews; and to
generate new rent by developing buildings,
either on a pre-let or speculative basis.
Rent from acquisitions is not included.
Our performance
In total, we generated £65 million of
net new annualised rent during the year
(2022: £77 million). The decrease was driven
by a lower number of pre-lets signed during
the year (£27 million versus £41 million in
2022) as occupier demand normalised
closer to pre-pandemic levels.
202 3
2022
2021
65m
77m
72m
Loan to value (LTV) (%)
34%
Description
Borrowings as a proportion of our portfolio
value, including joint ventures and associates
at share. The timing of investment decisions
and disposals, as well as movement in the
value of our assets, may cause the LTV to
luctuate. We believe that REITs with lower
through-cycle leverage oer a lower risk
and less volatile investment proposition
for shareholders.
Our performance
Our LTV ratio increased to 34 per cent during
2023. This was due to a combination of the
£809 million unrealised fall in the value of our
portfolio and £575 million of net investment
in our business. We recognise that this is
above recent levels, but given where we
are in the cycle we are comfortable with
this level. We retain signiicant headroom
to covenants as well as liquidity to fund
both visible investment and potential
opportunities that may arise.
202 3
2022
2021
34%
32%
23%
Linked to remuneration Yes
Link to strategy: All strategic pillars
Linked to remuneration Yes
Link to strategy: Operational excellence
Linked to remuneration No
Link to strategy: Eicient capital and
corporate structure
See more on our strategy on page 20
We recognise that the management of risk has a
role to play in the achievement of our strategy and
KPIs. Risks can hinder or help us meet our desired
level of performance.
Read more about our risk management
on page 54
Where relevant we have linked our KPIs directly
to SEGRO’s incentive schemes.
Find out more in Remuneration page 107
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
33
Non-inancial
Our non-inancial KPIs help to measure
the shared value our business creates to
ensure that our business is positioned for
long-term success.
Our non-inancial KPIs link to our Responsible
SEGRO strategic priorities.
Given where we are in our journey towards
these goals we anticipate that our non-
inancial KPIs will evolve as we progress
towards our stated ambitions.
Customer satisfaction (%)
86%
What it is
The percentage of our customers who rate
their experience as occupiers of our buildings
as ‘good’ or ‘excellent’ as opposed to ‘poor’ or
‘average’. Our customers are at the heart of
our business and we strive to ensure that we
are providing the best level of service possible
to maximise customer retention.
Our performance
Satisfaction as an occupier of our buildings
was rated as ‘good’ or ‘excellent’ by 86 per
cent of the 347 customers who participated
in 2023 (2022: 85 per cent). The continued
high satisfaction rate relects our focus on
communication, being responsive and
understanding the needs of our customers
and is particularly pleasing given the cost
pressures that some of them are under
(including rental increases). 96 per cent
of our customers said that they would
recommend SEGRO to others.
202 3
2022
2021
86%
85%
90%
Employee engagement (%)
89%
What it is
We carry out an employee survey annually
asking all our people to comment on various
aspects of their work at SEGRO. We share the
results of this with the Board, Leadership
team and all our people.
Our performance
Our 2023 employee engagement score
was top quartile at 89 per cent. 97 per cent
of our people responded and 91 per cent of
employees said that they are proud to work
at SEGRO. 91 per cent of employees believe
that all people are valued at SEGRO,
regardless of gender, ethnicity, disability,
sexual orientation or background.
202 3
2022
2021
89%
91%
94%
Embodied carbon intensity (kgCO
2
e/m
2
)
348
What it is
The largest source of carbon emissions
within our control is the embodied carbon
in our newly developed buildings. Within our
science-based targets, we are committed
to reducing the average carbon intensity
of all new developments by 20 per cent
by 2030 (compared to a 2020 baseline of
400 kgCO
2
e/m
2
). We calculate this metric
based on completed developments over
the past two years for which a life cycle
assessment has been completed.
Our performance
The average embodied carbon intensity
in our development programme was
348 kgCO
2
e/m (2022: 353 kgCO
2
e/m)
relecting a 13 per cent improvement
from the 2020 baseline. We reduced this
by trialling low carbon or recycled materials,
including concrete, steel and timber across
multiple projects.
For more information see page 28
202 3
2022
2021
348
353
394
Linked to remuneration Yes
Link to strategy: Operational excellence
Linked to remuneration Yes
Link to strategy: Responsible SEGRO
Linked to remuneration Yes
Link to strategy: Operational excellence and
Responsible SEGRO
Key performance indicators continued
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
34
Corporate and customer
carbon emissions (tonnes CO
2
e)
254k
Description
Our corporate and customer carbon
emissions cover our own operations under
Scope 1 and 2 and our customer emissions
under Scope 3. We have visibility of 81 per
cent of the energy use from our buildings by
loorspace. For buildings where we do not
receive data we have estimated energy use.
Our science-based targets commit us to
reducing the absolute corporate and
customer carbon emissions of our portfolio
by 42 per cent by 2030 (compared to a
2020 baseline of 312,115 tCO
2
e), in line with
a 1.5 degree scenario.
Our performance
During 2023, we reduced the corporate
and customer emissions of our portfolio
to 254,168 tCO
2
e (2022: 272,318 tCO
2
e),
relecting a 19 per cent improvement from
the baseline. This reduction was largely
due to us having an increased amount of
customer energy data (both their usage
and also the type of energy sourced,
i.e. renewable).
For more information see page 28
202 3
2022
2021
254,168
272,218
280,575
Visibility of customer energy use (%)
81%
Description
Under standard market lease terms we do
not have automatic visibility of customer
energy usage data. We recognise the
importance of having good visibility of this
data so we can accurately assess our Scope
3 emissions and help our customers to
reduce their own carbon footprint as well as
improving their energy eiciency. We are
therefore proactively engaging with our
customers, requesting access to this data
and have introduced green clauses requiring
energy use visibility to all new leases.
Our performance
The visibility of our customers’ energy use
improved to 81 per cent (2022: 68 per cent)
of our total property footprint by area.
For more information see page 28
202 3
2022
2021
81%
68%
54%
Number of volunteering days (number)
707
Description
Now that we have launched 12 Community
Investment Plans (CIPs) across many of
our key markets we have turned our focus
towards the implementation of them.
We are therefore measuring the number
of employees who volunteered in projects
(including on our annual Day of Giving).
Our performance
During 2023 we delivered 707 volunteering
days. This was almost double the number
delivered in 2022.
For more information on the projects within
these plans see page 29
202 3
2022
2021
707
387
234
Linked to remuneration Yes
Link to strategy: Operational excellence and
Responsible SEGRO
Linked to remuneration Yes
Link to strategy: Operational excellence and
Responsible SEGRO
Linked to remuneration Yes
Link to strategy: Responsible SEGRO
See more on our strategy on page 20
We recognise that the management of risk has a
role to play in the achievement of our strategy and
KPIs. Risks can hinder or help us meet our desired
level of performance.
Read more about our risk management
on page 54
Where relevant we have linked our KPIs directly
to SEGRO’s incentive schemes.
Find out more in Remuneration page 107
Find out more about
Responsible SEGRO on page 23
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
35
Performance review
Assets under management
£20.7bn
2022: £20.9bn
Portfolio valuation
£17.8bn
2022: £17.9bn
Portfolio valuation change
1
-4.0%
2022: -11.0%
ERV growth
+6.0%
2022: +10.9%
Rent contracted
£88m
2022: £98m
Pre-lets signed
£27m
2022: £41m
Portfolio update
Warehouse property values saw modest
declines during 2023, as higher interest rates
and uncertainty over the future trajectory for
interest rates continued to impact investors’
appetite for real estate assets. Investment
market volumes remained low and yields
expanded further, although at a much
slower pace than during 2022.
Occupier markets continued to perform well
and although macroeconomic uncertainty
contributed to take-up returning closer to
pre-pandemic levels, the availability of
well-located, modern and sustainable space
remains limited across our markets. This helped
us to grow the rental income on our portfolio,
by increasing the rents on our existing space
and through our development programme,
both of which contributed to income and
earnings growth.
Modest decline in portfolio value due
to further interest-rate driven yield
expansion, partly oset by strong
estimated rental value growth
The Group’s property portfolio was valued at
£17.8 billion at 31 December 2023 (£20.7 billion
of assets under management). The portfolio
valuation, including completed assets, land
and buildings under construction, decreased
by 4.0 per cent (after adjusting for capital
expenditure and asset recycling) during the
year, compared to a decline of 11.0 per cent
in 2022. The majority of the fall came in the
second half of the year and relected the
tighter inancial conditions in capital markets,
particularly in September and October.
The signiicant fall in bond yields and future
interest rate expectations at the end of
2023 did not come in time for an increase in
investment activity last year, but it appears to
have improved sentiment in the investment
market in the early stages of 2024, which we
expect will lead to increased activity during
the year ahead.
The reduction in the valuation of our
portfolio primarily comprises a 4.5 per cent
decline in assets held throughout the year
(2022: 13.1 per cent decline), driven by yield
expansion in most markets, which was partly
oset by a 6.0 per cent increase in our valuer’s
estimate of the market rental value of our
portfolio (2022: 10.9 per cent increase) as well
as development proits and the beneit of our
asset management initiatives.
Assets held throughout the year in the
UK decreased in value by 3.3 per cent
(2022: 15.5 per cent decrease), underperforming
the MSCI Real Estate All Industrial Quarterly
Index which decreased by 0.3 per cent over
the same period.
The underperformance was due to our
weighting towards lower yielding prime
assets, that were more sensitive to yield
movements in response to higher interest
rates. The net true equivalent yield applied
to our UK portfolio was 5.2 per cent, 40 basis
points higher than at 31 December 2022
(4.8 per cent). Rental values improved by
4.9 per cent (2022: 11.5 per cent).
Assets held throughout the year in
Continental Europe decreased in value by
6.4 per cent (2022: 8.8 per cent decrease)
on a constant currency basis, relecting a
combination of 60 basis points of yield
expansion to 5.4 per cent (31 December 2022:
4.8 per cent) and rental value growth of 7.9
per cent (2022: 9.9 per cent).
Further details of property portfolio can be found
in Note 25 to the Financial Statements and in the
2023 Full Year Property Analysis Report, at
www.SEGRO.com/investors.
-£358m £58m -£95m -£99m -£215m -£40m -£749m
Greater
London
Total
Thames
Valley
National
Logistics
Northern
Europe
Southern
Europe
Central
Europe
Unrealised gains and losses on whole portfolio
1 Percentage valuation movement during the period
based on the dierence between opening and
closing valuations for all properties including
buildings under construction and land, adjusting
for capital expenditure, acquisitions and disposals.
The valuation movement cannot be directly derived
from the Financial Statements and is calculated to
be comparable with published MSCI Real Estate
indices against which SEGRO is measured.
Table 3 on page 187 provides a reconciliation
to the Financial Statements.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
36
Passing
rent at
31 Dec 2023
Rent in rent-
free, reversions
and vacancy
£240m£639m £1,411m£71m £461m
Current and
near-term
development
pipeline
Future
pipeline
and options
Total
potential
Annualised rent potential as at 31 December 2023 (£m)
Strong rent roll growth, with a large
contribution from the capture of
reversion on the standing portfolio
as well as development
During 2023, we contracted £88 million
(2022: £98 million) of new headline rent,
consistent with our expectations after the
elevated levels seen during the pandemic
and its immediate aftermath.
We added £30 million of net new rent from
our existing portfolio (2022: £31 million).
This comprised £16 million on new lettings
(2022: £21 million) and £35 million from the
capture of reversion (the dierence between
in-place and market rents) on rent reviews and
renewals, and from inlation-related uplifts in
index-linked leases (2022: £28 million), oset
by rent lost from space returned of £21 million
(2022: £18 million), much of it for refurbishment.
Occupier demand for new space enabled us
to sign further pre-let agreements for delivery
over the next two years. We contracted
£27 million of headline rent from pre-let
agreements and lettings of speculative
developments prior to completion
(2022: £41 million). The pre-lets signed
during 2023 included an additional data
centre on the Slough Trading Estate and
big box warehouses across the UK and
Continental Europe for third-party logistics
operators, manufacturers and retailers
(both traditional and online).
As a result of this activity, rent roll growth which
relects net new headline rent from existing
space (adjusted for takebacks of space for
development), take-up of developments
and pre-lets agreed during the period,
was £65 million (2022: £77 million).
At 31 December 2023, our portfolio generated
passing rent of £639 million, rising to
£697 million once rent free periods expire
(‘headline rent’).
What to expect from our portfolio in 2024
Forecasting yields over any future period is
notoriously diicult given the multitude of
economic and inancial drivers (particularly
interest rates and credit spreads), most of
which are outside of our direct control.
However, if market expectations that central
bank rates have peaked are sustained, this
should provide a supportive backdrop for
a recovery of investment market sentiment
during 2024.
The fundamentals for our sector remain
strong, with occupier demand supported
by structural drivers and limited supply,
which leaves us optimistic about the
prospects for further rental value growth.
This should result in investment markets in
the industrial and logistics sector recovering
more quickly than wider real estate assets.
In addition, we expect investors to remain
selective about where and in what they invest
which, along with our active approach to asset
management, should lead to our high-quality,
modern and sustainable portfolio
outperforming the wider industrial and
logistics market on a long-run basis.
In terms of rent roll, we expect this to increase
through the letting up of space currently
under refurbishment, the further capture
of reversion on the existing portfolio and
by signing further pre-lets in response to
occupier demand. We have the potential
to more than double our rent roll over the
coming years through our active asset
management of the existing portfolio and
the build out of our high-quality land bank.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
37
Scan the QR code to see
our video on collaboration
www.segro.com/ara23/
space-for-collaboration
Progress through partnership in East London
Our market-leading operating platform,
with local networks across Europe, is crucial
to the development of strong relationships
with local authorities and stakeholder groups.
One such relationship is the East Plus
partnership, which was established in
London in 2016 and last year celebrated
its halfway point. This partnership aims to
revitalise 86 acres of industrial land across
the London boroughs of Newham, Havering,
and Barking and Dagenham and is a
collaboration between SEGRO and GLA
Land and Property (GLAP).
Since the partnership’s inception,
investment of over £120 million has
delivered almost 60,000 sq m of
sustainable industrial space for 50
businesses, ranging from SMEs to major
corporates. Beyond physical site delivery,
East Plus has broader regeneration goals
including upskilling the workforce, inspiring
younger generations, and supporting
community projects. Our community
investment programme has helped over
4,700 residents to develop the skills and
conidence to reach their full potential,
assisted 157 unemployed people into work,
and supported 29 charities.
Collaboration, adaptability, experience,
and a passion for delivering excellence
in everything, forms the basis for the
partnership and its extraordinary
progress and success to date.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
38
Taking a disciplined approach to capital
allocation is key to delivering long-term
outperformance. We use our in-depth
knowledge of our markets and our customer
base to position our portfolio accordingly.
We also adapt our approach to capital
deployment depending on our assessment of
the property cycle and other external factors.
During 2023 this has resulted in us prioritising
capital deployment into the most proitable
development opportunities on land that we
already own, and increasingly funding this
through disposals rather than taking on
additional debt.
Net investment during the year was
£575 million comprising: development capital
expenditure of £527 million and £404 million
of land acquisitions, partly oset by
£356 million of disposals during the period.
Capital deployment focused on the most
proitable development opportunities,
increasingly funded by disposals
During the year we invested £931 million
into our development pipeline, which
comprised £527 million (2022: £787 million)
in development spend, of which £92 million
was for infrastructure and £404 million on
new land acquisitions. The land acquisitions
focused on rare and unique sites providing
opportunities for future development.
In the UK, this included the acquisition of Bath
Road Shopping Park in Slough, which creates
signiicant further potential for data centre
development due to its position adjacent
to the Slough Trading Estate. We also
acquired the former Radlett Aerodrome
in Hertfordshire, a brownield site on the
edge of London and close to the M25,
which provides us with the opportunity
to develop an exceptionally rare site of
scale that will deliver over 330,000 sq m
of logistics buildings.
It will be supported by a strategic rail freight
interchange, allowing customers to reduce
the number of trucks used in their operations,
as well as a substantial 610 acre country park
for use by the local community.
In Continental Europe we purchased an
excellent plot of land outside Dortmund which
will deliver over 200,000 sq m of big box and
urban warehouse space in one of Germany's
most attractive logistics markets. We also
purchased small plots of land in Italy, France,
Spain and Poland.
Amid volatile capital markets and higher
inancing costs, we increased the pace of
disposals to fund our development activity,
generating £356 million of proceeds from
asset and land sales, crystallising a proit
of £39 million compared to book value.
These included:
– Asset sales totalling £242 million, mainly
of assets that did not meet our hurdle rates
in our annual asset review process, as well
as some non-core oice assets. In total,
£8 million of rental income (annualised)
was lost as a result of these disposals.
– Land plots totalling £114 million, the majority
of which came from the sale of land that the
buyer intends to develop themselves for
owner-occupation, oering us attractive
risk-adjusted returns.
What we said we would do
We said that we would continue to take a
disciplined approach to capital allocation,
focusing the majority of our investment
on our development pipeline (through
development capex, land acquisitions and
acquiring assets with future redevelopment
potential) and making strategic asset
acquisitions if and when the
opportunity arose.
What we achieved in 2023
All of the investment into our portfolio during
2023 was into our development pipeline, a
combination of development capex to build
out our land bank and land acquisitions to
fuel future growth. We made no asset
acquisitions during the year but took
advantage of increased appetite for prime
assets in the second half to dispose of a
number of assets ahead of book value.
What to expect in 2024
We will continue to take the same disciplined
approach during 2024, putting most of our
focus on building out our attractive land
bank will continue to consider unique asset
or land acquisition opportunities that may
arise in these subdued investment market
conditions. We expect to dispose of
between one and two per cent of the
portfolio as per our normal levels of capital
recycling but adapting the overall volume of
disposals to market conditions. We have a
number of transactions under discussion
and expect to make further progress with
these during 2024.
£575m
of investment for growth
Acquisitions of assets
£0m
2022: £155m
Acquisitions of land
£404m
2022: £712m
Development capex
£527m
2022: £787m
Disposals of assets and land
(including sales to SELP)
£356m
2022: £367m
Link to strategy:
Disciplined capital allocation
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Investment
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
39
Performance review continued
Disciplined capital allocation and Operational
excellence are both key to the success of our
development programme. They ensure that
we deploy capital into the most proitable
opportunities and into markets with the
greatest long-term return potential, execute
on our pipeline eiciently and safely, and build
to the highest construction and sustainability
standards.
Development completions delivered
£50 million of potential headline rent
Development completions added
625,700 sq m of new space to the portfolio
during 2023, generating £43 million of
headline rent, with a potential further
£7 million to come when the remainder of the
space is let. The yield on total development
cost (including land, construction and inance
costs) is expected to be 7.0 per cent when
fully let (excluding developments completed
by third parties on a forward funded basis
acquired at investment value).
We completed 478,800 sq m of big box
warehouse space, including one of our last
remaining plots at SEGRO Logistics Park East
Midlands Gateway and across all of our major
European markets, let to third-party logistics
operators, retailers and manufacturers.
We completed 146,900 sq m of urban
warehouses, including three data centres in
Slough and industrial units in South London,
Berlin, Cologne and Paris. The majority of
these were developed speculatively and
almost 80 per cent of the rent has already
been secured.
During the year the contractor on one of
our UK big box projects, Buckingham
Contracting Group, entered administration.
Our development team responded quickly
to secure the scheme and liaise with our
aected customers.
Thanks to our strong relationship with an
alternative contractor we were able to restart
works quickly. Although an inevitable
consequence has been an increase in costs
along with a short delay to the original delivery
programmes, we have managed the impacts of
this alongside our customers and have revised
completion dates in place. Contractor failure is
a supply chain risk we consider explicitly and it
is managed in part through avoiding over-
reliance on any single contractor.
Reducing embodied carbon in our
development programme is critical to
helping us achieve our net-zero targets
and we continue to make progress in this
area, reducing the carbon intensity of our
developments to 348 kgCO2e per sq m during
2023. This represents a 13 per cent reduction
from our 2020 baseline, meaning we are on
course to achieve our science-based target
of a 20 per cent reduction by 2030.
Almost all (99 per cent) of our eligible
development completions during 2023 have
been, or are expected to be, accredited at least
BREEAM ‘Very Good’ (or local equivalent), with
92 per cent ‘Excellent’ or ‘Outstanding’.
£71 million of potential headline rent
currently under development or due to
start shortly
At 31 December 2023, we had development
projects approved, contracted or under
construction totalling 415,200 sq m,
representing £183 million of future capital
expenditure to complete and £51 million of
annualised gross rental income when fully let.
62 per cent of this rent has already been secured
and these projects should yield 7.3 per cent on
total development cost when fully occupied.
In the UK, we have 169,900 sq m of space
approved or under construction. Within this
are our irst multi-level warehouse scheme in
West London, two new data centres on the
Slough Trading Estate (the second largest
hub of data centres globally) and big box
warehouses at our logistics park in Coventry.
What we said we would do
We expected to continue to develop out our
land bank during 2023 and anticipated
investing in excess of £600 million in
development capex, including £100 million
of infrastructure expenditure.
What we achieved in 2023
2023 was another strong year of
development completions. We completed
625,700 sq m of space, capable of delivering
£50 million of new headline rent.
We spent £527 million on development
capex, including £92 million on
infrastructure. This was a little lower than our
expectations and the residual capex is
expected to be incurred in 2024.
What to expect in 2024
We expect to invest approximately
£600 million in development capex
during 2024, including £150 million of
infrastructure related to our UK big box
logistics parks. The yield on cost for our
development programme is expected to be
between 7 and 8 per cent.
Development completions
625,700sq m
2022: 639,200sq m
Development capex
£527m
2022: £787m
Current pipeline potential rent
£51m
2022: £67m
Current pipeline yield on cost
7.3%
2022: 6.5%
Potential rent from future pipeline
£392m
2022: £305m
Embodied carbon
348 kgCO
2
e/sq m
2022: 353 kgCO
2
e/sq m
Link to strategy:
Disciplined capital allocation and
operational excellence
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Development
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
40
In Continental Europe, we have 245,200 sq m
of space approved or under construction.
This includes pre-let big box warehouses for a
variety of dierent occupiers, from retailers to
manufacturers, across Italy, Spain and Poland.
We are also developing a further phase of
our successful urban warehouse park in
Amsterdam and are also on site with our
underground scheme in central Paris.
We continue to focus our speculative
developments on urban warehouse projects,
particularly in cities such as London and Paris,
where modern space is in short supply and
occupier demand is strong.
We have factored current construction and
inancing costs into the returns for our future
development projects. Encouragingly, we are
seeing build costs stabilise across most of our
markets and in some regions have started to
see construction tenders coming in at reduced
prices. We expect to be able to develop at a
margin over the valuation yields on equivalent
standing assets of at least 150 to 200 basis
points, meaning that development remains
a proitable way of growing the rent roll.
Within the future development pipeline are
a number of pre-let projects close to being
approved, awaiting either inal conditions to
be met or planning approval to be granted.
We expect to commence these 'near-term'
projects within the next six to 12 months.
These projects total 208,700 sq m of space,
equating to approximately £159 million of
future capital expenditure and £20 million
of potential annual rent.
Further details of our completed projects and
development pipeline are available in the
2023 Full Year Property Analysis Report, at
www.SEGRO.com/investors.
A zero-tolerance approach
to poor health & safety
Accident incident rate:
0.93
2022: 0.25
Health and safety is central to all of our
business activities and it is our responsibility
to ensure that we provide and promote a
healthy, safe and secure environment in
which our people can work, extending
throughout our supply chain, and in
particular on our development projects.
We aim to achieve our high standards
through a combination of risk mitigation,
training and promoting a widespread
awareness of health and safety. We only
want to work with businesses that share our
approach of zero-tolerance of poor health
and safety. We require all of our suppliers to
conirm that they meet our Health and Safety
Standards, and we undertake particularly
rigorous assessments of those companies
working on our development sites. We
support our contractors by providing
additional guidance, signage and
undertake health and safety visits of all
our development sites through the life of
each project. We also facilitate the sharing
of best practice across the industry though
our Contractor Forums.
This approach also extends to the ongoing
day-to-day life of our estates, many of
which are accessed by both our customers
and the public. We factor this into the
design, mitigate risks and provide training
to raise awareness.
Whenever incidents occur we fully
investigate to understand the causes and
disseminate learnings across the Group,
including the Board and Executive
Committee, to ensure that we (and where
appropriate third-parties) respond and
improve our processes where necessary.
The accident incident rate increased
slightly during 2023, but these were minor
incidents, mainly slips and trips, and we
believe the increase has been driven by
improved reporting.
£481 million of future potential rent from
land bank and options
Our land bank identiied for future
development (including the near-term
projects detailed above) totalled 1,138
hectares as at 31 December 2023, valued at
£1.7 billion, roughly 10 per cent of our total
portfolio value. This includes £645 million
of land acquired for future redevelopment
but which is currently income producing,
reducing the holding costs until development
can start (equating to £20 million of
annualised rent).
We estimate our land bank can support
3.7 million sq m of development over the next
ive to seven years. The estimated capital
expenditure associated with the future
pipeline is approximately £3.7 billion. It could
generate £392 million of gross rental income,
representing a yield on total development
cost (including land and notional inance
costs) of between 7 and 8 per cent. These
igures are indicative, based on our current
expectations, and are dependent on our
ability to secure pre-let agreements, planning
permissions, construction contracts and on our
outlook for occupier conditions in local markets.
The land bank also includes 24 sites that
SEGRO has identiied as suitable for data
centre development, equating to a potential
1.2 GW of additional capacity across the UK
and Continental Europe. SEGRO expects to be
able to commence construction on several of
these sites (two of which are currently under
development) over the next ive years,
which could more than double the current
£50 million of headline rent attributed to the
data centre sector (approximately 7 per cent
of group headline rent at 31 December 2023).
Land acquisitions (contracted but subject to
further conditions) and land held under option
agreements are not included in the igures
above, but represent signiicant further
development opportunities. These include
sites for big box warehouses in the UK
Midlands as well as in Italy and Poland.
They also include urban warehouse sites
in East and West London.
The options are held on the balance sheet at
a value of £26 million (including joint ventures
and associates at share). Those we expect to
exercise over the next two to three years are
for land capable of supporting almost
830,000 sq m of space and generating
£89 million of headline rent, for a blended
yield of approximately 7 per cent.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
41
Performance review continued
The performance of our existing portfolio
relies on our continued focus on Operational
excellence; whether that means providing the
best customer experience throughout the
customer’s ‘journey’ with SEGRO, optimising
rental income and lease terms, ensuring
consistency of operating standards, or driving
eiciency through continuous improvement
and the digitalisation of processes.
We believe SEGRO has a market-leading
operating platform with people on the ground
in all of our key locations. Through the internal
management of our portfolio, we build strong
and meaningful relationships with our
customers and other business partners, and
actively manage our assets to generate
long-term outperformance.
Strong and diversiied customer base
Understanding our customers and their
evolving needs is crucial to the success of
our business. The insights that we gain from
these partnerships help us to shape our
portfolio and ensure that our buildings are
it for the future and suitable for occupier’s
evolving needs.
Our customer base remains well diversiied,
relecting the lexibility of warehouse space
and that two-thirds of our portfolio is in urban
locations. Our top 20 customers account for
32 per cent of total headline rent. Amazon
remains our largest customer, accounting
for 7 per cent of our total rent roll.
Customers from the transport and logistics
sector were the largest takers of our space
during 2023, as they continued to focus
on prioritising eiciency, resilience and
sustainability into their operations. This was
closely followed by the technology, media
and telecoms sector, which was driven by
data centre operators taking additional space
to keep up with increased corporate and
consumer demand.
The health of our customer base remains
strong: less than £3 million of rent was lost
due to insolvency (2022: £2 million) and rent
collection is tracking at normal levels despite
the tougher economic environment.
Focused on delivering excellent
customerservice
Although the quality and location of our
portfolio is important to our customers,
we aim to build outstanding customer
relationships through the delivery of excellent
customer service. This enables us to maintain
high levels of customer retention, grow rents
and create new business opportunities.
We often work with our larger customers in
more than one location and regularly across
geographies: 27 per cent of our headline rent
comes from customers with whom we have
leases in more than one country. Our cross-
border customer account teams help to
ensure that we oer a streamlined and
informed approach to these businesses.
We carry out a rolling survey of our customers
throughout the year to identify and rectify
issues promptly. In 2023, we spoke to
347 customers, and 96 per cent said that
they would recommend SEGRO to others
(2022: 98 per cent) while 86 per cent said
they rated their experience with SEGRO as
‘Excellent’ or ‘Good’ (2022: 85 per cent).
During 2023 we extended the reach of our
customer insight programme and added new
customer onboarding and senior stakeholder
interviews to better understand our
customers' experiences of working with
SEGRO and how we can best support them.
One of the key takeaways from these
interviews was that customers appreciate our
eorts to improve connectivity with SEGRO
and between their fellow customers. Our
regular Customer Futures Forums bring
together customers from dierent sectors
to discuss emerging trends and anticipate
future requirements.
What we said we would do
We expected occupier demand to remain
strong, but at more normalised levels to the
pandemic years. We anticipated that rental
growth would continue, supported by this
demand and the continued shortage of
supply in our chosen markets.
What we achieved in 2023
Our focus on Operational excellence and
commitment to excellent customer service
helped us to deliver another strong year of
rent roll growth during 2023, albeit not quite
at the 2022 record level. We made great
progress capturing reversion and kept
occupancy high, despite taking back some
space in London for refurbishment and
redevelopment to very high sustainability
standards. We also made great progress with
our carbon targets within the existing
portfolio by improving the visibility of
customer emissions and adding a signiicant
amount to our solar capacity through
retroitting projects.
What to expect in 2024
We have a unique portfolio in Europe’s
strongest markets. Our active asset
management approach will ensure that it will
continually evolve to provide high quality,
modern space appealing to the widest
variety of customers, thereby increasing
rental levels. In 2024, we will continue to
focus on providing excellent customer
service and to capture the reversion inherent
in our leases which relects the quality of our
buildings. We will continue to take advantage
of leases coming to an end on some of our
older buildings to refurbish them, bringing
them up to the high environmental
standards our customers and other
stakeholders expect.
Portfolio passing rent
£639m
2022: £587m
Rent contracted during the year
£88m
2022: £98m
Customer satisfaction
86%
2022: 85%
Corporate and customer carbon emissions
254,168 tonnes CO
2
e
2022: 272,218 tonnes CO
2
e
Visibility of customer emissions
81%
2022: 68%
On-site renewable energy capacity
59MW
2022: 44MW
Link to strategy:
Operational excellence
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Asset management
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
42
Actively managing our portfolio
to create value
The supply-demand dynamics across our
chosen markets remained favourable during
2023, helping to drive further rental (ERV)
growth and £88 million of new headline rent
signed during the year. The active asset
management of portfolio ensures that we
generate long-term outperformance. We
create plans for every single asset as part of
our annual asset review process, aiming to
strike a balance between maintaining current
high occupancy and creating opportunities to
drive future rents and create value through
refurbishment, redevelopment or conversion
to alternative uses such as data centres.
We monitor a number of metrics that help us
assess the performance of our existing portfolio:
– Good progress in capturing the embedded
reversion within our portfolio: Lease reviews
and renewals during the period generated an
uplift of 31.0 per cent (2022: 23.3 per cent),
adding £20 million of new headline rent. New
rents agreed at review and renewal were
39.9 per cent higher in the UK (2022: 28.0 per
cent) as reversion accumulated over the past
ive years was relected in new rents agreed. In
Continental Europe, rents agreed on renewal
were 7.9 per cent higher (2022: 1.7 per cent
higher), as a result of market rental growth
continuing to outpace annual indexation
uplifts that have accumulated over recent
years. Our portfolio is now 20 per cent
reversionary, providing us with the opportunity
to capture a further £137 million of headline
rent over the next ive years, £84 million of
which is up for rent review or renewal by the
end of 2026.
– Occupancy has remained high at 95.0 per
cent (31 December 2022: 96.0 per cent), in
line with our 94 to 96 per cent target. The slight
reduction from 2022 is concentrated in our
London portfolio and primarily relects the
recent completion of speculative projects in
South London as well as the take-back of some
older buildings to facilitate refurbishment or
redevelopment. For example, a number of
customers were relocated from their existing,
older SEGRO premises into brand new space
at SEGRO Park Hayes and SEGRO Park
Tottenham. The occupancy rate excluding
recently completed speculative developments
remains high at 96.0 per cent (31 December
2022: 97.3 per cent) and the average
occupancy rate during the period was
95.5 per cent (2022: 96.4 per cent).
– Customer retention rate increased
to 81 per cent. Approximately £71 million of
headline rent was at risk from a break or lease
expiry during the period, of which we
retained 78 per cent in existing space
(2022: 75 per cent), and a further 3 per cent
in new premises (2022: 1 per cent).
– Lease terms continue to oer attractive
income security. The level of incentives
agreed for new leases (excluding those on
developments completed in the period) fell
slightly to 5.8 per cent of the headline rent
(2022: 6.1 per cent). We maintained the
portfolio’s weighted average lease length, with
7.3 years to irst break and 8.3 years to expiry
(31 December 2022: 7.0 years to irst break,
8.3 years to expiry). Lease terms are longer in
the UK (8.4 years to break) than in Continental
Europe (5.7 years to break), relecting the
market convention of shorter leases in
countries such as France and Poland.
Working closely with our customers and
refurbishing older assets to help us achieve
our Championing low-carbon growth
ambitions
We have targets set and approved under the
international Science-Based Targets Initiative
(SBTi) to reduce the absolute corporate and
customer carbon emissions from our portfolio
by 42 per cent by 2030 (compared to a 2020
baseline), in line with the 1.5 degree scenario.
During 2023, we reduced these carbon
emissions by 7 per cent, taking our reduction
from 2020 to 19 per cent and putting us a year
ahead of our target.
The recent introduction of green lease clauses is
helping us to improve our visibility of customer
carbon emissions, which allows us to better
identify opportunities to help them operate their
buildings more eiciently, reducing their carbon
footprint and operating costs. These clauses, as
well as an increase in the number of automatic
meter feeds that we receive, have helped take
the visibility of our portfolio energy use to
81 per cent (2022: 68 per cent).
At the end of 2023, 65 per cent of the
portfolio had an EPC rating of B or better
(2022: 58 per cent). Whilst the majority of our
portfolio is modern and already meets the
highest sustainability standards, we do have
some older assets in heavily populated and
congested cities such as London and Paris,
where land and buildings are in short supply
and rents continue to grow. This provides us
with the opportunity to add signiicant value
through refurbishment, redevelopment, or
conversion into alternative uses whilst also
improving their environmental performance.
A key part of our asset planning process is
therefore determining the phasing of these
projects and managing the space to ensure we
have vacant possession to suit our future plans.
This can lead to periods where the headline
vacancy in these sub-markets is elevated, for
example in our West London portfolio at the
end of 2023, but the cost of this vacancy is
more than outweighed by the value created
through the refurbishment or redevelopment.
Opportunities such as these are not included in
our future development programme and could
create signiicant rental uplifts. One such
refurbishment, SEGRO Park Greenford in West
London, was awarded BREEAM ‘Outstanding’
during the period and rated EPC A+ and is our
most sustainable refurbishment to date.
Our asset management teams are also
working hard to expand the solar capacity of our
portfolio through retroitting onto existing assets
(whilst the development teams are installing
panels on new developments) where feasible.
During 2023 we added 15 MW to our solar
capacity, including 11 MW through retroits
onto existing buildings.
Applying Operational excellence
to our supply chains
Supplier spend:
£887m
Number of suppliers:
2,842
We apply the same approach in our supply
chains as we do in our internal operations and
aim to develop collaborative partnerships, with
mutually beneicial aims and objectives. Our
suppliers range from small local businesses to
multinational companies and we look to work
with businesses who share our approach to
matters such as health and safety, compliance,
anti-bribery and corruption. Our Supplier
Code of Conduct and Modern Slavery and
Labour Standards Supply Code consolidate
and set out in full the principles and standards
that we expect and outline how we can work
side-by-side to create real change.
Our relationships with our suppliers are also
important in us achieving our Responsible
SEGRO ambitions. We work closely with our
construction partners to reduce the embodied
carbon intensity of our development
programme. We also expect our suppliers to
work with us to support local businesses and
economies; this included proactively sourcing
labour, goods and services from our local
communities and contributing to our
Community Investment Plans.
In the spirit of partnership, we treat our
suppliers well and ensure they are paid on
time. We are a signatory of the UK Prompt
Payment Code (average UK payment time is 14
days). We are also an accredited UK Living
Wage employer, and are working with our
suppliers to help ensure everyone working in
our supply chain to support us is paid a real
Living Wage.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
43
Regional updates and 2023 key highlights
Occupier demand was
resilient across all of our
markets and vacancy in our
chosen sub-markets remains
low, supporting continued
market rental growth during
2023.
Greater London
– Signiicant capture
of reversion.
– Completion of
world's irst BREEAM
'Outstanding'
refurbishment.
– Celebrating the
ten-year anniversary
of our East Plus
partnership.
Headline rent
(at share)
£226m
Occupancy
91.2%
National Logistics
– Completion of our
inal units at
SLP-EMG.
– Further pre-lets
signed in Coventry.
– Acquisition of rare
land plot in Radlett
for 300,000 sq m
logistics park.
Headline rent
(at share)
£58m
Occupancy
98.4%
Thames Valley
– Attracted 16 new
customers to the
Slough Trading
Estate.
– Signiicant capture
of reversion.
– Acquisition of Bath
Road Shopping Park
for data centre
redevelopment.
Headline rent
(at share)
£115m
Occupancy
96.8%
Southern Europe
– Continued rental
growth across our
markets.
– Two major new
pre-lets signed in
Spain.
– Commencement of
work on our new
central Paris
schemes.
Headline rent
(at share)
£159m
Occupancy
96.3%
Central Europe
– Completed 82,000
sq m of new space.
– Acquired 16.5
hectares of new
land in Warsaw.
– 100 per cent
customer and
supplier satisfaction
rate.
Headline rent
(at share)
£49m
Occupancy
95.7%
Northern Europe
– Strongest ERV
growth in Europe.
– Completion of
rezoning and
acquisition of land in
Dortmund.
– Installation of 4 MW
of solar capacity in
Germany.
Headline rent
(at share)
£90m
Occupancy
98.8%
Q&A with our Continental European MD
Marco Simonetti
Marco Simonetti covers
the following topics
– Continental European operational
highlights
– Performance of our dierent markets
– Continental European e-commerce trends
– Outlook for construction costs
Q&A with our UK MD
James Craddock
James Craddock covers
the following topics
– UK operational highlights
– Occupier demand trends
– Supply and market vacancy levels
– Rent aordability
Scan the QR code to see the video.
www.segro.com/ara23/
James-Craddock
Scan the QR code to see the video.
www.segro.com/ara23/
Marco-Simonetti
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
44
AUM
€6.7bn
2013: €1bn
Headline rent
€342m
2013: €81m
Space developed
1,870,000sq m
Rent added from new developments
€102m
Number of customers
284
10-year internal rate of return
12.7%
10 years of SELP
Assets under Management €m
Germany
€1,853m
Poland/Czech Republic
France
Italy
Netherlands
Spain
€1,539m
€1,205m
€460m
€443m
€1,155m
€415m
€126m
€349m
€
–
€22m
€
–
AUM at inception
AUM as at 31 December 2023
SEGRO European Logistics Partnership (SELP)
SELP's assets are managed by SEGRO alongside
its own portfolio and in return SELP pays SEGRO
annual fees for asset management, development
and advisory and administrative services. Since
2013, SELP has paid SEGRO £192 million of these
fees, which has resulted in a net beneit before tax
to SEGRO of £96 million, enhancing the returns
from the Continental European big box portfolio.
In addition to these management fees, during the
irst ten-years of the joint venture SEGRO also
received £141 million (net beneit before tax of
£70 million) in performance fees, relecting its
successful growth. The inal fee for the ten-year
period of £89 million was recognised in 2023 (net
beneit before tax of £44 million) and was in
addition to two other performance fees
recognised in 2018 and 2021 of £26 million
each (net beneit before tax of £13 million).
The appetite for investing in big box warehousing
in strategic locations in Continental Europe
remains strong and we look forward to successful
collaboration in the future.
During 2023 we celebrated the tenth anniversary
of the SEGRO European Logistics Partnership
(SELP). SELP is our Continental European big box
joint venture with PSP Investments, one of
Canada’s largest pension investment managers.
SELP started in October 2013 with €1 billion of
assets. At the end of 2023, it had a portfolio worth
€6.7 billion. SELP generates €342 million of headline
rent with an occupancy rate of 99 per cent.
Our partnership is an important element of our
strategy to build scale in Continental European big
box warehousing in a capital-eicient manner. By
sharing the capital investment with PSP
Investments, we have been able to grow the
portfolio further and faster than we could have
done on our own. Both partners beneit from the
attractive yield on the portfolio, the development
potential from the land and from the economies of
scale we can extract from this high-quality,
modern collection of big box warehouses.
During SELP's irst ten years it has developed
almost 1.9 million sq m of big box warehouse
space across six European countries, adding
€102 million of headline rent to the portfolio.
As a result, SEGRO now has in excess of €1 billion
of assets under management in each of Germany,
France, Italy and Poland, and we are building scale
in the smaller markets of Spain, Czech Republic
and the Netherlands.
1 SEGRO Logistics Park Saint
Quentin-Fallavier
2 SEGRO Park South Rome B
21
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
45
Scan the QR code to see
our video on growth
www.segro.com/ara23/
space-for-growth
Cologne gets a fresh coat of paint
Given the scarcity of land in our urban
markets, many of our developments involve
the regeneration of brownield sites. These
schemes help to grow the local economy by
helping to attract new business investment
into local areas and creating diverse and
high-quality employment opportunities.
In 2014, we acquired a former paint factory on
the edge of Cologne which, as with many of
our brownield urban developments, required
a signiicant amount of remediation work. This
included the removal of 62 tonnes of material
contaminated by paint and varnish waste.
Less than 10 years on this site is now SEGRO
Park Cologne City: a 55,000 sq m urban
logistics and light industrial park built to the
highest sustainability standards (helping it to
be awarded DGNB the highest possible DGNB
‘Platinum’ Certiication).
The park is now home to 23 customers
from a diverse range of industries including:
retail, ilm and media, post and parcel,
luxury cars and food manufacturing.
Together they employ 1,128 and are enabling
a wide range of extraordinary things to
happen in Cologne.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
46
A Q&A with our CFO
We aim to maintain our
mid-cycle LTV at around
30 per cent, although
the evolution of the
property cycle will
inevitably mean that
there are periods of time
when our LTV is higher
or lower than this.
Soumen Das, Chief Financial Oicer
Soumen Das covers the
following topics:
– Outlook for earnings growth
– Investment market activity and
property valuations
– Potential growth opportunities
and the funding of these
– Managing leverage through
macroeconomic cycles
Scan here to see the video
www.segro.com/ara23/Soumen-Das
To ind out more
about SEGRO visit
www.segro.com
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
47
Financial position at 31 December 2023
As at 31 December 2023, the gross borrowings
of SEGRO Group and its share of gross
borrowings in joint ventures totalled £6,420
million (31 December 2022: £5,887 million),
of which £6 million (31 December 2022:
£7 million) are secured by way of legal charges
over speciic assets. The remainder of gross
borrowings are unsecured. Cash and cash
equivalent balances were £404 million
(31 December 2022: £194 million). The average
debt maturity was 6.9 years (31 December
2022: 8.6 years) and the average cost of
debt (excluding non-cash interest and
commitment fees) was 3.1 per cent
(31 December 2022: 2.5 per cent).
Funds available to SEGRO Group (including its
share of joint venture funds) at 31 December
2023 totalled £1,930 million (31 December
2022: £2,208 million), comprising £404 million
cash and short-term investments and £1,526
million of undrawn credit facilities of which
£148 million was uncommitted. Cash and
cash equivalent balances, together with the
Group’s interest rate and foreign exchange
derivatives portfolio, are spread amongst a
strong group of banks, all of which have a
credit rating of A- or better.
Financing
During 2023, we arranged £230 million of
additional term loan facilities with existing
relationship banks to inance the Group’s
obligations and strengthen liquidity. We have
extended £1,096 million of SEGRO bank
facilities and €600 million of SELP bank
facilities by a further year. In response to
increased interest rate volatility, we have
expanded our interest rate cap portfolio to
maintain the level of ixed and capped rate
debt at 95 per cent.
Financing during the year
– Short-term debt: SEGRO has extended the
term of €800 million of its revolving credit
facilities by a further year, €200 million to
2028 and €600 million to 2026. SELP also
extended the term of its €600 million of
facilities a further year to 2027. In January
2024, SEGRO arranged a €100 million
bilateral revolving credit facility with a new
relationship bank, increasing available
revolving credit facilities to €1.9 billion.
– Medium-term debt: SEGRO arranged
£100 million and €150 million of new term
loans, maturing in 2026, from existing
relationship banks, and extended the term
of £300 million and €115 million of term
loans by a further year also to 2026.
During the year, SEGRO drew £400 million
and €558 million of term loans.
– Long-term debt: SEGRO repurchased the
remaining £82 million of 6.75 per cent bonds
maturing in 2024.
Adjusted proit before tax
£409m
2022: £386m
IFRS loss before tax
£263m
2022: £1,967m loss before tax
Available cash and undrawn facilities
£1.9bn
2022: £2.2bn
Loan to value ratio
34%
2022: 32%
Financial position and funding
31 December 2023 31 December 2022
SEGRO
Group
SEGRO Group, JVs
and associates at
share
SEGRO
Group
SEGRO Group, JVs
and associates at
share
Net borrowings (£m) 4,972 6,016 4,722 5,693
Available cash and undrawn facilities(£m) 1,736 1,930 1,920 2,208
Balance sheet gearing (%) 45 N/A 41 N/A
Loan to value ratio (%) 34 34 32 32
Net debt:EBITDA ratio (times)
3
10.4 N/A 11.7 N/A
Weighted average cost of debt
1
(%) 3.2 3.1 2.6 2.5
Interest cover
2
(times) 2.7 3.0 4.3 4.5
Average duration of debt (years) 7.6 6.9 9.4 8.6
1 Based on gross debt, excluding commitment fees and non-cash interest.
2 Net rental income/Adjusted net inance costs (before capitalisation).
3 Calculation detailed in Table 2 in the Supplementary Notes.
Financial review
Monitoring and mitigating inancial risk
As explained in the Risks section of this Annual
Report, the Group monitors a number of
inancial metrics to assess the level of inancial
risk being taken and to mitigate that risk.
Treasury policies and governance
The Group Treasury function operates within
a formal policy covering all aspects of treasury
activity, including funding, counterparty
exposure and management of interest rate,
currency and liquidity risks. Group Treasury
reports on compliance with these policies
on a quarterly basis and policies are reviewed
regularly by the Board.
Gearing and inancial covenants
We consider the key leverage metric for
SEGRO to be a proportionally consolidated
(‘look-through’) loan to value ratio (LTV) which
incorporates assets and net debt on SEGRO’s
balance sheet and SEGRO’s share of assets
and net debt on the balance sheets of its joint
ventures. The LTV at 31 December 2023 on
this basis was 34 per cent (31 December 2022:
32 per cent), the increase primarily driven by
the reduction in asset values and a higher
debt balance.
SEGRO’s borrowings contain gearing
covenants based on Group net debt and net
asset value, excluding debt in joint ventures.
The gearing ratio of the Group at 31 December
2023, as deined within the principal debt
funding arrangements of the Group, was
45 per cent (31 December 2022: 41 per cent).
This is signiicantly lower than the Group’s
tightest inancial gearing covenant within
these debt facilities of 160 per cent. Property
valuations would need to fall by around 44 per
cent from their 31 December 2023 values to
reach the gearing covenant threshold of
160 per cent. A 44 per cent fall in property
values would equate to an LTV ratio of
approximately 62 per cent.
The Group’s other key inancial covenant within
its principal debt funding arrangements is
interest cover, requiring that net interest before
capitalisation be covered at least 1.25 times by
net property rental income: the ratio for 2023
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
48
was 2.7 times, comfortably ahead of the
covenant minimum. Net property rental income
would need to fall by around 54 per cent from
2023 levels, or interest rates would need to rise
to 7.4 per cent from the full year average interest
rate of 3.4 per cent to breach the interest cover
covenant threshold. On a proportionally
consolidated basis, including joint ventures,
the interest cover ratio was 3.0 times.
SEGRO also monitors its leverage on a net
debt:EBITDA basis which is an increasingly
important metric for rating agencies and our
investors. SEGRO has a long-term issuer
default rating of ‘BBB+’ and a senior
unsecured rating of ‘A-’ from Fitch Ratings as
at 31 December 2023. These ratings were
reduced from ‘A-’ and ‘A’ respectively in May
2023, and placed on ‘negative watch’.
SEGRO’s net debt:EBITDA ratio at the end
of 2023 was 10.4 times (2022: 11.7 times),
relecting the net impact of an £75 million
increase in EBITDA and a £250 million increase
in net debt. The elevated 2022 ratio was the
prime reason cited by Fitch Ratings for
downgrading our senior unsecured debt
rating during the year to A- from A and
applying a negative outlook. Fitch state
that a net debt:EBITDA ratio of 9.5 times
is consistent with an A- rating and we have
made signiicant progress towards that during
2023 as a result of growing our rent roll and
funding a signiicant proportion of our
investment with the proceeds of disposals.
We mitigate the risk of over-gearing the
Company and breaching debt covenants by
carefully monitoring the impact of investment
decisions on our LTV and by stress testing our
balance sheet to potential changes in
property values.
Our intention for the foreseeable future is
to maintain our LTV at around 30 per cent,
although the evolution of the property cycle
will inevitably mean that there are periods of
time when our LTV is higher or lower than this.
However, this level of LTV through the cycle
provides the lexibility to take advantage of
investment opportunities arising and ensures
signiicant headroom compared against our
tightest gearing covenants should property
values decline.
The weighted average maturity of the gross
borrowings of the Group (including joint
ventures at share) was 6.9 years, with the
closest maturity being SELP’s €500 million
euro bond in November 2025, followed by
SEGRO’s €195 million term loan in December
2025. This long average debt maturity
comprises a well spread debt funding
maturity proile which reduces future
reinancing risk.
Interest rate risk
The Group’s interest rate risk policy is
designed to ensure that we limit our exposure
to volatility in interest rates. The policy states
that between 50 and 100 per cent of net
borrowings (including the Group’s share of
borrowings in joint ventures) should be at
ixed or capped rates, including the impact
of derivative inancial instruments.
At 31 December 2023, including the impact
of derivative instruments, 95 per cent
(2022: 95 per cent) of the net borrowings
of the Group (including the Group’s share of
borrowings within joint ventures) were either
at ixed rates or are protected from rising
interest rates with interest rate caps, with a
spread of expiry dates over the next 6 years
and an average expiry of 3.4 years. The
pure ixed level of debt is 76 per cent
at 31 December 2023 (31 December
2022: 83 per cent), rising to 95 per cent
including loating rate debt which is now
subject to an active cap. The remaining
5 per cent of debt is at loating rates.
During the year, in line with our risk
management processes and due to the higher
levels of market volatility, the Group entered
into €532 million of interest rate cap contracts
to mitigate the risk of rising interest rates
on our loating rate debt exposure. At
31 December 2023 all of these caps
were triggered.
As a result of the ixed rate cover in place,
if short-term interest rates had been 200
basis points higher throughout the year to
31 December 2023, the adjusted net inance
cost of the Group would have been
approximately £10 million higher (31 December
2022: £27 million higher) representing around
3 per cent (31 December 2022: 7 per cent) of
Adjusted proit after tax. This decrease in
sensitivity to interest rate increases since 2022
is attributed to the greater protection from our
interest rate cap portfolio.
The Group elects not to hedge account its
interest rate derivatives portfolio. Therefore,
movements in its fair value are taken to the
income statement but, in accordance with
EPRA Best Practices Recommendations
Guidelines, these gains and losses are
eliminated from Adjusted proit after tax.
Foreign currency translation risk
The Group has minimal transactional foreign
currency exposure but does have a potentially
signiicant currency translation exposure
arising on the conversion of its foreign
currency denominated assets (mainly euro)
and euro denominated earnings into sterling
in the Group consolidated accounts.
The Group seeks to limit its exposure to
volatility in foreign exchange rates by hedging
its foreign currency gross assets using either
borrowings or derivative instruments. The
Group targets a hedging range of between
the last reported LTV ratio (34 per cent at 31
December 2023) and 100 per cent. At 31
December 2023, the Group was 74 per cent
hedged by gross foreign currency denominated
liabilities (31 December 2022: 76 per cent).
Including the impact of forward foreign
exchange and currency swap contracts used
to hedge foreign currency denominated net
assets, if the value of the other currencies in
which the Group operates at 31 December
2023 weakened by 10 per cent against sterling
(to €1.27, in the case of euros), net assets
would have decreased by approximately £151
million and there would have been a reduction
in gearing of approximately 2.2 per cent and
in the LTV of 1.3 per cent.
The average exchange rate used to translate
euro denominated earnings generated
during 2023 into sterling within the
consolidated income statement of the Group
was €1.15: £1. Based on the hedging position
at 31 December 2023, and assuming that this
position had applied throughout 2023, if the
euro had been 10 per cent weaker than the
average exchange rate (€1.27: £1), Adjusted
proit after tax for the year would have been
approximately £9 million (2.3 per cent) lower
than reported. If it had been 10 per cent
stronger, Adjusted proit after tax for the year
would have been approximately £11 million
(2.8 per cent) higher than reported.
Progress against our strategy
What we said we would do
We intend to keep our LTV at around
30 per cent.
What we achieved in 2023
The impact of increased borrowings
(due to £0.6 billion net investment) during
the year and the reduction in asset values
meant that LTV has increased from 32 per
cent to 34 per cent at 31 December 2023.
What to expect in 2024
We aim to maintain our mid-cycle LTV at
around 30 per cent, although the evolution
of the property cycle will inevitably mean
that there are periods of time when our LTV
is higher or lower than this. We believe this
approach ensures signiicant headroom
compared against our tightest gearing
covenants should property values decline
further, as well as providing the lexibility to
take advantage of investment opportunities
which may arise. We have cash and
available facilities of £1.9 billion (including
our share of joint ventures and associates)
on which we can draw to fund our
investment plans.
Read more on our strategy on page 20
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
49
Financial review continued
Going concern
As noted in the Financial Position and Funding
section above, the Group has signiicant
available liquidity to meet its capital
commitments, a long-dated debt maturity
proile and substantial headroom against
inancial covenants.
– In 2023, the Group extended the term
of its €600 million and €200 million
revolving credit facilities to 2026 and 2028,
respectively, and extended the term of its
£300 million and €115 million term loans
to 2026.
– The Group added a further £100 million
and €150 million term loan facilities, both
maturing in 2026.
– Cash and available committed facilities
at 31 December 2023 were £1.5 billion.
– The Group continuously monitors its liquidity
position compared to committed and
expected capital and operating expenses
on a rolling forward 18-month basis.
The quantum of committed capital
expenditure at any point in time is
typically low due to the short timeframe
to construct warehouse buildings.
– The Group also regularly stress-tests its
inancial covenants. As noted above, at
31 December 2023, property values would
need to fall by around 44 per cent before
breaching the gearing covenant. In terms of
interest cover, net rental income would have
needed to fall by 54 per cent or the average
interest rate would have needed to reach
7.4 per cent before breaching the interest
cover covenant. All would be signiicantly
in excess of the Group’s experience during
the inancial crisis.
Having made enquiries and having
considered the principal risks facing the
Group, including liquidity and solvency risks,
and material uncertainties, the Directors have
a reasonable expectation that the Company
and the Group have adequate resources to
continue in operational existence for the
foreseeable future (a period of at least 12
months from the date of approval of the
inancial statements). Accordingly, they
continue to adopt the going concern basis
in preparing these inancial statements.
Income statement review
Presentation of inancial information
The Group Financial Statements are
prepared under IFRS where the Group’s
interests in joint ventures and associates
are shown as a single line item on the
income statement and balance sheet
and subsidiaries are consolidated at
100 per cent.
The Adjusted proit measure relects the
underlying inancial performance of the
Group’s property rental business, which
is our core operating activity. It is based
on EPRA earnings as set out in the Best
Practices Recommendations Guidelines of
the European Public Real Estate Association
(EPRA) which are widely used alternate
metrics to their IFRS equivalents within the
European real estate sector (further details
can be found at www.epra.com). In
calculating Adjusted proit, the Directors
may also exclude additional items
considered to be non-recurring, unusual,
or signiicant by virtue of size and nature.
In the current year, the net proit after tax
impact of the SELP performance fees
recognised of £42 million have been
excluded. Furthermore an impairment of a
loan to an associate of £28 million has also
been excluded. Both items are discussed in
more detail in Note 2. In the prior year there
have been no such adjustments and
therefore Adjusted proit and EPRA
earnings were the same.
Adjusted proit (note 2)
2023
£m
2022
£m
Gross rental income 547 488
Property operating
expenses (85) (76)
1
Net rental income
462 412
2
Joint venture
management fee
income 29 30
Management and
development fee
income 4 5
Net solar energy
income 1 1
Administrative
expenses (63) (59)
3
Share of joint
ventures and
associates’
adjusted proit
1
82 71
Adjusted operating
proit before
interest and tax 515 460
4
Net inance costs
(106) (74)
Adjusted proit
before tax 409 386
5
Tax on adjusted
proit (10) (11)
Non-controlling
interests share of
Adjusted proit – (1)
6
Adjusted proit
after tax 399 374
1 Comprises net property rental income less
administrative expenses, net inance costs and
taxation.
Net rental income
£50m higher
1
Net rental income increased by £50 million
to £462 million (or by £65 million to
£587 million including joint ventures and
associates at share before joint venture
fees), relecting the positive net impact of
like-for-like rental growth, development
completions and investment activity during
the year, oset by the impact of disposals.
On a like-for-like basis¹, before other items
(primarily corporate centre and other costs
not speciically allocated to a geographic
Business Unit), net rental income increased
by £31 million, or 6.5 per cent, compared
to 2022.
This is due to strong rental performance
across our portfolio. Continental Europe:
8.5 per cent increase, primarily through
indexation; and UK: 5.3 per cent increase,
primarily through capturing the reversionary
potential in the portfolio through lease
reviews and renewals (for more information
see Performance review page 37.)
1 The like-for-like net rental growth metric is based on
properties held throughout both 2023 and 2022 on
a proportionally consolidated basis. This provides
details of underlying net rental income growth
excluding the distortive impact of acquisitions,
disposals and development completions.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
50
Income statement review
Income from joint ventures and associates
£10m higher
2
3
Net inance costs
£32m higher
4
Taxation
2.4% (eective rate)
5
Adjusted proit (EPS)
£25m higher (32.7p)
6
SEGRO’s share of joint ventures and
associates’ Adjusted proit after tax
increased by £11 million from £71 million in
2022 to £82 million in 2023, excluding
performance fee expense. The increase is
driven by net rental income growth partially
oset by interest costs and taxation.
Joint venture fee management fee income
decreased by £1 million to £29 million in
2023 due to a reduction in property values
on which elements of the fees are based.
Performance fees from joint ventures have
been excluded from Adjusted proit and are
discussed in the IFRS loss section below.
Net inance costs were £32 million higher
than 2022 at £106 million. Average interest
rates during the year were 3.2 per cent
compared to 2.6 per cent in the prior
year. This has been partially oset by a
£42 million increase in capitalised interest
compared to the prior year due to the
higher rate of interest on debt used to
inance development projects. Furthermore,
gross debt levels were higher in 2023
compared to the prior year. At 31 December
2023 gross debt was £5,348 million,
£464 million higher than the prior year.
The tax charge on Adjusted proit of
£10 million (2022: £11 million) relects
an eective tax rate of 2.4 per cent
(2022: 2.8 per cent).
The Group’s eective tax rate relects
the fact that around three-quarters of its
wholly-owned assets are located in the
UK and qualify for REIT status. This status
means that income from rental proits and
gains on disposals of assets in the UK are
exempt from corporation tax, provided
SEGRO meets a number of conditions
including, but not limited to, distributing
90 per cent of UK taxable proits.
Adjusted proit after tax increased by £25
million to £399 million (2022: £374 million)
as a result of the above movements,
primarily growth in rental income oset
by increased inance costs.
Adjusted proit is detailed further in Note 2
to the Financial Statements.
Adjusted earnings per share are 32.7 pence
compared to 31.0 pence in 2022 due to the
increase in Adjusted proit slightly oset by
the 13 million increase in the average
number of shares in issue compared
to the prior year.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
51
Financial review continued
IFRS earnings in the year also included
recognition of a performance fee from SELP
following the ten-year anniversary of the joint
venture. The overall net proit impact was
£42 million (2022: £nil). This constituted a
£89 million income less taxation of £10 million
in respect of the wholly-owned business and
a cost of the performance fee of £45 million
less a tax credit of £8 million from the joint
venture (at share).
Further detail on the performance fee
including the recognition criteria and
cumulative fee recognised are detailed
in Note 7(ii).
IFRS earnings were also impacted by a net
fair value gain on interest rate swaps and
other derivatives of £24 million (2022: loss
of £199 million).
In addition, SEGRO recognised a tax credit
in respect of adjustments of £30 million
(2022: £48 million) primarily in relation to
property valuation movements.
Balance sheet
At 31 December 2023, IFRS net assets
were £10,904 million (31 December 2022:
£11,373 million), relecting 886 pence per
share (31 December 2022: 938 pence) on
a diluted basis.
Adjusted NAV per share at 31 December
2023 was 907 pence (31 December 2022:
966 pence). The 6.1 per cent decrease
primarily relects property valuation losses
in the year as explained above. The chart
highlights the other main factors behind the
decrease. A reconciliation between IFRS and
Adjusted NAV is available in Note 12 to the
Financial Statements.
Cash low and net debt reconciliation
Cash lows from operating activities of £584
million are £105 million higher than the prior
year. This is primarily due to increased rental
income received during the year, and other
working capital movements. As well as inance
cost outlows of £162 million in servicing the
debt facilities, a further £5 million was spent in
closing out debt and reproiling interest rate
derivatives. Interest rate risk management is
detailed further in the Financial review on
page 49. In addition there were tax payments
of £24 million primarily in France.
The Group made net investments of £487
million in investment and development
properties during the year on a wholly-owned
cash low basis (2022: £1,162 million). This is
principally driven by expenditure of £839
million (2022: £1,472 million) to purchase and
develop investment properties to deliver
further growth in line with our strategy.
Disposals of investment properties increased
by £42 million to £352 million compared to the
prior year (2022: £310 million) as the business
looked to recycle assets when the opportunity
arose.
During the year £185 million (2022: £222
million) dividends were paid which is lower
than the total dividend due to the level of scrip
uptake of £129 million (2022: £79 million) and
tax due after year end on a Property Income
Distribution of £13 million (2022: £nil).
Other signiicant cash lows include £29
million acquisition of plant and equipment
and intangibles primarily on enhancing the
businesses technology and PV plant, and £16
million to acquire the residual non-controlling
interest of Vailog Sarl.
Overall, net debt has increased in the year
by £250 million to £4,972 million.
Adjusted net asset value (pence per share)
EPRA NTA
attributable
to ordinary
shareholders
at 31
December
2022
Realised and
unrealised
property
losses
Adjusted
proit after tax
Dividend net
of scrip shares
issued (2022
inal and 2023
interim)
SELP
performance
fee (net after
tax)
Exchange rate
movement
(net of
hedging)
Other EPRA NTA
attributable
to ordinary
shareholders
at 31
December
2023
966p (64)p 33p (27)p 3p (3)p (1)p 907p
IFRS loss
IFRS loss before tax in 2023 was £263 million
(2022: £1,967 million loss), equating to basic
post-tax IFRS loss per share of 20.7 pence
compared with loss per share of 159.7 pence
for 2022. A reconciliation between Adjusted
proit before tax and IFRS loss before tax is
provided in Note 2 to the Financial Statements.
The principal driver of IFRS loss is realised and
unrealised property losses and gains which is
the main reason for the lower loss per share in
2023 versus 2022. Total loss on properties is
£760 million (2022: £2,175 million loss).
This includes a £598 million realised and
unrealised property loss on investment
and trading properties in the wholly-owned
business (2022: £1,939 million loss) and
£162 million loss from joint ventures and
associates at share (2022: £236 million loss).
The largest component are valuation losses
on investment and trading properties of
£809 million including joint ventures at share
(2022: £2,191 million), which is driven by yield
expansion in most markets partially oset by
increases in ERV. These are discussed in more
detail in the Performance review on page 36.
Other property movements include proit on
sale of wholly-owned investment properties
of £39 million (2022: £9 million proit).
There was also a loss of £28 million
recognised in the year in relation to the
impairment of a loan to an associate which
is assumed to be recovered through the fair
value of land which has fallen during the year.
This is further detailed in Note 17(vi).
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
52
Capital expenditure
Table 10 in the Supplementary Notes sets
out analysis of the capital expenditure during
the year. This includes acquisition and
development spend, on an accruals basis,
in respect of the Group’s wholly-owned
investment and trading property portfolios,
as well as the equivalent amounts for joint
ventures and associates, at share.
Total spend for the year was £1,121 million,
a decrease of £777 million compared to
2022, primarily from lower acquisition and
development spend. More detail on this
spend can be found in the Development
and Investment Updates on pages 39 to 40.
Development capital expenditure was £527
million in the year (2022: £787 million) across
all our Business Units, particularly Southern
Europe and National Logistics, relecting our
development-led growth strategy. Interest of
£68 million (2022: £24 million) has been
capitalised in the year.
Spend on existing completed properties,
totalled £67 million (2022: £62 million), of
which £1 million (2022: £13 million) was for
incremental lettable space. The balance
mainly comprises refurbishment and it-out
costs, which equates to less than six per cent
of total spend.
Dividend increase relects the strong
operational results and conidence for
the future
Under the UK REIT rules, we are required to
pay out 90 per cent of UK-sourced, tax-
exempt rental proits as a ‘Property Income
Distribution’ (PID). Since we also receive
income from our properties in Continental
Europe, our total dividend should normally
exceed this minimum level and we target a
payout ratio of 85 to 95 per cent of Adjusted
proit after tax. We aim to deliver a progressive
and sustainable dividend which grows in line
with our proitability in order to achieve our
goal of being a leading income-focused REIT.
The Board has concluded that it is appropriate
to recommend an increase in the inal
dividend per share by 0.9 pence to 19.1 pence
(2022: 18.2 pence). We will pay the 2023 inal
dividend as a PID and expect to pay the 2024
interim dividend as an ordinary dividend. The
Board’s recommendation is subject to
approval by shareholders at the 2024 Annual
General Meeting to be held on 18 April 2024,
in which event the inal dividend will be paid
on 3 May 2024 to shareholders on the register
at the close of business on 15 March 2024.
In considering the inal dividend, the Board
took into account:
– the policy of targeting a payout ratio of
between 85 and 95 per cent of Adjusted
proit after tax;
– the desire to ensure that the dividend is
sustainable and progressive throughout
the cycle; and
– the results for 2023 and the outlook for
earnings.
The total dividend for the year will, therefore,
be 27.8 pence, a rise of 5.7 per cent versus
2022 (26.3 pence) and represents distribution
of 85 per cent of Adjusted proit after tax.
The Board has decided to retain a scrip
dividend option for the 2023 inal dividend
(subject to approval by shareholders at the
2024 AGM), allowing shareholders to choose
whether to receive the dividend in cash or
new shares. In 2023, 49 per cent of the 2022
inal dividend and 21 per cent of the 2023
interim dividend were paid in new shares,
equating to £129 million of cash retained on
the balance sheet.
Cash low bridge (£m)
Opening net
debt
Cash low
from
operating
activities
before debt
close out
costs
Finance costs
(net)
Dividends
received
Tax paid Dividends
paid
Purchase and
development
of investment
properties
Sale of
investment
properties
Acquisitions
of interest in
property and
other
investments
Net
investment in
joint ventures
and
associates
Purchase of
non-
controlling
interests
Purchase of
plant and
equipment
and
intangibles
Other cash
movements
Exchange rate
movements
on borrowings
Non cash
movements
on borrowings
Closing net
debt
(4,722) 584 (167) 38 (24) (185) (839) 352 (5) (5) (16) 58 (29) (3) (9) (4,972)
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
53
The Group Risk Committee is made up of
members of senior management and now
includes the Group Customer & Operations
Director. The members of the Committee
have detailed knowledge of, and expertise in
operational, inancial and corporate aspects
of our business. The Group Risk Committee
has met three times during the year and has
been responsible for overseeing the work of
the risk management function on behalf of
the Executive Committee.
Although SEGRO’s principal risks do not
dramatically change year-to-year there are key
areas of focus in response to changes within the
external environment or within the business. An
example of a risk which has been a particularly
are of focus this year is the risk associated with
developments and construction.
The successful delivery of SEGRO’s
development programme required a suitable
land bank in order to achieve SEGRO’s strategy
of operational excellence. The macroeconomic
environment is driving supply chain instability
and more concern over contractor insolvency.
Although development and construction
execution is a long-standing principal risk
within SEGRO’s risk register, the external
environment impacts the type and signiicance
of the risks associated with holding land and
managing our development pipeline. We are
therefore carefully monitoring our appetite for
land holdings and undertaking due diligence
associated with land, developments, appraisal
assumptions and contractor performance.
We have also extended this risk to speciically
include reference to the potential impact of
faulty design or construction, deleterious
materials and changes in regulation
aecting the compliance of our buildings.
Emerging risks
In addition to monitoring our principal risks in
a risk register, we identify, assess and monitor
emerging risks. We consider wide-ranging risks
such as water availability and our buildings’
water demands, energy usage and access to
power and changes to public sentiment which
may aect customer demand associated, for
example with air travel or data centres.
Two examples of emerging risks we are
currently monitoring are longer-term climate
change and disruptive technologies.
Longer-term climate change
We consider the longer-term eects of some
risks which are also principal risks within our
risk register, for example, the eects of climate
change. The further ahead the timescale,
the harder it becomes to predict the physical
eects of climate change, like temperature
increases and heavier or more unpredictable
rainfall, but we know this is something that will
aect us in the future. In addition, SEGRO
needs to consider how our actions to reduce
carbon emissions will aect our strategy in the
longer term, as well as potential new and
rapidly changing liabilities associated with
climate litigation. The impact of these risks
could be a change in desired location of our
assets, change in customer demand,
reputation damage, downward impact on
valuations and potential asset obsolescence.
Disruptive technologies
We also consider ‘new’ risks such as those
associated with disruptive technologies.
These may include developments such as the
widespread adoption of autonomous vehicles
and the resultant eect on demand and use
of our assets, the longer term ‘working-from-
home’ habits and the eect on urbanisation,
use of data and automation within our
warehouses and the rise of ‘space-as-a-
service’ operators. While these changes could
bring opportunities as well as threats, SEGRO
cannot maintain a position of strength unless
we continue to monitor the changes and
increase our understanding over time.
Soumen Das
Chief Financial Oicer
Eective risk management
We understand that a
uniied and responsive
approach to risk
management is essential
for us to be able to
address the risks to our
strategy.
Soumen Das, Chief Financial Oicer
An eective, proportionate, and reliable
risk management process is essential to
support our strategy and business model.
Whilst we still face the challenges of the
external environment, risk management
is embedded in our decision-making
processes, meaning our business
can remain stable and resilient.
Annual risk management update
The macroeconomic and geopolitical
challenges of 2022 have continued into
2023 which inevitably aect SEGRO in terms
of higher interest rates, and pressure on our
asset valuations. Our rigorous risk management
approach is therefore as vital as it has ever
been, to not only maintain SEGRO’s stability
and resilience into 2024 but also to remain well
positioned in order to beneit from any positive
trends in the near and longer-term future.
The Group’s Board and key committees
have continued to oversee our response
to these challenges and the wider
economic implications throughout the year.
Consequentially, they have taken actions to
mitigate the impact on both our operations
and the wellbeing of our employees. We review
our investment plans regularly and continue to
manage our balance sheet proactively to help
mitigate the impacts of future volatility.
Managing risk
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
54
1
2
1 SEGRO Park Le Thillay
2 SEGRO Park Collégien
Our risk appetite
The Group’s ability to eectively manage
risk throughout the organisation is central
to the ongoing success of the business.
Risk management ensures that there is a
structured approach to the decision-making
process that looks to reduce uncertainty over
expected outcomes and to bring controllable
risks within our appetite, thereby balancing
uncertainty against the objective of creating
and protecting value for our stakeholders,
now and in the future.
We have put risk appetite at the heart of
our risk management processes and it is
integral both to our consideration of strategy
and to our medium-term planning process.
Our risk appetite is applicable throughout
the organisation including joint ventures
and associated companies.
The Group’s risk appetite is reviewed
annually and approved by the Board in order
to guide the business. As well as qualitative
descriptions, the risk appetite deines
tolerances and targets for key metrics. It also
includes criteria for assessing the potential
impact of risks and our mitigation of them.
Our risk appetite is dynamic, varying over
time and during the course of the property
cycle. We adjust our risk appetite in relation
to dierent types of risks, as explained further
below. However, overall, the Group maintains
a low appetite for risk, appropriate to our
strategic objectives of delivering long-term
sustainable value.
Property risk
We recognise that, in seeking
outperformance from our portfolio,
the Group must accept a balanced level
of property risk in order to enhance
opportunities for superior returns. We strive
for diversity in geographic locations and
asset types, with an appropriate mixture
of stabilised income-producing and
opportunity assets. This is balanced
against the backdrop of the geopolitical
and macroeconomic environment and
its impact on the property cycle.
Our portfolio should deliver attractive, low
risk income returns with strong rental and
capital growth when market conditions are
positive and with reasonable resilience in a
downturn. We aim to enhance these returns
through development, which requires
appropriate levels of land holdings to
support the pipeline. We seek to balance the
risk of holding too much land, which might
be a drag to earnings, by closely monitoring
the churn and duration of our land holdings.
We also seek to mitigate the risks, especially
contractor covenant risks, that are inherent
in development. With due consideration of
our environmental responsibilities, we seek
to develop buildings which meet and,
preferably, exceed minimum regulatory
requirements. Buildings which fail to achieve
high environmental certiication standards
are increasingly less attractive to occupiers
now and we expect this sentiment to
intensify in the future.
We have a low appetite for risks to income
from customers and therefore we maintain a
diverse occupier base with strong covenants
and avoid over-exposure to individual
occupiers in specialist properties.
Financial risk
The Group maintains a low appetite for
inancial risk in general, with a very low
appetite for risks to solvency and gearing
covenant breaches.
As an income-focused REIT we have a low
appetite for risks which threaten a stable
progression in earnings and dividends
over the long-term.
We also seek long-term growth in net
asset value notwithstanding the impact
of luctuations from external factors which
inluence the property cycle. Our appetite
for risks to net asset value from the
factors within our control is low, albeit
acknowledging that our appetite for
moderate leverage across the cycle
ampliies the impact of market-driven asset
valuation movements on net asset value.
Corporate risk
We have a very low appetite for risks to our
good reputation with our customers and
wider stakeholders. These stakeholders
include investors, regulators, employees,
business partners, suppliers, lenders and
the communities in which we operate.
Our responsibilities to these stakeholders
include compliance with all relevant laws;
accurate and timely reporting of inancial
and other regulatory information;
protecting the health and safety of
employees, suppliers, customers and
other users of our assets; our impact on
the environment; compliance with codes
of conduct and ethics; ensuring business
continuity; and making a positive
contribution to our local communities.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
55
Managing risk continued
Risk management
Our integrated and robust approach
to risk management
The risk management process is designed
to identify, assess and respond to signiicant
risks to the Group’s objectives. Most of these
risks cannot be eliminated or avoided so,
instead, the process aims to understand,
document, mitigate and monitor the
risks. The risk management process
can therefore only provide reasonable
and not absolute assurance.
The identiication and review of emerging
risks is integrated into our risk review
process. Emerging risks are those risks
or a combination of risks with a longer
timescale. They are often rapidly evolving
and, consequently, the impact and probability
may be less predictable. Therefore, necessary
mitigations are usually not yet fully evolved.
All risk owners and managers within the
business are challenged to consider
emerging risks and this is supplemented
through formal, twice-yearly horizon scans
with the Executive Committee, as well as
other relevant internal groups.
The Board has performed a robust
assessment of the principal and emerging
risks facing the Group. It formally reviewed
the risks twice during the year and also
completed its annual review and approval of
the Group’s risk appetite, and the Group’s risk
management policy. The Audit Committee
then reviewed how the Group Risk Register
has been compiled, at two points during
the year.
The Board recognises that we have limited
control over many of the external risks that
the Group faces, such as global events as
well as the macroeconomic, geopolitical, and
regulatory environment, but still ensures we
assess the potential impact of such risks on
the business and consequential decision
making. Internal risks are monitored by the
Board to ensure that appropriately designed
controls are in place and operate eectively
to manage those risks.
The most signiicant risks are detailed in the
Group Risk Register. Risks are assessed in both
inherent (before taking any relevant controls
into account) and residual (with mitigating
controls operating normally) states. As part
of the assessment, risk impact is directly
measured against risk appetite so that it is
clear whether each risk is classed as within
appetite, tolerable, intolerable or below
appetite. We also formally assess the velocity
of the most signiicant risks to determine how
quickly they might become intolerable. Each
risk has a range of mitigating controls which
are in place.
A Key Risk Indicator (KRI) dashboard is
produced and monitored regularly to show
actual and forecast performance against risk
appetite metrics, allowing informed decision
making. KRIs are considered regularly by the
relevant monitoring committees in their
decision making, as well as being integral
to the Group’s Medium-Term Plan.
The Register is used as a key input to
determine priorities for the Group’s internal
audit assurance programme.
Furthermore, management’s annual self-
assessment of control eectiveness is driven
by the Register.
Our framework for risk governance
The Group adopts the ‘three lines of defence’
model of risk management.
The irst line of defence is provided by the
function that has primary responsibility to
own and manage the risk associated with
day-to-day operational activities which may
include operational management, the
individual risk manager and executive
risk owner.
The second line of defence is provided
by the function that oversees the risk or
which specialises in compliance or risk
management. This would typically be a
monitoring committee such as the Executive
Committee, the Investment Committee or
the Technology Committee, as well as the risk
management function overseen by the Group
Risk Committee.
The third line of defence is provided by
Internal Audit which gives objective and
independent assurance over whether the irst
and second lines of defence are operating
eectively. Risks are considered within each
area of the business to ensure that risk
management is fully embedded within the
Group’s operations, culture and decision-
making processes.
The Board has overall responsibility for
ensuring that risk is eectively and
consistently managed across the Group.
The Audit Committee monitors eectiveness
on behalf of the Board. Further information
on compliance with the risk management
provisions of the UK Corporate Governance
Code can be found in the Internal controls
and risk management section of the Audit
Committee Report.
Accountabilities for the Group’s risk
management are outlined in the diagram.
1
2
1 SEGRO Logistics Park East
Midlands Gateway
2 SEGRO Logistics Park Poznań,
Komorniki
Our risk management
process is long-standing
and therefore is
embedded and well
understood throughout
our business.
Soumen Das
Chief Financial Oicer
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
56
Our framework for risk governance
– Overall responsibility for ensuring that risk
is eectively managed across the Group
– Determines the Group’s risk appetite and policy – Conducts robust assessment of current and
emerging risks
Monitors eectiveness of the Group’s risk management process and internal control systems
Board
Audit Committee
Risk Managers
– Responsible for ensuring the risk is within appetite.
– Drive design, implementation and operation of controls.
– Review, identify and assess existing and emerging risks with the
risk management function at least twice per year.
Stage 3
Internal Audit
– Agrees internal audit programme in conjunction with the Group Risk Register.
– Conducts internal audit programme and reports to Audit Committee.
– Continues to monitor issues as they arise, the resolution of issues identiied and is agile in its response to such issues and amends the programme accordingly.
Stage 1
Executive Risk Owners
– Own risks in area for which they are responsible.
– Assign accountability for mitigating individual risks to risk managers.
– Ensure that risks are identiied, assessed and adequately
controlled and mitigated.
– Review and identify existing and emerging risks with the risk management
function at least twice per year.
Monitoring Committees
– Regularly identify and monitor the signiicant risks and
corresponding controls within their function.
– Risk management team regularly attends these committees.
Group Risk Committee
– Coordinates the risk management process on behalf of the
Executive Committee.
– Develops risk policy and appetite.
– Oversees the work of the risk management function,
which in turn:
• Manages, maintains and reports on the Risk Register.
• Assesses and documents risks and controls.
• Provides quality assurance and challenge to risk owners
and managers
Stage 2
Executive Committee
– Oversees execution of risk management across the business.
– Formally considers risks, including emerging risks, twice a year.
– Directly oversees strategic risks.
– Delegates accountability for risk management and monitors
performance of risk controls.
– Assigns Executive Risk Owners to each risk.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
57
Principal risks and uncertainties
The principal risks have the potential to
aect SEGRO’s business materially. Risks are
classiied as ‘principal’ based on their potential
to intolerably exceed our appetite (considering
both inherent and residual impact) and cause
material harm to the Group.
Some risks that may be unknown at present,
as well as other risks that are currently regarded
as immaterial and therefore not detailed here,
could turn out to be material in the future. The
principal risks are reviewed and amended to
relect changing knowledge, understanding
and assessment, including considering
whether an emerging risk should be
recorded, instead, as a principal risk.
The current principal risks that the Group is
aware that it is facing are summarised in the
diagram and described on the following pages.
The descriptions indicate the potential areas
of impact on the Group’s strategy; the time-
horizon and probability of the risk; the principal
activities that are in place to mitigate and
manage such risks; the committees that
provide second line of defence oversight;
changes in the level of risk during the course
of the year; and link to further relevant
information in this report.
A summary of the Group’s principal risks
including an update of changes during the
period and activity during the year, is provided
below. The principal risks remain the same as
reported in the 2022 Annual Report but, as
mentioned earlier, the development plan
execution risk has been slightly amended
and renamed ‘Development and Construction
Execution’. The impact and probability of each
risk has not changed in the last year and the
residual risk for each (after factoring in
mitigations) remains within appetite.
Macroeconomic impact on market cycle
Portfolio strategy and execution
Health and safety
Development and construction execution
People and talent
Operational delivery
Legal, political and regulatory
Environmental sustainability
and climate change
Financing strategy
Major event/business disruption
Impact
High
Probability
Low
Medium
HighLow Medium
Risk heatmap
2
3
4
8
9
6
10
7
5
1
Residual
Principal risks
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
58
1
Macroeconomic impact on market cycle
The property market is cyclical in nature
and there is a continuous risk that the
Group could either misread or fail to
react appropriately to the changing
property market, cost of inance or wider
macroeconomic and geopolitical conditions.
This could result in the adoption of an
inappropriate strategy or the ability to deliver
a strategy being inhibited, and consequential
impact on property performance and
shareholder value.
Mitigations
The Executive Committee, Investment
Committee and ultimately the Board monitor
the property market cycle on a continual
basis and adapt the Group’s investment
and divestment stance in response to
experienced and anticipated changing
market conditions.
Multiple, diverse investment and occupier
market intelligence is regularly reviewed
and considered, both from internal ‘on the
ground’ sources and from independent
external sources.
Upside and downside scenarios are
incorporated into Investment Committee
papers to assess the impact of diering
market conditions and to inform our portfolio
strategy (see separate principal risk).
Current year activity
The uncertain geopolitical and
macroeconomic outlook has continued
to cause volatility in the capital markets
and reduced liquidity in the property
investment market.
In response, we have continued to perform
economic outlook assessments regularly
and have ensured that portfolio strategy
consequences are appropriately linked
(see separate principal risk). We are therefore
prepared to withstand these pressures even
if they persist across the countries we
operate in for some time.
Link to strategy:
Disciplined capital allocation; Eicient capital
and corporate structure
Overseen by:
Executive Committee, Investment Committee
The market outlook is detailed in the Chief
Executive’s statement on page 8
Change in 2023:
No change
2
Portfolio strategy and execution
The Group’s Total Property and/or
Shareholder Returns could underperform
in absolute or relative terms as a result of an
inappropriate portfolio strategy. This could
be caused by:
– Unexpected macroeconomic factors;
– Incorrect or ineective capital allocation
decisions;
– Poor or incorrect market or asset level
assumptions including disruptions, for
example from changing occupier and
customer needs, technological
developments and innovation;
– Inaccurate modelling or forecasting;
– Increased competition for our assets or
target customers; and/or
– Lack of appropriate procedures and
inadequate due diligence resulting in
lengthy, onerous or costly transactions
and missed opportunities.
Mitigations
The Group’s portfolio strategy is subject to
regular review by the Board in order to
consider the desired shape of the portfolio,
so as to meet the Group’s overall strategy
and to determine our response to changing
opportunities and market conditions.
The Group’s approach to capital allocation is
informed by comprehensive asset plans and
independent external assessments of market
conditions and forecasts. Major capital
investment and disposal decisions are
subject to Board approval in line with
portfolio strategy. Locally-based property
investment and operational teams provide
market intelligence and use their networks to
source attractive opportunities. They are
overseen by UK and CE Heads of Investment.
Regular analysis enables the portfolio to be
correctly positioned in terms of location and
asset type, and to retain the right mix of core
and opportunity assets. The annual asset
planning exercise provides a bottom-up
assessment of the performance and
potential for all existing assets to determine
where to invest capital and to identify assets
for disposal. ESG credentials are playing an
increasingly signiicant role in transactional
considerations.
Policies are in place to govern the evaluation,
due diligence process, approval, execution
and subsequent review of investment
activity. Investment hurdle rates are regularly
reappraised taking into account estimates of
our weighted average cost of capital.
Current year activity
The Group’s approach to portfolio
management and capital allocation remains
disciplined and responsive to opportunities
that arise, as detailed in the Investment
and Development updates sections. We
continue to review our portfolio and maintain
appropriate investment criteria and hurdle
rates to ensure we remain resilient to
macroeconomic uncertainty.
Link to strategy:
Disciplined capital allocation; Operational
excellence; Eicient capital and corporate structure
Overseen by:
Executive Committee, Investment Committee
The market outlook is detailed in the Chief
Executive’s statement on page 8
Change in 2023:
No change
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
59
Principal risks continued
3
Major event/business disruption
Unexpected global, regional or national
events may result in severe adverse
disruption to SEGRO, such as sustained
asset value or revenue impairment, solvency
or covenant stress, liquidity or business
continuity challenges. A global event or
business disruptor may include, but is not
limited to, a global inancial crisis, health
pandemic, power/water shortages, weather-
related event, war or civil unrest, acts of
terrorism, cyber-attack or other IT disruption.
Events may be singular or cumulative, and
lead to acute/systemic issues in the business
and/or operating environment.
Mitigations
The Group positions itself to withstand a
global event and business disruption through
its inancing strategy (see separate principal
risk); portfolio strategy (see separate principal
risk) including holding a diverse set of
property assets; staying close to customers
to understand their changing needs; holding
insurance; strong customer base;
organisational resilience of the workforce;
and detailed business continuity and disaster
recovery plans. Going concern and viability
is assessed through a detailed, bottom-up,
medium-term planning process including a
business stress test and downside scenarios.
Specialist employees, under the oversight
of our Technology Committee, continue to
ensure the resilience and security of our
technology using controls, training, testing
and audits. We maintain suitable processes
and controls in respect of business
continuity and IT disaster recovery. We use
third parties to supplement internal expertise
when testing our resilience to a cyber-attack.
Current year activity
The heightened geopolitical uncertainty
(including the ongoing conlict in Ukraine
and the Middle East) has exacerbated global
macroeconomic volatility. This economic
backdrop continues to cause a degree of
uncertainty to the Group’s operations and
stakeholders.
The Group maintains a robust inancing and
portfolio strategy in order to be well
positioned and lexible in response to major
events/business disruption. The Board and
other committees remain vigilant and
responsive in managing the mitigation of
risks as they evolve. Working groups are set
up, as required and often at short notice, to
collate and align the Group’s response in an
agile fashion as issues arise. These groups
report directly to the Executive Committee.
Link to strategy:
Disciplined capital allocation; Operational
excellence
Overseen by:
Executive Committee, Technology Committee
The market outlook is detailed in the Chief
Executive’s statement on page 8
Change in 2023:
No change
4
Health and safety
A health and safety incident may occur
which involves harm to an individual or loss
of life. This may be due to the failure of
management processes, failure of a building
or other physical asset, or negligence of a
third-party. Furthermore, the Group may
breach relevant legislation and fail to provide
suitable employee support. This may
consequentially result in litigation, ines,
serious reputational damage and a negative
impact on employees.
Mitigations
The Group operates an active health
and safety management system, with a
particular focus on the quality of and
compliance with good health and safety
practice of all our suppliers.
A published health and safety policy is
supported by site inspections of existing
assets (and potential new assets), as part of
proactive management, and development
project inspections in line with SEGRO’s
Health and Safety Construction Standard.
SEGRO has a zero-tolerance approach to
poor health and safety and continues to
work closely with our suppliers and health
and safety consultants to increase
understanding and implementation of
SEGRO’s requirements.
The Health and Safety Committee develops
and manages the implementation of Health
and Safety policies, reviews the outcomes of
the Health and Safety Working Group as well
as any other health and safety matters.
The Health and Safety Working Group is
responsible for the implementation of,
and compliance with the Health and Safety
Policy and Safety Management System. It
undertakes continuous monitoring of health
and safety practices, including incidents,
inspections and training tracked across the
Group. Legal guidance and further support
is provided through local health and safety
consultants and lawyers who provide
regulatory assurance support to the
Group alongside our internal expertise.
Current year activity
The health and safety of the workforce
remains a key priority in locations where we
operate, including when working away from
the oice. We have continued to expand our
wellbeing activities with employees. We have
closely monitored our development sites
with in-person inspections, in local language,
in order to ensure a safe and compliant
working environment and detailed further on
page 41. This risk is expected to remain a key
focus going forward.
Link to strategy:
Operational excellence; Responsible SEGRO
Overseen by:
Executive Committee, Joint Operating Group
Approach to Health and Safety on page 41
Change in 2023:
No change
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
60
There is a risk that we fail to anticipate and
respond to the impact of both physical and
transitional risks from climate change on
our business as well as changes in climate-
related regulatory reporting. The likelihood
of increased severity and unpredictability of
weather-related events may result in more
frequent and/or prolonged damage to our
buildings causing disruption and increased
costs to SEGRO and our customers. Non-
compliance with changing laws, regulations,
policies, taxation and obligations cause loss
of value to the Group. Not keeping pace with
social attitudes and customer behaviours
and preferences whereby SEGRO may need
to alter the design and build and/or energy
provision of their assets could additionally
cause reputational damage and reduce the
attractiveness and value of our assets.
Climate-related risks, their time horizon
and their management and mitigation
are detailed further on pages 71 to 73.
Mitigations
The Responsible SEGRO framework sets out
our corporate responsibility strategy, as well
as medium and long-term commitments.
Our dedicated Sustainability team is in place
to support Group and local teams and share
updates on legal and regulatory changes
and best practice, as advised by a range
of external expert advisors. Each signiicant
investment appraisal includes an assessment
of climate-related risk and other
considerations such as measures taken
to increase energy eiciency and reduce
carbon emissions. A climate resilience study
has been undertaken to assess the medium
and long-term physical risks to our portfolio
as detailed further on page 71.
Current year activity
Our Responsible SEGRO framework
continues to outline our strategy to reduce
our corporate and customer carbon
emissions and embodied carbon and is
underpinned by minimum requirements set
out in our Mandatory Sustainability policy.
This risk has increasing prominence each
year and we expect this to continue. See
page 73 for details of further actions
during 2023.
1
2
1 SEGRO V-Park Grand Union
2 SEGRO Park Greenford Central
3 SEGRO Park Greenford North
5
Environmental sustainability and climate change
Change in 2023:
No change
Link to strategy:
Responsible SEGRO
Overseen by:
Executive Committee, Joint Operating Group
Responsible SEGRO, Carbon Climate Related
disclosures on page 67
3
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
61
Principal risks continued
6
Development and construction execution
The Group has an extensive current
programme and future pipeline of
developments which brings the
following risks:
– Cost over-runs on larger, more complex
projects, for example, due to contractor
default or poor performance and
management;
– Increased construction costs or over-
optimistic appraisals leading to reduced
or uneconomic development yields;
– Above-appetite exposure to non-income
producing assets, reducing returns;
– Below-appetite land holdings restricting
opportunities; and
– Additional costs, reputation damage,
health and safety exposure or regulatory
breach due to building defect or
deleterious materials in buildings.
Mitigations
Our appetite for exposure to non-income
producing assets (including land,
infrastructure and speculative developments)
is monitored closely, for example, when
acquisition decisions are being made by the
Investment Committee. The development
programme remains weighted towards
pre-let opportunities. We retain a high level
of optionality in our future development
programme including at the point of land
acquisition, commitment to infrastructure
and commitment to building.
The risk of cost overruns or supply chain
issues is, at least in part, mitigated by using
our experienced development teams and a
panel of trusted advisors and contractors,
and typically using ixed price contracts. We
work collaboratively with our contractors and
remain in constant dialogue to identify
possible issues and possible solutions
ahead of time.
The risk of contractor default is mitigated by
using a diversiied selection of companies
which have been through a rigorous
onboarding process and closely monitoring
their inancial strength. Our short
development lead-times enable a quick
response to changing market conditions.
Internally, oversight is maintained via the
Construction Steering Group, who link in
with the Health and Safety team and manage
challenges like defects or deleterious
materials in our buildings. Additionally, our
Partnership Development team engages
with stakeholders as part of SEGRO’s social
responsibilities and also support planning
processes.
Current year activity
As market conditions have remained
challenging, as detailed in the Portfolio
Strategy Execution risk above, we have
maintained clear investment criteria. We
continue to work closely with our contractors
and were able to react with agility and
responsiveness when a UK contractor
faced diiculties during the year. Going
forward, with an expected continuing volatile
economic environment, similar pressures
are likely to continue so we must carefully
monitor the risks while we balance the needs
of our contractors and customers. We have
investigated our exposure to defective and
deleterious materials in response to issues
as they have arisen.
Link to strategy:
Disciplined capital allocation; Operational
excellence
Overseen by:
Executive Committee, Investment Committee,
Joint Operating Group
Development update on page 40
Change in 2023:
Increased
1 SEGRO Park Coventry
1
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
62
8
Legal, political and regulatory
The Group could fail to anticipate legal,
political, tax or other regulatory changes,
leading to litigation, censure, penalties
and ines. This would result in a signiicant
unforeseen inancial or reputational impact.
In general, legal, regulatory and tax matters
present medium- to long-term risks with a
medium likelihood of causing signiicant
harm to the Group.
Political risks could impact business
conidence and conditions in the short
and longer terms.
Mitigations
Legal and regulatory risks are reviewed
regularly by internal specialists (e.g. Legal,
Health and Safety, Sustainability) as well as
the Executive Committee. Corporate heads
of function regularly consult with external
advisers, attend industry and specialist
brieings, and sit on key industry bodies
such as EPRA and the British Property
Federation, as well as maintaining
relationships with their peers.
We continue to closely monitor the taxation
regulations with our advisors to ensure
changes which may impact the Group or
our customers are identiied and addressed,
in a timely fashion. The Group’s tax
compliance is managed by an experienced
internal tax team. REIT and SIIC tax regime
compliance is demonstrated at least
bi-annually. Compliance with joint venture
and associated shareholder agreements
is managed by experienced property
operations, inance and legal employees.
Where necessary, comprehensive
governance and compliance arrangements
are in place, including speciic management
operating manuals.
Current year activity
The legal and regulatory environment
remains dynamic with an ever-increasing
number of new laws and regulations.
Tax authorities are continuing to update
regulations and SEGRO is working closely
with advisors to respond to this enhanced
reporting environment.
In addition, the current economic situation
means we are alert to an increased risk of
unethical behaviour making our Code of
Business Conduct and Ethics, with the
accompanying training, even more
important.
Link to strategy:
Disciplined capital allocation; Operational
excellence; Eicient capital and corporate
structure
Overseen by:
Executive Committee
Our Governance Framework on page 89
7
Financing strategy
The Group could suer an acute liquidity
or solvency crisis, inancial loss or inancial
distress as a result of a failure in the design
or execution of its inancing strategy.
Such an event may be caused by a number
of factors including a failure to obtain debt or
equity funding (for example, due to market
disruption or rating downgrade); having an
inappropriate debt structure (including
leverage level, debt maturity, interest rate
or currency exposure); poor forecasting;
defaulting on loan agreements as a result
of a breach of inancial or other covenants;
or counterparty default.
Mitigations
The Group’s inancing strategy is aligned
with our long-term business strategy, the
Medium-Term Plan and our risk appetite.
Our Treasury policy deines key policy
parameters and controls to support
execution of the strategy.
The Group regularly reviews its changing
inancing requirements in light of
opportunities and market conditions and
maintains a good long-term relationship
with a wide range of inance providers.
Funding requirements and liquidity are
closely monitored and there is substantial
headroom on all our inancial covenants.
Current year activity
Despite uncertainty caused by the external
geopolitical macroeconomic environment
the Group can still access inancial markets
as seen by our funding activity (as detailed in
the Financial review). The Group (including its
largest joint venture SELP) maintains a
meaningful presence in the Euro bond
market as well as in the sterling bond and US
Private Placement markets leaving us well
positioned inancially to fund activity in
line with our strategy priorities. The Group
continues to use ixed rate debt and
relevant derivatives to mitigate against
the risk of interest rates increasing both
now and going forward.
Change in 2023:
No change
Link to strategy:
Eicient capital and corporate structure
Overseen by:
Executive Committee
Financial review on page 48
Change in 2023:
Increased
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
63
Principal risks continued
9
People and talent
The performance of the business could be
impaired due to SEGRO:
– Not having the appropriate culture,
organisational structure, policies
and procedures or skilled people;
– Failing to attract, motivate, retain and
develop diverse talent as part of our
Nurturing talent ambition due to
inappropriate reward and recognition,
learning and development, performance
management, hybrid working practices
or social policies; and
– Failing to prepare adequate talent
management or succession plans.
Mitigations
We review succession planning and key
person risk at least annually with the
Executive Committee and the Board. We
review compensation in our largest countries
annually with a third party to ensure that we
have appropriate salary ranges in place. We
have a variety of incentive tools that can be
applied lexibly during the year to retain at
risk, talented employees and these are
reviewed by the Remuneration Committee.
We have created a people planning process
with senior leaders so that we can proactively
plan for resourcing and development needs.
We regularly review the hiring, and appraisal,
succession planning and talent process as
well as undertaking employee engagement
surveys to understand employee sentiment.
Our ambition is to build a more sustainable
business, a key feature of which is to become
more inclusive and diverse, as set out in our
Responsible SEGRO framework. We continue
to use a programme of work which is being
guided by the National Equality Standard
framework. The Human Resources team
work with our Partnership Development team
on wider Responsible SEGRO initiatives like
employment projects.
Current year activity
The talent market continues to be relatively
benign and attrition levels are within appetite
and lower than the previous year. We have
restructured our organisation in 2023 and,
with a new Executive Committee and
Leadership Team in place, we are well
progressed with embedding the changes.
The majority of appointments were internal,
showing the strength of our talent and
succession pipeline.
We have further developed our Values and
introduced clear Behaviours for all
colleagues. We continue to review our
employment proposition in each country to
ensure that we are able to attract and retain
strong talent.
Link to strategy:
Operational excellence; Eicient capital
andcorporate structure; Responsible SEGRO
Overseen by:
Executive Committee
Nurturing talent section on page 31
Change in 2023:
No change
10
Operational delivery
The Group could suer an operational failure
such as: major customer default; supply
chain, reporting or treasury failure;
inappropriate or inaccurate valuation
reporting; erroneous lease execution
or poor customer insight and retention.
This could cause a range of negative impacts
including reputational damage and inancial
impact from ines, unexpected costs and
lost revenue.
Mitigations
The Group maintains a strong focus on
Operational excellence. The Executive
Committee and Joint Operating Group
regularly monitor the range of risks to
property management, organisational
eectiveness and customer management.
Each operational area is overseen by a strong
and skilled internal team.
We ensure our customer base is broad and,
as far as possible, has a strong covenant
which we closely monitor as well as
customer concentration metrics. We
undertake senior customer stakeholder
interviews and an annual strategic customer
survey which shapes our customer
engagement plans.
We regularly review our policies and
procedures to ensure they remain
appropriate as well as checking
compliance through internal and external
audits. We also maintain adequate
insurances across the Group.
Current year activity
During the period we continue to have
enhanced engagement with our customers
in light of the volatile economic conditions
and have continued to consider customer
concentration risks. Our customer
development team has grown over the year
to support the customer engagement and
development work.
We have introduced worklow tools which
increase the automation and transparency
of the lettings and asset management
processes.
We work closely with our supply chain and
have undertaken a review of key suppliers
to ensure suitable alternatives are in place
should one fail. Critical suppliers include
those contractors and, by association their
sub-contractors (detailed more fully in the
Development and Construction Execution
risk) and IT suppliers. Furthermore, we
continue to ensure our suppliers are
paid promptly.
Link to strategy:
Operational excellence; Eicient capital and
corporate structure
Overseen by:
Executive Committee, Joint Operating Group
Our Business Model on pages 16, and Asset
Management Update on page 42
Change in 2023:
No change
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
64
Conirmation of viability
The Directors have considered the Group’s
prospects, including reference to the Group’s
principal risks, to form the basis of our
assessment of short-term and longer-term
viability. The process for conducting this
assessment is summarised in the Audit
Committee’s report on page 100.
The Directors conirm that they have a
reasonable expectation that the Group will
be able to continue in operation and has
adequate resources to meet its liabilities
as they fall due over the next ive years.
The assessment of viability is split into
short-term and longer-term time horizons.
Short-term assessment
The short-term assessment included
consideration of our going concern
assessment (see page 50) and a review of key
controls around liquidity management.
Management regularly reviews the Group’s
liquidity position and operating results. In
addition, key treasury metrics including
inancial covenants are reviewed by the
Executive Committee on a quarterly basis.
Longer-term assessment
The period assessed for the longer term is
the same ive-year time horizon as covered by
the Group’s annual rolling ive-year strategic
inancial plan. This is considered to be the
optimum balance between our need to plan
for the long term, and the progressively
unreliable nature of forecasting in later years,
particularly given the historically cyclical
nature of the property industry.
The strategic inancial plan comprises a
ive-year Medium-Term Plan (MTP) and
an Asset Plan, within the context of
macroeconomic and property market
outlooks provided by external advisers
and SEGRO expertise.
The central corporate team and each of the
Business Units provide a forecast for revenue
and costs for the business for the MTP and for
total returns from each asset for the Asset
Plan. They also provide forecasts on potential
development activity from the existing land
bank, refurbishment of existing assets
(including with regard to current and
expected environmental legislation - see
page 68 for more detail on climate-related
inancial disclosure) and their expectations of
acquisitions and disposals.
This process generates a ive-year forecast for
capital expenditure and associated funding
requirements, net income, net asset values
and cash lows. The Directors conirm that
they have no reason to expect a step-change
in the Group’s viability immediately following
the ive-year period assessed.
In addition to the robust ongoing assessment
and management of the risks facing the
Group, as already set out in this section, the
Group has stress tested the MTP. The stress
tests consider the risks that could either
individually, or in aggregate, threaten the
viability of the Group, represented by the
breach of key inancial ratios and covenants.
The risks are based on an individual event or
combination of events occurring, using
historic data (for example the acute property
valuation decline in 2007–2009) and forward-
looking probability analysis where available.
The process for conducting the Group’s
assessment is the responsibility of the
Chief Financial Oicer and is overseen
by the Audit Committee.
The main stress tests carried out in 2023,
along with their potential impacts, were:
– Zero market rental (ERV) growth
throughout the period: the main impacts
are lower asset values and Adjusted NAV
throughout the period, with earnings
growth reduced in later years.
– A scenario where, in addition to the
previous scenario, occupier demand for
new space slows, manifested in reduced
take-up of standing assets and
development levels: the main impacts are
reduced earnings growth throughout the
period (primarily from fewer development
completions), while gearing levels beneit
from lower capital expenditure.
– A scenario where, in addition to the two
previous scenarios, capital value decline,
manifested through a 100bp increase in
yields: the main impacts are lower asset
values throughout the period, causing
leverage to rise.
– Impact of rising interest rates, manifested
in a reverse stress test to assess what
level of interest rates would cause a
covenant breach: a rise of at least ive
percentage points in the Group’s average
interest rate towards the middle of the
period, assuming current levels of ixed
rate interest and protection from our
interest rate caps.
Reverse stress testing was also undertaken
over the period under review. None of the
inancial covenants were breached during
the ive-year period, with gearing remaining
comfortably below 160 per cent and interest
cover well above 1.25 times.
Property valuations would need to fall by
around 44 per cent from their 31 December
2023 values to reach the gearing covenant
threshold of 160 per cent. A 44 per cent fall in
property values would equate to an LTV ratio
of approximately 62 per cent. Net property
rental income would need to fall by around 54
per cent from 2023 levels to reach the interest
cover covenant threshold of 1.25 times.
Outside the MTP, the following viability risks
were also considered:
– A 10 per cent movement in foreign
exchange rates: due to long-term hedging
arrangements in place foreign exchange
movements are not considered a material
risk to the Group’s viability.
– An inability to reinance maturing debt:
the nearest material reinancing requirement
is in 2025 (SEGRO and SELP) so the risk to
the Group’s viability is towards the middle
and end of the period. We tend to reinance
long-term debt around 12 months in
advance of maturities and, should
relationship bank lending, equity and bond
markets be unavailable, options to raise
liquidity include reductions in capital
expenditure and increased asset disposals.
– A sustained interruption to the Group’s
business continuity: a qualitative
assessment of SEGRO’s ability to operate
with compromised workspace and IT
structure is carried out each year, with
regular live scenario tests undertaken by key
members of sta with the help of external
advisers to ensure responses are rehearsed
and mitigations are in place. No material
threat to SEGRO’s viability was identiied.
– Climate-related threats to the portfolio:
working with Savills Earth, we conducted a
climate resilience study to assess the acute
and chronic physical risks to our portfolio
spanning a period from current day to 2100.
Heat and drought stress present as the
most signiicant emerging chronic risks but
assets at risk represent only between 2 and
3 per cent of the portfolio rental value.
Therefore, we do not consider such risks
to be a threat to the viability of the Group.
The scenarios set out are hypothetical and
severe for the purpose of creating outcomes
which have the ability to threaten the viability
of the Group. We also note that, in the event of
a severe threat to liquidity, various options are
available to the Group to maintain viability.
These options include reduction of any
non-committed capital expenditure and
acquisitions, selling assets, or reducing cash
dividends (including the use of scrip
dividends).
We are optimistic about the longer-term
prospects of our business based on our
prime, sustainable portfolio, high levels of
occupancy let to a diverse range of customers
on long average lease lengths, backed by
strong balance sheet with long debt maturity
and no near-term reinancing requirements.
These are supported by the long-term trends
in the warehouse and industrial real estate
sector of greater e-commerce penetration of
retail sales, supply chain reconiguration and
increasing urbanisation across Europe (see
Market Overview on page 12 for more
information).
Viability Statement
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
65
This table signposts related non-inancial and sustainability information in this report and further reading on our website.
Reporting requirement Policies Website (www.SEGRO.com) Reference in 2023 Annual Report
1. Environmental matters Mandatory Sustainability Policy About – Policies
Responsible SEGRO
Championing low-carbon growth 26-28
2. Climate-related inancial disclosure requirements Responsible SEGRO Climate-related inancial disclosures 68-75
3. Employees Code of Business Conduct and Ethics
Human Rights Policy
About – Policies
About – Policies
Suppliers
Governance
43
88
Our Purpose and Values Our Purpose – Our Values Our business model
Nurturing talent
Governance
16-17
31
86
Diversity and Inclusion Policy About – Policies Nurturing talent 31
Group Health and Safety Policy About – Policies Nurturing talent 31
4. Human rights Human Rights Policy
Modern Slavery and Human Traicking
Statement
Anti-Slavery and Human Traicking Policy
About – Policies
About – Slavery and Human Traicking
About – Slavery and Human Traicking
Directors' Report
Directors' Report
131
131
Modern Slavery and Labour Standards Supplier
Code
About – Slavery and Human Traicking Suppliers
Directors' Report
43
131
5. Social Modern Slavery and Labour Standards Supplier
Code
About – Slavery and Human Traicking Suppliers
Directors’ Report
43
131
Human Rights Policy About – Policies Directors' Report 131
Group Health and Safety Policy About – Policies Performance review 41
Supplier Code of Conduct About – Policies Suppliers 43
6. Anti-corruption and anti-bribery Code of Business Conduct and Ethics About – Policies Nurturing talent
Governance
31
88
7. Business model About – Our Business Our business model 16-17
8. Principal risks and uncertainties Eective risk management 54-64
9. Non-inancial key performance indicators Investors – Investment Case – Non Financial Key
Performance Indicators
Key Performance Indicators 34-35
Non-inancial and sustainability information statement
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
66
Streamlined energy and carbon reporting
We are proud of the part that our buildings
play in supporting our customers to achieve
eiciencies and carbon reductions
throughout their supply chain, and this is
relected in SEGRO’s comprehensive
approach to carbon management. SEGRO’s
Scope 1 and 2 emissions (our ‘corporate’
emissions) account for less than 1 per cent
of our total (Scopes 1 to 3) carbon emissions.
Customer direct energy use in our buildings
totalled 251,058 tonnes of CO
2
e, equating to
39 per cent of total emissions (57 per cent
including upstream fuel and energy-related
activities outside their and our control) and
the carbon emissions related to the
construction of new buildings (known as
embodied carbon) represent a further
31 per cent (196,855 tonnes). This is why
SEGRO’s two key carbon reduction metrics
are our corporate and customer emissions
and our embodied carbon intensity, and why
our performance on these two metrics is
incorporated into the annual bonus of all
SEGRO employees.
We have made good progress on both
measures. We have delivered a 7 per cent
absolute reduction in our corporate and
customer emissions in 2023, despite growing
the portfolio area by almost 5 per cent, which
means we are on track to achieve our
science-based target (see the Metrics and
Targets within our Climate-related inancial
reporting disclosure on pages 74 to 75). This
relects our regional teams’ eorts to support
and work with our customers to deliver
carbon reductions. More of our customers
are sharing their energy data with us than
ever before, meaning we have actual data
covering 81 per cent of our loor area
(2022: 68 per cent) improving the accuracy
of our emissions igures.
We have also made further progress
in cutting the carbon intensity of our
development programme, improving
the igure to 348 kg CO
2
e per sq m on
developments completed over the past two
years (2022: 353 kgCO
2
e). Our development
teams and contractors have applied
innovative approaches to materials and
design to reduce the carbon intensity of our
buildings across their full life cycle.
Streamlined energy and carbon reporting
(SECR)
The SECR legislation only covers our
corporate energy use which accounts for less
than 1 per cent of SEGRO’s total emissions. For
our full Scopes 1 to 3 carbon footprint, and all
of the metrics we are tracking on our path to
net-zero carbon, please see our Responsible
SEGRO Report at www.segro.com/
responsible-segro.
In line with best practice, we report both a
‘market-based’ and ‘location-based’ igure for
emissions from electricity consumption. The
market-based approach incorporates
SEGRO’s move towards low-carbon energy
taris on its controlled space (largely its
SEGRO-occupied oices, SEGRO-managed
common parts and vacant space), whereas
the ‘location-based’ approach uses national
grid averages (see the notes to the table
below for more on location/market).
SLR Consulting provide limited independent
assurance to ASAE3000.
Reporting Methodology
The SECR igures above have been prepared
in accordance with the GHG Protocol to
discharge our regulatory obligation to report
greenhouse gas emissions pursuant to
section 7 of the Companies Act 2006
(Strategic Report and Directors’ Report)
Regulations 2013 and the Companies
(Directors’ Report), and Limited Liability
Partnerships (Energy and Carbon Report)
Regulations 2018; the latter commonly
referred to as Streamlined Energy and Carbon
Reporting.
We report our data using an operational
control approach to deine our organisational
boundary and have reported emissions
following both the location-based and
market-based approach, using the IEA
residual emission factors for any energy taris
that are not low carbon.
We have chosen ‘responsible loor area’ as our
intensity metric, which is all loor area with
Scope 1 and 2 emissions in the reporting year.
‘Total energy use’ covers electricity, fuels
(including transport fuels) and district heating
converted to kWh units. Our Responsible
SEGRO Report, and a detailed description of
our methodology, can be found at segro.com/
responsible-segro/reports-downloads. The
2023 greenhouse gas emissions and energy
use data above are for the period 1 October
2022 to 30 September 2023 (2022: 1 October
2021 to 30 September 2022).
Global SECR-relevant GHG emissions in metric tonnes CO
2
e
Emissions from: 2022 2022 – UK 2022 – EU 2023 2023 – UK 2023 – EU
Scope 1 emissions – combustion
of fuels 2,329 402 1,927 1,403 336 1,067
Scope 2 emissions – purchased
energy (location-based)* 4,835 986 3,849 2,516 731 1,785
Scope 2 emissions – purchased
energy (market-based)** 1,662 862 800 1,707 989 718
Scope 3 – Business Travel 42 40 2 138 55 83
Total SECR carbon emissions
(location-based) tCO
2
e 7,206 1,428 5,778 4,057 1,122 2,935
Responsible loor area sq m 1,759,566 1,266,181
Carbon intensity (kgCO
2
e/sq m)
– location-based 4.1 3.2
Carbon intensity (kgCO
2
e/sq m)
– market-based 2.3 2.6
Total Energy Use (kWh) 22,185,460 15,122,165
Note: Responsible loor area can change signiicantly from year to year as it only relates to space under SEGRO’s
control which, apart from space for our own use (e.g. our management oices), includes space vacant for a
portion of the year. This is relected in the low carbon intensity per square meter as empty buildings use very little
energy.
* The location-based approach to calculating Scope 2 emissions (emissions from electricity consumption) uses
national grid average emissions factors which relect the make-up of a country’s electricity supply between
fossil fuels and renewables. SECR legislation requires that a location-based igure be reported.
** The market-based approach to calculating Scope 2 emissions relects the carbon intensity of the electricity
taris procured by SEGRO.
For more details of the
independent assurance see segro.com/
responsible-segro/reports-downloads
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
67
As a leading owner, manager and developer
of industrial and warehouse assets in Europe,
our sustainability and inancial strength is
reliant upon an eective and rigorous risk
management framework. Our properties
span the UK and Continental Europe and are
therefore exposed to a variety of eects from
a changing climate. We believe that these
climate-related risks, if unmitigated, present
a threat to society as well as to our business
operations and inancial strength over the
coming decades.
We have made good progress on our strategy
to reduce the carbon intensity of our business,
particularly reducing the embodied carbon
intensity of our development activities and
increasing our solar energy generation
capacity. We have made further progress
on increasing the visibility of our Scope 3
customer emissions: in most leases, we have
little or no legal right to be informed about
such emissions, so progress in this area relies
on adopting our 'green' lease clause on new
lettings or persuading our customers to share
their energy data. As at 31 December 2023,
approximately 10 per cent of our space
was covered by leases containing our
green clause.
There have been no material changes to the
nature of the business over the past twelve
months which would require a review to our
baseline metrics or future targets.
We believe this disclosure is consistent with
the recommendations and recommended
disclosures of the Task Force on Climate
related Financial Disclosures (TCFD), including
the 'Guidance for All Sectors' and the speciic
guidance applicable to the 'Materials and
Buildings' industry to the extent to which it is
applicable to SEGRO's operations. It sets out
how SEGRO incorporates climate-related risks
and opportunities into governance, strategy,
risk management, metrics and targets, and
how we are responding to stakeholder
expectations, national regulations and
sector-wide best practice.
This is an area of constant evolution and we
intend to continue improving the disclosure
of our activity and performance. The material
information and disclosure on climate impact
is provided in this Annual Report but
additional complementary information can be
found in the 2023 Responsible SEGRO Report.
Governance
Governance plays a key contributing role to
the eective delivery of strategy and SEGRO
has a clear governance structure with a
single Board comprising an independent
Chair, six independent Non-Executive
Directors and two Executive Directors.
Board oversight of climate-related risks
and opportunities
The Board is responsible for setting the
strategic direction of the Company to ensure
its long-term success which includes the
delivery and integration of its eight strategic
priorities, three of which relate to Responsible
SEGRO, and their associated targets.
Speciically, the Board has oversight of
climate-related performance, risks and
opportunities and takes into consideration all
elements of Responsible SEGRO, including
climate-related risks and opportunities, when
reviewing and guiding on annual budget and
long-term planning matters as well as major
strategic and investment decisions.
The Board has access to advice relating to
climate-related risks and opportunities from
internal and external bodies including the
in-house Sustainability Team, CBRE which
values the portfolio, Longevity Partners as
environmental and energy consultants and
SLR Consulting as providers of partial
assurance of Group environmental data,
among others.
The Chief Executive has overall responsibility
for the Responsible SEGRO strategic priorities.
The Group Customer and Operations
Director is responsible for climate-related
risks and opportunities as they may relate
to the portfolio.
The table on page 69 outlines the ways in
which Board and Management Committees
provide oversight for SEGRO’s climate
change-related strategy and targets.
Governance: action during 2023
– The Board received updates on Responsible
SEGRO actions from Group Customer and
Operations Director and the Director of
Sustainability, including progress on
reducing carbon emissions, in addition to
updates on speciic projects including on an
update to SEGRO’s Net-Zero Transition Plan;
– The Board and Audit Committee received
training from the Commercial Finance
Director and Director of Sustainability on the
introduction of new sustainability reporting
requirements from the European
Commission and the International
Sustainability Standards Board and the
progress SEGRO is making to introduce and
integrate them throughout the business; and
– The Remuneration Committee approved the
targets relating to the Responsible SEGRO
annual bonus metrics for Executive
Directors and all employees, of which half
are related to reducing carbon emissions
throughout the business.
Strategy
As a long-term property owner, we need to
ensure that our buildings are it for purpose for
the future. One of the ways we do this is to
build adaptable buildings, suited to more than
one customer. This ensures a longer lifespan
for the building as well as reducing the risk of
vacancy and future refurbishment costs.
The Responsible SEGRO framework sets out
how we integrate environmental and social
considerations into our corporate strategy
through three strategic priorities. The irst
strategic priority sets out our approach to
reducing carbon emissions from our business
activities. This commitment includes Scope 1
and 2 emissions and the material Scope 3
emissions which are Capital Goods
(embodied carbon from completed
developments) and Downstream Leased
Assets (largely corporate emissions and those
from customers occupying our buildings). See
the Responsible SEGRO Report at www.segro.
com for a full breakdown of our Scope 1, 2
and 3 emissions.
Strategy: action during 2023
SEGRO completed a number of projects
to mitigate climate-related transition risks:
– We integrated our analysis of climate
change physical risk, carried out in 2022,
within our annual asset planning exercise
and the investment process;
– We conducted a full audit of our portfolio,
identifying missing and expired Energy
Performance Certiicates, and taking action
to understand why an EPC may be
unavailable (primarily buildings nearing the
end of their useful life which are to be
redeveloped) or to commission refreshed
EPCs to measure more accurately the
energy eiciency of our portfolio and what
investment is required to improve below-
average units; and
Climate-related inancial disclosures
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
68
– We initiated a project with external
consultants to reine our Net-Zero Transition
Plan, taking advantage of the increased
visibility of the carbon emissions from our
business activities to inform a more accurate
strategy and timeline for achieving net zero.
We have also worked with external
consultants to ensure that we comply with
the requirements of the Corporate
Sustainability Reporting Directive and EU
Taxonomy comfortably before we become
eligible to report them.
Identiication of climate-related risks and
opportunities over the short, medium and
long term and their impact on SEGRO’s
business, strategy and inancial planning
Materiality analysis of physical risk
In 2022, working with Savills Sustainability in
conjunction with climate change physical risk
and scenario data from global reinsurer
Munich Re, we have carried out a climate
change physical risk study to assess the acute
and chronic physical risks to our portfolio by
geography, by Representative Concentration
Policy (RCP) scenario and across four time
horizons out to 2100. The full report from
Savills is available at https://www.segro.com/
responsible-segro/reports-downloads and
more detail can be found in the 2023
Responsible SEGRO Report.
For this study, the physical risk from hazards
under RCP 2.6 (less than 2ºC warming by
2100), 4.5 (3ºC warming by 2100) and RCP 8.5
(4-5ºC warming by 2100) were modelled on
197 estates, covering 99 per cent of our
owned or managed loor area (at 100 per
cent) and rental value (based on SEGRO
wholly-owned properties and its share of
properties in joint ventures and associates).
In summary, Heat and Drought Stress present
as the most signiicant emerging chronic
climate-related hazards across all three RCP
scenarios, although assets exposed represent
only between 2 and 3 per cent of rental value.
In terms of change from current baselines,
both of these hazards show potentially
signiicant percentage increases indicating
that asset adaptive measures likely to become
more important in these areas. The absolute
exposure risk to Drought Stress and Heat
Stress is primarily concentrated in SEGRO’s
Southern European portfolio, speciically our
assets in Italy, Spain and southern France.
Governance of climate-related risks and opportunities
Oversight of climate-related strategy and performance
Oversight of climate-related
disclosure within the Annual
Report
Considers Sustainability- and
climate change-related
experience of new and existing
Board members
Sets, monitors and approves
compensation and targets
related to Sustainability
performance, including reducing
Group carbon emissions
The Board
Audit Committee Nomination Committee Remuneration Committee
Investment
Committee
Ensuring capital
expenditure is
consistent with
climate-related
targets
Risk
Committees
Monitoring
climate
change-related
risks and
emerging risks
Strategic
Priorities
Steering Group
Monitoring of
delivery of
SEGRO’s eight
strategic
priorities,
including those
related to the
Responsible
SEGRO strategy
Technical Implementation Group
Focus on development policy and
improvement
Operational Implementation Group
Focus on policy and improvement of
existing assets
Setting climate change-related strategy and targets
Executive Committee
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
69
Climate-related inancial disclosures continued
Climate change physical exposure risk at asset level based on RCP 8.5 and RCP 2.6 by 2050
Hazard Metric
Scenario
(RC P, Ye a r)
Floorspace
(at 100%) ERV (at share) Markets most aected
River Flood 1 in 100-year
return period >0
8.5, 2050
(Undefended)
6% 5% Asset-speciic, including
London Airports, inland
port assets (Hamburg,
Gennevilliers),
Netherlands
Precipitation
Stress
‘High’ and ‘Very
High’ Risk
8.5, 2050 5% 3% Northern Italy assets
2.6, 2050 5% 3% Northern Italy assets
Drought Stress ‘High’ and ‘Very
High’ Risk
8.5, 2050 2% 1% Primarily assets in Spain
with modest exposure in
Northern Italy
2.6, 2050 1% 0% Primarily assets in Spain
Heat Stress ‘High’ and ‘Very
High’ Risk
8.5, 2050 7% 3% Southern France,
Northern Italy and Spain
2.6, 2050 5% 2% Southern France,
Northern Italy and Spain
The table above shows the modelled climate
change physical exposure risk metrics and
outcomes based on percentage of loor area
and rental value at risk based on the worst-
case scenario (RCP 8.5, 2050) and the
best-case scenario (RCP 2.6, 2050). Note that
River Flood was not modelled under RCP 2.6
given the limited expected impact compared
to the current risk.
The assessment report and data above do
not consider any asset speciic development
or refurbishment mitigation cycles. As part of
our sustainable development objectives,
assessments are carried out prior to
development and adaptation measures,
including but not limited to those listed
below, are carried out accordingly.
Materiality analysis of transition risk
We work with our stakeholders (primarily
our customers, suppliers and investors)
and advisers (primarily our valuers and
environmental consultants) to monitor,
assess and prioritise emerging climate
change transition risks. We judge
materiality with reference to two main risks:
the environmental and reputational risk of
failing to meet our carbon emission reduction
targets and the inancial risk of building
redundancy or being unable legally to
lease our buildings.
Risk Adaptation Techniques
Drought Stress and Heat
Stress (see R1 below)
– Rainwater harvesting systems for internal building use and landscaping
– Thermal modelling undertaken and orientation/window positioning of the building
reviewed, including external planting to provide shade, brise soleil, louvres, window
tinting
– Onsite renewable energy generation installed to manage additional cooling
requirements
River Flood and
Precipitation Stress (see
R2 below)
– Flood risk assessment to be carried out on development or retrospectively
– Sustainable urban drainage systems
– Retention schemes – ponds/basins
We believe that there are three main climate
change transition risks with the potential to
impact the Group inancially:
– Environmental legislation: legislation
surrounding the sustainability performance
of commercial and non-commercial real
estate is likely to tighten in future as
governments pursue their commitments
under the Paris Agreement. We expect this
to take the form of regulations but also
increasingly some form of carbon tax
to encourage the use of lower carbon
materials and processes. The primary
inancial risk relates to our ability to rent
out our buildings if they fall below emerging
environmental legislation. This drives our
determination to improve the energy
performance of our portfolio both in new
development and through refurbishment,
measured primarily by increasing the
loorspace rated B or better by Energy
Performance Certiicates.
– Customer behaviours and preferences:
our customers, particularly our largest,
international customers, increasingly
expect their premises to display high levels
of energy eiciency. Energy eiciency not
only reduces the operating costs of the
building but also helps them with their
own environmental and carbon reduction
targets. The primary inancial risk relates to
the appeal of our buildings to customers if
they are below acceptable levels of energy
eiciency and wider environmental
sustainability. We are addressing this risk
through improving the EPC ratings of our
portfolio, increasing the amount of on-site
renewable energy generation, and
improving the sustainability credentials
of our developments.
– Access to capital: investors are increasingly
discriminating between investment
opportunities based on sustainability
credentials. The primary inancial risk relates
to reduced availability and higher cost of
capital for companies which do not show
strong performance and/or progress in this
area. Under our Green Finance Framework,
we have issued €2.9 billion of Green ‘Use
of Proceeds’ bonds in SEGRO and SELP
since 2021.
Applying the analysis to strategic planning
In terms of decision making, we consider
climate-related issues within the following
time horizons:
– Short term: up to 12 months, in line with the
budget setting carried out annually in the
autumn;
– Medium term: up to 5 years, in line with the
Medium-Term Planning carried out annually
in the autumn;
– Long term: up to 10 years, in line with capital
investment appraisal cash lows. We assume
a 60-year life span for our newly-developed
properties.
Given the relatively small element of the
portfolio exposed to the physical risks, and
the fact that our Southern European portfolio
contains some of our newest buildings, we
believe the overall inancial risk to be
immaterial and longer term. However, as part
of our active asset management and based
on the scenario analysis work above, we
expect to improve our visibility of the asset-
level risks and opportunities and their
associated inancial implications. We
recognise that this is an area for improvement
within our climate-related inancial disclosure.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
70
Climate-related risks
Risk Risk Horizon Corporate Strategy Financial Planning
R1 Chronic physical risk
Rising temperatures (including extreme
heat events)
Medium-term risks:
– Higher operating costs for customers and
SEGRO from increased cooling demand
– Greater investment in cooling measures inside
and outside buildings
– Reduced wellbeing and productivity of workforce
Mitigations integrated into developments and
refurbishments in properties in high-risk
geographies, including water conservation through
recycling of rain water and measures to relect heat
and improve shading externally.
Measures incorporated into inancial appraisals of
developments and refurbishments.
R2 Acute physical risk
Flood and precipitation
Short-term risks:
– Increased insurance, maintenance and repair
costs from growing lood risk
– Increased investment in drainage solutions and
lood defences
– Negative impact on asset valuations
All new investments (both acquisitions and
developments) incorporate lood risk assessments.
Measures taken to mitigate lood risk include
rainwater recycling and landscaping to minimise
run-o, and balancing pools to cater for run-o
from hard-standing areas.
Measures incorporated into inancial appraisals of
acquisitions, refurbishments and developments.
Valuers review assets for short-term physical risks
as part of twice-yearly appraisals.
R3 Policy & legal transition risk
Environmental legislation
Medium-term risks:
In the UK, the MEES (Minimum Energy Eiciency
Standard) regulations require buildings to achieve a
certain standard of energy performance for them
to be leased. At a high level, by 2030, properties
will need to achieve a minimum Energy
Performance Certiicate rating of ‘B’ before they
can be leased.
Similar legislation is emerging across a number of
our other markets. The aim of our corporate
strategy is to be compliant with such legislation
well in advance of the deadlines.
Properties which are unrated or have an EPC below
B are expected to be upgraded when they become
vacant (approximately 64 per cent of such
buildings in the UK are expected to be vacated by
2030).
Capex associated with refurbishment,
including improving energy eiciency, is
factored into short-term budgets and the ive-year
Medium-Term Plan.
The estimated cost to upgrade the UK estate to EPC
rating ‘B’ or better is approximately £66 million by
2030, much of which will be absorbed within
normal course of refurbishment capex. The igure
has reduced primarily due to work carried out
during 2023 to improve low-grade EPC premises
to at least B-grade.
R4 Market transition risk
Customer behaviours
Short- and medium-term risks:
Customers expect to operate their properties
eiciently. There is growing evidence of rental
discount associated with buildings which display
poor sustainability credentials.
New developments and refurbishments
incorporate sustainability technologies suited to
their use and location, including (but not limited to)
solar panels (for customer use), electric vehicle
charging facilities, low-carbon heating and
initiatives to promote local biodiversity and
worker wellbeing.
Capex associated with refurbishment, including
improving energy eiciency, is factored into
short-term budgets and the ive-year Medium-Term
Plan.
R5 Reputation transition risk
Access to capital
The Sustainable Finance Disclosure Regulation
(SFDR) imposes mandatory ESG disclosure
obligations for asset managers and other inancial
markets participants.
We have established a Green Finance Framework
which complies with International Capital Market
Association and the Loan Market Association
principles. The Framework sets out the investment
criteria for deploying and allocating the proceeds
of green inance instruments, including in energy
eicient and low-carbon buildings.
When a decision is made to raise capital,
consideration is given to whether the issue should
fall under the Green Finance Framework (e.g. a
Green Bond).
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
71
Climate-related inancial disclosures continued
Climate-related opportunities
Opportunity Risk Horizon Corporate Strategy Financial Planning
O1 Energy & fuel
Onsite renewable energy generation
Short- and medium-term opportunity: revenue
and zero-emission energy potential from installing
PV panels on building roofs.
PV panels are installed on roofs where feasible and
all new developments are constructed with roofs to
support PV panels if a full array is not installed
during construction. Energy saving from solar PV is
an important element in creating net-zero carbon
buildings on a full life basis.
The costs of solar panels are incorporated in new
development and refurbishment capex. Revenues
and cost savings, which are currently a small
proportion of overall revenues, are split between
being incorporated into rents and separately
identiied.
O2 Adaptation & mitigation
Landscaping
Medium- and long-term opportunity: nature-
based carbon capture and storage.
We are reviewing more strategic use of estate
landscaping to plant additional trees and shrubs to
act as long-term carbon capture while also
improving the local environment for the beneit of
our customers and communities.
The cost of landscaping is incorporated within
development and refurbishment capex and is
immaterial compared to overall spend.
O3 Market & transition
Customer behaviour
Short- and medium-term opportunity: installation
of electric vehicle (EV) charging infrastructure.
All new developments require installation of EV
chargers in at least 20 per cent of parking spaces.
The cost of EV chargers suicient to comply
with the SEGRO Mandatory Sustainability Policy
is factored into all development and refurbishment
appraisals.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
72
Risk management
Climate-related risks are identiied and
assessed using our risk management
framework set out on page
56. Principal risks
are deined as those which could intolerably
exceed our risk appetite, considering both
inherent and residual impact, and cause
material harm to the Group.
Engagement with stakeholders
We engage with our stakeholders throughout
the year on many dierent topics, although
the subjects of climate change and the need
to reduce corporate and customer GHG
emissions have featured more prominently
over the past year. More detail on our
stakeholder engagement, including on
climate-related matters, can be found on
pages
18 and 19.
Identifying and assessing
climate-related risks
Although climate change presents
opportunities as well as risks for SEGRO,
Climate Change is identiied as a Principal Risk
within Environmental Sustainability and
Climate Change on the Risk Register. Climate-
related risks are also considered within other
principal risks including Political and
Regulatory, Development plan execution
and Major event/Business disruption.
For each risk, our Risk Register tracks:
– Description of the risk and the potential
eects;
– Identiies the Executive Director with overall
ownership and the Risk Manager
responsible for monitoring and managing
the risk;
– An annual probability and potential impact,
to enable prioritisation;
– Mitigations in place as well as the owner
of each mitigating action.
At the current time and based on asset-level
scenario analysis, no material capital
expenditure has been identiied beyond
normal course development and
refurbishment costs associated with
mitigating assets in high-risk locations
against climate change-related risks. Such
risks, and related capital expenditure, are
considered as part of the annual asset
planning process associated with the
ive-year Medium-Term Plan.
Managing and mitigating
climate-related risks
Our process for recognising, monitoring and
mitigating Principal Risks, including climate-
related risks, is set out on page
58 of the
Annual Report. The Board has overall
responsibility for ensuring that risk is
eectively and consistently managed
across the Group.
The Audit Committee monitors the
eectiveness of the Group’s risk management
process on behalf of the Board. In every year,
the Audit Committee twice reviews the
process of how the Group Risk Register has
been compiled and the Board twice reviews
the principal and emerging risks. The Board
also reviews and approves the Group’s risk
appetite at least once every year.
In its Responsible SEGRO framework, SEGRO
has committed itself to achieving science-
based targets for reducing Scope 1, 2 and 3
emissions (including corporate and customer
emissions) to ensure compliance with a less
than 1.5ºC increase in global temperatures by
2050. A key risk surrounding these targets is
that we cannot be certain to achieve them
given the lack of visibility and control relating
to customers’ energy use in our buildings and
the embodied carbon emissions in
developments. We believe that we have
suicient full or partial visibility to be able to
provide suiciently accurate information to be
consistent with the TCFD's recommended
disclosures and we are working hard to
improve our visibility, and therefore accuracy,
in this regard.
The Metrics and Targets section below
provides details on how we monitor these
risks and our progress over the past year.
Risk management: action during 2023
We have established the Mandatory
Sustainability Policy and set internal targets
associated with not only reducing emissions
but also working with our customers and
supply chain to achieve greater visibility of
those emissions. These targets are integrated
within a Responsible SEGRO element of the
bonus metrics throughout the organisation.
– Materiality: we refreshed our materiality
assessment to incorporate the double-
materiality requirement under new
European Commission (EC) reporting
requirements. This 'Double Materiality
Assessment' (DMA) reviews not only the
impact of SEGRO’s economic activity on
society and the environment but also the
impact of society and the environment on
SEGRO’s economic activity. Under the EC
requirements, the DMA needs to be
reviewed by an independent third party to
ensure the process has been carried out
appropriately. Once that review has
completed, we will publish the results;
– Sustainability Policy: Having established the
Mandatory Sustainability Policy in 2022, we
kept it under continuous review and
adjusted and tightened it in response to
emerging regulation and market norms to
ensure that it is always in line with best-in-
class practice;
– Reporting requirements: The new EC
reporting regulations set down a number of
very speciic requirements for buildings to
be classed as 'green'. Our development and
asset management teams are formally
engaging with external consultants to align
our policies with the new requirements.
Metrics and targets
To enable our stakeholders to consider and
compare our reporting, we contribute to a
number of externally-recognised initiatives
including GRESB, CDP and the FTSE4Good
Index. We also disclose metrics in line with
externally-recognised frameworks including
Sustainability Accounting Standards Board
(SASB), Global Reporting Initiative (GRI) and
the EPRA Best Practices Recommendations
on Sustainability Reporting.
In order to ensure that we also report on those
issues that we can have a direct impact upon,
we use our materiality assessment to identify
the key metrics that are material to the
business. Below are the climate-related
metrics and targets which we monitor.
Those in bold are incorporated into the
Responsible SEGRO elements of the annual
bonus of all employees.
There are no metrics speciically mapped to
Risk 2 (lood) or Opportunity 2 (biodiversity),
although Risks 1 and 2 are addressed in the
Scenario analysis on pages 69 and 70. We
are monitoring and addressing the asset-level
risks and opportunities but there is not yet
a meaningful, measurable metric for
these areas.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
73
Climate-related inancial disclosures continued
Financial Climate-Related Metric 2023 2022 Narrative
Associated risk or
opportunity
Assets Policy and Legal Corporate and customer carbon intensity of the
portfolio (based on the CO
2
e emissions of the
portfolio for which we have visibility of the data), in
kgCO
2
e per square metre of AUM
20.2kg 22.5kg Relects higher visibility of our corporate and
customer emissions as well as the improving energy
eiciency of our buildings and increased on-site
renewable energy capacity.
R3, R4, O1
EPCs rated B or better (based on loorspace AUM) 65% 58% Increase due to completions of energy eicient
developments and refurbishment oset by disposals
of recently developed buildings.
R3, R4
EPCs rated below E (based on loorspace AUM) 3% 2% Small increase relects impact of disposals and
developments.
R3
Portfolio with high environmental certiication
(BREEAM Very Good or better (or equivalent))
based on loorspace AUM
51% 46% Increase primarily due to completions of
developments.
R4, R5, O1
Assets Risk Adaptation and
Mitigation
Portfolio with high environmental certiication
(BREEAM Very Good or better (or equivalent) and/
or EPC certiicate of B or better (percentage of
value at share) (‘Green portfolio’)
£9.2 billion
(61%)
£8.2 billion
(55%)
Comprising wholly-owned assets of £7.0 billion
(2022: £6.2 billion) and assets held in joint ventures
of £2.2 billion at share (2022: £2.0 billion).
R5
Liabilities Risk Adaptation and
Mitigation
Green Finance Instruments as a percentage of
Green Portfolio (including joint venture assets and
debt at share)
22% 24% Green Finance Instruments should not exceed the
total value of the Green Portfolio. No new Green
Bonds were issued during the year.
R5
Expenditures GHG Emissions Visibility of customer emissions
Percentage of portfolio space (sq m of AUM) for
which we have energy data
2024 interim target: 75% (minimum)
81% 68% Many customers are not obliged to disclose energy
use data to us. Without it, however, we cannot
accurately measure our corporate and customer
emissions (approximately 40 per cent of our total
Scope 1-3 emissions). Downstream Leased Assets
GHG emissions. The increase during 2022 relects
negotiation with customers across our portfolio.
R1, R3, R4
Corporate and customer emissions (Scope 1, 2 and
3 – Downstream Leased Assets)
Tonnes CO
2
-equivalent emissions (science-based
target)
2020 baseline: 312,115 tonnes
2030 target: 181,027 tonnes (-42% vs baseline)
2024 interim target: 259,680 tonnes
(-17%vsbaseline) (minimum)
254,168 272,218 Incorporates Scope 1, 2 (market-based) and 3
(Downstream Leased Assets) emissions from the
portfolio.
This reduction was largely due to having greater
visibility of the energy use and of the type of energy
(renewable) sourced by our customers.
R3, R4, R5, O1, O3
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
74
Financial Climate-Related Metric 2023 2022 Narrative
Associated risk or
opportunity
Embodied carbon intensity (based on Scope 3
Capital Goods)
kgCO
2
e per sq m of completed space
(science-based target)
2020 baseline: 400 kgCO
2
e per sq m
2030 target: 320 kgCO
2
e per sq m (-20% vs
baseline)
2024 interim target: 368 kgCO
2
e per sq m
(-8%vsbaseline)
348 353 Based on completed developments for which we
have Life Cycle Assessments (LCAs). To
accommodate delayed receipt of LCAs we have
adopted a two-year rolling average to assess
embodied carbon intensity. This igure incorporates
the results from 974,000 sq m of space completed
in 2022 and 2023. As we transition more of our LCAs
to more accurate Building Information Modelling
(BIM) assessments, our embodied carbon intensity
may rise as BIM provides more detailed analysis of
materials and processes used in construction.
R3, R4
Internal carbon price (£ per tonne) £100 £100 A carbon price is applied to capex relating to
environmental improvements, particularly when
considering the returns from retroitting solar PV to
existing assets.
R3, R4, O1
Revenues Energy/Fuel Onsite solar power capacity (based on AUM) 59 MW 44 MW 15 MW capacity added during the calendar year
(2022: 9 MW) as part of new development
completions and retroitting PV panels to
existing buildings.
R3, R4, O1
Percentage of visible corporate and customer
energy use from certiied renewable sources
51% 49% Based on the portfolio for which we have visibility.
Where we have not been provided with the source
of energy, we assume a non-renewable tari. This
igure will luctuate as we increase the visibility of
our customers’ energy use. We are working with our
customers to improve this metric through increased
use of certiied renewable energy taris and
renewable energy generated on-site.
R3, O1
Revenue from sale of on-site renewable energy to
customers or to national grids (£m)
£2m £2m Revenue from SEGRO-owned PV panels. This metric
relects cases where SEGRO sells the energy to the
occupier or feeds surplus energy into the national
grid and includes local or national subsidies. In other
cases, PV-generated energy is provided to
customers as part of their rent. This revenue is not
recorded here as it is not possible to disaggregate it
from underlying rent.
O1
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
75
Governance
In this section:
We provide an overview of our
corporate governance structure,
policies and practices as well as
the key activities undertaken by
the Board and its Committees
in ensuring eective leadership,
oversight and application of best
practice principles at SEGRO.
Governance Report
Chair’s introduction to Governance 78
Application of the UK Corporate
Governance Code 80
Board of Directors
81
Key activities of the Board
84
Governance Framework
89
Section 172(1) Statement
90
Stakeholder engagement from the Board's
perspective 90
Internal Board evaluation
93
Nomination Committee Report
95
Audit Committee Report
100
Directors’ Remuneration Report
107
Directors’ Remuneration Policy – summary
126
Directors’ Report
131
Statement of Directors’ responsibilities
133
How our governance activities enable
extraordinary things
A focused and active Board –
keymilestones during 2023 84
How the Board lives our Purpose
andValues
86
How the Board manages and
monitorsour culture 87
Nomination Committee
Our Nomination Committee
ensures that we have a
balanced Board with the
appropriate skills and
experience to govern the
business, and an eective
succession plan.
Read more in
the Directors'
Remuneration Report
on page 107
Remuneration Committee
Our Remuneration Committee
determines the Remuneration
Policy which aims to incentivise
strong performance whilst
avoiding excessive risk taking.
Audit Committee
Our Audit Committee monitors
the integrity of the Financial
Statements, oversees the
external audit, risk
management process and
internal control environment.
Read more in
the Nomination
Committee Report
on page 95
Read more
in the Audit
Committee Report
on page 100
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
76
A Q&A with our Chair
The depth and breadth of
experience of the Executive
and Non-Executive Directors
brings a true diversity of
thought to the Board,
creating a great Board of
which I am proud to Chair.
Andy Harrison, Chair
Andy Harrison covers the following
topics:
– SEGRO's performance in 2023
– Board focus on talent development
throughout the organisation during
the year
– The role of the Board in protecting
and creating shareholder value
– What our Purpose and Values mean
to the Board
Scan here to see the video of Andy
Harrison talking about SEGRO's Board.
www.segro.com/ara23/Andy-Harrison
To ind out more
about SEGRO visit
www.SEGRO.com
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
77
Chair’s introduction to governance
Our long-established
and eective corporate
governance procedures
provide a robust
structure to Board
decision-making
Andy Harrison, Chair
Dear shareholder,
As Chair of SEGRO, I am pleased to present
the Governance Report for 2023 in which you
will read how the Board continued to promote
the long-term, sustainable success of the
Company during the year.
Governance and the delivery of strategy
2023 was another busy year for the Board, with
the Company responding to the challenges
associated with the macroeconomic and
geopolitical environments, the impact of
higher inlation and interest rates on property
valuations, and the step up in the cost of
capital. The impact of these external factors
on the business and its stakeholders remained
an important inluence on Board discussions
throughout the year, as we ensured decisions
made against this backdrop were done so in
the best interests of the Company, for both
the short and long term.
Board changes and our people
As you will read in the Nomination Committee
Report on page 95, our Chief Operating
Oicer, Andy Gulliford, and Non-Executive
Director, Martin Moore, retired from the Board
in 2023. I would like to take this opportunity
to thank them both for their signiicant
contributions over a number of years.
The internal Board evaluation carried out in
2023 conirmed that the Board and its
Committees continued to operate eectively,
and we have proposed that all Directors will
stand for re-election at the 2024 AGM. You
can read more about this on pages 93 to 94,
and 99.
Succession planning and talent development
throughout the organisation remain one of the
Board’s key areas of focus. The promotion of
internal candidates to create the new
Executive Committee demonstrates the
eectiveness of the Company’s succession
planning and the Board was delighted to see
the breadth of experience that the new
members of the Committee bring. You can
read more about these appointments on
page 11.
On a personal note, having now been in the
role of Chair for over a year, I have enjoyed
getting to know our people across the
business even more and am continually
impressed with the high quality of our
employees and the passion they have
for working at SEGRO.
1
1 2023 Annual General Meeting
Read about our strategy on page 20
Read about Responsible SEGRO on page 23
Find out more about Board changes during
the year in the Nomination Committee Report
on page 95
Despite these challenges, we have
delivered another year of strong operational
performance. This is testament not only
to our high-quality portfolio of assets, but
to the eectiveness of our long-term strategy,
our culture, and the hard work and talent
of our people.
In addition, our long-established and eective
corporate governance procedures have
provided a robust structure to decision
making, ensuring that we identify, consider
and manage the risks and uncertainties
facing the business.
Responsible SEGRO and our stakeholders
Our Responsible SEGRO framework remains
at the core of our strategy, recognising the
importance of considering all stakeholders
in our decisions, as well as our commitment
to be a force for good in society.
You can ind examples throughout this report
on how we consider all stakeholders in our
operating business and our Section 172
statement on page 90 provides details about
how the Board engaged with these stakeholder
groups, and how this engagement has
impacted its decision making. The Board
received regular updates on our Responsible
SEGRO ambitions throughout the year and was
particularly pleased at the engagement from
across the business and the progress made
against our Responsible SEGRO targets.
Our regular Strategy Event was a valuable
opportunity for the Board to step away from
the day-to-day with the members of the
Executive Committee, and to keep one eye
on the horizon by hearing from a number of
experts to add further perspective to Board
discussions about the strategy and long-term
objectives of the Company. You can read
more about this on page 85.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
78
Our shareholders
Each year we write to our larger shareholders,
oering them the opportunity to meet
privately and discuss their thoughts on
the Company and the wider market with
myself, the Senior Independent Director or
the Committee Chairs. In addition, during
the year our Head of Investor Relations and
Deputy Company Secretary met with the
stewardship teams from a number of our
larger shareholders to gain insight into the
matters which are important to them. Valuable
feedback from those meetings was relayed to
and considered by the Board. We will continue
to engage with our shareholders and
representative bodies to make sure that there
is an ongoing dialogue about our approach
to governance, including remuneration, and to
ensure any feedback from our shareholders is
shared with the Board and all views are fully
understood and considered.
Annual General Meeting (AGM)
On behalf of the Board, I would like to extend
my thanks to those shareholders who joined
us in April for the 2023 AGM, where the Chief
Executive delivered a presentation on
SEGRO’s performance in 2022 and the early
part of 2023.
All shareholders received communications for
the AGM at least 20 working days in advance
of the meeting and were invited to ask
questions, either in the room or by email
ahead of the meeting. The other Directors and
I were also available to meet with attendees
informally, both before and after the meeting,
and we look forward to doing so again at this
year’s AGM.
The Company proposes separate resolutions
on each substantially separate issue, with
voting conducted by poll. All the resolutions
proposed at the 2023 AGM were passed with
80 per cent of the issued share capital voted
(2022: 82 per cent). Following the meeting,
the results of votes lodged for and against
each resolution were announced to the
London Stock Exchange and added to
our website.
The 2024 AGM will be held on 18 April 2024 at
RSA House, and we hope that we can count
on shareholders’ support for the proposed
resolutions. Full details can be found on page
195 and in the Notice of Meeting.
Thank you
I would like to take this opportunity to
recognise the hard work and commitment
of all our people during the year and to thank
them for their continued eorts to ensure the
future success of the business.
Finally, please also join me in thanking my
Board colleagues for their insightful and
valuable contributions during the year.
Andy Harrison
Chair
1
2
1 Shareholders visit SEGRO Park Tottenham
2 SEGRO Park Amsterdam Airport
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
79
UK Corporate Governance Code 2024
The FRC has recently published an updated
Code whose provisions will largely apply for
inancial years starting on or after 1 January
2025. We will continue to adapt our practices
and procedures as required to ensure
continuing compliance with the new Code
when it is adopted.
Application of the UK Corporate Governance Code 2018
Board leadership and Company
purpose
A. An eective and
entrepreneurial Board which
promotes the long-term
sustainable success of the
Company.
Pages 81
to 83
B. Alignment of our Purpose,
Values, culture and
strategic priorities.
Pages 16;
31; 86
and 87
C. Our Governance
Framework.
Page 89
D. Stakeholder engagement
from the Board's
perspective.
Pages 90
and 91
E. Our people and alignment
of our workforce policies to
support our long-term
success.
Pages 31;
86; 92
and 119
Division of responsibilities
F. The role of the Chair. Page 89
G. Composition of the Board
and Directors'
independence.
Pages 97
to 99
H. Non-Executive Directors'
external commitments and
conlicts.
Pages 81
to 83; 88;
and 99
I. Eective and eicient
functioning of the Board
and Board resources.
Pages 83;
88; and
89
Composition, succession
and evaluation
J. Board appointment
process and succession
planning.
Page 97
K. Directors' skills, experience
and knowledge.
Pages 81
to 83; 96
and 97
L. Board evaluation. Pages 93
and 94
Audit, risk and internal control
M. External and internal
auditors and the integrity of
the inancial reporting
process.
Pages 102;
and 104
to 105
N. Fair, balanced and
understandable review.
Page 102
O. Internal controls and risk
management processes.
Page 106
Remuneration
P. Remuneration practices
which are aligned to our
Purpose and Values and
support our strategic
priorities and long-term
sustainable success.
Pages 107
to 109; 117
Q. Remuneration Policy. Pages 126
to 130
R. Exercise of independent
judgement in respect of
the 2023 performance
outcomes.
Page 106
Key Governance Statements
Going Concern
The Going Concern Statement is made
on page 50.
Viability
The Viability Statement is made on page 65.
Further details of the Board’s assessment of
the viability of the Company are set out in
the Audit Committee Report on page 102.
Principal Risks and Uncertainties
The Principal Risks and Uncertainties are set
out on pages 58 to 64.
The Board has undertaken a robust review
of the Group’s principal and emerging risks,
including those that would threaten its
business model, future performance,
solvency or liquidity and reputation.
The Board has monitored the Company’s
risk management and internal control
systems and carried out a review of their
eectiveness. Further details are set out in
the Audit Committee Report on page 106.
Fair, Balanced and Understandable
The Fair, Balanced and Understandable
statement is made on page 133.
See the Audit Committee Report on page
102 for further information on how this
conclusion was reached.
Section 172(1)
The Section 172(1) Statement is made on
page 90 and provides cross-references to
the required detail set out throughout this
Annual Report.
Statement of compliance
The UK Corporate Governance Code 2018
(the Code) is the key governance guidance
to which we referred during the inancial
year to 31 December 2023. It can be found
in full on the Financial Reporting Council’s
(FRC) website at www.frc.org.uk.
The Board considers that, throughout the
year, it has complied with the Provisions of
the Code in all respects.
Details on how we have complied with the
Provisions and applied the Principles as set
out in the Code are outlined in this Annual
Report.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
80
Board of Directors
Our Board is made up of talented individuals,
with a depth of commercial experience from a
range of industries. This diversity of thought
helps create an eective and entrepreneurial
Board as each member has a fresh
perspective to bring to discussions,
supporting our ambition to be the best
property company.
Full details of each of the Directors’ previous
appointments can be found on the Company’s
website at www.SEGRO.com/about/the-board.
Board leadership and Company purpose
Audit Committee member
Nomination Committee member
Remuneration Committee member
Chair of Committee
* denotes a publicly listed appointment
Chair Executive Directors
Andy Harrison
Chair
David Sleath OBE
Chief Executive
Soumen Das
Chief Financial Oicer
Appointed: 1 April 2022
(Chair from 30 June 2022)
Skills and experience
Andy is an experienced chair having held the position
at Dunelm Group plc for over seven years. He is also a
former CEO who has led multiple large consumer
facing organisations with strong service oerings. His
leadership, business understanding and insights have
proven to be invaluable additions to the boardroom.
Contribution to SEGRO's long-term success
With over 35 years' experience serving on the boards
of listed companies across a wide range of industries
and during varying economic conditions, Andy is
particularly well-placed to lead SEGRO through the
current, more challenging market conditions to enable
the business to remain it for the future.
His Board colleagues consider him to be an eective
Chair, with his thoughtful leadership style facilitating an
open and collaborative environment amongst the
Directors which, in turn, encourages constructive
challenge and debate.
See the Governance Framework on page 89 for
the roles and responsibilities of the Chair, Chief
Executive and Senior Independent Director.
Appointed: 1 January 2006
(Chief Executive from 28 April 2011;
Finance Director from 1 January 2006 to 28 April 2011)
Skills and experience
David has considerable board-level experience of
listed companies and has extensive knowledge of the
real estate, manufacturing and distribution sectors and
the Company. His inancial and general management
experience has helped lead the successful design and
implementation of the Company’s strategy during his
tenure as Chief Executive.
He is a Fellow of the Institute of Chartered Accountants
in England and Wales.
Contribution to SEGRO's long-term success
As Finance Director, David was a key member of the
management team which navigated SEGRO through
the global inancial crisis, swiftly followed by the
acquisition of Brixton whose London-centric portfolio
complemented and enhanced SEGRO's own. As Chief
Executive, he initiated a wide-ranging strategic review
in 2011 involving reshaping both the portfolio and the
business, with a particular focus on culture, purpose
and sustainability. This review laid the foundation for
SEGRO to become the largest UK REIT and the only
liquid means of investing in a pan-European urban and
big box logistics portfolio. Outside SEGRO, his position
as a Non-Executive Director at a global business-to-
business distribution company provides valuable
insight into the opportunities and challenges in this
sector, while his involvement with the EPRA Board and
the BPF ensures that SEGRO has a leadership position
in two inluential trade associations.
External appointments
– Senior Independent Director, RS Group plc*
– Board member, European Public Real Estate
Association
– Chair, BPF Logistics Property Board and Member,
BPF Policy Steering Group
Appointed: 16 January 2017
Skills and experience
Soumen combines leadership of the inance functions
with a wider contribution to the business through
investment, insight and transformation and
technology. He brings his extensive board-level
experience and deep knowledge of capital markets to
the Group, having been Chief Financial Oicer of listed
companies for 14 years and with a background as a
corporate inancier.
Contribution to SEGRO's long-term success
Since his arrival in 2017, Soumen has been responsible
for driving the inancial performance of SEGRO and
managing a capital structure which is both eicient
and appropriate for the dierent stages of the property
cycle. In his role, he is also responsible for SEGRO's risk
management, investment and technology strategies
which are vital to SEGRO's future inancial success and
resilience.
He holds external positions which are also pertinent
to his SEGRO role. His position as a Non-Executive
Director at a major retailer provides valuable insight
into the opportunities and challenges in a sector which
comprises a material proportion of SEGRO's customer
base. His Co-Chair role of the Parker Review into
improving ethnic diversity on UK Boards gives him
a unique perspective on diversity and inclusion to
support SEGRO's actions and progress in this
important area.
External appointments
– Non-Executive Director, NEXT plc*
– Co-Chair of the Parker Review
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
81
Board leadership and Company purpose continued
Our Independent Non-Executive Directors
bring independent judgement and scrutiny
to the decisions taken by the Board. They
monitor the success of management in
delivering the agreed strategy within the risk
appetite and control framework set by the
Board and hold the Executive to account
against these objectives.
Independent Non-Executive Directors
Mary Barnard
Independent Non-Executive Director
Sue Clayton
Independent Non-Executive Director
Carol Fairweather
Senior Independent Non-Executive Director
Appointed: 1 March 2019
Skills and experience
Mary has extensive commercial and general
management experience and a deep understanding
of customer needs and trends through her various
international roles in sales and marketing. She has a
strong knowledge of the operation of the retail market
and supply chain.
Contribution to SEGRO's long-term success
Mary has irst-hand experience of international retail
markets and customer trends, and often shares her
observations at Board meetings which helps to set the
scene on global market sentiment. This provides useful
insight into some of the key drivers which may impact
our customers, allowing the Board to be mindful of
them in its decision making.
External appointments
– Chief Commercial Oicer, Mondelez International
Inc*
Appointed: 1 June 2018
Skills and experience
Sue brings a wealth of property market knowledge
to the Board, with over 30 years of experience in
property investment markets, having worked in the
UK commercial property market for her whole career.
She is active in promoting diversity in the Real Estate
industry including through her former role as the Chair
of Women’s Network at CBRE and as co-founder of
Real Estate Balance.
Sue is a Fellow of the Royal Institute of Chartered
Surveyors (FRICS).
Contribution to SEGRO's long-term success
Sue's real estate expertise brings an additional
viewpoint to discussions on the industry,
complementing the experience of the Executive
Directors, and she also provides constructive
challenge on the valuation of the property portfolio.
Her passion for promoting diversity in the Real Estate
industry echos the ambitions of the Company's
Nurturing talent framework and both the Board and
the Nomination Committee beneit from her insights
on this important topic.
External appointments
– Senior Independent Non-Executive Director,
Helical plc*
– Member of the Committee of Management,
Federated Hermes Property Unit Trust
– Senior Adviser, Blue Coast Capital
Appointed: 1 January 2018
(Senior Independent Non-Executive Director from
1 July 2023)
Skills and experience
Carol has recent and relevant inance experience and
brings commercial knowledge to the Board. Her prior
experience as Chief Financial Oicer of the retailer
Burberry Group is valuable to the Company in her
understanding of retail and digital commerce trends.
Carol is a Fellow of the Institute of Chartered
Accountants in England and Wales.
Contribution to SEGRO's long-term success
Carol's inancial expertise and understanding of the
importance of good governance is integral to her role
as Chair of the Audit Committee. Under her leadership,
the Audit Committee provides comfort for our
shareholders and other stakeholders by ensuring that
there is robust oversight of the internal control
framework and eective processes and controls in
place to safeguard the integrity of the Financial
Statements.
As Senior Independent Director, she led this year's
internal Board evaluation process, which provided the
opportunity for the Board to step back, relect on its
performance and conclude that it continued to
operate eectively.
External appointments
– Non-Executive Director, Smurit Kappa Group plc*
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
82
Eective and eicient functioning of the Board
During 2023, there were seven scheduled Board meetings. Each Director has committed to
attend all scheduled Board and Committee meetings, and would not do so only in exceptional
circumstances. This is kept under review to ensure that Directors are fulilling their
commitments to the Company. Similarly, every eort is made by Directors to attend ad hoc
meetings. On the rare occasion that a Director cannot attend a meeting they are still provided
with the papers in advance of the meeting and are given an opportunity to discuss them with
the Chair or Chief Executive.
The Board has the lexibility to meet in person, by telephone or by video conference as the
need arises or on an ad hoc basis.
Attendance at scheduled Board and Committee meetings
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee AGM
Mary Barnard
1
7/7 1/1 1/1 3/3 1/1
Sue Clayton 7/7 3/3 1/1 3/3 1/1
Soumen Das 7/7 - - - 1/1
Carol Fairweather 7/7 3/3 1/1 3/3 1/1
Simon Fraser 7/7 3/3 1/1 3/3 1/1
Andy Gulliford
2
3/3 - - - 1/1
Andy Harrison 7/7 - 1/1 - 1/1
Martin Moore
3
6/7 3/3 1/1 3/3 1/1
David Sleath 7/7 - - - 1/1
Linda Yueh 7/7 3/3 1/1 3/3 1/1
Total number of scheduled meetings
in 2023 7 3 1 3 1
1 Mary Barnard stepped down from the Audit Committee with eect from 1 July 2023.
2 Andy Gulliford retired from the business and stepped down from the Board on 30 June 2023.
3 Martin Moore retired from the Board on 31 December 2023 and missed one Board meeting during
the year due to illness.
Simon Fraser
Independent Non-Executive Director
Linda Yueh CBE
Independent Non-Executive Director
Appointed: 1 May 2021
Skills and experience
Simon has extensive knowledge of working on
remuneration committees, having previously chaired
the remuneration committees at Derwent London and
Lancashire Holdings. He is a former investment banker
with a wealth of inancial experience, having spent the
majority of his career with Bank of America Merrill
Lynch where he was appointed Managing Director and
Co-Head of the Corporate Broking division in 2004.
Contribution to SEGRO's long-term success
Board discussions beneit from Simon's extensive
knowledge of inancial markets and his perspective
has been particularly useful during this period of
macroeconomic challenge.
He has led the Remuneration Committee in delivering
an appropriate remuneration framework for Executive
Directors and the wider workforce, which is designed
with the views of our key stakeholders in mind, whilst
also aligning with our Purpose and Values and aiming
to promote the long-term sustainable success of the
Company.
External appointments
– Non-Executive Director, Legal & General Investment
Management (Holdings) Ltd
Appointed: 1 May 2021
Skills and experience
Linda brings a broad range of skills to the Board,
including robust commercial experience and a strong
background in economics, as a Fellow in Economics
at St Edmund Hall, Oxford University and Adjunct
Professor of Economics at London Business School.
Contribution to SEGRO's long-term success
Linda regularly draws on her wealth of knowledge of
international markets, the macroeconomic context,
and global, economic trends, both past and present,
to shape Board discussions. Her perspective helps the
Board to keep one eye on the horizon by applying
learnings from past trends to the current environment.
Through her role chairing a sustainability committee,
she brings another perspective to the ESG
considerations which are embedded in the Board's
decision making and help guide our Responsible
SEGRO strategy.
External appointments
– Non-Executive Director, Standard Chartered PLC*
– Non-Executive Director, Rentokil Initial plc*
– Chair, Baillie Giord’s The Schiehallion Fund Ltd*
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
83
Role of the Board
The Board's primary role is to provide overall
leadership of the Company and to promote
its long-term sustainable success, generating
value for shareholders and contributing to
wider society.
It sets the Company’s strategic aims and
ensures that it operates within a framework of
prudent and eective controls which enable
risks to be assessed and managed. It makes
certain that the necessary inancial and
human resources are in place for the
Company to meet is aims.
Further, the Board makes sure that there is
eective engagement with shareholders and
other key stakeholders in order for the
Directors to satisfy their obligations under
section 172(1) of the Companies Act 2006. The
work of the Board complements, enhances
and supports the work of the Executive, in
particular in respect of the Company’s culture,
and its Purpose and Values.
Our Section 172(1) statement can be found
on page 90
Read about how the Board lives our Purpose
and Values on page 86
A focused and active Board –
key milestones during 2023
February
2022 Full-Year Results approval
April
2023 Annual General Meeting
May
2022 inal dividend payment
Approved change to the executive leadership
structure
Stakeholder engagement sessions with Heathrow
Airport and PSP Investments
June
Warsaw, Poland Board tour
Andy Gulliford retired as Chief Operating Oicer
and stepped down from the Board
July
Carol Fairweather appointed as Senior
Independent Director
2023 Half-Year Results approval
September
2023 interim dividend payment
November
2023 Strategy Event
December
Martin Moore retired as Non-Executive Director
Regular dialogue between the Chair, Chief Executive and Company Secretary helps ensure that the
Board agendas contain the appropriate mix of: strategy; people and culture; governance; inancial;
and operational matters to enable it to eectively discharge its duties. During 2023, the Board:
Strategy
– considered the strategic priorities of the business and agreed they remained appropriate;
– received regular updates from advisers, industry experts and employees to ensure that the Directors
were kept up to date with market trends and implemented this knowledge in its decision making; and
– reviewed regularly the Group’s investment stance, adapting the focus as necessary in response to the
changes in the property cycle and wider investment market.
Our strategy can be found on page 20
Read about the Strategy Event on page 85
Financial
– approved the Half- and Full-Year Financial Statements and the Annual Report and Accounts;
– approved the 2022 inal and 2023 interim dividends in line with the dividend policy;
– monitored liquidity through regular reviews of the cash low position, committed capex and the
development pipeline; and
– received presentations from the Company’s independent valuers, CBRE, and provided constructive
challenge around the valuation process to gain comfort that it remained robust and appropriate.
Find out more in the Financial review on page 48
Operational
– approved signiicant transactions over £/€100 million, including a land acquisition for the planned
development of a strategic rail freight terminal and logistics scheme at Radlett, Hertfordshire and the
disposal of two assets in line with the annual disposal plan;
– monitored performance against the Company’s zero-tolerance approach to Health and Safety
breaches, and reviewed key indings and learnings from any incidents; and
– reviewed the results of the Customer and Supplier Satisfaction Surveys to gain assurance that excellent
customer service had been upheld, customer retention maximised and strong relationships with
suppliers maintained.
Hear about SEGRO's operations directly from our MDs of Continental Europe and UK on page 44
Governance
– ensured ongoing compliance with regulatory requirements, the UK Corporate Governance Code and
market best practice through robust governance procedures;
– reviewed and approved the Principal Risks and risk appetite of the Company; and
– noted ongoing compliance with the Code of Business Conduct and Ethics including our Anti-Bribery
and Corruption and Modern Slavery policies.
Hear from SEGRO's Chair in his introduction to Governance on page 78
People and Culture
– focused on talent development across the organisation as a whole, maintained oversight of the new
Executive Committee appointments and received a presentation on progress against our Nurturing
talent objectives from the Group HR Director;
– heard how our Community Investment Plans had delivered positive impacts on employment, the local
economy and the environment in the communities in which we operate; and
– continued the annual programme of workforce engagement sessions with Non-Executive Directors to
gain a irst-hand insight into the issues that matter most to our people.
Find out more about Nurturing talent on page 31
Board leadership and Company purpose continued
Key Activities of the Board in 2023
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Annual Report & Accounts 2023
84
Strategy Event 2023
In November 2023, the Board and Executive
Committee spent a day and a half osite,
where they relected on the strategic
direction of the Company and considered
how to position the business for continued
long-term, sustainable success in pursuit of
the Company’s ambition to be the best
property company, all whilst navigating the
ongoing uncertainty in the wider
macroeconomic and geopolitical
environment.
As always, the Board valued this opportunity
to step away from the usual day-to-day
boardroom agenda and dedicate its time to
discussing key strategic areas. The Strategy
Event focused on a small number of key
items and a full pack of papers, covering a
wide range of topics, was provided ahead of
the session to set the context for discussion
and ensure that the Directors were fully
briefed. As well as hearing from speakers
from around the business, external guests
were invited to share their areas of expertise
to further inform the conversation.
The irst part of the osite was spent
considering the external economic
environment and macroeconomic outlook
within the countries in which the Company
operates, and the Board welcomed a
number of external speakers, including
those from Morgan Stanley and Savills to
share their views on the outlook for the UK
and Continental European economies as
well as the occupier market.
The Board also heard from the newly
appointed Managing Directors for the UK
and Continental Europe, James Craddock
and Marco Simonetti, who summarised
their initial relections on their new roles and
what they considered to be the near-term
challenges for each of their business areas
in light of the current market conditions.
These insights contributed to the Board’s
discussions on the assumptions, strategic
choices and outputs underlying the Group’s
Medium Term Plan. It also considered the
annual portfolio review, views of the
property cycle and the markets the
Company operates in, as well as the
investment strategy in the near term
and in future years.
On the second day, as part of the Board's
enhanced programme of stakeholder
engagement, a speaker from National Grid
was welcomed who provided an overview
of National Grid’s business and the broader
risks, challenges and opportunities
associated with the energy market
in the UK.
Finally, upon relection of the discussions
from the irst day, the Board further
considered the key strategic priorities for
the business with the Group HR Director,
Margaret Murphy, leading a discussion on
Nurturing talent, including diversity and
inclusion and succession planning for
the business.
The Board concluded that the strategic
direction of the business remains
appropriate. Whilst being mindful
of the pace of change in the wider
macroeconomic environment and
the need to remain vigilant and nimble in
the execution of that strategy, there was
consensus amongst Directors on the
Company’s planned approach for 2024.
The Directors value meeting and hearing from
dierent people in the business who are close
to the Company’s markets and who can tell
the Board what they are seeing and hearing
on the ground, as well as from external
sources who give a wider perspective on
market trends. These sessions allow the
Directors to gain further insight on market
trends and provided the context for them to
make strategic decisions about acquisitions,
disposals and the development pipeline.
During the year, the Board heard from:
– the Executive Committee on their individual
areas of responsibility and the Group’s
strategic priorities;
– the Head of Investor Relations on investor
feedback following the Full- and Half-Year
Results;
– the Managing Director, Group Investment on
market outlook, the investment stance and
customer exposure across the Group;
– the Commercial Finance Director on the
Group's liquidity position; and
– the Head of Tax, Head of Legal and Director
of Health and Safety who all provided
regular updates on their areas.
Directors receive accurate, timely and clear
information on the matters to be considered.
Electronic Board packs are available to the
Directors well in advance of a meeting.
During the Board evaluation process, the
Non-Executive Directors commented
positively on the quality of the papers
received from the Company which set the
scene for the Board meetings and signpost
the important aspects for consideration.
Everyone agreed that the Board meetings
were well managed and facilitated open
discussion of the appropriate topics and focus
areas.
There is an approved Schedule of Matters
Reserved for Decision by the Board which
is reviewed periodically and available at
www.SEGRO.com. The Board retains
responsibility for the approval of certain
matters which include:
– Group strategy;
– the annual budget;
– reviewing the Medium Term Plan;
– the inancial structure;
– major capital expenditure including
investments and disposals;
– approval of the inancial statements;
– the dividend policy; and
– compliance with the Code.
See how the Board delegates some of its
responsibilities in the Governance Framework
on page 89
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
85
How the Board lives our Purpose
and Values
We are proud of our Purpose – to create the
space that enables extraordinary things to
happen – and our ive Values which support
our culture and align with our strategic
priorities. They are well embedded in
the business and form the basis of our
workforce policies. They help to unify
employees and describe the core beliefs
about how SEGRO does business, acting
as a universal language across our business
and the countries in which we operate.
It is essential that the Directors lead by
example and live the Values. The Executive
Directors are more visible leaders around
the business and help set the tone.
Within the boardroom, the consistent
feedback from the recent evaluations is that
all Directors feel they can contribute, speak
freely and do not feel constrained. The
Chair encourages open debate and no
one individual dominates. The seasoned
relationships of most of the Board
members mean that they are able
to say it like it is whilst their varied
backgrounds and wide-ranging
experience bring diering perspectives
to Board discussions, allowing for true
diversity of thought and constructive
challenge in a supportive environment.
Board leadership and Company purpose continued
See more on our Purpose and Values on page 31
We have a unifying set
of Values that drive
our culture. When the
Directors are together,
they live the Values as
follows:
Say it like it is
The Directors are honest and
transparent in dealings with
each other and those who
interact with them both inside
and outside of the boardroom.
The Chair encourages
constructive debate and
challenge during meetings.
Does it make the
boat go faster?
The Directors look at dierent
ways of working to create
eective relationships and
discuss regularly where they
can best add value.
If the door is closed…
The Non-Executive Directors
support the Executive
Directors to ind solutions to
more complex issues and
provide assistance where
more diicult judgement calls
and decisions need to be
made.
Keep one eye
on the horizon
The Directors look to the long
term in their decision making.
They want to understand future
trends and how the Company
can use them for the beneit of
all of our stakeholders.
Stand side by side
The Non-Executive Directors
bring to the Board their
knowledge and experience
from other businesses. The
Directors are supportive and
take collective responsibility
for decisions.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
86
How the Board manages and monitors
our culture
The Board believes that our culture can be
deined by:
– a strong desire to create a successful
business we can be proud of;
– trust and strong professional integrity –
we deliver on promises;
– pragmatism – a ‘sleeves up’ approach
regardless of status;
– thoughtful, detailed and measured
decision making;
– respect and transparency; and
– caring about people and taking an interest
in their wellbeing.
The Board continues to monitor the culture of
the Company through indicators which serve
as a temperature check. They consider:
– the results of the annual employee
engagement survey 'Your Say';
– feedback from the workforce engagement
sessions led by the Non-Executive Directors;
– internal audit reports;
– data on employee turnover;
– feedback from oice and site visits by
Executive Directors and the Board as a
whole;
– any whistleblowing incidents;
– any health and safety incidents;
– any breaches of the Code of Business
Conduct and Ethics; and
– the results of the annual Customer and
Supplier Satisfaction surveys.
Promoting long-term sustainable success
SEGRO’s principal duty is to deliver lasting,
sustainable success and generate value for
shareholders and other investors, whilst being
mindful of our impact on stakeholders and
wider society. The Board helps facilitate this
through robust governance processes and
ensuring eective risk management is in place
against which key decisions are made on
behalf of the Company.
Despite continued low volumes in investment
markets during the year, occupier markets
remained strong with demand being driven
by long-term structural trends and vacancy
remaining low in our chosen sub-markets. This
resulted in further rental growth, which, when
combined with our customer focus and the
active asset management of our portfolio of
high quality, sustainable assets, allowed us to
deliver another strong year of operational
performance.
The Company contracted £88 million of
new headline rent during the year through
capturing reversion and growing rents on
the existing portfolio and we also completed
625,700 sq m of new space, capable of
delivering £50 million of new headline rent.
This activity resulted in further growth in
earnings and resulted in the Board
recommending an increase in dividend
returns for our shareholders. The Board
was also pleased to hear about the progress
that has been made against the Responsible
SEGRO targets during the year, as detailed
further on pages 23 to 31.
Looking ahead, the combination of new rental
income from the development programme,
and the beneits of active asset management
of our existing portfolio, a key strategic priority
for the business, should enable us to drive
sustainable growth in both earnings and
dividends. The Chief Executive’s Statement on
pages 8 to 11, along with the Financial review
on pages 48 to 53, set out in much more
detail our strategy and the reasons why we are
conident in the long-term prospects for our
business.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
87
Board leadership and Company purpose continued
Investing for the long term
Since the Company's principal duty is to
deliver long-term success, much of the
Board’s decision making is focused around
ensuring that the Company is sustainable in
the long term.
– Each year, the Board considers our Medium
Term Plan, which assesses the opportunities
and risks for the Company over the following
ive years, and forms the basis of our viability
statement.
– At the annual Strategy Event, the Board
takes time to consider the long-term
strategy of the business, incorporating
presentations and discussions on
longer-term opportunities and threats
to the business.
– Throughout the year, the Board has overall
responsibility for the Company’s approach
to risk and ensures that risk is eectively and
consistently managed. It reviews the
measures in place to mitigate the near- and
longer-term risks (including emerging risks)
to the business.
Real estate is inherently a long-term industry,
and the Board therefore takes this into
consideration in all its decision making. The
Board approved the current strategy in 2011,
which included the repositioning of the
portfolio and strengthening of the balance
sheet. In the Chief Executive’s statement on
page 8, you can read more about how we
have adapted our long-held strategy to
respond to the current environment.
Identifying and managing conlicts of
interest
The Board operates a policy to identify and,
when appropriate, manage actual or potential
conlicts of interest aecting Directors.
Prior to taking on any additional external
commitments, Directors are required to
submit any actual or potential conlicts of
interest they may have with the Company
to the Chair or Senior Independent Director
for approval. Any conlicts of interest are
recorded and approved by the Board at
each meeting. Directors have a duty to keep
the Board updated about any changes to
these conlicts.
Eective controls and necessary resources
The Board has a responsibility to ensure that
appropriate controls and resources are in
place to enable the Company to achieve
its long-term goals.
As detailed on page 84 there is a Schedule of
Matters Reserved for Decision by the Board.
You can read about the Company’s approach
to risk and risk management on pages 54 to
67, whilst page 106 contains further details
about the Audit Committee’s role in ensuring
that robust processes have been put in place
to ensure risks are identiied, evaluated and
managed. The Board regularly discusses the
Company’s principal risks, along with new
and emerging risks, and considers how
they may impact on our long-term goals.
The Board is ever mindful of the need to
balance the pursuit of opportunities without
taking unacceptable or excessive risk and
ensures that the Company has the
appropriate resources, in terms of time,
people and funding to do so.
Code of Business Conduct and Ethics
The Board takes an active interest in ensuring
that appropriate policies and practices are in
place, consistent with the Company’s Purpose
and Values. One such policy is our Code of
Business Conduct and Ethics (Code of Ethics)
which is core to the way in which our business
is run, the work we do, and to our reputation.
The Code of Ethics sets out the high ethical
standards expected of all our people in their
daily work to enable us to act with honesty
and integrity. The Code of Ethics covers
various policies on a wide range of activities
and any breaches are thoroughly investigated
with appropriate action taken. The Board
receives regular reports on compliance with
the Code of Ethics and the Company’s policy
on whistleblowing, which sets out the
procedure by which employees and any third
parties can use a conidential external service
to raise concerns. No matters of concern were
raised via the conidential external service
during 2023.
The Code of Ethics also sets out our approach
to the human rights of all our stakeholders.
Our due diligence to combat slavery and
human traicking which is set out in our
Modern Slavery Statement which is approved
by the Board each year and is on our website.
See page 131.
The Audit Committee is responsible for
ensuring that appropriate safeguards are in
place for the detection of fraud and
prevention of bribery, including overseeing
and monitoring the Group’s anti-bribery and
corruption policies and procedures. See page
106. During the year, the Company received a
direct report of one whistleblowing allegation
which, following a thorough investigation, was
found to be not material and unsubstantiated,
and was therefore closed.
See the Chief Executive's statement on page 8
Find out more about our approach to risk
and risk management on pages 54 to 67
The Audit Committee report can be found
on page 100
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
88
The division of responsibilities of the Chair,
Chief Executive and Senior Independent
Director are clearly established in writing
and approved by the Board.
Chair
The Chair is responsible for the leadership
of the Board and its overall eectiveness in
directing the Company and promoting an
open environment for challenge and debate.
He encourages participation by all the
Directors, facilitates constructive relations
and creates the right atmosphere to promote
a culture of open discussion and eective
decision making.
Along with the other Non-Executives, he is
responsible for holding the Executives to
account against agreed objectives.
Chief Executive
The Chief Executive recommends the Group’s
strategy to the Board and is responsible for its
implementation and for the Group’s overall
performance. He ensures that the interests
of the Group’s stakeholders are taken into
account with regards to the long-term
impact of the Board’s decisions.
Senior Independent Director
The Senior Independent Director, acts as a
sounding board for the Chair and serves as
an intermediary for Directors and shareholders
should communication through the normal
channels fail. She leads the appraisal of the
Chair’s performance each year and would,
as required, chair the Nomination Committee
when it considers his succession.
Availability of the Chair, Chief Executive
and the Company Secretary
The Chair, the Chief Executive and the
Company Secretary are always available for
the Directors to discuss any issues concerning
Board meetings or other matters. All Directors
have access to the advice and services of the
Company Secretary, who is responsible for
ensuring compliance with Board procedures.
Directors also have the right to seek
independent professional advice at the
Company’s reasonable expense should
they so wish.
Division of responsibilities
Our Governance Framework
The Board is responsible for creating and delivering shareholder value by setting the strategic direction of the Group.
The Board delegates a number of its responsibilities to its three sub-Committees. The Committee Chairs provide regular updates on the activities
of each Committee at Board meetings.
The Board
The Executive Committee supports the Chief Executive with the development and implementation of Group strategy, the management of the business and
the discharge of responsibilities delegated by the Board. It typically meets formally each month and informally on a weekly basis, and during the year there
are dedicated sessions to discuss strategic priorities as well as ad hoc sessions to keep up to date with more day-to-day operational issues.
The Executive Committee delegates some of its responsibilities to a number of management committees, membership of each includes
at least one member of the Executive Committee.
For more information see page 11
Executive Committee
The Leadership team comprises the members of the Executive Committee and their senior direct reports, each of whom has
responsibility for the Group’s operations in a particular geography, or for one or more of the Group’s main functional areas.
It serves as a discussion forum and sounding board with which the Executive Directors can share knowledge and ideas,
gain a better understanding of the local market outlook and share cross-functional and cross-border information.
Leadership team
Audit Committee
Monitors the integrity of the Group’s Financial
Statements, reviews the relationship with the
external auditor and the role and eectiveness
of the internal audit function. Oversees the risk
management process and internal control
environment.
For more information see the Audit
Committee Report on page 100
Nomination Committee
Ensures that the Board and its Committees have
the appropriate skills, knowledge, diversity and
experience to operate eectively and to oversee
the delivery of the strategy.
For more information see the Nomination
Committee Report on page 95
Remuneration Committee
Determines the reward strategy for the
Executive Directors to align their interests with
those of shareholders and employees.
For more information see the Remuneration
Committee Report on page 107
Joint Operating Group
Assists the Group
Customer and Operations
Director to manage the
operations of the Group
and to discharge the
responsibilities delegated
to him by the Chief
Executive.
Group Risk Committee
Establishes, monitors and
reports to the Executive
Committee and ultimately
the Board and Audit
Committee on the Group’s
approach to risk
management.
See page 54
Investment Committee
Recommends the
investment strategy for the
Group, manages the
allocation of capital and
oversees all major
investment and divestment
decisions on behalf of the
Executive Committee.
Technology Committee
Manages the Group’s
Digital and Technology
strategy, and ensures that
activity within this domain
is aligned with this
strategy.
Health and Safety
Develops and manages
the implementation of
Health and Safety policies,
reviews the outcomes of
the Health and Safety
Working Group as well as
any other health and
safety matters.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
89
Stakeholder engagement from the Board’s perspective
Employees Customers
Read about the Board's extensive Workforce
Engagement programme on page 92
How does the Board engage with them?
– Directors held an informal breakfast with
representatives from Heathrow Airport where
they discussed matters pertinent to both
companies.
– During its visit to Poland, the Board toured local
assets and developments and met with some
of our customers.
– The Board considered the results of the annual
Customer Satisfaction Survey.
How do they inluence decision making?
– The opportunity to meet with customers is
always greatly appreciated by the Board and
helps to further its understanding of what our
customers value in our developments and
buildings, so we can continue to create the
space that enables extraordinary things to
happen.
– Board oversight of the results of the Customer
Satisfaction Survey ensures that excellent
customer service is maintained.
Section 172(1) Statement
The Board conirms that during the year
ended 31 December 2023 it has acted in
the way it considers, in good faith, would
be most likely to promote the long-term
success of the Company for the beneit
of its members as a whole whilst having
due regard to the matters set out in
section 172(1) (a) to (f) of the Companies
Act 2006 (s172).
Each of the Directors is mindful of their
duties under s172 to run the Company for
the beneit of its shareholders, and in doing
so, to take into account the long-term
impact of any decisions on stakeholder
relationships and the impact of the
Company’s activities on the environment,
whilst maintaining its reputation for high
standards of business conduct at all times.
The Company cannot operate in a vacuum.
We can only succeed if we conduct
ourselves in a responsible manner and
have positive relationships with all of our
stakeholders.
When making decisions which impact our key stakeholders the Board considers the factors
set out in s172, including:
A. the likely consequences of any decision in the long term; Pages 10; 20 to 21;
23 to 31; and 87 to 88
B. the interest of the Company’s employees; Pages 31; 92;
118 to 119
C. the need to foster the Company’s business relationships with
suppliers,
Pages 15; 29;
43 and 131
D. the impact of the Company’s operations on the community and
the environment;
Pages 23 to 31;
and 67 to 75
E. the desirability of the Company maintaining a reputation of high
standards of business conduct; and
Page 88
F. the need to act fairly as between members of the Company. Pages 12 to 13;
16 to 17; 36 to 37;
and 48 to 49
The Directors engage directly with as many
stakeholders as they can but given the
number of stakeholders, who are spread
across multiple geographies, engagement
often takes place at the operational level. In
this section we explain how the Board has
speciically engaged with our stakeholders
and how the engagement has inluenced their
decision making.
Suppliers Investors
How does the Board engage with them?
– At the 2023 Strategy Event, the Board heard
from a representative from National Grid on the
challenges and opportunities in the UK energy
market.
– The Board considered the results of the annual
Supplier Satisfaction Survey.
How do they inluence decision making?
– The session with National Grid enhanced the
Board's understanding of the current
challenges facing UK energy suppliers, and
potential impacts on our customers and their
businesses.
– The Board considers the highest ethical
standards as integral to SEGRO's business and
approves the annual Modern Slavery Statement
and has oversight of the Modern Slavery and
Labour Standards Supplier Code and Code of
Business Conduct and Ethics to ensure that
these high standards are also maintained by
our suppliers.
How does the Board engage with them?
– All Directors attended the 2023 AGM where
they were available to answer questions from
shareholders both formally, during the meeting,
and informally, over refreshments.
– The Chair extended an invitation to our ten
largest shareholders to meet with him, the
Senior Independent Director and/or the
Committee Chairs.
– With the support of the Board, we also reached
out to the governance and stewardship teams
of our top 30 institutional investors to initiate a
two-way dialogue on any current or future
matters of importance to them and relayed
feedback from these sessions to the Board.
How do they inluence decision making?
– Regular engagement with our investors helps
the Board understand what is important to
them and helps to shape decision making.
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Annual Report & Accounts 2023
90
How the Board considered stakeholders in its decision making during 2023:
Decision / Action Stakeholders How our stakeholders were considered
Acquisition of the
Radlett Aerodrome in
Hertfordshire for the
development of
330,000 sq m of
logistics buildings
supported by a
strategic rail freight
interchange.
– Communities
– Environment
– Suppliers
– Investors
– Customers
In line with our Responsible SEGRO commitments to Champion low-carbon growth and Invest in our local
communities and environments, the Board was pleased to note that the development will incorporate a
610 acre country park for use by the local community. The park will include a 10-mile network of footpaths
and recreational features including a trim trail, outdoor gym, new children’s play areas, new bird watching
hides and a Visitor Interpretation Centre. Over 4,000 trees and 132,000 saplings will be planted, while the
local habitat will be enhanced by creating new ponds and nesting sites.
It is anticipated that the completed scheme will deliver around 4,000 jobs, with approximately 500 further
jobs generated on site during construction. In addition to employment opportunities and environmental
considerations, the development will stimulate economic growth and enhance local infrastructure. SEGRO
is committed to a signiicant investment programme to fund new traic relieving measures, including £22
million to fund a new 1.4-mile stretch of relief road for Park Street / Frogmore to alleviate traic on the A5183,
and it is estimated that the completed scheme will deliver around £12 million each year in business rates.
Retail shareholder
asset tour and investor
presentation
– Investors
– Environment
At the 2023 AGM, a number of our shareholders communicated to the Board that they would value the
opportunity to visit one of our assets, to see irst hand the work that we do at SEGRO.
In October, we invited a group of retail shareholders to our London oice for a presentation on the
Company followed by an asset tour at SEGRO Park Tottenham. We received great feedback from the
attendees, who were appreciative of the invitation, and were impressed with the modern look and feel
of SEGRO Park Tottenham along with the biodiversity features of the asset.
1 Shareholders visit SEGRO Park Tottenham
2 SEGRO Park Le Thillay
3 SEGRO Park Tottenham
See more about our stakeholders
on pages 18 and 19
Communities
How does the Board engage with them?
– All Executive Directors participated in the
annual Group-Wide Day of Giving.
– The Group Customer and Operations Director
and Partnership Development Director
attended the July 2023 Board meeting to
present on our Community Investment Plans.
How do they inluence decision making?
– The Board is mindful of the impact that our
investment decisions could have on the local
community and actively considers how
investments can beneit the local area when
considering capital allocation requests.
– The Remuneration Committee approved the
targets for the 2024 SIP/GSIP awards which
included a targeted number of volunteering
days primarily focusing on supporting young
people and the environment.
2 3
1
Environment
How does the Board engage with them?
– The Board received training on the introduction
of new sustainability reporting requirements
including EU Taxonomy and The Corporate
Sustainability Reporting Directive.
– The Commercial Finance Director and Director
of Sustainability attended the December Audit
Committee meeting to provide an update on
sustainability matters and the evolving
reporting requirements in respect of ESG.
– Regular updates on progress against our
Responsible SEGRO ambitions are provided
to the Board.
How do they inluence decision making?
– The Board monitors progress against our
Responsible SEGRO targets to ensure they
remain appropriate, stretching and in the
best interests of our stakeholders.
– The Remuneration Committee considered
changes to the ESG metrics in the 2024 bonus
targets, for both Executive Directors and the
wider workforce, to focus on more stretching
goals to incentivise our employees to deliver
our Responsible SEGRO targets.
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Annual Report & Accounts 2023
91
Workforce Engagement
The Board feels strongly that, in order to be
authentic, meaningful and received
positively by our employees, its approach to
engaging with the wider workforce should
mirror the Company’s value to say it like it is.
As the Group has a non-unionised business
with a headcount of 460 employees based
in multiple countries, an alternative
arrangement (as permitted by Provision 5
of the Code) remains the most appropriate
option. This involves a three-stage approach
which, whilst now well-embedded, remains
under review to ensure it continues to be
eective and encompasses the spirit of
enabling the voice of the employee to be
heard in the boardroom.
1. Individual meetings with the Directors
Each year, our Non-Executive Directors
hold a series of informal meetings with
employees from across the business to hear
irst hand how they feel about working at
SEGRO. The Board appreciates the value
of hearing a variety of views directly from
a broad cross-section of employees in
dierent roles, grades and oices to gain a
deeper understanding of the issues that are
important to them without members of the
Leadership team present.
In 2023, pairs of Non-Executive Directors
led three sessions: two thematic sessions
which focused on Diversity and Inclusion
and Executive Remuneration (which is
detailed further on page 119), and one
session on more general topics during their
visit to Poland. We felt that this was a good
balance between focused conversations on
topics the Board wanted to hear more from
employees on as well as oering the
lexibility for employees to share their views
on areas of importance for them.
Non-attributable feedback from each
session was relayed at the following Board
meeting for discussion.
We take meaningful action to address the
areas of importance raised by our people
during these sessions and their feedback
is an important consideration in our people
strategy and planning. After hearing what
was important to our colleagues during
2023, we will continue to build on our
commitments to improve employee
communication around workforce
remuneration, enhance our employee
experience with a focus on more
lexible policies and continue to evolve
and communicate our diversity and
inclusion strategy.
2. Presentations at Board and Committee
meetings
The Board regularly invites representatives
from around the business to present at
Board and Committee meetings and in
2023 welcomed a number of guest
speakers as detailed on page 85.
Each of the Committee Chairs also met
with employees in relation to the business
of their Committees.
3. Informal meetings
During the year, the Board travelled to
Warsaw, Poland where they toured local
assets with the Managing Director, Poland
and Czech Republic and her team. During
their time there they took the opportunity
to have lunches and a dinner with dierent
members of the Polish and Czech teams.
The Board enjoyed the opportunity to spend
time with the Central European team.
Stakeholder engagement from the Board’s perspective continued
1 Independent Non-Executive Directors,
Carol Fairweather and Simon Fraser,
meet with employees.
1
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
92
Composition, succession and evaluation
Internal Board evaluation
Frequency and evaluation type
Year 1: External Year 2: Internal Year 3: Internal
The Board undertakes an externally
facilitated evaluation on a triennial basis in
line with the requirements of the Code. The
last external evaluation took place in 2021 and
our intention is to repeat this exercise in the
coming year.
In the intervening two years, an internal
review of the Board, its Committees and the
performance of individual Directors is carried
out, allowing the Board the opportunity
to relect regularly on its performance,
eectiveness and address any areas of
concern as they arise.
This year's internal review was led by
the Senior Independent Director,
Carol Fairweather, who was supported
throughout the process by the Chair and
the Company Secretary.
The overall picture
from the review remains
positive, with all Directors
feeling that the Board
works well, performs
to a high standard
and covers all its
statutory duties.
Carol Fairweather,
Senior Independent Director
Areas of focus
The review focused on a wide selection
of themes, and the combination of topics
allowed us to seek views on both strategic
and business as usual items.
Key areas of focus included:
– the size and composition of the Board and
its Committees and the balance of the skills,
experience, independence and diversity
brought by each of the Directors;
– Board dynamics and the relationships
between the Directors, and between the
Board and the Executive Committee;
– the performance of the Board as a whole
as well as the contributions of individual
Directors, including the Chair;
– how the Board focused its time and the ratio
of time spent on strategic and non-strategic
items;
– stakeholder engagement and the
consideration of stakeholder interests
as part of Board discussion and decision
making; and
– Board succession planning, along with the
people strategy for the wider business.
Conclusions
The overall picture from the review remained
positive and very much in line with the
indings of the last internal review and external
evaluation, conducted in 2022 and 2021
respectively, concluding that the Board and its
Committees continued to operate eectively
and perform well.
The key indings of the review are summarised
below:
– The balance of experience and skills was
considered to be appropriate, with the
collaborative culture enabling a suitable
level of challenge and support.
– The overall size of the Board was considered
carefully in light of Martin Moore’s retirement.
On balance, the Board felt that the revised
ratio of Independent Non-Executive Directors
to Executive Directors would continue to
provide the right amount of challenge,
independent scrutiny and hold the
Executives to account. However, this would
be kept under review during the coming year.
Process
Stage 1:
The Senior Independent Director, Chair and Company Secretary met to discuss their initial thoughts for
this year's review and agreed to follow a similar process to 2022, which the Board found to be eective,
comprising a short survey followed by individual face-to-face meetings with the Board members and
key contributors.
Stage 2:
The areas of focus for the review were agreed and all participants were asked to complete a short,
anonymous survey where they rated and provided feedback on a selection of questions to help focus the
face-to-face meetings.
Stage 3:
The responses were collated and analysed and the Senior Independent Director and Company Secretary met
with each of the Board members on a one-to-one basis to gain a deeper understanding of their feedback and
give them the opportunity to express their views on any other matters of importance to them.
During these meetings, participants also shared their feedback on the contribution and performance of each
of the individual Directors, including the Chair.
Stage 4:
A draft report, summarising the key themes coming from the survey and meetings, was discussed with the
Chair and Chief Executive ahead of the December meeting.
Stage 5:
The inal report was presented to the December Board meeting where time was allocated for an open
discussion on the conclusions of the review and the recommendations for the coming year.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
93
Composition, succession and evaluation
continued
Review of the actions from the 2022 review
– Board meetings were eectively run with
the quality of papers supporting eective
discussions and decision-making.
– All three Board Committees were thought to
be well-chaired and eective in discharging
their respective duties with the combination
of skills and experience brought by the
Committee members deemed appropriate
to enable informed debate and
recommendations on their areas of
responsibility. Membership of the
Committees would remain under review
to ensure the most eicient use of Board
resources.
Actions
As ever, the Board appreciated the
opportunity to relect on its performance and
highlighted areas for continued focus in 2024,
some of which included:
– continuing to maintain focus on strategic
drivers of the business and receive updates
throughout the year on the key topics
considered at the 2023 Strategy Event;
– continuing the programme of regular
stakeholder engagement;
– inviting members of the new Executive
Committee to attend Board meetings,
allowing the Board to hear irst-hand about
their areas of responsibility; and
– keeping succession planning under review.
Actions against these priorities will be
considered by the Board during the course
of 2024 and reported against in next year's
Annual Report.
In June 2023 and December 2023, the Board also revisited the conclusions of the 2022 internal Board review to ensure that progress was being
made on the key actions identiied:
What we said we would do: What we did: Further information:
Succession planning
Dedicate additional time on the Board agenda
to succession planning discussions, inclusive
of reviewing the skills and experience for the
appointment of Non-Executive Directors in the
longer term as well as wider Leadership team
considerations.
The Board approved the changes to the executive leadership
structure following the retirement of our Chief Operating Oicer
during the year and were delighted to see a signiicant number of
promotions from the internal pool of talent, both at the Executive
Committee level and below.
All Directors agreed that succession planning remained a priority
for the coming year.
New Executive Committee – page 11
Nomination Committee Report –
Succession planning – page 97
Stakeholder engagement
Maintain the programme of regular stakeholder
engagement to enable the Board to hear from our
key stakeholders and industry experts on areas of
interest, allowing deep dive sessions into areas of
relevance to enhance Board discussion and
thinking.
The enhanced stakeholder engagement programme was valued
by the Board who had found the opportunities to meet with key
stakeholders interesting and insightful. Feedback to further
improve this engagement for the coming years was taken on
board during the 2023 review.
Our stakeholders - page 18
Stakeholder engagement from
the Board's perspective – page 90
Workforce Engagement – pages 92
and 119
Strategy Event – page 85
Strategy
Maintain focus on key strategic items and succinct
summaries in Board and Committee papers.
In addition to the dedicated Strategy Event in November 2023,
the Board spent time discussing our strategic priorities at
regularly scheduled Board meetings.
This will continue to be an area of focus throughout 2024.
Strategy Event – page 85
Key activities of the Board – page 84
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
94
Dear shareholder,
I am pleased to present to shareholders the
Nomination Committee (the Committee)
Report for 2023, in which we set out how the
Committee has discharged its responsibilities
during the year.
The Committee comprises the Independent
Non-Executive Directors and is chaired by
myself as the Chair of the Board.
In this Report we will demonstrate how
the Committee has fulilled its role of
overseeing the composition of the Board and
its Committees, and monitoring the balance
of skills, experience, independence and
knowledge as well as the diversity of its
members in its broadest sense.
Throughout the year, the Committee has
acted in accordance with its Terms of
Reference, which were last updated in
February 2024 and can be found at
www.SEGRO.com.
Board changes
In 2023, there were a number of planned
changes to the Board and membership of
the Board Committees:
– Chief Operating Oicer
Our Chief Operating Oicer, Andy Gulliford,
retired from the business and stepped down
from the Board on 30 June 2023 following
which the Company announced the
expansion of the executive leadership
structure and four internal promotions to
create the new Executive Committee. The
Committee was supportive of this decision
which relected the ambitions of SEGRO’s
Nurturing talent programme.
Further information on the new Executive
Committee members and the wide range
of experience they bring to their roles can
be found on page 11.
– Senior Independent Director
On 1 July 2023, following completion of nine
years' service on the Board, Martin Moore
stepped down from the role of Senior
Independent Director and Independent
Non-Executive Director and Chair of the
Audit Committee, Carol Fairweather, was
appointed to the role.
Martin continued to serve on the Board as
a Non-Executive Director and member of
the Audit, Nomination and Remuneration
Committees until his retirement on
31 December 2023.
Please join me in thanking Andy and Martin
for their service and valuable contributions
to the Board. We wish them all the best for
the future.
– Committee membership
Additionally, Independent Non-Executive
Director, Mary Barnard, stepped down as a
member of the Audit Committee with eect
from 1 July 2023. She remains a member of
the Nomination and Remuneration
Committees.
– Appointments
There were no new Board appointments
during the year.
Board succession planning
Succession planning has long been a key
focus of the Committee and you can read
more about our approach on page 97.
Within the context of the recent Director
retirements, the Committee considered
carefully the overall size of the Board, the
skillsets of the individual Directors as well
as the ratio of Executive to Independent
Non-Executive Directors. We concluded that
the balance remained appropriate but would
be kept under review.
Committee membership
Andy Harrison (Chair)
Mary Barnard
Sue Clayton
Carol Fairweather
Simon Fraser
Martin Moore (until 31 December 2023)
Linda Yueh
Quick links
Composition, skills and experience 97
Induction and ongoing and training 97
Succession planning 97
Board Diversity and Inclusion 98
Directors' independence
99
Director re-election at the 2024 AGM
99
Key Responsibilities:
Composition of the Board and its
Committees
Appointment of new Directors
Induction of new Directors and ongoing
training for individual Directors and the
Board as a whole
Oversight of the Board Diversity and
Inclusion Policy
Succession planning for the Board, the
Group HR Director and the Company
Secretary
Oversight of the development pipeline for
the Leadership team and talent
development programme for the wider
workforce
See the attendance at scheduled
Nomination Committee meetings on page 83
Andy Harrison
Chair of the Nomination Committee
Nomination Committee Report
Composition, succession and evaluation
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
95
What the Committee did in 2023
In addition to its key responsibilities,
in 2023 the Committee:
– recommended the re-appointment of
Carol Fairweather for a further three-year
term;
– recommended the appointment of
Stephanie Murton as Company Secretary;
and
– recommended the updated Board
Diversity and Inclusion Policy for approval
by the Board, and reviewed the diversity
of the Board and its Committees against
the new Policy.
See the Key Responsibilities of the Committee
on page 95
Re-appointment of Independent
Non-Executive Directors
Non-Executive Directors are appointed by the
Board for three-year terms. At the conclusion
of each term, the Committee undertakes a
review of their performance and contribution
before making any recommendation to the
Board for their re-appointment.
In January 2024, Carol Fairweather reached
six years’ service on the Board. Following her
conirmation that she wished to continue
serving as Senior Independent Director and
Chair of the Audit Committee, her re-election
was considered by the Committee at the
December 2023 meeting.
The Committee gave due regard to her
performance, contributions and ongoing
ability to contribute to the long-term success
of the Board as well as the time commitment
required to fulil these role. We concluded that
Carol continued to be a valuable member of
the Board and it was agreed that her term be
extended for a further three years, subject to
the annual re-election by shareholders at the
upcoming AGM.
Carol was not present when her
re-appointment was discussed.
Board Diversity and Inclusion Policy
The updated Board Diversity and Inclusion
Policy was considered at the December 2023
meeting, where the Committee determined
that it was appropriate and in line with best
practice, and recommended it to the Board
for formal approval. Further information can
be found on page 98 of this Report.
Committee eectiveness
As part of the internal Board evaluation
undertaken during the year, detailed on
pages 93 and 94, the operation of each of the
Board Committees was considered and it was
concluded that they continue to operate
eectively. An update on the activities of the
Committee is provided to the Board at each
subsequent Board meeting.
Looking ahead
Simon Fraser and Linda Yueh will each reach
the end of their irst three-year term in May
2024 and Sue Clayton will reach the end of
her second three-year term in June 2024. The
Committee will consider their contribution to
the long-term success of the Company and
re-appointments in due course, as well as
succession planning and Board diversity
more generally for the longer term.
If you have any questions on the Nomination
Committee or the contents of this Report,
do contact me on
companysecretariat.mailbox@SEGRO.com.
Andy Harrison
Chair of the Nomination Committee
Age
1.
2.
3.
4.
5.
1. 45-50 (1)
12.5%
2. 51-55 (1)
12.5%
3. 56-60 (2)
25.0%
4. 61-65 (2)
25.0%
5. 66-70 (2)
25.0%
Skills and experience of Directors
Number of Directors
FTSE Listed Executive
Real Estate
4
3
Banking/City
4
Finance/Accounting/Audit
7
International
8
Customer experience
6
Remuneration
7
ESG
1
Nomination Committee Report continued
Composition, succession and evaluation
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
96
Induction and ongoing training
On joining the Board new Directors participate
in a comprehensive induction programme
designed to familiarise them with the
Company, its assets, policies and procedures,
and to introduce them to employees and key
advisers, in order to assist them in becoming
eective in their role as quickly as possible.
As part of the induction process, they are
provided with detailed information on the
Group, its policies and its governance
structure by the Company Secretary.
They will also meet with the Executive
Directors, the other members of the
Executive Committee, the Heads of
Functions covering all aspects of the business,
and the Company’s valuers, brokers, as well
as the internal and external auditors.
To ensure the Board continually updates and
refreshes its skills and knowledge, ongoing
training and development support is provided
to the Board during the year. The Board is
regularly briefed on: business-related matters;
governance updates; investor expectations;
and legal and regulatory changes which
impact the Company. During the year, both
the Audit and Remuneration Committees
received updates on relevant accounting,
remuneration and regulatory developments,
evolving market trends and changing
disclosure requirements from external
advisers and management.
Directors may request training on speciic
issues with some attending external courses
(often provided by our professional advisers).
From time to time, meetings with specialists
in the business are arranged for Directors
who may wish to gain a deeper insight into a
particular topic. The Directors may raise any
training needs with the Chair which helps to
ensure that the training programme meets the
needs of the Board, individual Directors and
the business. The Directors have access to
the advice of the Company Secretary and
independent professional advice is available
at the Company’s expense, if necessary,
in fulilling their duties and responsibilities.
In order to stay abreast of the enhanced
regulation and disclosure requirements
around ESG, which the Board recognises
to be an area of importance for many of
our stakeholders, Directors received training
on EU Taxonomy and The Corporate
Sustainability Reporting Directive at
the September 2023 Board meeting.
Additionally, Board members received the
annual refresher training on Market Abuse
Regulation from the Company Secretary.
Succession planning
The Committee is responsible for the eective
and orderly succession planning for Directors,
both Non-Executive and Executive, the Group
HR Director and the Company Secretary.
It monitors the tenure of Directors to ensure
that it plans suiciently in advance of
retirements from the Board to ensure orderly
succession of Non-Executive Directors. All
the Directors stand for election or re-election
at each AGM.
Along with considering Board succession,
the Committee oversees the development
of a strong pipeline of diverse and talented
individuals below Board level. It reviews
regularly the quality of the Leadership team
and senior managers as it recognises the
importance of creating and developing a
suitably talented, diverse pipeline ready to
serve as the next generation of leaders.
The Chief Executive, supported by the Group
HR Director, presents to the Committee on
Leadership team succession planning and the
talent development programme for the wider
workforce. For the Executive Committee and
for roles in the Leadership team, plans are in
place for both sudden, unforeseen absences,
and for longer-term succession. These form
the basis of development plans for our most
talented people and will ensure that, looking
forward, we have the right people to deliver
our strategic priorities.
Composition, skills and experience
The Board is currently made up of a
Non-Executive Chair, two Executive Directors
and ive Independent Non-Executive Directors,
all of whom are equally responsible for the
eective stewardship and leadership
of the Group.
During the year, the Committee reviewed the
skills and experience of the Board members,
as well as the size of the Board as a whole,
and concluded that it was appropriate in
size with the right balance of skills and
experience to fulil its duties. As ever, this
will be kept under review.
Read more about the skills and experience of the
Directors in their biographies on pages 81 to 83
Further information on the roles of the Chair,
Chief Executive and Senior Independent Director
can be found on page 89
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
97
Reporting table on sex/gender representation
Gender
Number
of Board
Members % of Board
Number of
senior
positions
on the Board
1
Number in
executive
management
% of
executive
management
Men
(including those self-identifying as men) 4 50 3 6 75
Women
(including those self-identifying as women) 4 50 1 2 25
Non-binary 0 0 0 0 0
Not speciied/prefer not to say 0 0 0 0 0
Reporting table on ethnicity representation
Ethnicity
Number
of Board
Members % of Board
Number of
senior
positions
on the Board
1
Number in
executive
management
2
% of
executive
management
White British or other White
(including minority-white groups) 6 75 3 7 87
Mixed/Multiple Ethnic Groups 0 0 0 0 0
Asian/Asian British 2 25 1 1 13
Black/African/Caribbean/Black/British 0 0 0 0 0
Other ethnic group, including Arab 0 0 0 0 0
Not speciied/prefer not to say 0 0 0 0 0
Gender balance of senior management's
direct reports
3
1.
2.
1. Male (25) 64%
2. Female (14) 36%
Gender balance of total workforce
1.
2.
1. Male (226) 49%
2. Female (234) 51%
1 Senior positions on the Board include the Chair, Chief Executive, Chief Financial Oicer or Senior Independent
Director.
2 The Executive Committee and the Company Secretary are considered to be the Company’s executive
management as deined by the Listing Rules and senior management as deined by the Code.
3 The senior management’s direct reports (who include members of the Leadership team) are the next layer
of management below senior management as deined by the Code.
Board Diversity and Inclusion
The Directors are committed to having a
balanced Board which recognises the beneits
of diversity in its broadest sense and the value
that this brings to the organisation in terms of
skills, knowledge and experience.
The composition of the Board exceeds the
criteria of both the FTSE Women Leaders
Review on gender balance and the Parker
Review on ethnic diversity. As at 31 December
2023, 50 per cent of the Board were female
and 25 per cent were from an ethnic
minority background.
In last year’s Report, the Committee
demonstrated its support of the FCA’s aim to
encourage increased transparency around
diversity reporting at a Board and senior
management level by proactively reporting
compliance with two out of the three diversity
targets set out in the updated Listing Rules.
We are pleased to report that, following the
appointment of Carol Fairweather to the role
of Senior Independent Director on 1 July 2023,
the Company now complies with all three
targets as set out in the charts to the right. The
data collected from Directors and executive
management for the purposes of making this
disclosure is provided on a voluntary basis.
When searching for an additional Director,
the Committee is mindful of the advantages
a diverse board brings, and ensures that in
selecting and brieing executive search irms,
the importance of diversity and inclusion are
highlighted at the outset. The Committee
particularly considers how it describes the skills
and experience needed for the roles as this
helps attract as wide a pool of candidates as
possible. Only executive search irms who have
signed up to the Voluntary Code of Conduct
for Executive Search Firms will be used in the
recruitment of Directors. In the inal selection
decision, all Board appointments are made
on merit and relevant experience, against the
criteria identiied by the Committee with regard
to the beneits of diversity in the widest sense,
including gender and ethnicity.
The Board aspires to promote greater diversity
across the business which forms an integral
part of our Nurturing talent strategic priority.
During the year, the Group HR Director
presented to the Board on the progress
against these objectives, which included
plans to set and publicly disclose voluntary
gender and ethnicity diversity targets for
senior leadership roles as recommended
by the FTSE Women Leaders Review and
Parker Review.
Read more about Nurturing talent, including our
senior leadership diversity targets, on page 31
Board Diversity and Inclusion Policy
The Committee is responsible for monitoring
the eectiveness of the Board Diversity and
Inclusion Policy (the Policy), available to view
on the Company’s website, www.SEGRO.com,
which sets out the Company’s approach to
diversity and inclusion in respect of the
Board and its Committees.
The Policy incorporates a broad range of
diversity factors as set out in the Disclosure
Guidance and Transparency Rules, speciies
diversity targets with which the Board aims
to comply, and considers how the Policy
is applied to the Audit, Nomination and
Remuneration Committees as well as the
Board as a whole.
It was last updated during 2023 to incorporate
Board oversight of diversity below Board level,
including monitoring our diversity targets for
senior leadership roles.
The Committee considers that the Board
and its Committees are in compliance with
the Policy, which is appropriate and aligned
with best practice, and will keep both the
Policy itself and compliance with it under
periodic review.
For further information about the Company’s
approach to diversity and inclusion in the
workforce see page 31
Nomination Committee Report continued
Composition, succession and evaluation
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
98
Time commitment
As part of the recruitment process, the
signiicant time commitments of potential
Board members should be disclosed to the
Committee. On appointment, the Chair and
Non-Executive Directors receive a formal
letter of appointment clearly setting out their
expected time commitment to the Company
and any additional future commitments
should not be undertaken without prior
notiication to the Board.
Executive Directors are permitted to hold one
external directorship as approved by the Board.
The Committee has considered the additional
commitments of all Directors and has
concluded that each of them has suicient
time to commit to the Company and are not
overboarded. Their individual contributions
are, and continue to be, important to the
Company’s long-term sustainable success.
For transparency we disclose all signiicant
external appointments held by our Directors in
their biographies on pages 81 to 83; however
many of these appointments do not require
the same time commitment as appointments
to publicly listed companies.
Directors’ independence
The Board is made up of a majority of
Independent Non-Executive Directors,
which promotes the good governance of the
Company by ensuring that the Executives are
held to account and are not able to dominate
Board decision making.
The Committee considers each of the
Non-Executive Directors to be independent
in character and judgement in accordance
with the criteria set out in the Code.
The Chair was considered independent
on appointment and the Committee still
considers him to be so.
Prior to their appointment, the Directors
must disclose any actual or potential conlicts
of interests and any future business interests
that could result in a conlict must not be
undertaken without the prior notiication to,
and authorisation of, the Board. The Board
considers and approves the conlicts of
interest as declared by any Director at
each Board meeting.
Directors' Independence
1.
2.
3.
1. Independent
Chair (1)
12.5%
2. Independent
Non-Executive
Directors (5)
62.5%
3. Executive
Directors (2)
25.0%
Directors’ eectiveness
The performance and individual contribution
of each of the Directors is reviewed annually
as part of the Board evaluation process led
by the Senior Independent Director.
The review concluded that the Chair
demonstrated strong leadership and
remained eective in his role.
The Non-Executive Directors also agreed that
the Chief Executive continued to perform his
role with energy and commitment and leads
an eective Executive team.
The performance of the other Non-Executive
Directors is appraised by the Chair and
Senior Independent Director, whilst the
Chief Executive provides feedback on the
Chief Financial Oicer.
Director re-election at the AGM
Having considered the skills and performance
of each Director and whether they continue
to be eective and demonstrate commitment
to their roles, the Committee makes a formal
recommendation to the Board that they be
re-elected.
The Committee has concluded that all
Directors continue to be eective in their roles
and accordingly will submit themselves for
re-election by shareholders at the 2024 AGM.
For information on how each of the Directors
contribute to the long-term success of the
Company see their biographies on pages 81 to 83
Tenure
Executive Directors
David Sleath
Soumen Das
17 years,
11 months
6 years,
11 months
Non-Executive Directors
Carol Fairweather
5 years,
11 months
Sue Clayton
5 years,
6 months
Simon Fraser
2 years,
7 months
Mary Barnard
4 years,
9 months
Linda Yueh
2 years,
7 months
Andy Harrison
1 year,
8 months
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
99
Dear shareholder,
As Chair of the Audit Committee (the
Committee), I am pleased to present
the Committee’s report for 2023.
During the year, the Committee has acted in
accordance with the objectives of its Terms
of Reference which are available at
www.SEGRO.com.
Over the following pages you will see how the
Committee has discharged its responsibilities,
as well as other areas which it has focused on.
Composition and Committee Changes
The Committee is made up entirely of
Independent Non-Executive Directors and
each member has considerable commercial
knowledge and broad industry expertise.
I satisfy the requirement of the UK Corporate
Governance Code 2018 (the Code) to bring
recent and relevant inancial experience to the
Committee, and the Committee also beneits
from the additional inancial expertise and
experience provided by both Simon Fraser
and Linda Yueh as well as the wealth of
property experience brought by Sue Clayton.
There have been a number of planned
changes to the Committee during the year:
– As you will have read on page 93, the Board
reviewed Committee membership during
the year to ensure the most eicient use of
resources and, following the review, Mary
Barnard stepped down as a member of the
Committee on 1 July 2023.
– Having served nine years as an Independent
Non-Executive Director, Martin Moore
stepped down from the Board and the
Committee at the end of the year.
I would like to extend my thanks to both Martin
and Mary for their valuable contributions and
support to the Committee during their tenure.
The Board remains satisied that the
Committee as a whole has the relevant
competence and appropriate balance of
skills and experience to properly discharge
its duties.
Meetings
The Committee met formally three times
during the year and provided updates to the
Board on its activities at each subsequent
meeting. Outside of the scheduled meetings,
we can also use time set aside for Board
meetings to discuss any matters that arise in
real time. We feel that this is the appropriate
balance of scheduled meetings and time
available for ad hoc discussion, however
should the need arise, additional formal
meetings would be convened.
As usual, our external and internal auditors
joined the meetings throughout the year,
together with a number of employees from
across the business. We continue to ind this
incredibly valuable as it allows us to see the
pool of talent within the Company and
facilitates a greater depth of discussion
and debate on some specialist topics.
In 2023, we were joined by:
– the Head of Finance for the Group and
Head of Financial Reporting to consider the
accounting judgements and treatments that
have been adopted for particular
transactions;
– the Head of Legal, who provided updates on
relevant legal and regulatory matters as well
as the status of material litigation matters
impacting the Group;
– the Head of Tax, who provided an update on
developments in the current tax landscape,
the Group’s tax strategy and an overview of
signiicant tax issues or changes that could
potentially impact the Group’s tax charge;
Committee membership Key responsibilities
Carol Fairweather (Chair)
Mary Barnard (until 1 July 2023)
Sue Clayton
Simon Fraser
Martin Moore (until 31 December 2023)
Linda Yueh
Advising the Board on the statements made
in the Annual Report and Half-Year Report
on viability, going concern, risk and controls
and whether the Annual Report and
Accounts are, when taken as a whole, fair,
balanced and understandable
Monitoring the integrity of the Financial
Statements of the Group including
reviewing signiicant judgements
Reviewing internal controls and risk
management systems
Overseeing internal and external audit
processes and the independence of the
external auditor
Quick links
Financial reporting process 102
Viability statement and goingconcern 102
Fair, balanced and understandable
102
Signiicant judgements made in 2023
103
External audit
104
Internal audit
105
Valuers
105
Internal controls and risk management
106
See the attendance at scheduled
Audit Committee meetings on page 83
Carol Fairweather
Chair of the Audit Committee
Audit Committee Report
Audit, risk and internal controls
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
100
– the Head of Technology, who delivered his
annual update on developments in cyber
security threats, the continued investments
by the Company in response, and the
current status of cyber security defences;
and
– the Commercial Finance Director and
Director of Sustainability, who shared an
update on sustainability matters and the
evolving reporting requirements in respect
of ESG.
Regular updates were also provided to the
Committee on the risk management process,
internal controls and anti-bribery and
corruption matters.
In addition to scheduled meetings, I speak
regularly with the Chief Financial Oicer, Head
of Finance for the Group and Head of Legal
and Company Secretary to discuss any topical
issues that should be brought to the attention
of the Committee.
Areas of focus in 2023
A comprehensive list of the Committee's
activities in 2023 can be found on the right.
Some highlights included:
– oversight of the transition of lead audit
partner;
– reviewing the recognition of the SELP
performance fee; and
– considering the evolving requirements
for the Group in relation to forthcoming
European standards on sustainability
reporting.
Committee eectiveness
As part of the internal Board evaluation
process, the operation of the Committee was
considered (see pages 93 and 94) and was
deemed to be operating eectively.
Discharge of responsibilities
The quality of debate and challenge amongst
the Committee, management and the internal
and external audit teams, together with the
comprehensive information provided to the
Committee, has assisted us in appropriately
discharging our responsibility.
I would like to thank all those who have
contributed to the Committee this year for
their eorts.
Looking ahead
In 2024, the Committee will:
– respond to new legislation and guidance
aecting the Group as it becomes available,
including the incoming Economic Crime
Act, the updated UK Corporate Governance
Code 2024 and the Revised Ethical Standard
for audit engagements;
– continue to review and respond to the
evolving regulatory landscape around
corporate sustainability reporting; and
– consider the implications of the RICS
mandatory requirement for the periodic
rotation of UK external valuers which comes
into force in May 2026, following a two-year
transition period.
If you have any questions on the Audit
Committee or the contents of this Report,
do contact me on
companysecretariat.mailbox@SEGRO.com.
Carol Fairweather
Chair of the Audit Committee
What the Committee did in 2023
Throughout the year, the Committee has:
– reviewed and monitored the integrity
of the Financial Statements including
reviewing signiicant inancial reporting
judgements and estimates made by
management, to ensure that the quality
of the Company’s inancial reporting is
maintained, in the Company’s Half-
and Full-Year Financial Statements;
– assessed the objectivity, independence
and competence of the external valuer of
the Group’s property portfolio and gained
assurance around the valuation process;
– ensured compliance with applicable
accounting standards, monitoring
developments in accounting regulations
as they aect the Group and reviewing the
appropriateness of accounting polices
and practices in place;
– received a brieing on the Committee's
evolving responsibilities concerning
non-inancial and sustainability data
reporting and governance under
forthcoming European and international
regulations and accounting standards;
– monitored matters relating to tax,
including REIT status and other signiicant
open matters;
– reviewed the recognition of the
performance fee received from SELP;
– monitored the eectiveness of the
Group’s risk management systems and
considered the adequacy of the process
being undertaken to identify risks and
mitigate the exposure of the Group to
them;
– reviewed cyber security processes and
the continued investment in this area to
respond to increasing trends in cyber
threats;
– ensured the processes followed to
support the making of the going concern
and viability statements remained robust
and were correctly followed;
– ensured appropriate safeguards were
in place for the detection of fraud and
prevention of bribery. This extends
to responsibility for overseeing and
monitoring the Group’s Anti-Bribery
and Corruption policies and procedures
contained in the Company’s Code of
Business Conduct and Ethics;
– reviewed the adequacy of internal
inancial controls and broader internal
control systems;
– oversaw the process for transition
of the lead external audit partner;
– examined the performance of the
external and internal auditors, their
objectivity, eectiveness and
independence, as well as the terms
of their engagement and scope of
the external and internal audit plans;
– reviewed and re-approved the Policy
for Approval of Non-Audit fees;
– monitored the ratio and level of audit to
non-audit fees paid to the external auditor
and agreed their remuneration for the
year;
– analysed and challenged the results of
internal audit reviews and management’s
plans to resolve any actions arising from
them; and
– advised the Board on whether the process
supporting the preparation of the Annual
Report taken as a whole, is appropriate to
allow the Board to conclude that the
Annual Report is fair, balanced and
understandable and provides the
information necessary to shareholders to
assess the Group’s position, performance,
business model and strategy.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
101
Financial reporting process Viability statement and going concern Fair, balanced and understandable
A key area of responsibility for the
Committee is the monitoring of the integrity
of the Company’s Financial Statements and
any formal announcements relating to the
Company’s inancial performance, as well
as reviewing any signiicant inancial
reporting issues and judgements
contained therein.
The Group has long-established internal
controls and risk management systems in
relation to the process for preparing the
Financial Statements. Various checks on
internal inancial controls take place
throughout the year, including internal
audits which are detailed further on page
106. Developments in accounting
regulations and best practice in inancial
reporting are monitored by the Company
and, where appropriate, relected in the
Financial Statements. Training is also
provided to the inance teams and the
Committee is kept appropriately informed.
The inancial reporting from each Business
Unit is reviewed by a local Finance Director
prior to being submitted to the Group
Finance function. The results of each
Business Unit are subject to further review
by the Group Finance function before being
consolidated by Group Finance and are
subject to various levels of review including
by senior members of the Finance team.
The draft consolidated statements are
reviewed by various individuals including
those independent of the preparer. The
review includes checking consistency
internally, with other statements and with
internal accounting records.
The Committee receives reports from
management and the auditor on signiicant
judgements, changes in accounting
policies, and other relevant matters relating
to the consolidated Financial Statements.
The Committee and the Board review the
draft consolidated Financial Statements.
The Committee is responsible for ensuring
that the process put in place to allow the
Board to make the viability statement on
page 65 remains robust, in line with market
practice and is correctly and properly
followed.
The Committee reviewed the process which
included extended scenario analysis and is
comfortable with the process followed to
make the viability statement and has
conirmed this to the Board.
The Committee reviewed the
recommendation setting out the support
for adopting the going concern basis in
preparing the inancial statements. The
Committee conirmed to the Board that
the recommendation was appropriate. The
Board’s statement is set out on page 50.
The Code requires the Board to conirm
that they consider that the Annual Report,
taken as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s position,
performance, business model and strategy.
In order to enable the Board to make this
conirmation, the Audit Committee has
oversight of the process which has been
followed, whereby the section owners and
an independent reviewer conirm that in
their opinion and against an agreed list of
criteria the Annual Report is fair, balanced
and understandable.
These criteria include:
– is the whole story presented, with key
messages appropriately relected?;
– does the Report properly provide the
necessary information, with a good level
of consistency, for stakeholders to assess
SEGRO as a business?; and
– is the Report presented in straightforward
language, easy to understand and within a
clear framework?
The Committee reviewed the process that
management had undertaken to make the
statement, which included regular meetings
of the Annual Report and Accounts Working
Group during the drafting process to ensure
a consistent approach, and conirmed to
the Board that the processes and controls
around the preparation of the Annual
Report are appropriate, robust and
consistent.
The fair, balanced and understandable
statement is made on page 133.
Audit Committee Report continued
Audit, risk and internal controls
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
102
Signiicant judgements made by the Committee in 2023
Signiicant matter The action taken
Valuation of the property portfolio
Valuation is central to the business' performance and is a signiicant estimate for the
Committee as it is inherently subjective, because the valuer must make assumptions
and judgements in reaching its conclusions.
This is a recurring risk for the Group as it is key to its IFRS proitability, balance sheet
portfolio value, net asset value, total property return, and employee incentives. It also
aects investment decisions and the implementation of the Company’s Disciplined
Capital Allocation policy.
It is included on the Risk Register and the process risk map as a potential key business
risk.
For further information see page 135
The Committee ensured that there was a robust process in place to satisfy itself that the valuation of the property portfolio by
CBRE, a leading irm in the UK and Continental European property markets, was carried out appropriately and independently.
The Chair of the Audit Committee met separately with CBRE in advance of the Committee meetings to review the valuation
process in detail and ensure the valuer remained independent, objective and eective.
Given the signiicance of this judgement, as in previous years, the full Board also met twice with CBRE to review, challenge,
debate and consider the valuation process; understand any particular issues encountered in the valuation; understand the
impact of climate change and sustainability requirements on valuations; and discuss the processes and methodologies used.
The auditors also meet with the valuers, and they use the services of their own in-house property valuation expert to test the
assumptions made by CBRE. They report to the Audit Committee on their indings.
The Committee conirmed that it was satisied that the valuation was not subject to undue inluence and had been carried
out fairly and appropriately, and in accordance with the industry valuation standards, and therefore suitable for inclusion in
the Financial Statements.
For details of the Group’s properties and related accounting policies see Note 13 and Note 1 of the Financial Statements. For
details of the results of the valuation see Note 13 of the Financial Statements.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
103
External auditor
Following a tender in 2015,
PricewaterhouseCoopers LLP (PwC) has
served as the Company’s external auditor
since 2016, and the Committee continues
to enjoy a constructive working relationship
with them.
As highlighted in last year's Report, our
previous external audit partner retired
from PwC in 2023 and the Committee
welcomed Richard Porter into the role.
Richard has been supported by a strong
team already familiar with the Company,
and the Committee is satisied that there
has been a smooth and eective transition
of audit partners.
The Committee Chair has had regular
discussions with Richard and his PwC
colleagues to consider matters as they arise
throughout the year and the Committee
regularly meets privately with Richard to
discuss PwC’s work and observations on the
Company. No areas of concern were raised
during the year.
Oversight
PwC presented their audit plan for the year
which the Committee considered and
approved. The key areas of risk, which were
primarily identiied as areas of judgement
and complexity, were highlighted by PwC
and were consistent with those areas
identiied by the Committee.
The level of audit materiality was also
discussed and agreed.
PwC presented a detailed report of their audit
indings at the year end, which were reviewed
and discussed. A review of the external
auditor’s report was also undertaken by the
Committee at the half year. As part of the
reviews the Committee probed and
challenged the work undertaken and the
indings and the key assumptions made,
with particular attention to the areas of
audit risk identiied.
Eectiveness
The Committee assesses the eectiveness of
the external audit process on an annual basis,
by taking account of the views of
management involved in the audit and by
reviewing a number of factors including:
– performance in discharging the audit and
half-year review;
– independence and objectivity;
– robustness of the audit process, including
how the auditor demonstrated professional
scepticism and challenged management’s
assumptions particularly in relation to the
valuation of the Group’s portfolio;
– the quality of service and delivery, including
appropriate resources and skills for the
complexity of SEGRO’s audit; and
– reappointment and remuneration.
The Committee also noted the results of the
PwC Audit Quality Review inspection results
2022/23.
Independence
The Company complies with the Competition
and Markets Authority Order 2014 relating to
audit tendering and the provision of non-audit
services. There are no contractual obligations
which restrict the Committee’s choice of
external auditor or which put in place a
minimum period for their tenure. The external
audit was last tendered in 2015 following
which the auditor changed in 2016 from
Deloitte LLP to PwC.
The Committee has no current plans to
re-tender the services of the external auditor
before it is required in 2025, as stipulated by
current regulation that requires a tender
every 10 years.
The Committee believes that the audit quality
and process beneits from the continuity,
stability and understanding of the business
by the PwC team, with an appropriate level
of challenge.
Remuneration
The Committee considers the remuneration
of the external auditor at least on a semi-
annual basis and approves its remuneration.
It also keeps under close review the ratio of
audit to non-audit fees to ensure that the
independence and objectivity of the external
auditor are safeguarded.
In 2023, fees for audit services amounted to
£1.39 million and the non-audit fees amounted
to £0.19 million.
The decrease in non-audit fees from 2022 to
2023 is due to the engagement of PwC on
debt oerings in 2022 and not in 2023. It is
standard practice for a Company's external
auditor to undertake this engagement.
The non-audit fee for 2023 equates to 15 per
cent of the average audit fees of the last
three years.
The chart below sets out the ratio of audit to
non-audit fees for each of the past three years:
2023 2022 2021
Audit fees (£m) 1.39 1.31 1.14
Non-audit fees (£m) 0.19 0.32 0.20
Ratio of non-audit fees
to audit fees (%) 14 24 18
The Committee has concluded that PwC
remains independent and objective, and
that the level of non-audit to audit fees is
acceptable for 2023. PwC has provided
written conirmation of its independence
to the Committee.
We have voluntarily provided details on the
fees relating to the audit of the Group’s SELP
joint venture with PSP Investments, for which
PwC is the auditor, in Note 6(ii) to the Financial
Statements. The Committee has no oversight
or control over these fees as the SELP joint
venture operates totally independently and
is not controlled by the SEGRO Group or the
Committee. The fees are provided solely for
information purposes and do not form part
of the audit fees nor are they included in the
calculation to determine the ratio of audit to
non-audit fees on an annual or three-year
basis for the SEGRO Group.
Policy for approval of non-audit fees
The Committee considers the Policy for
Approval of Non-Audit Fees on an annual
basis to ensure that it remains it for purpose.
The Policy, which is available on our website at
www.SEGRO.com, was updated in February
2023 to relect the latest updates to the
International Code of Ethics for Professional
Accounts (including International
Independence Standards) issued by the
International Ethics Standard Board for
Accounts (IESBA) and in February 2024 in
preparation for the work that will be carried
out by PwC in respect of statutory reporting
required by the Corporate Sustainability
Reporting Directive.
The Committee is satisied that the Policy
is appropriate and in line with industry
best practice.
Audit Committee Report continued
Audit, risk and internal controls
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
104
External auditor continued
The Policy sets out the very limited
circumstances where PwC may be appointed
to carry out non-audit services but only with
the prior consent of the Committee or the
Committee Chair, through delegation of
authority from the Committee. There must be
an obvious and compelling reason why PwC
should be appointed and there should be no
threat to the independence of PwC.
The impact on non-audit to audit fees must
also be considered, and fees incurred for
non-audit work must not exceed 70 per cent
of the average of the audit fees paid for the
last three consecutive years. All non-audit fees
are reported to the Committee.
Re-appointment
Taking into account the views of management
involved in the audit, the Committee was
satisied with the performance of PwC on the
basis of the above and recommended to the
Board that it propose to shareholders at the
2024 Annual General Meeting that PwC
should be reappointed for the 2024
inancial year.
We are aware of the requirements of the
Audit Committees and External Audit:
Minimum Standards as published by the
FRC in May 2023 and, whilst these do not
apply at the date of this report, the Group will
comply with these requirements which will be
particularly relevant during any forthcoming
audit tender processes.
Internal auditor
The Committee believes that given the
Company’s size and structure using a third
party to perform the internal audit function
continues to be the most appropriate model.
This provides independent challenge of
management and gives access to a wide
range of expertise.
KPMG has performed the role since its
appointment in 2007 and re-appointments
in 2014 and 2022 following a tender.
During their tenure, there have been a number
of rotations of lead partners and audit
managers to ensure that a fresh perspective
is given, and their independence and scrutiny
are maintained.
Topics included in the internal audit plan for
2023 were selected based on a review of the
Group’s principal risks, the timing of the
previous audit and advice on market insights
from KPMG. Signiicant areas of risk are
subject to internal audit on a cyclical basis.
The proposed internal audit plan for 2023 was
considered and approved by the Committee
in December 2022, and was kept under review
during the course of the year.
Internal audits during 2023 included:
– Valuation;
– Corporate Tax;
– Land Disposals;
– Developments;
– Treasury;
– Oversight of third-party IT suppliers; and
– Small country audit.
Each internal audit during 2023 conirmed
that no signiicant control issues were
identiied. However, a number of process
and minor control improvement points were
identiied with follow up actions and timelines
which were regularly monitored by
management and the Committee.
Feedback on the performance of KPMG for
each internal audit is given by the Company
and was largely positive and no areas of
particular concern have been brought to
the Committee’s attention. The lead KPMG
partner attends Committee meetings to
present its report and the Committee also
meets privately with him during the year.
No matters of concern were raised in the
private meetings.
Eectiveness of internal audit
The Committee believes that both the process
for determining the internal audit programme,
and the programme itself, are appropriate and
eective, and as in previous years the
programme will be amended during the year
if required to react to any new events or
information.
The Committee is satisied that the internal
audit function continues to perform
eectively.
Valuers
The single most important judgement that the
Committee and the Board has to make is the
value of the Group’s portfolio. The Committee
is assisted in reaching this judgement by its
external valuer CBRE, which has held this
position since 2012. CBRE was reappointed
in 2021 for a further four-year term, and the
Committee believes that it continues to be
eective in its role.
The eectiveness of the Group’s valuers is
assessed through regular meetings during the
year with the Chair of the Audit Committee
and supplemented by additional sessions with
management, which focused on the following:
– independence and objectivity;
– experience and qualiication of the valuation
team;
– consistency of approach across each of the
countries in which the Group operates; and
– quality of data and materials, including the
two presentations to the Board.
As a result, the Committee concluded that the
external valuers performed to a high standard,
were independent, and that the well-run
process delivered a robust set of valuations.
The Committee is cognisant of the new RICS
(Royal Institute of Chartered Surveyors) rules
requiring the periodic rotation of valuers in the
UK, which will come into force on 1 May 2024
and require a change to the Company’s valuer
every 10 years. The Committee will consider
how to prepare for this requirement (which will
come into eect for SEGRO in 2025/2026) in
the coming year.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
105
Internal controls and risk management
Risk
The Board recognises that eective risk
management is key to the long-term
sustainable success and future growth of the
business and the achievement of the Group’s
strategic objectives (see pages 54 to 57). It is
ever aware of the need to ensure that new
and emerging risks, as well as the more
established principal risks, are adequately
managed and mitigated. Risk management
is therefore embedded in the Company’s
decision making and culture, and robust
systems have been put in place to ensure
this remains the case.
There is an ongoing process for identifying,
evaluating and managing the principal risks
faced by the Group, which has been in place
during the year, together with the means for
identifying those emerging risks which may
impact the Group in the future. These
emerging risks are discussed throughout the
business by the appropriate working groups,
conducting both horizon scanning and
discussions at a more granular level.
The Group Risk Committee monitors and
reports on the Company’s approach to risk
management as detailed further on page 54.
The Board assumes responsibility for the
eective management of risk across the
Group, determined by its risk appetite, as
well as ensuring that each business area
implements appropriate internal controls. The
Committee reviews regularly the eectiveness
of the risk management process on behalf of
the Board and is satisied that it remains
robust for the inancial year in question
and up to the date of this Annual Report.
Internal controls
The Committee is responsible for reviewing
the adequacy and eectiveness of internal
control systems, (covering all material controls
including inancial, operational and
compliance controls and risk management
systems) on behalf of the Board.
At each meeting, the Committee receives
an update on internal controls and regularly
reviews the adequacy and eectiveness of
the Group’s internal control systems through
various activities including:
– reviewing the eectiveness of the risk
management process;
– reviewing and challenging management’s
self-assessment of the internal controls
framework; and
– reviewing the work undertaken by the
internal and external auditor, in relation
to internal controls.
The Committee also receives at each
meeting an anti-bribery and corruption
report to enable it to satisfy its responsibility
for ensuring that adequate safeguards for the
detection of fraud and prevention of bribery
are in place. Details of how matters of concern
can be reported and will be investigated are
on page 88.
During the year, the Committee received a
report of one whistleblowing allegation which,
following a thorough investigation, was found
to be not material and unsubstantiated.
Outcome
The framework for monitoring and
maintaining internal controls is considered
appropriate for a Group of SEGRO’s size and
complexity and is designed to provide
reasonable assurance against material
misstatement or loss.
On the basis of the Committee’s work, it
conirms that it has not been advised of, or
identiied, any failings or weaknesses which
it regards to be signiicant in relation to the
Group’s internal control systems during the
year. It also conirms that the Group’s internal
control systems have been in place for the
year under review and up to the date of
approval of this Annual Report and are in
accordance with the Guidance on Risk
Management, Internal Control and Related
Financial and Business Reporting issued by
the Financial Reporting Council.
Audit Committee Report continued
Audit, risk and internal controls
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
106
Remuneration Committee Report Letter from the Chair of the Remuneration Committee
Simon Fraser
Chair of the Remuneration Committee
Dear shareholder,
On behalf of the Board, I am pleased to
present our Remuneration Report for 2023.
The role of the Remuneration Committee
(the Committee) is to determine the
remuneration policies and practices which
promote the long-term sustainable success
of the Company, which are aligned with
the Company’s Purpose and Values and
its strategy.
In the following pages you will see how the
Committee has discharged its responsibilities
as well as other key areas of focus in 2023.
Composition and Committee meetings
The Committee continues to be comprised
entirely of Independent Non-Executive
Directors. Martin Moore retired from the
Board and stepped down as a member of
the Remuneration Committee with eect
from 31 December 2023. On behalf of the
Committee, we would like to thank Martin
for his valuable contribution during his
tenure. There were no other changes to
the composition of the Committee during
the year.
The Committee had three scheduled
meetings during the year and Committee
member attendance can be found on page
83. The Chief Executive, Group HR Director
and external remuneration adviser attend
Committee meetings by invitation as
required. Following each Committee
meeting, I provide an update to the Board
on the Committee’s activities.
Key areas of focus in 2023
Following the retirement of Andy Gulliford
as Chief Operating Oicer and Executive
Director on 30 June 2023 and the subsequent
organisational changes, the Committee
reviewed the remuneration arrangements of
the new Executive Committee and Leadership
team. Full details of Andy’s exit arrangements
can be found on page 124.
During the year, the Committee approved
the Executive Directors’ variable remuneration
and annual salary increases and assessed the
variable targets prior to the LTIP vesting to
ensure the outcomes represented a fair
relection of the business performance
throughout the performance period.
The Committee also approved the grant of
awards under the Company’s all-employee
schemes and reviewed the wider workforce
remuneration framework to ensure this
remained aligned with the structure of
remuneration for the Executive Directors.
Remuneration and alignment to Company
performance
As covered elsewhere within this Annual
Report, 2023 provided a challenging market
environment characterised by weak economic
growth, stubborn inlation and geopolitical
instability. Central banks continued to hike
interest rates well into the second half of the
year, which impacted property investment
markets as the uncertainty around where rates
would settle longer term left potential buyers
unable to accurately assess future returns.
Investment volumes remained low as a
result and yield expansion drove further falls
in asset values, albeit at a more moderate
pace than in 2022.
Despite the more challenging macroeconomic
environment, SEGRO delivered strong
operational results during 2023, helped by
the long-term structural drivers at play in
our sector. These ensured resilient levels of
occupier demand for our prime, well-located
and sustainable space, whilst supply in our
chosen markets remained limited. This
supply-demand tension, along with the
active asset management of our prime
portfolio, helped us to deliver further rental
growth, capture a signiicant amount of
reversion and expand our development
programme, all of which contributed to
income and earnings growth.
Committee membership Key responsibilities
Simon Fraser (Chair)
Mary Barnard
Sue Clayton
Carol Fairweather
Martin Moore (until 31 December 2023)
Linda Yueh
Set the remuneration of the Chair, Executive
Directors, Group HR Director and the Company
Secretary
Review the remuneration of the Leadership team
Ensure Executive remuneration is aligned to the
Company’s Purpose and Values, and the
successful delivery of its long-term strategy
Oversee the framework and policies for workforce
remuneration and assess their alignment with
Company culture
Consider individual remuneration outcomes
for the Executive Directors
Quick links
Remuneration at a glance 110
How we intend to apply the
Policyin2024 111
How we applied the Policy in 2023
112
Aligning remuneration outcomes to
strategy and Company performance 117
Workforce remuneration and
engagement 118
Directors’ Remuneration Policy –
summary 126
See the attendance at scheduled
Remuneration Committee meetings on page 83
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
107
Remuneration
Adjusted proit before tax (Adjusted PBT)
increased by 6.0 per cent to £409 million
and adjusted earnings per share increased by
5.5 per cent to 32.7 pence. Adjusted NAV per
share has fallen by 6.1 per cent to 907 pence,
relecting the decline in the value of our
portfolio. The balance sheet remains in
good shape with a loan to value ratio of
34.0 per cent. The Board is recommending a
inal dividend of 19.1 pence per share, making
the full year dividend 27.8 pence per share, an
increase of 5.7 per cent.
Further information on the Company’s
performance during the year can be found in
the Chief Executive’s statement on pages 8 to
11 and the Strategic Report on pages 6 to 75.
A summary of the Group’s key inancial
metrics relating to Executive remuneration
in 2023 can be found on page 110 and
information regarding the alignment of
remuneration outcomes to our strategy
and performance can be found on page 117.
Remuneration in 2023
Directors’ remuneration in 2023 was paid
in line with the Company’s existing
Remuneration Policy (the Policy), which was
approved by shareholders at the 2022 AGM.
The remuneration framework for both our
Executive Directors and the wider workforce
is aligned with the strategic direction and
performance of SEGRO as well as the interests
of our stakeholders, and this is set out in the
charts on pages 117 and 118.
As indicated on page 118, the 2023 annual
bonus for the wider workforce is aligned to
Group-wide Adjusted PBT, rent roll growth
(RRG), ESG measures, as well as the
achievement of personal objectives. The
weighting of the personal performance
measure varies based on seniority and makes
up a larger percentage of bonus measures for
more junior employees, allowing for suicient
opportunity to recognise individual
performance as well as Company inancial
and operational performance in the annual
bonus structure.
In light of the diicult macroeconomic
conditions, the Committee and Executive
Committee continued to ensure that the
remuneration framework remained it for
purpose to adequately support our workforce.
Further details can be found on page 117.
Following his retirement from the Board and
the Company on 30 June 2023, Andy Gulliford
was paid in line with the Policy. This entitled
him to participate in the bonus for the irst six
months of the year and retain the time
prorated proportion of the LTIP awards he has
been awarded. None of these payments were
accelerated and he is required to retain
SEGRO shares with a value of at least 2.5 times
his salary until 30 June 2025. He ceased to be
paid his salary and all other beneits (which
include cash allowances in lieu of a company
car, company pension and private medical
healthcare) from 30 June 2023 and received a
payment for accrued but unused holiday as at
30 June 2023. Further details can be found on
page 124.
Variable remuneration
Taking into account our strong operational
results and our performance versus the
inancial and non-inancial KPIs that were
within management's control during a year
of continued macroeconomic uncertainty,
the Committee has conirmed the following
performance-related payments to the
Executive Directors:
– 2023 annual bonus
The annual bonus payment will be 81.6 per
cent of their maximum award (see page 113).
– 2021 LTIP performance
The LTIP structure is designed to ensure that
senior management reward is well aligned
with shareholder returns. Vesting is
calculated by reference to three equally-
weighted performance conditions. We
anticipate that the 2021 LTIP award will pay
out 62.7 per cent (subject to the inal TPR and
TAR data being available) (see page 114).
These awards are subject to a two-year
post-vesting holding period. The net amount
of shares will be released at the end of the
holding period in 2026.
The TSR component of the 2021 LTIP will
not vest due to the underperformance of
SEGRO’s shares compared to the benchmark
over the three-year period; although the
shares outperformed the benchmark in 2021
and 2023, it was not enough to outweigh the
underperformance in 2022 as industrial
property values adjusted more than other
types of real estate due to the higher
interest rate environment.
– Exercise of discretion and judgement
Given the Company’s performance during
the year, the Committee considered that
it was appropriate that the variable
components of remuneration for the
Executive Directors pay out in accordance
with the level at which their respective
performance conditions have been met.
When approving these payments and
awards, the Committee considered whether
or not they represented a fair relection of
the underlying performance of the business.
The Committee was satisied that the
performance conditions were relective
of the business performance and that no
overriding adjustment would have been
appropriate. The Committee did not exercise
discretion in relation to the operation of the
Policy during the year.
– 2023 LTIP award
The Chief Executive and Chief Financial
Oicer received an LTIP award in March 2023
with three equally-weighted performance
conditions in line with the Policy. Further
details can be found on page 115.
Remuneration Committee Report continued
Remuneration in 2024
A major area of focus for the Committee
in the upcoming year will be a review of the
current Remuneration Policy, which we will be
recommending to shareholders for approval
at the 2025 AGM (the 2025 Policy). The
Committee is committed to understanding
shareholder views relating to remuneration
policy and in our 2022 review of policy, we
consulted with holders of approximately
65 per cent of our shares. During 2024, we
will begin the consultation process to include
our shareholders and key proxy advisory
agencies, and will also ensure our
employees are well informed of any
proposed policy changes.
Salary reviews
The Committee reviewed the salaries of
Executive Directors taking into consideration
the increases for all other employees as part
of the process. Our salary budget is
approximately ive per cent higher for 2024
than 2023, excluding the impact of changes in
employee numbers. The highest increases are
being awarded where salary levels are below
mid-market ranges and in countries where
inlation remains highest.
Relecting their performance and that of
the business, we have approved salary
increases of approximately two per cent
for the Executive Directors to take eect
from 1 April 2024 (see page 111).
2024 bonus targets
Targets for the annual bonus are set by the
Committee at the beginning of the year. The
weighting of the annual bonus performance
measures are made up of 75 per cent for
inancial measures, comprising Adjusted PBT
(37.5 per cent) and RRG (37.5 per cent, made
up of 18.75 per cent standing (existing) stock
and 18.75 per cent development), and
25 per cent non-inancial measures linked
to our Responsible SEGRO (ESG) ambitions.
Following a review of the metrics used to
calculate the bonus elements and their
alignment to the Company’s strategy, the
Committee concluded that some adjustments
to the RRG and ESG measures were
appropriate.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
108
Remuneration
What the Committee did in 2023
Throughout the year, the Committee has:
– approved the Executive Directors’ annual
salary increases, approved the 2022
bonus payments and the outturn of the
2020 LTIP awards, along with the 2023
bonus and 2023 LTIP targets;
– approved the 2023 SIP, GSIP and
Sharesave awards and approved a new
ESG related target for the SIP and GSIP
schemes measured over the 2023
inancial year for the 2024 awards;
– considered the remuneration
arrangements following the retirement
of the Chief Operating Oicer and the
subsequent reorganisation of the Executive
Committee and Leadership team;
– reviewed the Chair’s fee;
– reviewed workforce pay to ensure that it
continues to be aligned with the structure
of remuneration for the Executive Directors;
– noted the Group-wide all-employee 2023
salary review and considered the salary
increases, bonus and LTIP awards for the
Leadership team; and
– received remuneration market updates
from Korn Ferry on emerging themes
and best practice.
About this Report
In this section we have used colour coding
to represent the dierent elements of Executive
Director Remuneration, and for information
relating to Non-Executive Director fees and
workforce remuneration.
Executive Directors
Salary
Taxable beneits
Pension beneits
Single year variable – Bonus, including DSBP
Multiple year variable – LTIP
Other – SIP and Sharesave
Non-Executive Directors
Non-Executive Directors
Workforce Remuneration
Workforce Remuneration
– Previously, the RRG target was set as a single
igure at the total level including growth in
absolute rents from developments and
standing (existing) stock. In 2024, these
elements will be separated. Whilst the
overall portion of the bonus assigned to
RRG will remain the same (37.5 per cent),
there will now be separate targets assigned
to standing (existing) stock (18.75 per cent)
and development (18.75 per cent). The
Committee recognises that the balance of
RRG changes through the business cycle,
particularly as developments can dominate
RRG at times. As a result, the Committee has
decided to split RRG between standing
(existing) stock and new developments to
ensure that the business as a whole is better
incentivised to deliver growth from both
sources. This change will make the overall
RRG element more diicult to achieve, but
in turn should help to drive the highest
possible RRG for the Group.
– Having introduced ESG measures into
remuneration in 2022, the Group has made
signiicant progress in delivering its
Responsible SEGRO ambitions. As a result,
the Committee concluded that reducing the
number of measures within this element
(from six to four) would be appropriate to
ensure continued focus on our more
stretching goals. In 2024, the ESG measures
will include a continued focus on carbon
reduction, customer service and diversity
and inclusion. The ESG measures will
continue to make up 25 per cent of the
overall bonus for Executive Directors.
The 2024 bonus remains in line with Policy.
2024 LTIP awards
The Committee anticipates that the 2024 LTIP
awards will be granted in March 2024 in line
with the Policy. The level of award will be
determined at the time of grant and the
Committee will assess then whether a scale
back in the normal LTIP grant level is
appropriate based on the share price at the
time of grant, compared to recent years’
prices. It will also consider whether a windfall
gain assessment should be considered after
the grant.
If the normal annual level remains appropriate
then this is expected to be 300 per cent of
salary for the Chief Executive and 250 per
cent of salary for the Chief Financial Oicer.
Stakeholder engagement
In November 2023, our Head of Investor
Relations and Deputy Company Secretary met
with the stewardship and governance teams
at some of our largest shareholders to discuss
governance related topics. This included the
opportunity for shareholders to provide
feedback on our current Executive Director
remuneration structure, which will be
considered as we develop the 2025 Policy.
Our Chair of the Board, Andy Harrison, also
wrote to ten of our largest shareholders to
oer the opportunity to meet with him and
me, as Committee Chair, in respect of any
remuneration related matters.
In May 2023, we also sought the views of our
own workforce on Executive remuneration
during a dedicated workforce engagement
session which I led with our Audit Committee
Chair, Carol Fairweather. Further details of this
can be found on page 119.
Committee eectiveness
As part of the internal Board evaluation
process, the operation of the Committee was
considered and it was concluded that the
Committee continues to operate eectively in
accordance with its terms of reference, which
are available to view at www.SEGRO.com.
Looking ahead
The key areas of focus for the Committee in
2024 will be:
– developing the 2025 Policy and launching
the shareholder consultation process later
in the year;
– consideration of ongoing inlationary
conditions and the impact of cost of
living for the wider workforce;
– ensuring that the vesting of long-term
incentives in 2024 accurately relects the
performance of the Executive Directors and
the experience of stakeholders;
– reviewing progress against the performance
conditions and weightings of the annual
bonus for Executive Directors, ensuring
they remain appropriate; and
– monitoring emerging trends in remuneration
and corporate governance as a whole.
Conclusion
The Remuneration Report will be submitted to
shareholders at the 2024 AGM. I am grateful
for the level of support and engagement from
shareholders during 2023 and look forward to
continuing this engagement throughout 2024
as we develop our 2025 Policy.
If you have any questions about
remuneration generally, or the contents
of this Report, do contact me at
companysecretariat.mailbox@SEGRO.com.
I will also be attending the 2024 AGM and will
be pleased to answer any questions you may
have about the work of the Committee.
Simon Fraser
Chair of the Remuneration Committee
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
109
Remuneration Committee Report continued
Remuneration at a glance
Chief Executive Workforce remuneration Breakdown of Executive Directors’ total remuneration in 2023 (£000)
£2,883k
2023 Single Figure
£2,000
worth of free shares
received by all eligible
employees in 2023
1.
£887k
David Sleath
Soumen Das
Andy Gulliford
£0 £1,000 £2,000 £3,000
1.
£662k
1.
£290k
2.
£958k
2.
£712k
2.
£313k
3.
£1,035k
3.
£734k
3.
£508k
1. Salary, Taxable Beneits and Pension 2. Bonus (including DSBP) 3. 2021 LTIP
Long termShort term
VariableFixed
£2,883k
£2,111k
£1,114k
1,242%
of salary held in SEGRO
plc shares by Chief
Executive (Policy: 400%)
87%
of employees participate
in one or more all-employee
share scheme
c.5%
Salary increase received
by the Chief Executive
in 2023
c.7%
The average UK employee
salary increase in 2023
23:1
CEO Pay Ratio
(Median Pay Ratio)
100%
of eligible employees
received a bonus in 2023
Group performance metrics
Adjusted proit before tax
£409m + 6.0%
2022: £386m + 8.4%
Rent roll growth
£65m
2022: £77m
Total accounting return
(3.3)%
2022: (12.8)%
Total property return
(0.5)%
2022: (10.3)%
Total shareholder return
20.3%
2022: (45.8)%
2023 Bonus payments 2021 LTIP award payout
1.
91.4%
2.
61.7%
3.
96.7%
25%37.5%
Weighting
37.5%
1.
100%
2.
88.2%
3.
0%
33.3%33.3%
Weighting
33.3%
1. Adjusted PBT 91.4%
2. RRG 61.7%
3. ESG 96.7%
1. TAR 100.0%
2. TPR 88.2%
3. TSR 0%
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
110
Remuneration
How we intend to apply the Policy in 2024
Executive Directors
Salary
From 1 April 2024, the Executive Directors will receive an increase in
salary of approximately two per cent.
Base salary with eect from 1 April 2024
David Sleath £798,200
Soumen Das £593,500
Bonus
The maximum bonus opportunity in 2024 is 150 per cent of salary
as at 31 December 2024 and is subject to the following three
performance conditions:
– Proit – Adjusted PBT against target (37.5 per cent)
– Rent Roll Growth (RRG) against target (37.5 per cent), split
between Standing (Existing) Stock (18.75 per cent) and
Development (18.75 per cent)
– ESG (25 per cent)
The Committee amended the RRG element for the 2024 bonus
target. Whilst the overall portion of the bonus assigned to RRG will
remain the same (37.5 per cent), there will now be separate targets
assigned to Standing (Existing) Stock (18.75 per cent) and
Development (18.75 per cent). See page 109 for further details
including the rationale for this change, which will be relected
through the Company-wide bonus scheme.
Any payments to be made under this bonus will be payable in 2025.
As targets are commercially sensitive, they are not disclosed at this
time but will be in next year’s Report.
50 per cent of the 2024 bonus will be deferred into shares under the
DSBP. The 2024 DSBP will vest in April 2028, on the third anniversary
of the payment of the 2024 bonus.
Pension
Executive Directors will receive cash in lieu of pension to the
value of 12 per cent of their base salaries, which is in line with
the UK workforce.
LTIP Award
The 2024 LTIP award for Executive Directors will be subject to the
following equally-weighted performance conditions:
Total Shareholder Return (TSR)
This benchmark is based on the market capitalisation weighted
TSR of the FTSE 350 REIT index, excluding SEGRO.
20 per cent of this element vests if the Company’s TSR over the
performance period is in line with benchmark TSR, rising on a
straight line basis to 100 per cent vesting if the benchmark is
exceeded by 6 per cent or more per annum.
Total Property Return (TPR)
This benchmark is based on the MSCI All Industrial Country
benchmarks weighted to relect the approximate geographical
mix of the Group’s portfolio.
20 per cent of this element vests if the Company’s TPR over the
performance period is in line with the MSCI benchmark, rising on
a straight-line basis to 100 per cent if the MSCI benchmark is
exceeded by 1.5 per cent or more per annum.
Total Accounting Return (TAR)
This benchmark is based on the market capitalisation weighted
TAR of other FTSE 350 REITs.
20 per cent of this element vests if the Company’s TAR over the
performance period is in line with benchmark TAR, rising on a
straight-line basis to 100 per cent vesting if the benchmark is
exceeded by 2.5 per cent or more per annum.
These awards will be calculated as a percentage of Executive
Directors’ salaries as at 31 December 2023 and will be granted during
2024. In line with the Policy, the Chief Executive will receive a
maximum LTIP award of 300 per cent of salary and the Chief Financial
Oicer will receive a maximum award of 250 per cent of salary.
Dividends will accrue on the gross number of LTIP shares which are
released. The Committee will decide whether this payment will be
made in cash or shares.
Chair and Non-Executive Directors
Fees
Fees for the Chair and Non-Executive Directors are reviewed on an
annual basis. The review of the fees paid to the Chair is within the
remit of the Committee, whilst the review of Non-Executive
Directors’ fees is a matter for the Board in the absence of the
Non-Executive Directors.
With eect from 1 January 2024, the Chair and Non-Executive
Directors’ fees were increased by two per cent throughout, and
were aligned to the Executive Directors’ pay increment. The Chair
received a base fee of £374,900 and the Non-Executive Directors
received a base fee of £71,100. There was also a two per cent
increase to the additional fee for the role of the Senior Independent
Director, which was increased to £17,700 per annum with eect
from 1 January 2024. There was no increase to the additional fee for
the roles of the Chair of the Audit and Remuneration Committees,
which were aligned with benchmarking and remained at £20,000
for the 2024 inancial year.
Total fees with eect from 1 January 2024
Andy Harrison £374,900
Mary Barnard £71,100
Sue Clayton £71,100
Carol Fairweather £108,800
Simon Fraser £91,100
Linda Yueh £71,100
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
111
Remuneration Committee Report continued
Executive Directors’ single total igure of remuneration (Audited)
Chart 1: Executive Directors’ single total igure of remuneration for 2023 (£000)
In April 2023, the Executive Directors received a salary increase of approximately ive per cent in line with the average UK employee increase.
Salary
Taxable
beneits
Pension
beneits
Total
ixed
Single year
variable
1,4
–
Bonus,
including
DSBP
Multiple year
variable
1,2,4
–
LTIP
Other
–
SIP and
Sharesave
Total
variable Total
David Sleath
2023 773 21 93 887 958 1,035 3 1,996 2,883
2022 740 21 148 909 1,065 1,936 5 3,006 3,915
Soumen Das
2023 575 18 69 662 712 734 3 1,449 2,111
2022 550 18 110 678 792 1,372 5 2,169 2,847
Andy Gulliford
2023 250 10 30 290 313 508 3 824 1,114
2022 484 21 97 602 697 1,266 5 1,968 2,570
1 The Single year variable and Multiple year variable igures for 2022 have been updated since the 2022 Annual Report as some values were estimated. For further information, see pages 113 and 114 respectively.
2 For further information on the 2023 Multiple year variable igure on the 2021 LTIP Award, see Chart 5 on page 114.
3 Andy Gulliford ceased to be an Executive Director of the Company with eect from 30 June 2023. Further details can be found on page 124.
4 The Single year variable and Multiple year variable for Andy Gulliford have been prorated to his inal day of employment (30 June 2023) in accordance with the bonus scheme rules and LTIP rules.
Salary
From 1 April 2023, the Executive Directors received an increase in salary of approximately ive per cent.
Chart 2: Salary
Base salary as at 1 April 2023
David Sleath £782,500
Soumen Das £581,900
Andy Gulliford
1
£512,100
1 Andy Gulliford ceased to be an Executive Director of the Company with eect from 30 June 2023.
Taxable beneits (Audited)
Taxable beneits include private medical healthcare, plus a cash allowance in lieu of a company car.
Executive Directors are also entitled to life assurance and for the 2023 inancial year, the total annual lump
sum premiums (including annual death in service premiums) were as follows:
David Sleath - £7,200
Soumen Das - £5,900
Andy Gulliford - £5,400
These igures are not included in Chart 1 above.
Pension beneits (Audited)
Each of the Executive Directors received cash in lieu of pension as detailed in Chart 1.
Throughout the year, each of the Executive Directors received a cash allowance of 12 per cent of base
salary. As previously reported, this was reduced from 20 to 12 per cent from 31 December 2022 to align
with the UK workforce.
How we applied the Policy in 2023
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
112
Single year variable – Bonus, including DSBP (Audited)
The bonus is paid 50 per cent in cash with the remainder awarded as shares under the DSBP. Shares will vest in three years subject to continued employment or good leaver status.
2023 Bonus (Audited)
The 2023 bonus comprised of three components: Adjusted Proit Before Tax (PBT) 37.5 per cent; rent roll growth (RRG) 37.5 per cent; and ESG 25 per cent. The 2023 bonus payment will be 81.6 per cent of the maximum
award and will be paid in April 2024.
The performance period for Adjusted PBT, RRG and ESG starts from 1 January. The Adjusted PBT and RRG
outturns were calculated using a constant exchange rate and also include adjustments for speciic items
(including acquisitions and disposals made during the year) in accordance with the bonus scheme rules as
approved by the Committee.
The ESG element comprises six equally-weighted Responsible SEGRO measures in accordance with the
bonus scheme rules as approved by the Committee.
Bonus payments are calculated as a percentage of Executive Directors’ salaries as at 31 December of the
relevant year. As explained on page 108, the Committee assessed the underlying performance of the
business and concluded that no discretion should be exercised in respect of the 2023 bonus.
The 2023 DSBP will be awarded in April 2024 and will vest on the third anniversary of the award date.
Details of the DSBP awards granted to Executive Directors are set out in Chart 14 on page 121.
Chart 3: 2023 Bonus
Bonus element
Threshold
(25% unless otherwise indicated)
Target
50%
Target
90% Maximum 100% payout Actual Weighting
Outcome
achieved
Financial element
Adjusted PBT against target £408.8m £412.9m £421.1m £429.3m £422.3m 37.5% 91.4%
Rent Roll Growth (RRG) against target £50.3m £62.9m £72.3m £78.6m £65.6m 37.5% 61.7%
Non-inancial element
ESG – – – – – 25.0% 96.7%
– Improving visibility of Scope 3 operating carbon
emissions in our buildings.
73% 78% 81% 100%
– Reducing corporate and customer carbon
emissions.
272,789 tonnes (2023 pathway target) 259,680 tonnes (double the 2023
pathway reduction)
254,168 tonnes 100%
– Reducing embodied carbon emissions. 376kg (2023 pathway target) 353kg (in line with prior year
achievement)
348kg 100%
– Creating and actioning Community Investment
Plans.
Customer participation in CIPs: 35
Supplier participation in CIPs: 25
Customer participation in CIPs: 70
Supplier participation in CIPs: 40
84 Customers participated
59 Suppliers participated
100%
– Providing excellent customer service. 75% customer satisfaction achieved
from surveys during the year
90% customer satisfaction achieved
on average from surveys during the
year
86% satisfaction 80%
– Achieving high levels of employee engagement. 75% payout for achieving top quartile
position vs peers in overall employee
engagement
100% payout for achieving top
quartile position vs peers in overall
employee engagement and on
inclusivity
Top quartile engagement and
inclusivity
100%
Total
100% 81.6%
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
113
Remuneration Committee Report continued
Multiple year variable – LTIP (Audited)
LTIP awards are subject to a three-year performance period and a compulsory two-year post-vesting holding period for Executive Directors.
LTIP vesting in 2024
The 2021 LTIP award will vest on 29 March 2024, subject to relative TSR, TPR and TAR over the three-year performance period to 31 December 2023.
It is anticipated that the 2021 LTIP award will pay out 62.7 per cent (subject to the inal TPR and TAR data being available).
Chart 4: 2021 LTIP award
Performance Conditions
Threshold
(20% vesting)
Stretch
(100% vesting) Weighting Outcome
TSR
1
Benchmark Benchmark +6%pa 33.3% 0%
TPR
2
MSCI Benchmark MSCI Benchmark
+1.5%pa
33.3% 88.2%
TAR
3
Benchmark Benchmark +2.5%pa 33.3% 100.0%
Estimated vesting
(% of award) 62.7%
1 The Company’s TSR over the performance period was -7.7 per cent and the benchmark TSR was -4.4 per
cent. The Company’s TSR target is 6 per cent per annum above the benchmark, which equates to TSR
of 13.8 per cent for this element to fully vest.
2 The estimated TPR calculation is based on the Company’s actual annualised TPR between 2021 and 2023
of 8.0 per cent and an estimated MSCI Benchmark over the same period of 6.6 per cent. On this basis, the
Company’s three-year TPR to 31 December 2023 has exceeded the estimated MSCI Benchmark by 1.28 per
cent which would lead to 88.2 per cent of the TPR element vesting. The inal benchmark will be available
in quarter two 2024 and based on the information available at the time of this Report the Committee has
estimated that 88.2 per cent of this element will vest. Any dierences will be disclosed in next year’s Report.
3 100 per cent of the TAR element will vest if the benchmark is exceeded by 2.5 per cent per annum. The
benchmark will be available in quarter two 2024 and based on the information available at the time of this
Report the Committee has estimated that 100 per cent of this element will vest. Any dierences will be
disclosed in next year’s Report.
The Committee has the discretion to adjust awards downwards at vesting if it is not satisied that the
outcome is a fair relection of underlying performance, or in the event of excessive risk taking or
misstatement. As explained on page 108, the Committee assessed the underlying performance of the
business and concluded that no such discretion should be exercised in respect of the vesting of the
2021 LTIP.
Once vested, the underlying number of shares under the award will be subject to a further two-year
post-performance holding period. The Executive Directors will continue to hold their award over the
shares, and will be entitled to the value of any dividend payments during the holding period; during this
time they will not be able to sell or transfer the shares under award. The award after vesting is not subject to
any further conditionality and the normal leaver provisions would not apply, meaning that if the individual
resigned during the holding period they would retain their award and be entitled to receive the underlying
shares at the end of the holding period. Only if the individual was summarily dismissed (for gross
misconduct) would the award lapse on termination of employment during the holding period.
Chart 5: 2021 LTIP award to Executive Directors
Share price
on award
(pence)
Percentage of
salary awarded
(%)
Number of
shares awarded
1
Estimated
percentage of
award vesting
(%)
Estimated
number of shares
eligible for
vesting
Estimated share
price on vesting
(pence)
2
Estimated value
of vesting shares
(£)
Value in
Chart 1
attributable
to share price
appreciation
(£)
Dividend
(pence
per share)
3
Total dividend on
vesting shares
(£)
David Sleath 933.0 250 190,986 62.7 119,812 785.8 941,483 0 78.4 93,933
Soumen Das 933.0 250 135,341 62.7 84,904 785.8 667,176 0 78.4 66,565
Andy Gulliford
1
933.0 250 93,670 62.7 58,762 785.8 461,752 0 78.4 46,070
1 Andy Gulliford ceased to be an Executive Director on 30 June 2023 and his 2021 LTIP award has been prorated in accordance with the LTIP rules.
2 The vesting share price has been estimated as the three-month average share price ending on 29 December 2023.
3 The igure in Chart 1 includes a cash value of 78.4 pence per share, equivalent to the dividends that the Executive Directors would have received on the 2021 LTIP shares from the award date.
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
114
Updated LTIP vesting in 2023 (estimated in 2022 Annual Report) (Audited)
The 2022 Directors’ Remuneration Report estimated that the TPR element for the 2020 LTIP would vest at
100 per cent.
The Company’s actual TPR over the performance period was 13.2 per cent and the MSCI benchmark was
9.4 per cent. The Company’s TPR outperformance of 3.6 per cent compared with the MSCI benchmark led
to 100 per cent of the TPR element vesting. Overall, this resulted in a total payout of 100 per cent for the
2020 LTIP as estimated.
In the 2022 Annual Report the estimated vesting share price for the 2020 LTIP was 783.4 pence,
and the igure in Chart 1 has been re-presented to relect the actual vesting share price of 807.7 pence.
2023 LTIP award (Audited)
The 2023 LTIP award was granted on 24 March 2023 and is subject to the following equally-weighted
performance conditions:
Total Shareholder Return (TSR)
This benchmark is based on the market capitalisation weighted TSR of the FTSE 350 REIT index.
20 per cent of this element vests if the Company’s TSR over the performance period is in line with
benchmark TSR, rising on a straight-line basis to 100 per cent vesting if the benchmark is exceeded
by 6 per cent or more per annum.
Total Property Return (TPR)
This benchmark is based on the MSCI All Industrial Country benchmarks weighted to relect the
approximate geographical mix of the Group’s portfolio.
20 per cent of this element vests if the Company’s TPR over the performance period is in line with the
MSCI benchmark, rising on a straight-line basis to 100 per cent if the MSCI benchmark is exceeded by
1.5 per cent or more per annum.
Total Accounting Return (TAR)
This benchmark is based on the market capitalisation weighted TAR of the other FTSE 350 REITs.
20 per cent of this element vests if the Company’s TAR over the performance period is in line with
benchmark TAR, rising on a straight-line basis to 100 per cent vesting if the benchmark is exceeded
by 2.5 per cent or more per annum.
The Chief Executive was awarded 300 percent of salary in respect of the 2023 LTIP and the Chief Financial
Oicer was awarded 250 per cent of salary. Further details can be found in Chart 15 on page 122.
Malus and clawback
Malus and clawback provisions apply to the bonus and awards made under the DSBP and LTIP over the time
periods detailed below and may apply in the following circumstances:
– fraud or serious misconduct on the part of the participant;
– a serious misstatement in the Company’s inancial results;
– an error in assessing performance conditions, resulting in an overpayment;
– when Company performance was achieved as a result of excessive risk taking;
– serious reputational damage; or
– corporate failure.
Malus Clawback
Bonus – Up to three years from the payment date
DSBP Until the award(s) vest –
LTIP Until the award(s) vest Up to two years from the vesting date
Other - SIP and Sharesave (Audited)
The ‘other’ igure in Chart 1 includes SIP and Sharesave:
Share Incentive Plan (SIP)
This is calculated as the number of shares awarded multiplied by the award price.
During the year, SIP free share awards of £2,000 were made to eligible UK employees and Global Share
Incentive Plan (GSIP) awards of £2,000 were made to eligible employees based outside of the UK.
The number of shares awarded was calculated using a share price of 813.2 pence, based on the ive-day
average share price prior to the date of award.
All eligible employees, including the Executive Directors, received 245 shares in respect of the 2023 SIP
and GSIP.
Sharesave (SAYE)
This is the discount used to calculate the Option Price, multiplied by the Executive Directors’ annual
savings each year.
All eligible UK employees are invited to join the SAYE annually, and can save up to a maximum of £500
a month across all open schemes.
At the end of the three-year savings period they can purchase shares at the Option Price, based on a
20 per cent discount to the share price on award.
The Option Price for the 2023 SAYE was 580.8 pence.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
115
Remuneration Committee Report continued
TSR chart and Chief Executive pay
Chart 6 below shows the TSR for the Company over the last 10 inancial years compared with the FTSE 350 REIT Index and the FTSE 100 Index. The Committee has determined that these
indices provide useful comparators as the Company and its peers are constituents of them.
Chart 6: Composite 10-year TSR chart and 10-year Chief Executive single total igure of remuneration
Dec
2019
Dec
2018
Dec
2017
Dec
2016
Dec
2015
Dec
2014
Jan
2014
700SEGRO
FTSE 100
FTSE 250
FTSE 350 REITs (excluding SEGRO) composite
Chief Executive single total igure of remuneration (£000)
100
200
300
400
500
600
7,000
1,000
2,000
3,000
4,000
5,000
6,000
Dec
2020
Dec
2021
Dec
2023
Dec
2022
Chief Executive single igure of remuneration (£000) 2,043 2,388 3,788 4,125 3,947 6,611 3,752 4,650 3,915 2,883
Short-term incentive payout against maximum opportunity (%) 66.7 100.0 99.2 100.0 94.3 100.0 91.2 100.0 95.3 81.6
Long-term incentive payout against maximum opportunity (%) 42.9 42.3 100.0 100.0 100.0 100.0 100.0 100.0 100.0 62.7
1 This igure has been updated since the 2022 Annual Report as some values were previously estimated. For further information see Chart 1.
CEO pay ratio
The table below shows how CEO pay compares to employees at the lower, median and upper quartiles.
The ratios have been calculated in accordance with Option A of the The Companies (Miscellaneous
Reporting) Regulations 2018. We have again opted for Option A as the preferred method of calculation,
as it is the most statistically accurate as recommended by the legislation.
Chart 7: CEO pay ratio
Year: Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
31 December 2023 A 37:1 23:1 16:1
31 December 2022 A 58:1 34:1 23:1
31 December 2021 A 80:1 47:1 27:1
31 December 2020 A 64:1 37:1 23:1
31 December 2019 A 111:1 70:1 40:1
31 December 2018 A 65:1 41:1 24:1
Chart 8: Total UK employee pay and beneits igures used to calculate the 2023 CEO pay ratio
25th percentile
pay (£000)
Median pay
(£000)
75th percentile
pay (£000)
Salary 58 85 88
Total UK employee pay and beneits 78 123 179
Supporting information for the CEO pay ratio
The Chief Executive’s single total igure of remuneration for 2023, detailed further in Chart 1, and employee
data as at 31 December 2023, have been used for the purposes of this calculation.
The median CEO Pay Ratio has decreased when compared against last year (34:1) and this reduction can
partially be attributed to the lower payout of the 2020 LTIP in 2023. Whilst this reduction was also observed
for the median comparator, proportionally this had a much larger impact on the Chief Executive based
on the payouts. Additionally, the salary increase received by the Chief Executive in April 2023 was
approximately ive per cent, which was below the average UK employee increase of seven per cent
in the same period.
SEGRO’s median CEO Pay Ratio is 23:1, which remains below the 2022 FTSE 100 median of 80:1 (source:
High Pay Centre). The Remuneration Committee considers that the median pay ratio is representative of
the pay, reward and progression policies for our UK workforce.
Chart 9: Relative importance of spend on pay
2023
£m
2022
£m
Increase
%
Total dividend 327 301 8.6
Total employee expenditure 61 56 8.9
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
116
Remuneration and strategy
Our ambition is to be the best property company and SEGRO’s remuneration structure is designed to align delivery of annual and long-term out-performance of the Company with the
priorities of our major stakeholders. This performance is assessed based on inancial and non-inancial KPIs linked to the four pillars of our corporate strategy. The remuneration structure
and KPIs are listed below and more detail including speciically how each KPI is linked to the strategic pillars and remuneration can be found on pages 32 to 35.
Our strategy
Our Strategic Pillars
Performance
measures
KPIs Operational
excellence
Eicient capital
& corporate structure
Disciplined
capital allocation
Responsible
SEGRO
Bonus
Adjusted PBT (37.5%) Adjusted EPS
Rent Roll Growth (37.5%) Rent Roll Growth
ESG (25%) – Customer satisfaction
– Employee engagement
– Embodied carbon intensity
– Corporate and customer carbon emissions
– Visibility of customer energy use
– Number of Community Investment Plans
LTIP
Relative TSR over 3 years Total shareholder return (33.3%)
Relative TAR over 3 years Total accounting return (33.3%)
Relative TPR over 3 years Total property return (33.3%)
SIP
PBT v Budget Adjusted EPS
All of the above performance measures are integrated directly into both Executive Directors’ and employees’ remuneration. See page 118 for a comparison of Executive
Director and employee remuneration components.
Aligning remuneration outcomes to strategy and Company performance
See more on ourstrategy
on pages 20 and 21
See more on ourKPIs
on pages 32 to 35
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Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
117
Remuneration Committee Report continued
Workforce Remuneration
Chart 10: Percentage change in Directors’ remuneration compared to average employee
Salary/Fees
(% change)
Taxable beneits
(% change)
Annual variable pay
(% change)
2023 2022 2021
2
2020 2023 2022 2021 2020 2023 2022 2021 2020
Average per employee
1
9.7 7.7 4.2 6.0 1.1 2.4 12.4 2.0 5.3 0.1 9.4 -2.0
Executive Directors
David Sleath 4.5 2.6 8.7 -2.2 0.0 0.0 4.8 0.0 -10.1 -1.5 11.3 -6.1
Soumen Das 4.5 2.6 14.1 -3.4 0.6 -11.3 -0.2 0.0 -10.1 -1.5 16.8 -6.1
Andy Gulliford
8
– 2.7 8.8 -2.3 – 0.0 1.8 0.0 – -1.5 11.4 -6.1
Non-Executive Directors
6
Andy Harrison
3
5.0 – – – – – – – – – – –
Mary Barnard 5.0 3.0 8.0 -0.6 – – – – – – – –
Sue Clayton 5.0 3.0 8.0 -0.6 – – – – – – – –
Carol Fairweather
5
18.6 3.0 8.0 -0.6 – – – – – – – –
Simon Fraser
4
8.1 3.0 – – – – – – – – – –
Martin Moore -5.5 3.0 8.0 -0.6 – – – – – – – –
Linda Yueh
4
5.0 3.0 – – – – – – – – – –
1 As there are only a very small number of employees in SEGRO plc, French branch, the 2023 average per employee igure is based on UK employees who have been continually employed for the entirety of 2022 and 2023 and
are entitled to receive annual variable payment.
2 Between May 2020 and July 2020, all Directors waived 25 per cent of their salaries and fees and the Company matched a donation equivalent to this amount to the SEGRO Centenary Fund. This waiver is relected in the 2020
numbers and accounts for the appearance of the above average increase in 2021.
3 Andy Harrison joined the Board as Director on 1 April 2022 and was appointed as Chair on 30 June 2022, accordingly there is no comparator for the previous years.
4 Simon Fraser and Linda Yueh were appointed as Independent Non-Executive Directors on 1 May 2021, accordingly there is no comparator for the previous years.
5 Carol Fairweather was appointed Senior Independent Director on 1 July 2023 and her fee increase to relect the increased responsibilities has been prorated for the year.
6 Martin Moore stepped down as Senior Independent Director on 30 June 2023 and his fees have been prorated for the year.
7 Fees for Non-Executive Directors have been annualised unless otherwise stated. Non-Executive Directors do not receive any taxable beneits and do not participate in the bonus scheme.
8 Andy Gulliford retired from the Board and the Company on 30 June 2023.
All employees Element of remuneration Executive Directors
Group salary budget reviewed by the Remuneration Committee Salary Below overall budgeted employee increases
All employees are eligible for Bonus
Targets: PBT, RRG, ESG, Personal Performance (weightings based on level)
Bonus
Maximum 150%
Targets: PBT (37.5%), RRG (37.5%), ESG (25%)
Leadership team 25% Deferred for 3 years Deferred Share Bonus Plan 50% Deferred for 3 years
Leadership team and senior managers
3-year performance period
No holding period
Three equally-weighted targets: TSR, TPR, TAR
Long Term Incentive Plan
Maximum 300% for Chief Executive and 250% for Chief Financial
Oicer
3-year performance period, 2-year holding period
Three equally-weighted targets: TSR, TPR, TAR
(UK) 12% matched contribution Pension beneit 12% cash
Maximum £3,600 Minimum 3-year hold Share Incentive Plan Maximum £3,600 Minimum 3-year hold
(UK) £500/month 3-year savings period Sharesave £500/month 3-year savings period
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
118
Stakeholder Engagement
Shareholder engagement
The Committee values shareholder
engagement and the Chair is available
should shareholders wish to discuss the
Company’s approach to remuneration or
share their views on current practice or
emerging issues. In November 2023, our
Head of Investor Relations and Deputy
Company Secretary met with the stewardship
and governance teams at some of our largest
shareholders to discuss governance related
topics. This included the opportunity for
shareholders to provide feedback on our
current executive remuneration structure,
which will be considered as we develop the
revised Remuneration Policy for approval by
shareholders at the 2025 AGM. In 2024, we
will launch a dedicated consultation process
with our shareholders and proxy advisory
irms to discuss any proposed changes to the
current Remuneration Policy and to oer the
opportunity to provide feedback.
Workforce engagement
In addition to setting the remuneration for
the Executive Directors, the Committee is
responsible for setting the remuneration
for the Group HR Director and the Company
Secretary, reviewing the remuneration of
the Leadership team and considering the
remuneration policies and practices for the
wider workforce. This ensures everyone is
rewarded fairly and that workforce pay aligns
with Executive remuneration. Further details
on workforce engagement can be found on
page 92 and a comparison of employee and
executive remuneration can be found on
page 118.
Further details on stakeholder engagement
can be found on pages 90 to 92.
Employee share ownership
– SEGRO is proud to operate two types of all-employees share
schemes. This encourages employees to own shares in the
Company, aligning their interests with our shareholders.
– SIP/GSIP: all eligible employees can receive an award of up to
£3,600 worth of SEGRO shares each year. These are held in Trust
on their behalf for a minimum of three years, following which they
can be released subject to continued employment.
– Sharesave: all UK employees are invited to join Sharesave on an
annual basis, where they can save up to £500 a month across all
open schemes. After three years, they can use their savings to buy
SEGRO shares at a 20 per cent discount to the share price when
they started saving.
87%
of SEGRO employees participated in one or more all-employee share
scheme, as at 31 December 2023.
£2,000
In May 2023, all eligible employees received £2,000 worth of SEGRO shares
through the SIP or GSIP.
67%
of UK employees participate in Sharesave, saving on average
£347 each month.
6.7m
As at 31 December 2023, there were 6.7 million SEGRO shares under award
in employee share schemes, representing 0.6 per cent of our issued share
capital.
Workforce engagement on Executive
Remuneration
As detailed on page 92, during the year the Non-Executive Directors
held a series of workforce engagement sessions with a cross-
section of employees from across the business. In May 2023,
Remuneration Committee Chair, Simon Fraser, and Audit Committee
Chair, Carol Fairweather, held a workforce engagement session
focusing on Executive remuneration.
Simon detailed the work of the Committee during the year including
changes to the bonus structure, with the addition of non-inancial
ESG elements, and increasing the weighting of the personal
performance element for more junior employees. Directors heard
that the addition of ESG as a performance metric to the bonus for
all employees was an impactful change and an important step for
the delivery of the Responsible SEGRO strategy. The Responsible
SEGRO targets were seen as tangible and authentic to SEGRO,
and employees attending the engagement session expressed
that frequent and consistent communication across the Group
on the progress against meeting company performance targets,
particularly the sustainability related targets, was helpful through
the regular employee brieings which are held across the Group.
An area of improvement identiied was around the visibility and
understanding of remuneration levels across the business and the
Company continues to make progress in increasing transparency
around the remuneration structures, including share awards, for the
beneit of the wider workforce. The reorganisation of the Executive
Committee and Leadership team provided a good opportunity to
review Company-wide policies and resources to ensure these
included suicient information to dierentiate remuneration
between levels.
The Remuneration Policy was also summarised and employees
were oered the opportunity to ask questions about the Executive
remuneration structure. The Directors felt that these sessions
remained invaluable in understanding employees’ views on
Executive remuneration, and appreciated the insightful, open and
honest feedback from the employee attendees. The employees
valued the opportunity to share their views. Feedback from the
session was relayed to the Board and discussed at the June 2023
Board meeting and will inform plans on the communication of
reward through 2024.
Further details can be found
on page 92.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
119
Remuneration Committee Report continued
Executive Directors’ shareholdings (Audited)
Chart 11: Executive Directors’ overall interest in shares
Beneicial
interest
(including SIP as
at 01.01.2023)
Beneicial
interest
(including SIP as
at 31.12.2023)
1
Subject to
deferral under
DSBP
Subject to
achievement of
performance
conditions under
LTIP
Subject to
two-year holding
period under LTIP
Outstanding
options under
Sharesave
Total overall
interest in shares
as at 31.12.2023
Shares which
contribute to
shareholding
guidelines as at
31.12.2023
Value of shares
which contribute
to shareholding
guidelines as at
31.12.2023
2
Salary (as at
31.12.2023)
3
Value of
shareholding as a
% of salary
David Sleath 734,939 771,599 162,437 680,705 450,557 3,099 2,068,397 1,096,485 £9,719,243 £782,500 1,242%
Soumen Das 401,567 428,467 119,255 438,806 327,233 3,099 1,316,860 665,105 £5,895,492 £581,900 1,013%
Andy Gulliford
4
716,203 739,811 106,285 130,440 294,824 1,211 1,272,571 952,398 £8,442,056 £512,100 1,649%
1 Beneicial interests represent shares beneicially held by each Executive Director, including any shares beneicially held by spouses as well as shares held on their behalf by the Trustees of the SIP. Between 31 December 2023
and 15 February 2024, there were no changes in respect of the Executive Directors’ shareholdings. The Trustees of the SIP held a non-beneicial interest in 463,457 shares as at 1 January 2023, 432,659 shares as at 31 December
2023 (2022: 463,457) and 427,960 shares as at 15 February 2024. The Trustees of the SEGRO plc Employees’ Beneit Trust held 54,640 shares as at 1 January 2023 and 254,076 shares as at 31 December 2023 (2022: 54,640).
There was no change in their holding between 31 December 2023 and 15 February 2024. As with other employees, Executive Directors are deemed to have a potential interest in these shares, being beneiciaries under these
two Trusts. The Trustees of the SEGRO plc Employees’ Beneit Trust have waived the right to receive dividends on these shares.
2 The number of shares which contribute towards the shareholding requirement comprise beneicial interests (including SIP shares), shares subject to deferral under DSBP and shares held under LTIP subject to the two-year post-
vesting holding period, net of Income Tax and National Insurance, but excludes shares subject to achievement of performance conditions under LTIP and options outstanding under Sharesave.
3 Value of shares calculated using a share price of 886.4 pence, as at 29 December 2023.
4 Andy Gulliford retired from the Board and the Company on 30 June 2023 and his share interests and share values are disclosed as at 30 June 2023.
Chart 12: Policy on shareholding guidelines (Audited)
The Chief Executive is expected to build a shareholding in the Company equivalent to 400 per cent of the
value of his base salary, and the other Executive Directors are expected to hold shares equivalent to 250 per
cent of their base salaries, which is calculated each year by reference to the share price as at 31 December.
Shares which qualify towards the shareholding guidelines comprise: beneicial interests; LTIP awards which
have vested and are subject to a two-year post-vesting holding period, net of Income Tax and National
Insurance; and unvested shares in the DSBP, net of Income Tax and National Insurance.
Executive Directors are required to retain half of their LTIP and DSBP shares post vesting until the above
guidelines have been met and are then maintained.
Policy
400%
David Sleath
Policy
250%
Soumen Das
0%
Policy
250%
% of salary
% of salary
% of salary
400% 800% 2,000%1,200% 1,600%
Andy Gulliford
1,242%
1,013%
1,649%
Value of shares calculated using a share price of 886.4 pence, as at 29 December 2023.
The shareholding guidelines include a post-cessation requirement for Executive Directors to retain their
shareholding, up to the amount required by the shareholding guidelines, for two years after leaving
the Company.
Chart 13: Post-cessation shareholding requirements: Andy Gulliford
Andy Gulliford retired from the Company and the Board on 30 June 2023. He is required to hold shares
equivalent to 250 per cent of his salary until 30 June 2025, calculated by reference to his base salary and
the share price on 30 June 2023.
Shares which qualify towards the post-cessation shareholding requirements comprise: beneicial
holdings; LTIP awards which have vested and are subject to a two-year post-vesting holding period, net
of Income Tax and National Insurance; and unvested shares in the DSBP, net of Income Tax and National
Insurance.
Andy has maintained compliance with the post-cession shareholding guidelines, as detailed below, since
his retirement on 30 June 2023.
Salary
(£)
Post-cessation
share-holding
requirement
(250% of
salary)
(£)
Share
price as at
30 June
2023
(pence)
Number of
shares
required to
satisfy
post-cessation
shareholding
requirements
Shares held which contribute to post-cessation
shareholding requirements
Post-
cessation
shareholding
requirements
metDetails Gross Net
Earliest
release date
512,100 1,280,250 716.9 178,582 Beneicial
holdings
739,811 739,811
Yes
2019 LTIP 151,036 80,049 29/05/2024
2020 LTIP 143,788 76,208 26/03/2025
2020 DSBP 28,698 15,210 28/04/2024
2021 DSBP 34,578 18,326 28/04/2025
2022 DSBP 43,009 22,795 28/04/2026
Total 1,140,920 952,399
Policy
Percentage of salary
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
120
Executive Directors’ share scheme holdings (Audited)
Chart 14: DSBP Awards outstanding
Date of Grant
No. of shares
under award
01.01.23
No. of shares
over which
awards were
granted during
the year
2
Share price
on grant
(pence)
3
Face value of
award made
in 2023
(£)
No. of shares
released during
the year
Share price on
date of release
(pence)
No. of shares
under award
31.12.23
End of
holding
period
David Sleath 2019 DSBP 28.04.20 63,200 – 821.2 – 63,200 810.6 – 28.04.23
2020 DSBP 28.06.21 43,885 – 1,110.5 – – – 43,885 28.04.24
2021 DSBP 27.06.22 52,835 – 1,027.0 – – – 52,835 28.04.25
2022 DSBP
4
28.04.23 – 65,717 810.6 532,702 – – 65,717 28.04.26
Total 159,920 162,437
Soumen Das 2019 DSBP 28.04.20 44,786 – 821.2 – 44,786 810.6 – 28.04.23
2020 DSBP 28.06.21 31,099 – 1,110.5 – – – 31,099 28.04.24
2021 DSBP 27.06.22 39,289 – 1,027.0 – – – 39,289 28.04.25
2022 DSBP
4
28.04.23 – 48,867 810.6 396,116 – – 48,867 28.04.26
Total 115,174 119,255
Andy Gulliford
1
2019 DSBP 28.04.20 41,329 – 821.2 – 41,329 810.6 – 28.04.23
2020 DSBP 28.06.21 28,698 – 1,110.5 – – – 28,698 28.04.24
2021 DSBP 27.06.22 34,578 – 1,027.0 – – – 34,578 28.04.25
2022 DSBP
4
28.04.23 – 43,009 810.6 348,631 – – 43,009 28.04.26
Total 104,605 106,285
1 Andy Gulliford retired from the Board and the Company on 30 June 2023. Further details can be found on page 124.
2 Awards are granted in the form of a provisional allocation of shares.
3 The share price on grant is based on the share price for the day before the award.
4 Executive Directors were awarded 150 per cent of salary in respect of the 2022 bonus, 50 per cent of which was deferred into shares under the 2022 DSBP awards.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
121
Remuneration Committee Report continued
Executive Directors’ share scheme holdings (Audited) continued
Chart 15: LTIP Awards outstanding
Date of Grant
No. of shares
under award
01.01.23
No. of shares
over which
awards were
granted during
the year
2
Share price
on grant
(pence)
3
Face value of
award made
in 2023
(£)
No. of shares
vested during the
year and subject
to two-year
holding period
Share price on
date of vest
(pence)
No. of shares
under award
31.12.23
No. of shares
subject to
two-year
post-vesting
holding period
End of performance
period over which
performance
conditions have
to be met
4
End of two-year
post-vesting
holding period
David Sleath 2019 LTIP 29.05.19 – – 691.0 – – – – 230,680 31.12.21 29.05.24
2020 LTIP 26.03.20 219,877 – 786.8 – 219,877 807.7 – 219,877 31.12.22 26.03.25
2021 LTIP 29.03.21 190,986 – 933.0 – – – 190,986 31.12.23 29.03.26
2022 LTIP 05.05.22 186,709 – 1,162.5 – – – 186,709 31.12.24 05.05.27
2023 LTIP
5
24.03.23 – 303,010 737.8 2,235,608 – – 303,010 31.12.25 24.03.28
Total 597,572 680,705 450,557
Soumen Das 2019 LTIP 29.05.19 – – 691.0 – – – – 171,418 31.12.21 29.05.24
2020 LTIP 26.03.20 155,815 – 786.8 – 155,815 807.7 – 155,815 31.12.22 26.03.25
2021 LTIP 29.03.21 135,341 – 933.0 – – – 135,341 31.12.23 29.03.26
2022 LTIP 05.05.22 115,698 – 1,162.5 – – – 115,698 31.12.24 05.05.27
2023 LTIP
5
24.03.23 – 187,767 737.8 1,385,345 – – 187,767 31.12.25 24.03.28
Total 406,854 438,806 327,233
Andy Gulliford
1
2019 LTIP 29.05.19 – – 691.0 – – – – 151,036 31.12.21 29.05.24
2020 LTIP 26.03.20 143,788 – 786.8 – 143,788 807.7 – 143,788 31.12.22 26.03.25
2021 LTIP 29.03.21 124,894 – 933.0 – – – 93,670 31.12.23 29.03.26
2022 LTIP 05.05.22 101,827 – 1,162.5 – – – 36,770 31.12.24 05.05.27
Total 370,509 130,440 294,824
1 Andy Gulliford retired from the Board and the Company on 30 June 2023 and his outstanding LTIP awards were prorated in accordance with the LTIP rules. He did not receive a 2023 LTIP award.
2 Awards are structured as conditional awards over ordinary shares.
3 The share price on grant is based on the share price for the day before the award.
4 Awards are subject to a three-year performance period and a two-year post-vesting holding period.
5 David Sleath was awarded shares to the value of 300 per cent of salary and Soumen Das was awarded shares to the value of 250 per cent of salary in respect of the 2023 LTIP award. This award is subject to three equally-
weighted performance conditions, TSR, TPR and TAR.
Chart 16: Sharesave Options outstanding
Date of Grant
No. of shares
under option
01.01.23
Options granted
during the year
Option price
(pence)
Options
exercised
during the year
Share price on
date of exercise
(pence)
No. of shares
under option
31.12.23
2
Period in which options
can be exercised
David Sleath 2020 Sharesave 22.04.20 2,919 – 616.48 2,919 806.2 – 01.06.23 – 30.11.23
2023 Sharesave 21.04.23 – 3,099 580.80 – – 3,099 01.06.26 – 30.11.26
Total 2,919 3,099
Soumen Das 2020 Sharesave 22.04.20 2,919 – 616.48 2,919 806.2 – 01.06.23 – 30.11.23
2023 Sharesave 21.04.23 – 3,099 580.80 – – 3,099 –
Total 2,919 3,099
Andy Gulliford
1
2020 Sharesave 22.04.20 1,459 – 616.48 1,459 806.2 – 01.06.23 – 30.11.23
2021 Sharesave 23.04.21 1,211 – 742.72 – – – 30.06.23 – 31.12.23
Total 2,670 –
1 Andy Gulliford retired from the Board and the Company on 30 June 2023 and from his last day of employment had a six-month period to exercise his Sharesave options in accordance with the Sharesave rules. His 2021
Sharesave Options lapsed on 31 December 2023.
2 There are no shares under option which have matured but have not been exercised.
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
122
Executive Directors’ share scheme holdings (Audited) continued
Chart 17: SIP Shares held in trust
No. of shares
in trust
01.01.23
Shares awarded
during the year
No. of shares
in trust
31.12.23
David Sleath 9,375 245 9,620
Soumen Das 1,956 245 2,201
Andy Gulliford 10,192 245 -
1 Andy Gulliford retired from the Board and the Company on 30 June 2023 and transferred his shares out of the
trust in accordance with the SIP rules.
Further information about the share schemes can be found in Note 18 to the Financial Statements
on page 172.
Dilution headroom
As the LTIP, SIP and Sharesave schemes are approved by shareholders, they may be satisied by the issue
of new shares in the Company, up to the dilution limits set by the Investment Association (IA). The chart
below shows the total number of shares under award or option for both Executive and all-employee
schemes in comparison to the IA limits over the last 10 years.
Chart 18: Dilution headroom
Actual
Policy
1.22%Executive
schemes
1.36%
All schemes
0% 1% 2% 8%3% 9% 10%4% 5% 6% 7%
10 years
10 years
5.0%
10.0%
Chair and Non-Executive Directors
Non-Executive Directors’ single total igure of remuneration (Audited)
In 2023, the Chair’s annual fee was £367,500 (2022: £350,000), Non-Executive Directors’ annual fee was
£69,700 (2022: £66,400), with an additional £17,400 per annum (2022: £16,600) for chairing the Audit or
Remuneration Committees and an additional £20,000 per annum (2022: £16,600) for the role of Senior
Independent Director.
The Chair and Non-Executive Directors do not participate in any of the Company’s share-based incentive
schemes nor do they receive any other beneits or rights under the pension scheme.
Chart 19: Non-Executive Directors’ single total igure of remuneration for 2023 (Audited)
Total fees
2023
(£000)
2022
(£000)
Andy Harrison
1
Chair (from 30 June 2022) 368 191
Mary Barnard 70 66
Sue Clayton 70 66
Carol Fairweather Chair of the Audit Committee
Senior Independent Director (from 1 July 2023)
98 83
Simon Fraser Chair of the Remuneration Committee 90 83
Martin Moore
2
Senior Independent Director (until 1 July 2023) 78 83
Linda Yueh 70 66
1 Andy Harrison was appointed as a Non-Executive Director on 1 April 2022 and was paid £66,400 pro rata.
Following his appointment as Chair on 30 June 2022 he was paid £350,000 pro rata.
2 Martin Moore retired from the Board on 31 December 2023.
Non-Executive Directors’ shareholding guidelines (Audited)
The Committee periodically considers the Non-Executive Directors’ shareholdings to ensure they remain
appropriate and aligned to the interests of shareholders, and where a Non-Executive Director has met the
100 per cent of their annual fees guidance previously, they would be considered to have adhered to the
guidelines and are not expected to adjust their holdings with subsequent share price movements.
Chart 20: Non-Executive Directors’ beneicial interests in shares and shareholding requirements
Beneicial interests
Shareholding
requirements
01.01.2023
Ordinary 10p shares
31.12.2023
Ordinary 10p shares
Shareholding
requirements
met
Andy Harrison 116,315 564,755 Yes
Mary Barnard 11,288 11,288 Yes
Sue Clayton 7,000 7,000 Yes
Carol Fairweather 12,000 12,000 Yes
Simon Fraser 31,440 31,440 Yes
Martin Moore
1
17,442 17,442 Yes
Linda Yueh 4,716 4,716 Yes
1 Martin Moore retired from the Board on 31 December 2023.
There was no change in Directors’ interests between 31 December 2023 and 15 February 2024.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
123
Remuneration Committee Report continued
External appointments
Executive Directors are permitted to hold one external directorship, approved by the Board.
Fees payable may be retained.
David Sleath is a Senior Independent Director of RS Group plc (previously Electrocomponents
plc) and he received a fee of £81,116 for this role in 2023 (2022: £78,922).
Soumen Das is a Non-Executive Director of NEXT plc and he received a fee of £73,208 for
his role in 2023 (2022: £69,112).
Exit payments and arrangements (Audited)
Further to the Company’s announcement on 17 May 2023, Andy Gulliford, Chief Operating
Oicer and Executive Director, stepped down from the Board with eect from 30 June 2023.
The remuneration details relating to Andy Gulliford required to be made available under section
430(2B) of the Companies Act 2006 are as follows:
– Andy Gulliford’s remuneration terms were in accordance with the key provisions for contract
termination as set out in SEGRO’s Remuneration Policy approved by shareholders in April
2022 and available to view at www.SEGRO.com. As he retired from the Company, he was
treated as a good leaver under the Company’s incentive scheme rules.
– Andy Gulliford was paid full salary and beneits (which include cash allowances in lieu of a
company car, company pension and private medical healthcare) to 30 June 2023. He also
received a payment of £23,635 in respect of any accrued but unused annual leave
entitlement as at 30 June 2023.
– Andy Gulliford was eligible to receive a cash bonus in respect of the Company’s inancial year
ending 31 December 2023, prorated to 30 June 2023, which is payable in April 2024 to the
extent that the performance targets are met. 50 per cent of any cash payment earned in
2023 will be deferred in shares under the Company’s Deferred Share Bonus Plan (DSBP).
– Andy Gulliford was entitled to time prorated shares from the Company’s Long Term Incentive
Plan (LTIP), subject to the Company meeting the performance targets for these awards and
subject to and in accordance with the rules of the LTIP. In accordance with the rules of the
LTIP, he will be required to retain and will not be permitted to transfer or otherwise dispose of
any shares that have vested under the LTIP for a period of two years after the vesting date of
each LTIP award. Any dividend equivalents accrued in respect of LTIP awards will be prorated
in line with the level of vesting of the relevant LTIP award and will be paid in cash at the end of
the holding period. The cash payment will also include the value of any dividend equivalents
accrued during the holding period.
Award Award Date
Number
Awarded
Maximum
number of shares
that could vest Vesting Date
End of
Holding Period
2019 LTIP Award 29/05/2019 29/05/2022 29/05/2024
2020 LTIP Award 26/03/2020 26/03/2023 26/03/2025
2021 LTIP Award 29/03/2021 29/03/2024 29/03/2026
2022 LTIP Award 05/05/2022 05/05/2025 05/05/2027
– Andy Gulliford will be entitled to receive shares which have been held under the DSBP.
As set out below, these shares will be released on the vesting date, together with a cash sum
equivalent to the value of dividends that would have been paid on the shares during the three
years under which they were under award.
Award Award date
Number
Awarded Vesting Date
2020 DSBP Award 28/06/2021 28/04/2024
2021 DSBP Award 27/06/2022 28/04/2025
2022 DSBP Award 28/04/2023 28/04/2026
– Andy Gulliford was eligible to retain shares awarded under the Company’s Share Incentive
Plan and to exercise options in accordance with the rules of the Company’s Sharesave option
scheme for a period of six months after termination.
– Other than the amounts disclosed above, Andy Gulliford was not eligible for any
remuneration payments or payments for loss of oice.
– Andy Gulliford is required to hold Company shares equivalent to 250 per cent of base salary
for a period of two years following termination of employment, in accordance with the
Company’s Shareholding Guidelines. Please see page 120 for further information.
Former Directors (Audited)
Other than disclosed above, no payments were made to former Directors during the year.
Additional information
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
124
Remuneration Committee advisers
The Committee has access to suicient resources to discharge its duties, which include
access to independent remuneration advisers, the Company Secretary, the Group HR Director
and other advisers as required.
The Committee is responsible for appointing its external advisers and in 2018, following a
competitive tender process, Korn Ferry was appointed. During 2023, Korn Ferry provided
advice on the operation of the Policy, Executive Directors’ remuneration, and market and best
practice guidance, including the provisions of the Code. Its total fees for advice to the
Committee in 2023 were £61,563 (2022: £42,083), calculated on a time-cost basis.
The Committee determined that Korn Ferry provided independent remuneration advice and
does not have any connections with the Company or its Directors. Korn Ferry provides services
to the Company’s HR function and the Committee is satisied that this does not impair its
independence. Korn Ferry is a signatory to the Code of Conduct for Remuneration Consultants
in the UK.
Shareholder voting
Chart 21: Shareholder voting at the 2022 AGM and 2023 AGM
Votes for
(including
discretionary)
For
(%)
Votes
against
Against
(%)
Total
votes
cast
Votes
withheld
1
Directors’ Remuneration Report for the inancial year ended 31 December 2022 (at the 2023 AGM) 934,487,172 96.30 35,943,041 3.70 970,430,213 126,398
Directors’ Remuneration Policy contained in the Directors’ Remuneration Report for the inancial year ended 31 December
2021 (at the 2022 AGM) 971,942,873 98.90 10,798,899 1.10 982,741,772 1,423,138
1 A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against a resolution.
This report was approved by the Board on 15 February 2024 and signed on its behalf by
Simon Fraser
Chair of the Remuneration Committee
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
125
Remuneration Committee Report continued
Directors’ Remuneration Policy – summary
The Remuneration Policy (the Policy) was approved by shareholders at the Annual General Meeting held on 21 April 2022 and became eective from this date. It applies to incentive awards
with performance periods beginning on 1 January 2022.
The following is a summary of the Policy. The full Policy, as approved by shareholders, was included in the 2021 Annual Report and Accounts and is available at www.SEGRO.com.
In determining the Policy, the Committee considered the following as set out in Provision 40 of the Code:
Clarity and simplicity The Committee is of the opinion that the Policy and the remuneration framework for the wider workforce is transparent, simple and easy
to understand. We believe that the framework is clearly communicated to and understood by our key stakeholders and our employees.
Remuneration for our Executive Directors consists of the following elements as set out in Chart 1:
– salary;
– pension beneits;
– Bonus;
– DSBP;
– LTIP;
– Sharesave;
– SIP; and
– other beneits.
The Committee engaged extensively with key stakeholders, such as shareholders and representatives from the workforce, who conirmed
this view.
Risk The Company’s remuneration arrangements discourage both the Executive Directors and the wider workforce from excessive risk taking in the
pursuit of achieving objectives. The bonus, DSBP and LTIP include malus and/or clawback provisions that apply when the Committee considers
that performance is achieved as a result of excessive risk taking, as well as in other circumstances as set out on page 115 of the Directors’
Remuneration Report.
Executive Directors are required to hold a percentage of their base salary in shares in the Company (as described further on page 120).
Additionally, they are subject to post-cessation requirement to continue holdings shares in the event that they leave the Company.
Part of their annual bonus is subject to deferral under the DSBP and a compulsory post-vesting holding period applies for LTIP shares.
The Committee has the discretion to override formulaic outturns to ensure incentive payouts relect underlying business performance, and is
aligned to shareholder experience.
Predictability Potential values of rewards to the Executive Directors under the Policy are clearly stated in Chart 5 on page 161 of the 2021 Annual Report and
Accounts, which sets out the minimum, maximum and on target scenarios. This chart also demonstrates the impact of share price appreciation
on the 2022 LTIP award. Potential outcomes are regularly reviewed by the Committee.
Proportionality In order to ensure outcomes do not reward poor performance, a signiicant portion of our remuneration framework is performance based and
requires challenging performance targets and metrics to be achieved.
Alignment to culture There is strong linkage between the structure of the Company’s incentive schemes, its Purpose and Values, and strategy. The Company’s
Responsible SEGRO ambitions have identiied net-zero carbon by 2030 as a key strategic objective, and the inclusion of ESG measures in the
new annual bonus structure reinforces its importance. The chart on page 117 illustrates how variable remuneration is aligned with KPIs that
measure performance against the Company’s strategy.
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
126
Chart 1: Remuneration policy table: Executive Directors
Element Strategic purpose Operation Maximum potential value Performance metrics
Salary To attract and motivate high-calibre
leaders in a competitive market and to
recognise their skills, experience and
contribution to Group performance.
The Committee reviews Executive
Directors’ base salaries each year in
the context of total remuneration,
taking into account the Directors’
responsibilities, experience and
performance, pay across the Group
and market competitiveness.
The maximum annual salary increase will not
normally exceed the average increase which applies
across the wider workforce. However, larger
increases may be awarded in certain circumstances
including, but not limited to: an increase in scope or
responsibilities of the role; salary progression for a
newly appointed Director; and where the Director’s
salary has fallen signiicantly below the market
positioning.
Not applicable.
Pension beneits To provide a market competitive
remuneration package.
Retirement beneits are available to all
UK employees and employees in
certain Continental European
jurisdictions dependent on local
market practice and geographical
dierences.
Currently, the Executive Directors receive
20 per cent of salary in lieu of pension, this will
reduce to the same level as the UK workforce by
31 December 2022.
Future Executive Directors will receive the level
received by the majority of the UK workforce
(currently a contribution to their pension plan of
12 per cent of salary). The cash allowance for
Directors is oered in lieu of membership of the
deined contribution Group Personal Pension Plan.
None.
Bonus To focus on the delivery of annual
goals, to strive for superior
performance and to achieve speciic
targets which support strategy, in
particular for income generation, ESG
ambitions and recurring proit.
Bonuses are awarded annually and
paid for performance over the
inancial year.
The bonus is reviewed each inancial
year to ensure performance measures
and targets are appropriate and
support the business strategy.
Payment is based on the achievement
of performance targets.
The Committee retains discretion
to reduce the amount of the bonus
award in the light of underlying
performance during the year.
The rules of the bonus contain
clawback provisions.
The maximum bonus opportunity for Executive
Directors is 150 per cent of salary.
The bonus scheme is based on three elements
which the Committee may review from time-to-
time, to ensure that they continue to relect the
Company’s strategic priorities: Adjusted PBT
against budget, which supports the objective of
delivering a sustainable, progressive dividend; rent
roll growth which focuses on driving the future
rental income of the business; and ESG metrics
comprising target ranges related to (i) reducing
our operating carbon emissions, (ii) reducing
our embodied carbon in developments and (iii)
customer, community and employee objectives.
The performance measures will initially be
weighted as follows: Adjusted PBT 37.5 per cent;
RRG 37.5 per cent; and ESG 25 per cent.
Threshold performance will result in vesting of no
more than 25 per cent of the relevant portion of
the bonus (where the nature of the performance
metric allows such an approach).
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
127
Remuneration Committee Report continued
Element Strategic purpose Operation Maximum potential value Performance metrics
Deferred Share Bonus
Plan (‘DSBP’)
To encourage retention of senior
managers and provide a long-term link
between the bonus and share price
growth so as to encourage long-term
decision making.
50 per cent of any bonus awarded in
the year is deferred into shares in the
DSBP for three years before vesting.
The award does not carry any
entitlement to dividends, however
the Committee may, at the time of the
release of the shares, deliver shares or
a cash sum equivalent to the value
of the dividends that would have
been paid over the three-year
holding period.
The rules of the DSBP contain
malus provisions.
For Executive Directors, 50 per cent of the
bonus earned in respect of the previous year’s
performance.
Vesting of shares is dependent on continued
employment or good leaver status.
Long Term Incentive
Plan (‘LTIP’)
To reward the execution of strategy
and drive long-term returns for
shareholders. The performance
measures are selected to align with
business strategy. The awards are
designed to align the most senior
managers’ goals with the creation
of sustainable growth in shareholder
value. The awards will also increase
retention of these senior managers.
For LTIP awards, dividends will accrue
on the LTIP shares which are released
on vesting and will be paid in shares or
cash. The Committee has discretion to
adjust awards downwards at vesting if
it is not satisied that the outcome is a
fair relection of underlying
performance, or in the event of
excessive risk taking or misstatement.
The rules of the LTIP contain malus
and clawback provisions.
Maximum 300 per cent of salary in performance
shares for the Chief Executive only, other Executive
Directors will continue to receive 250 per cent of
salary and the Committee would not increase this
without prior consultation with shareholders.
LTIP awards are subject to stretching performance
conditions, which are measured over a three-year
performance period. A two-year compulsory
holding period applies to these LTIP shares after
vesting and subject to payment of tax and
statutory deductions.
Awards to be granted in 2022 will be subject to
equally weighted Total Shareholder Return, Total
Property Return and Total Accounting Return
performance conditions.
Subsequent grants may be subject to dierent
performance conditions following consultation
with shareholders.
Threshold performance will result in vesting of no
more than 20 per cent of the relevant portion of
the LTIP (where the nature of the performance
metric allows such an approach).
Sharesave To provide a market competitive
remuneration package and to
encourage employee share ownership
across the Group.
Sharesave is a HMRC approved
scheme open to all UK employees.
Savings can be made over a
three-year period to purchase shares
in the Company at a price which is set
at the beginning of the savings period.
This price is usually set at a 20 per
cent discount to the market price.
Employees may save up to the HMRC limit across all
Sharesave grants.
None.
Chart 1: Remuneration policy table: Executive Directors continued
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
128
Chart 1: Remuneration policy table: Executive Directors continued
Element Strategic purpose Operation Maximum potential value Performance metrics
Share Incentive Plan
(‘SIP’) and Global Share
Incentive Plan (‘GSIP’)
To provide a market competitive
remuneration package and to
encourage employee share ownership
across the Group.
SIP is a HMRC approved scheme open
to all UK employees, subject to
service. Eligible employees are
awarded shares annually up to the
HMRC limits. GSIP is designed on a
similar basis to SIP, but is not HMRC
approved and is operated for non-UK
employees.
The maximum award is subject to the HMRC limit. Award may be based on achievement of a target
and is subject to a three-year holding period.
Other beneits To provide a market competitive
remuneration package.
Other beneits currently include: car
allowance; life assurance; disability
insurance; private medical insurance;
and health screening. The Committee
retains the discretion to oer
additional beneits as appropriate, for
example, assistance with relocation.
– None.
Additional notes
Remuneration Policy: the policy for the Executive Directors is designed with regard to the pay and beneits for employees across the Group. All employees are eligible for an annual bonus on the
same performance measures which are consistent with those of the Executive Directors, save that those below Board level have a fourth target based on their personal performance. The
maximum bonus opportunity is ixed according to seniority banding across the Company. The LTIP performance conditions are the same for all participants and the size of awards are
determined by seniority.
The Committee retains certain discretions in respect of the operation and administration of the incentive plans under their rules, in addition to the discretions described elsewhere in the Policy.
Subject to consultation with major shareholders, the Committee retains the ability to adjust and/or to set dierent LTIP and bonus performance measures if events occur (such as a change in
strategy, a material acquisition and/or divestment of a Group business, or change in prevailing market conditions) which cause the Committee to determine that the measures are no longer
appropriate and that amendment is required so that they achieve their original purpose.
Payments from existing awards: Executive Directors are eligible to receive payment from any award made prior to the approval and implementation of the 2022 Policy. Any outstanding share
awards made in accordance with a previous Remuneration Policy will remain in eect and will vest in accordance with the terms under which they were granted.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
129
Remuneration Committee Report continued
Element Strategic purpose Operation Maximum potential value Performance metrics
Fees To attract high-calibre Non-Executive
Directors and provide market
appropriate fees.
Fees are reviewed annually taking into
account relevant market data.
Additional fees are payable to relect
the time commitments and additional
responsibilities.
The fee paid to the Chair is set by the
Committee while the fees paid to the
Non-Executive Directors are set by the
Board.
No Director is involved in setting their
own remuneration.
Non-Executive Directors do not
participate in any performance related
remuneration and they do not receive
any beneits other than
reimbursement of business related
expenses and any tax that might be
charged thereon.
Any increases in the fees of the Chair or the
Non-Executive Directors will be based upon changes
in roles and responsibilities, and market data.
–
Policy on service contracts
Executive Directors
The Company may terminate the Executive Directors’ service contract on up to 12 months’ notice, with no liquidating damages provisions.
Non-Executive Directors
The Chair and the Non-Executive Directors have letters of appointment which set out their duties and anticipated time commitment to the Company. They are required to disclose to the Board
any changes to their other signiicant commitments. The Non-Executive Directors are appointed for an initial term of three years. The appointments may be extended for further three-year
periods on the recommendation of the Nomination Committee and subject to the Board’s agreement. The Non-Executive Directors’ letters of appointment contain a three-month notice period
and the Chair’s contains a six-month notice period. Further details are set out in Chart 3 below.
Chart 3: Dates of appointment and contractual notice period
Name Date of appointment Notice period Name Date of appointment Notice period
Andy Harrison 1 April 2022 6 months Sue Clayton 1 June 2018 3 months
David Sleath
1
1 January 2006 12 months by Company, 6 months by Director Carol Fairweather 1 January 2018 3 months
Soumen Das 16 January 2017 12 months by Company, 6 months by Director Simon Fraser 1 May 2021 3 months
Andy Gulliford
2
1 May 2013 12 months by Company, 6 months by Director Martin Moore
3
1 July 2014 3 months
Mary Barnard 1 March 2019 3 months Linda Yueh 1 May 2021 3 months
1 Appointed as Chief Executive on 28 April 2011.
2 Ceased to be an Executive Director of the Company with eect from 30 June 2023.
3 Ceased to be a Non-Executive Director of the Company with eect from 31 December 2023.
Chart 2: Remuneration policy table: Chair and Non-Executive Directors
Remuneration
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
130
Management Report
The Strategic Report, the Corporate Governance Report and the Directors' Report together
form the Management Report for the purposes of the Disclosure Guidance and Transparency
Rules (DTR) 4.1.5. and 4.1.8 - 4.1.11R.
Directors’ Report disclosures
Certain Directors’ Report disclosures, which have been incorporated into the Directors’ Report
by reference, can be found on the following pages:
Disclosure Section Reference
Culture, Purpose and Values Strategic Report Pages 16 and 31
Charitable donations Strategic Report Page 29
Employee engagement Strategic Report Page 31
Diversity and inclusion Strategic Report Page 31
Employment, training and advancement of
disabled persons
Strategic Report Page 31
Approach to investing in and rewarding the workforce Strategic Report Page 31
Review of the Group’s business during the year and any
future developments
Strategic Report Pages 36 - 45
Principal risks Strategic Report Pages 58 - 64
Greenhouse gas emissions Strategic Report Page 67
Corporate Governance Statement Governance Report Page 78
Details of the Directors who served during the year Governance Report Pages 81 - 83
Stakeholder engagement Governance Report Pages 90 - 92
Board diversity and inclusion Governance Report Page 98
Statement of Directors' Responsibilities Governance Report Page 133
Financial instruments and certain inancial risks Financial Statements Pages 165 - 171
Share capital
The Company is listed on the London Stock Exchange and, as of 24 November 2020,
has a secondary listing on Euronext, Paris.
The issued share capital for the year is set out on page 172.
There is one class of shares in issue and there are no restrictions on the voting rights attached
to these shares or the transfer of securities in the Company, and all shares are fully paid.
The Company made no purchases of its own shares during the year. The Company
was granted authority to make market purchases of its own shares at the 2023 AGM.
This authority will expire at the conclusion of the 2024 AGM and a resolution will be
proposed to seek further authority.
Recent share history of the Company
For information on the recent share history of the Company, see
www.SEGRO.com/investors/shareholder-information/recent-share-history.
Dividends
Subject to approval by shareholders at the 2024 AGM, a inal dividend of 19.1 pence per
share will be paid (2022: 18.2 pence) bringing the total dividend for 2023 to 27.8 pence
(2022: 26.3 pence). The inal dividend will be paid as a Property Income Distribution. The Board
proposes to oer a scrip dividend option for the 2023 inal dividend, subject to shareholder
approval at the 2024 AGM (see page 195).
The ex-dividend date for the inal dividend will be 14 March 2024, the record date will be
15 March 2024 and the payment date will be 3 May 2024.
Change of control
– Contracts and joint venture and associates agreements
There are a number of contracts and joint venture and associates agreements that could
allow the counterparties to terminate or alter those arrangements in the event of a change
of control of the Company. These arrangements are commercially conidential and their
disclosure could be seriously prejudicial to the Company.
– Borrowings and other inancial instruments
The Group has a number of borrowing facilities provided by various lenders. These facilities
generally include provisions that may require any outstanding borrowings to be repaid or
the amendment or termination of the facilities upon the occurrence of a change of control
of the Company.
– Employee share plans
The Company’s share plans contain provisions as a result of which options and awards may
vest or become exercisable on change of control of the Company, in accordance with the
rules of the plans.
Modern Slavery and Human Rights
SEGRO operates a Human Rights Policy which brings together a number of our existing
policies that relate to human rights such as our Modern Slavery and Labour Standards Supplier
Code, and Anti-Slavery and Human Traicking Policy. Copies of our policies that relate to
human rights can be found on our website www.SEGRO.com.
Modern slavery awareness posters, which contain information on key signs of modern slavery,
how and where to access help, and details of our whistleblowing reporting service are
displayed on SEGRO development sites and in all our oices. During 2023, we also delivered
targeted modern slavery awareness training to certain employees and teams who should
receive further training due to the nature of their role. In particular, teams which deal with
suppliers, visit sites and meet contractors more regularly are best placed to more eectively
uncover potential instances of modern slavery and human traicking. In addition, all employees
have completed mandatory online training on modern slavery.
The Company publishes an annual Modern Slavery and Human Traicking Statement in
compliance with the UK Modern Slavery Act 2015. The Board approved the latest statement
in June 2023 and it can be found on our website at www.SEGRO.com/modern-slavery.
Any employee who breaches our Anti-Slavery and Human Traicking Policy or Human Rights
Policy will face disciplinary action, which could result in dismissal for misconduct or gross
misconduct. We reserve the right to terminate our relationship with other individuals and
organisations working on our behalf if they do not comply with our Modern Slavery and
Labour Standards Supplier Code.
Directors' Report
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
131
Directors' Report continued
Employees and Directors
There are no agreements between the Company and its Directors or employees providing for
compensation for loss of oice or employment that occurs speciically because of a takeover
bid, with the exception of provisions of the Company’s share schemes as detailed above.
– Directors’ authorities in relation to shares
The Directors’ authorities in relation to issuing, allotting or buying back shares are governed
by the Company’s Articles of Association and the resolutions passed by shareholders at
a general meeting. These documents do not form part of this Report.
– Process for appointment/removal of Directors
The Company is governed by its Articles of Association, the UK Corporate Governance
Code, the Companies Act 2006 and related legislation with regard to the appointment
and removal of Directors. Directors are appointed by the Board and elected by shareholders.
Directors may be removed by the Board or shareholders as applicable.
Substantial interests in the share capital of the Company
Information provided to the Company under the Disclosure Guidance and Transparency
Rules (DTR 5) is published on a Regulatory Information Service and on the Company’s website.
As at 31 December 2023 and 15 February 2024, the Company had been notiied of the
following holdings:
As at 31 December 2023 As at 15 February 2024
Shareholder Number of shares
Percentage of
issued share
capital*
Number of
shares
Percentage of
issued share
capital*
BlackRock, Inc.** 136,019,109 11.07 135,334,889 11.01
Norges Bank 111,102,467 9.05 111,102,467 9.05
APG Asset Management N.V. 73,411,178 5.99 73,411,178 5.99
* Percentage based on ordinary shares in issue, as at the date the notiication was received by the Company.
** On 18 January 2024, Blackrock, Inc. notiied the Company of an increase in voting rights to 136,643,705 (representing 11.12 per
cent of the Company's issued share capital). On 19 January 2024, BlackRock, Inc notiied the Company of a decrease in voting
rights to 136,550,240 (representing 11.11 per cent of the Company's issued share capital). On 22 January 2024, BlackRock, Inc
notiied the Company of an increase in voting rights to 136,645,357 (representing 11.11 per cent of the Company's issued share
capital). On 25 January 2024, Blackrock, Inc notiied the Company of a decrease in voting rights to 135,456,717 (representing 11.02
per cent of the Company's issued share capital). On 5 February 2024, Blackrock, Inc. notiied the Company of an increase in
voting rights to 135,510,054 (representing 11.02 per cent of the Company's issued share capital). On 7 February 2024, BlackRock,
Inc notiied the Company of a decrease in voting rights to 135,272,589 (representing 11.00 per cent of the Company's issued share
capital). On 8 February 2024, BlackRock, Inc notiied the Company of an increase in voting rights to 135,307,162 (representing 11.01
per cent of the Company's issued share capital). On 9 February 2024, BlackRock, Inc notiied the Company of an increase in
voting rights to 135,334,889 (representing 11.01 per cent of the Company's issued share capital).
Articles of association
Shareholders may amend the Company’s Articles of Association by special resolution.
Political donations
No political donations were made by the Company or its subsidiaries during the year.
Directors’ indemnities and insurance
The Company maintains directors’ and oicers’ liability insurance which is reviewed annually
and is permitted under the Company’s Articles of Association and the Companies Act 2006.
The Company indemniies each Director, under a Deed of Indemnity, against any liability
incurred in relation to acts or omissions arising in the ordinary course of their duties. The
indemnity applies only to the extent permitted by law.
No Company Directors were indemniied during the year.
Overseas branches
The Company has a branch in Paris, France.
Auditor of the Company
A resolution to reappoint PricewaterhouseCoopers LLP as auditor of the Company is to be
proposed at the 2024 AGM.
Disclosure of information to the Auditor
Each of the persons who is a Director at the date of approval of this Report conirms that:
– so far as the Director is aware, there is no relevant audit information of which the Company’s
auditor is unaware; and
– each Director has taken all the steps that they ought to have taken as a Director in order to
make themself aware of any relevant audit information and to establish that the Company’s
auditor is aware of that information.
This conirmation is given and should be interpreted in accordance with the provisions of
section 418 of the Companies Act 2006.
The Directors’ Report has been approved by the Board and signed on its behalf by
Stephanie Murton
Company Secretary
15 February 2024
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
132
The Directors are responsible for preparing the Annual Report and the Financial Statements
in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each inancial year.
Under that law the Directors have prepared the Group and the Company Financial Statements
in accordance with UK-adopted international accounting standards.
The Directors have also prepared the Group and the Company Financial Statements in
accordance with international inancial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
Under company law, Directors must not approve the Financial Statements unless they are
satisied that they give a true and fair view of the state of aairs of the Group and Company
and of the proit or loss of the Group for that period. In preparing the Financial Statements
the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– state whether applicable UK-adopted international accounting standards and international
inancial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union have been followed, subject to any material departures disclosed and
explained in the Financial Statements;
– make judgements and accounting estimates that are reasonable and prudent; and
– prepare the Financial Statements on the going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group and Company
and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for keeping adequate accounting records that are suicient
to show and explain the Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the inancial position of the Group and Company and enable them to
ensure that the Financial Statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of Financial
Statements may dier from legislation in other jurisdictions.
Directors’ conirmations
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to assess the
Group’s and Company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Governance section of the
Annual Report conirm that, to the best of their knowledge:
– the Group and Company Financial Statements , which have been prepared in accordance
with UK-adopted international accounting standards and international inancial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European
Union, give a true and fair view of the assets, liabilities, inancial position and loss of the
Group; and
– the Strategic Report includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a description of the
principal risks and uncertainties that it faces.
By order of the Board
David Sleath Soumen Das
Chief Executive Chief Financial Oicer
15 February 2024 15 February 2024
Statement of Directors’ responsibilities in respect of the Financial Statements
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
133
Report on the audit of the inancial statements
Opinion
In our opinion, SEGRO plc’s group inancial statements and company inancial statements
(the “inancial statements”):
– give a true and fair view of the state of the group’s and of the company’s aairs as at
31 December 2023 and of the group’s loss and the group’s and company’s cash lows
for the year then ended;
– have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the Companies Act 2006; and
– have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the inancial statements, included within the Annual Report & Accounts 2023
(the “Annual Report”), which comprise: the group and company Balance Sheets as at 31
December 2023; the group Income Statement and the group Statement of Comprehensive
Income, the group and company Cash Flow Statements, and the group and company
Statements of Changes in Equity for the year ended 31 December 2023; and the notes to
the inancial statements, which include a description of the signiicant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Separate opinion in relation to international inancial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union
As explained in note 1 to the inancial statements, the group and company, in addition to
applying UK-adopted international accounting standards, have also applied international
inancial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union.
In our opinion, the group and company inancial statements have been properly prepared in
accordance with international inancial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs
(UK)”), International Standards on Auditing issued by the International Auditing and Assurance
Standards Board (“ISAs”) and applicable law. Our responsibilities under ISAs (UK) and ISAs are
further described in the Auditors’ responsibilities for the audit of the inancial statements
section of our report. We believe that the audit evidence we have obtained is suicient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are
relevant to our audit of the inancial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and the International Code of Ethics
for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code), and we have fulilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by either
the FRC’s Ethical Standard or Article 5(1) of Regulation (EU) No 537/2014 were not provided.
Other than those disclosed in Note 6 to the Financial Statements, we have provided no
non-audit services to the company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
– We tailored the scope of our audit to ensure that we performed enough work to be able to
give an opinion on the inancial statements as a whole.
– Audit procedures on Rental Income and Valuation of Investment Properties are performed
centrally by the group audit team in the UK.
– Full scope audit of SEGRO European Logistics Partnership (SELP) Joint Venture by
component auditors and full scope audit of SEGRO plc by the group audit team in the UK.
– In addition, component auditors performed the audit of speciic balances and transactions
in certain territories.
– Over 95% coverage of total assets of the group.
Key audit matters
– Valuation of investment properties (group)
– Valuation of investments in and loans to subsidiaries (parent)
Materiality
– Overall group materiality: £173 million (2022: £174 million) based on 1% of total assets.
– Speciic group materiality: £20 million (2022: £19 million), based on 5% of the group’s
adjusted proit before tax.
– Overall company materiality: £118 million (2022: £108 million) based on 1% of total assets.
– Performance materiality: £130 million (2022: £ 130 million) (group) and £89 million
(2022: £81 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the inancial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most
signiicance in the audit of the inancial statements of the current period and include the most
signiicant assessed risks of material misstatement (whether or not due to fraud) identiied by
the auditors, including those which had the greatest eect on: the overall audit strategy; the
allocation of resources in the audit; and directing the eorts of the engagement team.
These matters, and any comments we make on the results of our procedures thereon, were
addressed in the context of our audit of the inancial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identiied by our audit.
Valuation of investments in and loans to subsidiaries is a new key audit matter this year.
Estimation of variable performance fee income and large and/or complex transactions, which
were key audit matters last year, are no longer included because of the expiry of the 10 year
performance period in October 2023 and amounts due to SEGRO from SELP being settled in
the year. There have been no transactions identiied as large and/or complex during the year.
Otherwise, the key audit matters below are consistent with last year.
Independent auditors’ report to the members of SEGRO plc
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Key audit matter How our audit addressed the key audit matter
Valuation of investment properties (group)
Refer to the Audit Committee Report and the Financial
Statements (including notes to the Financial Statements;
Note 1, Signiicant Accounting Policies; Note 13, Properties;
and Note 25, Property Valuation Techniques, Sustainability
and Climate Change Considerations and Related
Quantitative Information).
We focussed on the valuation of investment properties
because investment properties represent the principal
element of the net asset value as disclosed in the Balance
Sheet in the inancial statements and is an area of signiicant
estimation uncertainty. The portfolio is held by the group,
and through joint ventures and includes warehouses and
light industrial buildings, including data centres. These are
concentrated in the UK, France, Germany and Italy. The
remainder of the portfolio is located across other European
countries including Poland, Spain, the Netherlands and the
Czech Republic.
The portfolio includes completed investment properties and
development properties. The valuation of the group’s
portfolio is inherently subjective due to, among other
factors, the individual nature of each property, its location
and the expected future rentals for that particular property.
The wider challenges currently facing the real estate sector
as a result of inlation and resulting interest rate policies
further contributed to the subjectivity at 31 December 2023.
For development sites, factors include projected costs to
complete, time until practical completion and the ability to
let if no prelet agreement is in place. Valuations are carried
out by third party valuers CBRE (the 'Valuers'). The Valuers
were engaged by the Directors, and performed their work in
accordance with the Royal Institution of Chartered
Surveyors (‘RICS’) Valuation – Global Standards 2022. The
valuations take into account the property-speciic
information including the current tenancy agreements and
rental income, condition and location of the property, and
future rental prospects, as well as prevailing market yields
and market transactions. The valuation of investment
properties may also impact the carrying value of investment
in the subsidiaries within the Financial Statements of the
company.
Given the inherent subjectivity involved in the valuation of investment properties, the need for deep market knowledge when
determining the most appropriate assumptions, and the technicalities of the valuation methodology, we engaged our internal
valuation experts (qualiied chartered surveyors) to assist us in our audit of this matter.
Assessing group's external Valuers’ expertise and objectivity
We assessed the Valuers’ qualiications and expertise and read their terms of engagement with the group to determine
whether there were any matters that might have aected their objectivity or may have imposed scope limitations upon their
work. We also considered fees and other contractual arrangements that might exist between the group and the Valuers. We
found no evidence to suggest that the objectivity of the Valuers was compromised.
Testing the valuations assumptions and capital movement:
We obtained and read the CBRE valuation reports covering all of the group's investment properties. We held meetings with
management and the Valuers, at which the valuations and the key assumptions therein were discussed. We focused on the
largest properties and any outliers (where the assumptions used and/or year on year capital value movement were out of line
with our range of assumptions developed using externally published market data for the relevant sector). To verify that the
valuation approach was suitable for use in determining the carrying value for investment properties in the Financial
Statements, we:
– Conirmed that the valuation approach was in accordance with RICS standards;
– Obtained valuation details of every property held by the group and developed ranges for each key valuation assumption or
capital value movement, determined by reference to published benchmarks and using our experience and knowledge of
the market. Compared the investment yields used by the Valuers with the expected range of yields and the year on year
capital movement to our expected range;
– Assessed the reasonableness of other assumptions that are not readily comparable with published benchmarks, such as
Estimated Rental Value;
– With the support of our internal valuation experts, we also questioned the external valuers as to the extent to which recent
market transactions and expected rental values used in deriving their valuations took into account the impact of climate
change and related ESG considerations; and
– Veriied where there could be alternative use opportunities, that this had been appropriately taken into account.
In addition to the above, where assumptions were outside the expected range or otherwise appeared unusual, and/or
valuations showed unexpected movements, we undertook further investigations and, when necessary, held further
discussions with the Valuers and obtained evidence to support explanations received. We also undertook further
investigations where properties within our expected ranges had high capital values .The supporting evidence and valuation
commentaries provided by the Valuers, enabled us to consider the property speciic factors that had or may have had an
impact on value, including recent comparable transactions where appropriate.
Information and standing data
We agreed the amounts per the valuation reports to the accounting records and from there we agreed the related balances
through to the Financial Statements. We tested the standing data which the group provided to the Valuers for use in the
performance of the valuation. This involved testing controls on a sample basis over the input of lease data for leases and
testing the accuracy of lease and other property information. For development properties, we also conirmed that the
supporting information for construction contracts and budgets was consistent with the group’s records, for example by
inspecting construction contracts. For development properties, capitalised expenditure was tested on a sample basis to
invoices, and budgeted costs to complete were compared with supporting evidence (for example construction contracts) to
support the inputs included within their valuation at the year end.
Overall outcome
We concluded that the assumptions used in the valuations by the Valuers were supportable in light of the evidence obtained.
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Independent Auditors’ Report continued
Key audit matter How our audit addressed the key audit matter
Valuation of investments in and loans to subsidiaries (parent)
Refer to note 7 (Investments by the Company) to the
inancial statements which discloses the company's
investments in and loans to subsidiaries as at 31 December
2023. This is following the recognition of a provision for
impairment on investments in and loans to subsidiaries
recognised in the year. The company’s accounting policy for
investments and loans is to hold them at cost less any
impairment. Impairment of the loans is calculated in
accordance with International Financial Reporting Standard
9 (Financial Instruments). Investments in subsidiaries are
assessed for impairment in line with International
Accounting Standard 36 (Impairment of Assets). Given the
inherent judgement in assessing both the carrying value of
a subsidiary company and the expected credit loss of
intercompany loan receivables, this was identiied as a key
audit matter.
We assessed the accounting policy for investments and loans to subsidiaries to ensure they were compliant with the
applicable accounting standards. We obtained the directors’ impairment assessment for the recoverability of investments in
and loans to subsidiaries as at 31 December 2023. We veriied that the methodology used by the directors in arriving
at the carrying value of each subsidiary, and the expected credit loss ‘simpliied approach’ provision for intercompany
receivables, was compliant with applicable accounting standards. We identiied the key estimate within the assessment
for impairment of both the investments and loans to subsidiaries to be the underlying valuation of investment property held
by the subsidiaries. For details of our procedures over investment property valuations please refer to the group key audit
matter above.
We have no matters to report in respect of this work.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give
an opinion on the inancial statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls, and the industry in which
they operate.
The group’s reportable segments are the geographical Business Units: Greater London,
Thames Valley, National Logistics, Northern Europe, Southern Europe and Central Europe.
In establishing the overall approach to the group audit, we determined the type of work that
needed to be performed at reporting components by us, as the group engagement team,
or component auditors operating under our instruction.
The group operates a common IT environment, processes and controls for rental income and
payroll across all its reported segments. The group’s valuation and treasury functions are also
based at the corporate centre in the UK. The related balances were therefore largely audited
by the group audit team in the UK. Additionally, audits of speciic balances and speciied
procedures were performed by component audit teams, such that the total testing programme
provided suicient audit evidence over all inancial statement line items.
The SELP Joint Venture was included as being in scope for a full scope audit. As noted above,
the work on rental income and valuation of investment properties for the Joint Venture was
performed by the group audit team. We determined the level of involvement we needed to
have in the component auditor’s work to be able to conclude whether suicient appropriate
audit evidence had been obtained as a basis for our opinion on the group inancial statements
as a whole. We issued formal, written instructions to the component auditors setting out the
work to be performed by each of them. Throughout the audit process, the group audit team
has been in close contact with the audit teams on location in each business unit to oversee
the audit process. Senior team members also attended the clearance meetings for each
component. During the clearance meetings, the results of the work performed by all
component teams were discussed. The group engagement team also evaluated the suiciency
of the audit evidence obtained by component teams. Taking into account the components and
Joint Ventures subject to a full scope audit, the centralised and other testing performed,
coverage over total assets of the the group was 95%.
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The audit of the company Financial Statements was performed entirely by the group audit
team in the UK, leveraging on the work performed on the group audit where appropriate
with additional audit procedures performed on other company speciic balances.
The impact of climate risk on our audit
In planning our audit, we made enquiries with management to understand the extent of the
potential impact of climate change risk on the inancial statements. Our evaluation of this
conclusion included challenging key judgements and estimates in areas where we considered
that there was greatest potential for climate change impact. We particularly considered how
climate change risks would impact the assumptions made in the valuation of investment
properties as explained in our key audit matter above. We also considered the consistency
of the disclosures in relation to climate change made within the Annual Report, the inancial
statements and the knowledge obtained from our audit.
Materiality
The scope of our audit was inluenced by our application of materiality. We set certain
quantitative thresholds for materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual inancial statement line items and disclosures and in evaluating
the eect of misstatements, both individually and in aggregate on the inancial statements
as a whole.
Based on our professional judgement, we determined materiality for the inancial statements
as a whole as follows:
Financial statements - group Financial statements - company
Overall materiality £173 million (2022: £174 million). £118 million (2022: £108 million).
How we determined it 1% of total assets 1% of total assets
Rationale for benchmark applied The primary measurement attribute
of the group is the carrying value of
property investments. On this basis,
we set an overall group materiality
level based on total assets.
The primary measurement attribute
of the company is the carrying
value of investments in subsidiaries.
On this basis, we set an overall
company materiality level based on
total assets.
In addition to overall group materiality, a speciic materiality was also applied to group Income
Statement line items that impact adjusted earnings, which is based on proit before tax,
adjusted to exclude fair value gain/(losses) on investment property and derivatives, joint
venture performance fee income and impairment loss on loan due from associate. We set
a speciic materiality level of £20 million (2022: £19 million), equating to 5% of adjusted proit
before tax.
For each component in the scope of our group audit, we allocated a materiality that is less
than our overall group materiality. The range of materiality allocated across components was
between £100 million and £135 million. Certain components were audited to a local statutory
audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds overall materiality.
Speciically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance materiality was 75% (2022: 75%) of
overall materiality, amounting to £130 million (2022: £ 130 million) for the group inancial
statements and £89 million (2022: £81 million) for the company inancial statements.
In determining the performance materiality, we considered a number of factors - the history
of misstatements, risk assessment and aggregation risk and the eectiveness of controls -
and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identiied
during our audit above £9 million (group audit) (2022: £9 million) and £6 million (company
audit) (2022: £5 million) as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
In addition we agreed with the Audit Committee that we would report to them misstatements
identiied during our group audit above £1 million (2022: £2 million) for misstatements related
to adjusted proit before tax within the inancial statements, as well as misstatements below
that amount that, in our view, warranted reporting for qualitative reasons.
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Independent Auditors’ Report continued
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability
to continue to adopt the going concern basis of accounting included:
– Procedures to identify events or conditions that may cast signiicant doubt on the ability
to continue as a going concern and whether or not a material uncertainty related to going
concern exists;
– Obtaining the Directors’ assessment of going concern and assessing the current impact of
severe, but plausible, downside scenarios and the basis for the downside stress scenarios
that have been applied;
– Evaluation and corroboration of management’s signiicant assumptions used to assess going
concern, including whether or not they are appropriate in the context of changes from prior
periods, and align with our understanding of the entity and other relevant areas of the entity’s
business activities;
– Review of potential inancial or non-inancial debt covenant defaults leading to acceleration
of repayment of borrowing facilities; and
– Assessing the group and company’s liquidity and whether the entity has adequately
disclosed all required going concern events and conditions.
Based on the work we have performed, we have not identiied any material uncertainties
relating to events or conditions that, individually or collectively, may cast signiicant doubt on
the group's and the company’s ability to continue as a going concern for a period of at least
twelve months from when the inancial statements are authorised for issue.
In auditing the inancial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the inancial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is
not a guarantee as to the group's and the company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’
statement in the inancial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern
are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the
inancial statements and our auditors’ report thereon. The directors are responsible for the
other information. Our opinion on the inancial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the inancial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the inancial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the inancial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report based on
these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires
us also to report certain opinions and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given
in the Strategic report and Directors’ Report for the year ended 31 December 2023 is consistent
with the inancial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the group and company and their environment
obtained in the course of the audit, we did not identify any material misstatements in the
Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
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Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern,
longer-term viability and that part of the corporate governance statement relating to the
company’s compliance with the provisions of the UK Corporate Governance Code speciied
for our review. Our additional responsibilities with respect to the corporate governance
statement as other information are described in the Reporting on other information section
of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with the
inancial statements and our knowledge obtained during the audit, and we have nothing
material to add or draw attention to in relation to:
– The directors’ conirmation that they have carried out a robust assessment of the emerging
and principal risks;
– The disclosures in the Annual Report that describe those principal risks, what procedures
are in place to identify emerging risks and an explanation of how these are being managed
or mitigated;
– The directors’ statement in the inancial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identiication of any material uncertainties to the group’s and company’s ability to continue
to do so over a period of at least twelve months from the date of approval of the inancial
statements;
– The directors’ explanation as to their assessment of the group's and company’s prospects,
the period this assessment covers and why the period is appropriate; and
– The directors’ statement as to whether they have a reasonable expectation that the company
will be able to continue in operation and meet its liabilities as they fall due over the period of
its assessment, including any related disclosures drawing attention to any necessary
qualiications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and
company was substantially less in scope than an audit and only consisted of making inquiries
and considering the directors’ process supporting their statement; checking that the
statement is in alignment with the relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the inancial statements and our
knowledge and understanding of the group and company and their environment obtained
in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the corporate governance statement is materially consistent with
the inancial statements and our knowledge obtained during the audit:
– The directors’ statement that they consider the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary for the members
to assess the group’s and company's position, performance, business model and strategy;
– The section of the Annual Report that describes the review of eectiveness of risk
management and internal control systems; and
– The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’
statement relating to the company’s compliance with the Code does not properly disclose a
departure from a relevant provision of the Code speciied under the Listing Rules for review by
the auditors.
Responsibilities for the inancial statements and the audit
Responsibilities of the directors for the inancial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the Financial
Statements, the directors are responsible for the preparation of the inancial statements in
accordance with the applicable framework and for being satisied that they give a true and fair
view. The directors are also responsible for such internal control as they determine is necessary
to enable the preparation of inancial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the inancial statements, the directors are responsible for assessing the group’s
and the company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the inancial statements
Our objectives are to obtain reasonable assurance about whether the inancial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) and ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably
be expected to inluence the economic decisions of users taken on the basis of these
inancial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identiied that the principal risks
of non-compliance with laws and regulations related to compliance with the Real Estate
Investment Trust (REIT) status and SIIC regime and the UK regulatory principles, such as those
governed by the Financial Conduct Authority, and we considered the extent to which non-
compliance might have a material eect on the inancial statements. We also considered those
laws and regulations that have a direct impact on the inancial statements such as the
Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent
manipulation of the inancial statements (including the risk of override of controls), and
determined that the principal risks were related to journal entries to increase revenue, and
management bias in accounting estimates and judgemental areas of the Financial Statements
such as valuation of investment properties. The group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit
procedures in response to such risks in their work.
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Independent Auditors’ Report continued
Audit procedures performed by the group engagement team and/or component
auditors included:
– Discussions with management and internal audit, including consideration of known or
suspected instances of non-compliance with laws and regulations and fraud, and review
of the reports made by internal audit;
– Understanding management’s internal controls designed to prevent and detect irregularities;
– Assessment of matters, if any, reported on the group’s whistleblowing helpline and the results
of management’s investigation of such matters;
– Reviewing the group’s litigation register in so far as it related to non-compliance with laws
and regulations and fraud;
– Reviewing relevant meeting minutes, including those of the Board of Directors and the
Audit Committee;
– Designing audit procedures to incorporate unpredictability around the nature, timing
and extent of our testing;
– Review of tax compliance with the involvement of our tax specialists in the audit;
– Procedures relating to the valuation of investment properties described in the related key
audit matter above; and
– Identifying and testing journal entries, in particular any journal entries posted with unusual
account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to
become aware of instances of non-compliance with laws and regulations that are not closely
related to events and transactions relected in the inancial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete populations. We will often
seek to target particular items for testing based on their size or risk characteristics. In other
cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the inancial
statements in accordance with ISAs (UK) is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
– Identify and assess the risks of material misstatement of the inancial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is suicient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
– Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the eectiveness of the group’s and company’s internal control.
– Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
– Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast signiicant doubt on the group’s and company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the inancial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the group to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the inancial statements, including
the disclosures, and whether the inancial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
– Obtain suicient appropriate audit evidence regarding the inancial information of the
entities or business activities within the group and company to express an opinion on the
inancial statements. We are responsible for the direction, supervision and performance of
the group and company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and signiicant audit indings, including any signiicant
deiciencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those
matters that were of most signiicance in the audit of the inancial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest beneits of such communication.
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Use of this report
This report, including the opinions, has been prepared for and only for the company’s
members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and
for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not obtained all the information and explanations we require for our audit; or
– adequate accounting records have not been kept by the company, or returns adequate for
our audit have not been received from branches not visited by us; or
– certain disclosures of directors’ remuneration speciied by law are not made; or
– the company inancial statements and the part of the Directors’ Remuneration Report to be
audited are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members
on 22 April 2016 to audit the inancial statements for the year ended 31 December 2016 and
subsequent inancial periods. The period of total uninterrupted engagement is eight years,
covering the years ended 31 December 2016 to 31 December 2023.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these inancial statements form part of the ESEF-prepared annual inancial report iled
on the National Storage Mechanism of the Financial Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance
over whether the annual inancial report has been prepared using the single electronic format
speciied in the ESEF RTS.
Richard Porter (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
15 February 2024
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141
| 2023 | 2022 | ||
| Notes | £m | £m | |
Revenue | 4 | ||
Costs | 5 | ( | ( |
Administrative expenses | 6 | ( | ( |
Share of loss from joint ventures and associates after tax | 7 | ( | ( |
Realised and unrealised property gains and losses | 8 | ( | ( |
Impairment loss on loan due from associate | 17(vi) | ( | |
Operating loss | ( | ( | |
Finance income | 9 | ||
Finance costs | 9 | ( | ( |
Loss before tax | ( | ( | |
Tax | 10 | ||
Loss after tax | ( | ( | |
Attributable to equity shareholders | ( | ( | |
Attributable to non-controlling interests | ( | ||
| Earnings per share (pence) | |||
Basic | 12 | ( | ( |
Diluted | 12 | ( | ( |
Group Income Statement For the year ended 31 December 2023
| 2023 | 2022 | |
| £m | £m | |
Loss for the year | ( | ( |
| Items that may be reclassiied subsequently to proit or loss | ||
Foreign exchange movement arising on translation of international operations | ( | |
Fair value movements on derivatives and borrowings in eective hedge relationships | ( | |
( | ||
Tax on components of other comprehensive (expense)/income | ||
Other comprehensive (expense)/income | ( | |
Total comprehensive expense for the year | ( | ( |
Attributable to equity shareholders | ( | ( |
Attributable to non-controlling interests | ( |
Group Statement of Comprehensive Income For the year ended 31 December 2023
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Balance Sheets As at 31 December 2023
GROUP | COMPANY | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
| Assets | |||||
| Non-current assets | |||||
Intangible assets | – | – | |||
Investment properties | 13 | – | – | ||
Other interests in property | – | – | |||
Plant, property and equipment | 1 | – | |||
Investments in subsidiaries | 7 | 11,413 | 10,597 | ||
Investments in joint ventures and associates | 7 | – | – | ||
Other investments | – | – | |||
Other receivables | 14 | – | – | ||
Derivative inancial instruments | 17 | 47 | 58 | ||
11,461 | 10,655 | ||||
| Current assets | |||||
Trading properties | 13 | – | – | ||
Trade and other receivables | 14 | 40 | 25 | ||
Tax asset | – | – | |||
Derivative inancial instruments | 17 | 8 | 11 | ||
Cash and cash equivalents | 16 | 294 | 72 | ||
342 | 108 | ||||
Total assets | 11,803 | 10,763 | |||
| Liabilities | |||||
| Non-current liabilities | |||||
Borrowings | 16 | 3,925 | 3,439 | ||
Deferred tax liabilities | 10 | – | – | ||
Trade and other payables | 15 | 2,088 | 2,063 | ||
Derivative inancial instruments | 17 | 97 | 188 | ||
Tax liabilities | – | – | |||
6,110 | 5,690 | ||||
| Current liabilities | |||||
Trade and other payables | 15 | 63 | 47 | ||
Borrowings | 16 | – | – | ||
Derivative inancial instruments | 17 | 52 | 14 | ||
Tax liabilities | – | – | |||
115 | 61 | ||||
Total liabilities | 6,225 | 5,751 | |||
Net assets | 5,578 | 5,012 |
GROUP | COMPANY | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
| Equity | |||||
Share capital | 18 | 123 | 121 | ||
Share premium | 19 | 3,577 | 3,449 | ||
Capital redemption reserve | 19 | 114 | 114 | ||
Own shares held | 19 | ( | ( | (2) | (1) |
Other reserves | 19 | 224 | 225 | ||
Retained earnings | 1,542 | 1,104 | |||
Total shareholders’ equity | 5,578 | 5,012 | |||
Non-controlling interests | – | – | |||
Total equity | 5,578 | 5,012 | |||
| Net assets per ordinary share (pence) | |||||
Basic | 12 | ||||
Diluted | 12 |
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| Attributable to owners of the parent | ||||||||||||
| Other reserves | ||||||||||||
| Translation, | Total equity | |||||||||||
| Ordinary | Capital | Share-based | hedging | attributable | Non- | |||||||
| share | Share | redemption | Own shares | payments | and other | Merger | Retained | to owners of | controlling | |||
| capital | premium | reserve | held | reserves | reserves | reserve | earnings | the parent | interests | Total equity | ||
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | ( | |||||||||||
Loss for the year | ( | ( | ( | |||||||||
Other comprehensive expense | ( | ( | ( | |||||||||
Total comprehensive expense for the year | ( | ( | ( | ( | ||||||||
| Transactions with owners of the Company | ||||||||||||
Issue of shares | ||||||||||||
Own shares acquired | ( | ( | ( | |||||||||
Equity-settled share-based transactions | ||||||||||||
Dividends | ( | ( | ( | |||||||||
| Movement in non-controlling interest | ||||||||||||
Total transaction with owners of the Company | ( | ( | ( | ( | ||||||||
Balance at 31 December 2023 | ( | |||||||||||
1 | See Note 19. | |||||||||||
| 2 During the year ended 31 December 2023, the non-controlling interest held in Vailog Sàrl. was acquired by the Group. There is no non-controlling interest held at 31 December 2023. | ||||||||||||
| For the year ended 31 December 2022 | Attributable to owners of the parent | |||||||||||
| Other reserves | ||||||||||||
| Translation, | Total equity | |||||||||||
| Ordinary | Capital | Share-based | hedging | attributable to | Non- | |||||||
| share | Share | redemption | Own shares | payments | and other | Merger | Retained | owners of the | controlling | |||
| capital | premium | reserve | held | reserves | reserves | reserve | earnings | parent | interests | Total equity | ||
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2022 | ( | ( | ||||||||||
Loss for the year | ( | ( | ( | ( | ||||||||
Other comprehensive income/(expense) | ( | |||||||||||
Total comprehensive income/(expense) for the year | ( | ( | ( | ( | ||||||||
| Transactions with owners of the Company | ||||||||||||
Own shares acquired | ( | ( | ( | |||||||||
Equity-settled share-based transactions | ||||||||||||
Dividends | ( | ( | ( | |||||||||
| Movement in non-controlling interest | ( | ( | ||||||||||
Total transaction with owners of the Company | ( | ( | ( | |||||||||
Balance at 31 December 2022 | ( | |||||||||||
1
1
2
1
1
1
2
1
1
2
1
1
1
2
1 See Note 19.
2 Non-controlling interests relate to Vailog S.r.l.
Statements of Changes in Equity For the year ended 31 December 2023
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144
Statements of Changes in Equity continued
For the year ended 31 December 2023
Ordinary share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Own shares
held
1
£m
Other reserves
Retained
earnings
£m
Total equity
attributable
to equity
shareholders
£mCompany
Share-based
payments
reserves
£m
Translation,
hedging
and other
reserves
£m
Merger
reserve
1
£m
Balance at 1 January 2023 121 3,449 114 (1) 9 47 169 1,104 5,012
Proit for the year – – – – – – – 767 767
Other comprehensive income – – – – – – – – –
Total comprehensive income for the year – – – – – – – 767 767
Transactions with owners of the Company
Issue of shares – 1 – – – – – – 1
Own shares acquired – – – (4) – – – – (4)
Equity-settled share-based transactions – – – 3 (1) – – (2) –
Dividends 2 127 – – – – – (327) (198)
Total transaction with owners of the Company 2 128 – (1) (1) – – (329) (201)
Balance at 31 December 2023 123 3,577 114 (2) 8 47 169 1,542 5,578
1 See Note 19.
For the year ended 31 December 2022
Ordinary share
capital
£m
Share
premium
£m
Capital
redemption
reserve
1
£m
Own shares
held
1
£m
Other reserves
Retained
earnings
£m
Total equity
attributable
to equity
shareholders
£mCompany
Share-based
payments
reserves
£m
Translation,
hedging
and other
reserves
£m
Merger
reserve
1
£m
Balance at 1 January 2022 120 3,371 114 (1) 9 47 169 1,056 4,885
Proit for the year – – – – – – – 351 351
Other comprehensive income – – – – – – – – –
Total comprehensive income for the year – – – – – – – 351 351
Transactions with owners of the Company
Own shares acquired – – – (4) – – – – (4)
Equity-settled share-based transactions – – – 4 – – – (2) 2
Dividends 1 78 – – – – – (301) (222)
Total transaction with owners of the Company 1 78 – – – – – (303) (224)
Balance at 31 December 2022 121 3,449 114 (1) 9 47 169 1,104 5,012
1 See Note 19.
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GROUP | COMPANY | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
| Cash lows from operating activities | |||||
Cash generated/(used) from operations | 24(i) | (17) | (16) | ||
Interest received | 202 | 120 | |||
Dividends received | 851 | 706 | |||
Interest paid | ( | ( | (196) | (127) | |
Cost of early close out of interest rate derivatives and new interest rate derivatives transacted | ( | ( | (4) | (77) | |
Cost of early close out of debt | ( | (1) | – | ||
Tax paid | ( | ( | (5) | (16) | |
Net cash received from operating activities | 830 | 590 | |||
| Cash lows from investing activities | |||||
Purchase and development of investment properties 1 | ( | ( | – | – | |
Sale of investment properties | – | – | |||
Acquisition of other interest in property | ( | ( | – | – | |
Purchase of plant and equipment and intangibles | ( | ( | – | – | |
Acquisition of other investments | ( | ( | – | – | |
Investment in subsidiary undertakings | – | (66) | |||
Loan advances paid to subsidiary undertakings | (935) | (626) | |||
Investment and loans to joint ventures and associates | ( | ( | – | – | |
Divestment from and repayment of loans by joint ventures and associates | – | – | |||
Net cash used in investing activities | ( | ( | (935) | (692) | |
| Cash lows from inancing activities | |||||
Dividends paid | ( | ( | (185) | (222) | |
Proceeds from borrowings | 961 | 1,794 | |||
Repayment of borrowings | ( | ( | (444) | (1,421) | |
Principal element of lease payments | ( | ( | – | – | |
Settlement of foreign exchange derivatives | ( | (2) | 15 | ||
Purchase of non-controlling interest | ( | – | – | ||
Proceeds from issue of ordinary shares | 1 | – | |||
Purchase of ordinary shares | ( | ( | (4) | (4) | |
Net cash generated from inancing activities | 327 | 162 | |||
Net increase in cash and cash equivalents | 222 | 60 | |||
Cash and cash equivalents at the beginning of the year | 72 | 12 | |||
Eect of foreign exchange rate changes | – | – | |||
Cash and cash equivalents at the end of the year | 16 | 294 | 72 |
1 Group cash payment for the purchase and development of investment properties of £8 39 million (2022: £1, 472 million) represents total costs for property acquisitions and additions to existing investment properties per Note 13(i)
of £9 6 4 million (2022: £1, 53 0 million) adjusted for the following cash and non-cash movements: deducts interest capitalised of £6 4 million (2022: £2 2 million); deducts net movement in capital related accruals, prepayments and
VAT of £61 million (2022: £23 million); deducts non-cash movements of £nil (2022: £13 million) from asset swaps.
2 The total 2023 divided paid as cash was £1 98 million (2022: £2 2 2 million), see Note 11. Tax of £13 million relating to the 2023 interim PID dividend is unpaid at 31 December 2023 (2022: £nil) meaning the actual cash paid in the year
is £185 million (2022: £2 2 2 million).
Cash Flow Statements For the year ended 31 December 2023
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146
1. Material Accounting Policies
General information
domiciled and registered in England
The address of the registered o s of the registered office is given on the inside back cover.
The principal activities of the Company and its subsidiaries (the Group) and the nature
of the Group’s operations are set out in the Strategic Report on pages 20 to 21.
These Financial Statements are presented in pounds sterling to the nearest million because
that is the currency of the primary economic environment in which the Group operates and
is the functional currency of the Company.
Notes to the Financial Statements For the year ended 31 December 2023
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Notes to the Financial Statements continued
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Annual Report & Accounts 2023
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Notes to the Financial Statements continued
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151
Notes to the Financial Statements continued
2. Adjusted Pro ted Profit
Adjusted proit is a no rofit is a non-GAAP measure and is the Group’s measure of underlying proit ng profit, which
is used by the Board and senior management to measure and monitor the Group’s income
performance.
It is based on the Best Practices Recommendations Guidelines of European Public Real Estate
Association (EPRA), which calculate proit excluding i ulate profit excluding investment and development property
revaluations and gains or losses on disposals. Changes in the fair value of ina e of financial instruments
and associated close-out costs and their related taxation, as well as other permitted one-o off
items, are also excluded. Refer to the Supplementary Notes for all EPRA adjustments.
The Directors may also exclude from the EPRA earnings measure additional items (gains and
losses) which are considered by them to be non-recurring, unusual or signi ignificant by virtue of
size and nature. In excluding such items going forward, management believe this gives a better
measure of the underlying performance of the business.
Historically SELP performance fees were included in Adjusted Proit. Th sted Profit. They were not excluded
because it was anticipated that further fees would subsequently be recognised throughout the
latter part of the performance period and therefore these would not be considered unusual.
The market volatility that was seen in the latter half of 2022 signii nificantly impacted property
valuations and, consequentially management’s consideration of SELP performance fees,
leading to no performance fee being recognised for the year ended 31 December 2022. Based
on this volatility, these fees are now considered unusual as they are inherently uncertain and
sensitive to movements in property valuations (which themselves are excluded from the EPRA
earnings metric). For the year ended 31 December 2023, the net proit af rofit after tax impact of the
SELP performance fee recognised of £42 million has been excluded from the calculation of
Adjusted proit and treated as a C rofit and treated as a Company speciic ad fic adjustment, see footnote 3 below and Note
7(ii) for further details.
As detailed further in Note 17(vi) an impairment loss of £28 million (2022: £nil) on a loan due
from an associate has been recognised for the year ended 31 December 2023. The impairment
of the loan is directly related to a wider property transaction entered into by the Group and has
arisen due to a fair value deic eficit on land held by an associate. As the size and nature of the
impairment does not rele s not reflect the underlying performance of the business this has been treated
as a Company speci cific adjustment.
No Company speci cific adjustments to underlying proit ing profits were made in the year ended
31 December 2022.
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152
| 2023 | 2022 | |||
| Notes | £m | £m | ||
Gross rental income | 4 | 547 | 488 | |
Property operating expenses | 5 | (85) | (76) | |
Net rental income | 462 | 412 | ||
Joint venture management fee income | 4 | 29 | 30 | |
Management and development fee income | 4 | 4 | 5 | |
Net solar energy income 2 | 1 | 1 | ||
Administrative expenses | 6 | (63) | (59) | |
| Share of joint ventures and associates’ Adjusted p | 7 | 82 | 71 | |
Adjusted operating pro | 515 | 460 | ||
9 | (106) | (74) | ||
Adjusted p | 409 | 386 | ||
| Adjustments to reconcile to IFRS: | ||||
| Adjustments to the share of loss from joint ventures and associates’ | ||||
| after tax | 7 | (158) | (215) | |
Realised and unrealised property gains and losses | 8 | (601) | (1,946) | |
13 | 3 | 7 | ||
Cost of early close out debt | 9 | (1) | – | |
Net fair value gain/(loss) on interest rate swaps and other derivatives | 9 | 24 | (199) | |
Joint venture performance fee incom | 4 | 89 | – | |
Impairment loss on loan due from associate | 17(vi) | (28) | – | |
Total adjustments | (672) | (2,353) | ||
Loss before tax | (263) | (1,967) | ||
| Tax | ||||
On Adjusted p | 10 | (10) | (11) | |
In respect of adjustments | 10 | 20 | 48 | |
Total tax adjustments | 10 | 37 | ||
Loss after tax before non-controlling interests | (253) | (1,930) | ||
| Non-controlling interests: | ||||
Less: | share of adjusted p | – | (1) | |
share of adjustments attributable to non-controlling interests | – | 4 | ||
Loss after tax and non-controlling interests | (253) | (1,927) | ||
| Of which: | ||||
Adjusted p | 399 | 374 | ||
Total adjustments after tax and non-controlling interests | (652) | (2,301) | ||
Loss attributable to equity shareholders | (253) | (1,927) |
1
1
1 A detailed breakdown of the adjustments to the share of loss from joint ventures and associates is included
2 Net solar income of £1 million (2022: £1 million) is calculated as Solar energy income of £2 million (2022:
3 Total impact of the joint venture performance fee from SELP being: Performance fee of £89 million within Joint
venture fee income; cost of £37 million within Share of joint ventures’ and associates adjusted pro d profit after tax
(being the share of performance fee cost of £45 million less a tax credit of £8 million) and a tax charge of £10
million recognised in respect of the performance fee income. Overall, the net proi rofit after tax impact was £42
million. There was no performance fee recognised in the year ended 31 December 2022.
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153
Notes to the Financial Statements continued
3. Segmental Analysis
The Group’s reportable segments are the geographical Business Units: Greater London, Thames Valley, National Logistics, Northern Europe (principally Germany), Southern Europe (principally
France and Italy) and Central Europe (principally Poland), which are managed and reported to the Board as separate distinct Business Units.
| Share of joint | ||||||||
| ventures and | Investments in | |||||||
| Gross | Net | associates’ | Total directly | joint | ||||
| rental | rental | Adjusted | Adjusted | owned property | ventures and | Capital | ||
| income | income | pro | PBIT | assets | associates | expenditure | ||
| 31 December 2023 | £m | £m | £m | £m | £m | £m | £m | |
Thames Valley | 132 | 122 | – | 120 | 3,231 | – | 164 | |
National Logistics | 54 | 51 | – | 53 | 1,850 | – | 402 | |
Greater London | 221 | 202 | – | 199 | 6,079 | 20 | 32 | |
UK Total | 407 | 375 | – | 372 | 11,160 | 20 | 598 | |
Northern Europe | 39 | 28 | 39 | 74 | 1,167 | 935 | 111 | |
Southern Europe | 93 | 71 | 50 | 131 | 2,390 | 1,159 | 232 | |
Central Europe | 8 | 3 | 30 | 37 | 200 | 603 | 23 | |
Continental Europe Total | 140 | 102 | 119 | 242 | 3,757 | 2,697 | 366 | |
Other | – | (15) | (37) | (99) | – | (1,081 | ) | 29 |
Total | 547 | 462 | 82 | 515 | 14,917 | 1,636 | 993 |
2
3
| Share of joint | |||||||
| ventures and | Investments in | ||||||
| Gross | Net | associates’ | Total directly | joint | |||
| rental | rental | Adjusted | Adjusted | owned property | ventures and | Capital | |
| income | income | pro | PBIT | assets | associates | expenditure | |
| 31 December 2022 | £m | £m | £m | £m | £m | £m | £m |
Thames Valley | 116 | 109 | – | 107 | 3,011 | – | 80 |
National Logistics | 47 | 43 | – | 45 | 1,721 | – | 362 |
Greater London | 203 | 185 | – | 183 | 6,401 | 11 | 325 |
UK Total | 366 | 337 | – | 335 | 11,133 | 11 | 767 |
Northern Europe | 33 | 23 | 29 | 60 | 1,149 | 958 | 345 |
Southern Europe | 82 | 63 | 40 | 114 | 2,503 | 1,191 | 474 |
Central Europe | 7 | 3 | 22 | 31 | 189 | 616 | 7 |
Continental Europe Total | 122 | 89 | 91 | 205 | 3,841 | 2,765 | 826 |
Other | – | (14) | (20) | (80) | – | (1,008) | 9 |
Total | 488 | 412 | 71 | 460 | 14,974 | 1,768 | 1,602 |
2
3
4
1 ‘Other’ category includes the corporate centre, SELP holding companies and costs relating to the operational business which are not specii fically allocated to a geographical Business Unit.
2 A reconciliation of total Adjusted PBIT to the IFRS loss before tax is provided in Note 2.
3 Capital expenditure includes additions and acquisitions of investment and trading properties but does not include tenant incentives and letting fees. Part of the capital expenditure incurred is in response to climate change
including the reduction of the carbon footprint of the Group’s existing investment properties and developments. The environmental sustainability within the Group’s property portfolio is discussed in more detail on pages 26 to 28
The ‘Other’ category includes non-property related spend, primarily IT.
4 Includes the bonds held by SELP Finance S.à r.l, a Luxembourg entity.
5 As set out in the Chief Executive's statement on page 9 a new organisational structure has been put in place during 2023, this does not impact the Group’s reportable segments in 2023 but may change the reportable segments
in 2024.
Revenues from the most signiic ficant countries within the Group were: UK £513 million (2022: £451 million), France £114 million (2022: £77 million), Italy £37 million (2022: £36 million), Germany
£52 million (2022: £46 million), Netherlands £3 million (2022: £30 million) and Poland £18 million (2022: £17 million).
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154
| 2023 | 2022 | |
| £m | £m | |
Rental income from investment and trading properties | 536 | 473 |
Rent averaging | 10 | 14 |
Surrender premia | 1 | 1 |
| Gross rental income | 547 | 488 |
Joint venture fee income – management fees* | 29 | 30 |
| – performance fees* | 89 | – |
Joint venture fee income | 118 | 30 |
Management and development fee income* | 4 | 5 |
Service charge income* | 43 | 44 |
Solar energy income* | 2 | 2 |
Proceeds from sale of trading properties* | 35 | 100 |
Total revenue | 749 | 669 |
| 2023 | 2022 | |
| £m | £m | |
Vacant property costs | 14 | 10 |
Letting, marketing, legal and professional fees | 15 | 17 |
| Loss allowance and impairment of receivables | 3 | 3 |
Other expenses | 16 | 12 |
Property management expenses | 48 | 42 |
| Property administrative expenses | 49 | 45 |
| Costs capitalised | (12) | (11) |
Total property operating expenses | 85 | 76 |
Service charge expense | 43 | 44 |
Solar energy expense | 1 | 1 |
Trading properties cost of sales | 32 | 93 |
Total costs | 161 | 214 |
| 2023 | 2022 | |
| £m | £m | |
Directors’ remuneration | 8 | 8 |
Depreciation and amortisation | 5 | 4 |
Other administrative expenses | 50 | 47 |
Total administrative expenses | 63 | 59 |
| 2023 | 2022 | |
| £m | £m | |
| Audit services: | ||
Parent company | 1.3 | 1.1 |
Subsidiary undertakings | 0.1 | 0.2 |
Total audit fees | 1.4 | 1.3 |
Audit related assurance services | 0.1 | 0.1 |
Audit and audit related assurance services | 1.5 | 1.4 |
| Other fees: | ||
Other | 0.1 | 0.2 |
Total other fees | 0.1 | 0.2 |
Total fees in relation to audit and other services | 1.6 | 1.6 |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
155
Notes to the Financial Statements continued
| 2023 | 2022 | |
| £m | £m | |
Wages and salaries | 54 | 50 |
Social security costs | 7 | 6 |
Pension costs | 3 | 2 |
Share scheme costs | 10 | 9 |
Total | 74 | 67 |
Average number of Group employees | 459 | 407 |
– Direct property | 290 | 264 |
– Indirect property and administration | 169 | 143 |
| At 100% | At 100% | At share | At share | |||
| SELP | Other | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | |
| Revenue | 347 | – | 347 | 303 | 174 | 152 |
Gross rental income | 267 | – | 267 | 237 | 134 | 119 |
| Property operating expenses: | ||||||
| – underlying property | ||||||
operating expenses | (16) | – | (16) | (16) | (8) | (8) |
– vacant property costs | (1) | – | (1) | (1) | (1) | (1) |
| – property management | ||||||
| fees | (24) | – | (24) | (25) | (12) | (13) |
Net rental income | 226 | – | 226 | 195 | 113 | 97 |
Management fee income | 4 | – | 4 | 3 | 2 | 2 |
Administrative expenses | (5) | – | (5) | (6) | (2) | (3) |
| Finance costs (including | ||||||
adjustments) | (40) | – | (40) | (34) | (20) | (17) |
Adjusted p | 185 | – | 185 | 158 | 93 | 79 |
Tax | (22) | – | (22) | (16) | (11) | (8) |
Adjusted p | 163 | – | 163 | 142 | 82 | 71 |
| Adjustments: | ||||||
Valuation d investment properties | (318) | (7) | (325) | (472) | (162) | (236) |
Cost of early close out of debt | – | – | – | (3) | – | (2) |
| Performance fees expense | (89) | – | (89) | – | (45) | – |
Tax in respect of adjustments | 98 | – | 98 | 46 | 49 | 23 |
Total adjustments | (309) | (7) | (316) | (429) | (158) | (215) |
Loss after tax | (146) | (7) | (153) | (287) | (76) | (144) |
Other comprehensive income | – | – | – | – | – | – |
| Total comprehensive | ||||||
expense for the year | (146) | (7) | (153) | (287) | (76) | (144) |
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| At 100% | At 100% | At share | At share | |||
| SELP | Other | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | |
Investment properties | 5,786 | 44 | 5,830 | 6,044 | 2,915 | 3,022 |
Property, plant and equipment | 12 | – | 12 | 6 | 6 | 3 |
Other receivables | 2 | – | 2 | 3 | 1 | 1 |
Total non-current assets | 5,800 | 44 | 5,844 | 6,053 | 2,922 | 3,026 |
Other receivables | 61 | 1 | 62 | 72 | 31 | 36 |
Cash and cash equivalents | 53 | 3 | 56 | 63 | 28 | 32 |
Total current assets | 114 | 4 | 118 | 135 | 59 | 68 |
Total assets | 5,914 | 48 | 5,962 | 6,188 | 2,981 | 3,094 |
| Borrowings | (2,143) | – | (2,143) | (2,005) | (1,072) | (1,003) |
Deferred tax | (381) | – | (381) | (481) | (191) | (241) |
Other liabilities | – | (34) | (34) | (41) | (17) | (20) |
Total non-current liabilities | (2,524) | (34) | (2,558) | (2,527) | (1,280) | (1,264) |
Other liabilities | (156) | (3) | (159) | (148) | (79) | (74) |
Total current liabilities | (156) | (3) | (159) | (148) | (79) | (74) |
Total liabilities | (2,680) | (37) | (2,717) | (2,675) | (1,359) | (1,338) |
Unrecognised share of losses | – | 28 | 28 | 23 | 14 | 12 |
Net assets | 3,234 | 39 | 3,273 | 3,536 | 1,636 | 1,768 |
| 2023 | 2022 | |
| £m | £m | |
Cost or valuation at 1 January | 1,768 | 1,795 |
Exchange movement | (30) | 92 |
| Net investments | 12 | 34 |
| Dividends received | (38) | (9) |
Share of loss after tax | (76) | (144) |
Cost or valuation at 31 December | 1,636 | 1,768 |
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Notes to the Financial Statements continued
7(iv) – Investments by the Company
| 2023 | 2022 | |
| £m | £m | |
Cost or valuation of subsidiaries at 1 January | 10,597 | 9,378 |
Exchange movement | (8) | 5 |
Additions 1 | 303 | 1,277 |
| Loan movement | 657 | (19) |
Increase in provision for investments in and loans to subsidiaries | (136) | (44) |
Cost or valuation at 31 December | 11,413 | 10,597 |
1
1 During 2023, £303 million (2022: £1,211 million) of non-current loans were recapitalised and converted into
equity. This is re y. This is reflected within additions and a reduction in loan movement in the table above.
Included in cost or valuation of subsidiaries at 31 December 2023 are investments of £6,401
million (2022: £6,126 million) and non-current loans of £5,012 million (2022: £4,471 million).
Loans held with subsidiaries are classi sified as non-current as there is no intention from the
Company to require the loan to be repaid, in whole or in part, within 12 months.
Subsidiary entities are detailed in Note 26.
In measuring expected credit losses (ECLs) of the intercompany loans under IFRS 9 the ability
of each subsidiary to repay the loan at the reporting date if demanded by the Company is
assessed. For the purpose of the impairment review the manner for recovering the loan is
assumed to be through the sale of the investment properties held by the subsidiary.
Investment properties are held at fair value at each reporting date and the assumptions and
inputs used in determining their fair value are shown in Note 25. Therefore, the net asset value
of the subsidiary is considered to be a reasonable approximation of the available assets that
could be realised to recover the loan balance and the requirement to recognise expected
credit losses. The requirement for impairment of investments under IAS 36 follows the same
assessment and the net asset value of the subsidiary is considered to be a reasonable
approximation of the recoverable amount.
| 2023 | 2022 | |
| £m | £m | |
46 | 9 | |
| Valuation | (647) | (1,970) |
Decrease in provision for impairment of trading properties | – | 15 |
Total realised and unrealised property loss | (601) | (1,946) |
The total valuation de n deficit on investment and trading properties are £809 million
(2022: £2,191 million). This comprises £647 million dei eficit from investment properties
(2022: £1,970 million), £nil impairment from trading properties (2022: impairment reversal
of £15 million) and £162 million deic ficit from joint ventures and associates at share
(2022: £236 million).
The total property loss on investment and trading properties are £760 million
(2022: £2,175 million). This comprises of the total valuation de n deficit on investment properties
and trading properties of £809 million (2022: £2,191 million) plus £46 million proit on sa rofit on sale of
investment properties and other investment income (2022: £9 million) and £3 million proit on rofit on
sale of trading property (2022: £7 million).
Details of proit o ils of profit on sale of trading properties are given in Note 13(ii).
9. Net Finance Costs
| 2023 | 2022 | |
| Finance income | £m | £m |
Interest received on bank deposits and related derivatives | 25 | 21 |
Fair value gain on interest rate swaps and other derivatives | 59 | 46 |
T | 84 | 67 |
| 2023 | 2022 | |
| Finance costs | £m | £m |
Interest on overdrafts, loans and related derivatives | (184) | (104) |
Cost of early close out of debt | (1) | – |
Amortisation of issue costs | (8) | (9) |
Interest on lease liabilities | (3) | (3) |
Total borrowing costs | (196) | (116) |
Less amounts capitalised on the development of properties | 64 | 22 |
Net borrowing costs | (132) | (94) |
Fair value loss on interest rate swaps and other derivatives | (35) | (245) |
– | (1) | |
T | (167) | (340) |
(83) | (273) |
(2022: £74 million). This excludes net fair value gains and losses on interest rate swaps and
other derivatives of £24 million gain (2022: £199 million loss) and the cost of early close out
debt of £1 million (2022: £nil).
The interest capitalisation rates for 2023 ranged from 2.6 per cent to 6.5 per cent
(2022: 1.9 per cent to 4.0 per cent). Interest is capitalised gross of tax relief. Further analysis
of exchange dierence fferences is given in Note 17 within the forward foreign exchange and currency
swap contracts section.
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10. Tax
10(i) – Tax on loss
| 2023 | 2022 | |
| £m | £m | |
| Tax: | ||
On Adjusted p | (10) | (11) |
| In respect of adjustments: | ||
Performance fee | (10) | – |
Other (primarily in respect of property valuation movements) | 30 | 48 |
Total tax in respect of adjustments | 20 | 48 |
Total tax credit | 10 | 37 |
| Current tax | ||
| United Kingdom | ||
Current tax (charge)/credit | (10) | 7 |
Total UK current tax (charge)/credit | (10) | 7 |
| Overseas | ||
Current tax charge | (10) | (31) |
Total overseas current tax charge | (10) | (31) |
Total current tax charge | (20) | (24) |
| Deferred tax | ||
Origination and reversal of temporary di | (10) | (13) |
Released in respect of property disposals in the year | 5 | 25 |
On valuation movements | 33 | 50 |
Total deferred tax in respect of investment properties | 28 | 62 |
Other deferred tax | 2 | (1) |
Total deferred tax credit | 30 | 61 |
Total tax credit on loss on ordinary activities | 10 | 37 |
10(ii) – Factors ae (ii) – Factors affecting tax credit for the year
The tax credit is higher than (2022: tax credit is lower than) the standard rate of UK corporation
tax. The dieren e differences are:
| 2023 | 2022 | |
| £m | £m | |
Loss on ordinary activities before tax | (263) | (1,967) |
Exclude valuation de | 421 | 1,701 |
158 | (266) | |
| Multiplied by standard rate of UK corporation tax of 23.5 per cent | ||
(2022: 19.0 per cent) | (37) | 51 |
REIT & SIIC exemption on income and gains | 94 | 1 |
Non (deductible)/taxable items | (13) | 3 |
| Joint venture and associates’ tax adjustment | (17) | (26) |
Higher tax rates on international earnings | (3) | (1) |
Other | – | (1) |
Adjustment in respect of assets not recognised | (14) | 10 |
Total tax credit on loss on ordinary activities | 10 | 37 |
1
1 The joint venture and associates’ tax adjustment is required because the loss on ordinary activities before tax
includes share of loss from joint ventures and associates’ after tax, whereas the total tax balance excludes joint
ventures and associates.
2 The UK corporation tax rate for the te for the financial year beginning 1 April 2023 increased to 25 per cent (previously 19
per cent in the i e financial year beginning 1 April 2022).
10(iii) – REIT and SIIC regimes and other tax judgements
SEGRO is a Real Estate Investment Trust (REIT) and does not pay tax on its UK property income
or gains on property sales, provided that at least 90 per cent of the Group’s UK property
income is distributed as a dividend to shareholders, which becomes taxable in their hands.
In addition, the Group has to meet certain conditions such as ensuring its worldwide property
rental business represents more than 75 per cent of total proits an ent of total profits and assets. Any potential or
proposed changes to the REIT legislation are monitored and discussed with HMRC. It is
management’s intention that the Group will continue as a REIT for the foreseeable future.
SEGRO is also a SIIC in France, and does not pay corporation tax on its French property income
or gains on property sales, provided that at least 95 per cent of the relevant Group French
subsidiaries’ property income is distributed to their immediate shareholder. In addition, the
Group has to meet certain conditions such as ensuring the property rental business of each
French subsidiary represents more than 80 per cent of its assets. Any potential or proposed
changes to the SIIC legislation are monitored. It is management’s intention that the Group will
continue as a SIIC for the foreseeable future.
In 2021 a formal tax assessment in relation to the applicability of a 25 per cent withholding tax
on distributions from the SIIC was received from the French tax authorities and a tax charge
was recognised. A legal conclusion has not been reached and communication with the French
tax authorities remains ongoing. As a result, a tax charge for the 25 per cent withholding tax on
results generated from the French business has been recognised in the current and prior year,
this includes withholding tax on unremitted earnings. As noted below, until a legal conclusion
has been reached, it is possible further tax charges may arise in relation to this matter.
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159
Notes to the Financial Statements continued
The Group operates in a number of jurisdictions and is subject to periodic challenges by
local tax authorities on a range of tax matters during the normal course of business. The tax
impact can be uncertain until a conclusion is reached with the relevant tax authority or through
a legal process. The Group uses in-house expertise when assessing uncertain tax positions
and seeks the advice of external professional advisors where appropriate. The Group believes
that its provisions for tax liabilities and associated penalties are adequate for all open tax
years based on its assessment of many factors, including tax laws and prior experience.
The signi ignificant assessment relating to the recognition of withholding tax in France
is discussed above.
| Balance | Exchange | Acquisitions/ | Recognised | Balance | |
| 1 January | movement | disposals | in income | 31 December | |
| Group – 2023 | £m | £m | £m | £m | £m |
Valuation surpluses and d properties/accelerated tax allowances | 209 | (3) | – | (28) | 178 |
Others | 17 | (1) | – | (2) | 14 |
Total deferred tax liabilities | 226 | (4) | – | (30) | 192 |
| Balance | Exchange | Acquisitions/ | Recognised | Balance | |
| 1 January | movement | disposals | in income | 31 December | |
| Group – 2022 | £m | £m | £m | £m | £m |
Valuation surpluses and d properties/accelerated tax allowances | 259 | 12 | – | (62) | 209 |
Others | 15 | 1 | – | 1 | 17 |
Total deferred tax liabilities | 274 | 13 | – | (61) | 226 |
10(v) – Factors that may ae at may affect future tax charges
Other than France no deferred tax is recognised on the unremitted earnings of international
subsidiaries, joint ventures and associates. In the event of their remittance to the UK, no net UK
tax is expected to be payable. As detailed in Note 10(iii) a tax charge for probable withholding
tax due on results generated from the French business has been recognised, this includes
withholding tax on unremitted earnings.
10(vi) – OECD Pillar Two model rules
Pillar Two legislation was enacted in the UK during 2023, the jurisdiction in which the Company
is incorporated, and will come into eect from 1 Janu e into effect from 1 January 2024. Management have engaged tax
specialists to assist with applying the legislation and assessing the impact. Based on the initial
assessment of this enacted legislation, management do not believe that the legislation will
have a material impact on the Company or the Group due to its UK REIT status, which should
result in the majority of the Group companies being excluded from the rules.
Notwithstanding the legislation is not expected to have a material impact, under the current
assessment, since the Pillar Two legislation was not ee n was not effective at the reporting date, the Group
has no related current tax exposure. The Group applies the exception to recognising and
disclosing information about deferred tax assets and liabilities related to Pillar Two income
taxes, as provided in the amendments to IAS 12 issued in May 2023.
11. Dividends
| 2023 | 2022 | |
| £m | £m | |
| Ordinary dividends paid | ||
Interim dividend for 2023 @ 8.7 pence per share | 107 | – |
Final dividend for 2022 @ 18.2 pence per share | 220 | – |
Interim dividend for 2022 @ 8.1 pence per share | – | 98 |
Final dividend for 2021 @ 16.9 pence per share | – | 203 |
Total dividends | 327 | 301 |
The Board recommends a ds a final dividend for 2023 of 19.1 pence which is estimated to result in a
distribution of up to £23 4 million. The total dividend paid and proposed per share in respect of
the year ended 31 December 2023 is 27.8 pence (2022: 26.3 pence).
The total dividend in 2023 of £327 million (2022: £301 million) was paid: £198 million as cash
(2022: £222 million) and £129 million in scrip dividends (2022: £79 million). For details on scrip
dividends see Notes 18 and 19.
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160
12. Earnings and Net Assets Per Share
The earnings per share calculations use the weighted average number of shares in issue during
the year and the net assets per share calculations use the number of shares in issue at year
end. Earnings per share calculations exclude 0.3 million shares (2022: 0.2 million) being the
average number of shares held on trust for employee share schemes and net assets per share
calculations exclude 0.4 million shares (2022: 0.2 million) being the actual number of shares
held on trust for employee share schemes at year end.
2023 | 2022 | |||||
| Earnings | Shares | Pence per | Earnings | Shares | Pence per | |
| £m | million | share | £m | million | share | |
Basic EPS | (253) | 1,220.0 | (20.7) | (1,927) | 1,206.6 | (159.7) |
| Dilution adjustments: | ||||||
| Share and save as you earn | ||||||
schemes | – | – | – | – | – | – |
| Diluted EPS | (253) | 1,220.0 | (20.7) | (1,927) | 1,206.6 | (159.7) |
Basic EPS | (253) | 1,220.0 | (20.7) | (1,927) | 1,206.6 | (159.7) |
Adjustments to loss before tax | 672 | 55.1 | 2,353 | 195.0 | ||
Tax in respect of Adjustments | (20) | (1.7) | (48) | (4.0) | ||
| Non-controlling interest | ||||||
– | – | (4) | (0.3) | |||
Adjusted Basic EPS | 399 | 1,220.0 | 32.7 | 374 | 1,206.6 | 31.0 |
Adjusted Diluted EPS | 399 | 1,223.4 | 32.6 | 374 | 1,210.0 | 30.9 |
2023 | 2022 | |||||
| Equity | Equity | |||||
| attributable | attributable to | |||||
| to ordinary | ordinary | |||||
| shareholders | Shares | Pence per | shareholders | Shares | Pence per | |
| £m | million | share | £m | million | share | |
Basic NAV | 10,904 | 1,2 2 7.2 | 889 | 11,373 | 1,209.1 | 941 |
| Dilution adjustments: | ||||||
| Share and save as you earn | ||||||
schemes | – | 3.5 | (3) | – | 3.4 | (3) |
Diluted NAV | 10,904 | 1,230.7 | 886 | 11,373 | 1,212.5 | 938 |
Fair value adjustment in respect of interest rate | ||||||
derivatives – Group | 106 | 9 | 131 | 11 | ||
Fair value adjustment in respect of trading | ||||||
properties – Group | 1 | – | 2 | – | ||
Deferred tax in respect of depreciation and valuation | ||||||
| surpluses – Group | 89 | 7 | 104 | 8 | ||
Deferred tax in respect of depreciation and valuation | ||||||
| surpluses – Joint ventures | ||||||
| and associates | 92 | 7 | 119 | 10 | ||
Intangible assets | (30) | (2) | (12) | (1) | ||
Adjusted NAV | 11,162 | 1,230.7 | 907 | 11,717 | 1,212.5 | 966 |
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161
Notes to the Financial Statements continued
13. Properties
13(i) – Investment properties
| Completed | Development | Total | |
| £m | £m | £m | |
At 1 January 2023 | 12,113 | 2,589 | 14,702 |
Exchange movement | (47) | (18) | (65) |
Property acquisitions | – | 403 | 403 |
Additions to existing investment properties | 54 | 507 | 561 |
Disposals | (204) | (83) | (287) |
| Transfers on completion of development and completed | |||
properties taken back for redevelopment | 824 | (824) | – |
Revaluation de | (455) | (191) | (646) |
At 31 December 2023 | 12,285 | 2,383 | 14,668 |
Add tenant lease incentives and letting fees | 175 | – | 175 |
| Investment properties excluding head lease ROU | |||
assets at 31 December 2023 | 12,460 | 2,383 | 14,843 |
| Add head lease liabilities (ROU assets) | 71 | – | 71 |
Total investment properties at 31 December 2023 | 12,531 | 2,383 | 14,914 |
1
| Completed | Development | Total | |
| £m | £m | £m | |
At 1 January 2022 | 13,815 | 1,461 | 15,276 |
Exchange movement | 143 | 42 | 185 |
Property acquisitions | 117 | 682 | 799 |
Additions to existing investment properties | 53 | 678 | 731 |
Disposals | (314) | (1) | (315) |
| Transfers on completion of development and completed | |||
properties taken back for redevelopment | 340 | (340) | – |
Transfer from/(to) trading properties | 3 | (7) | (4) |
Revaluation (deicit)/surplus during the year | (2,044) | 74 | (1,970) |
At 31 December 2022 | 12,113 | 2,589 | 14,702 |
Add tenant lease incentives and letting fees | 164 | – | 164 |
| Investment properties excluding head lease ROU | |||
assets at 31 December 2022 | 12,277 | 2,589 | 14,866 |
| Add head lease liabilities (ROU assets) | 73 | – | 73 |
Total investment properties at 31 December 2022 | 12,350 | 2,589 | 14,939 |
1
1 At 31 December 2023 investment properties included £71 million (2022: £73 million) for the head lease liabilities
recognised under IFRS 16.
Investment properties are stated at fair value as at 31 December 2023 based on external
valuations performed by professionally qualiie fied, independent valuers. The Group’s wholly-
owned, joint venture and associate property portfolio is valued by CBRE Ltd on a half-yearly
basis. The valuations conform to International Valuation Standards and were arrived at by
reference to market evidence of the transaction prices paid for similar properties. In estimating
the fair value of the properties, the valuers consider the highest and best use of the properties.
There has been no change to the valuation technique during the year.
CBRE Ltd also undertakes some professional and agency work on behalf of the Group. This is
carried out by departments separate from the Valuation team in CBRE and overall the total fees
earned from the Group are below 5 per cent of CBRE’s total income. This work does not
end.
Completed properties include buildings that are occupied or are available for occupation.
Development properties include land available for development (land bank), land under
development, construction in progress and covered land. The carrying value of covered
land held within Development properties as at 31 December 2023 is £645 million (2022:
£656 million).
The carrying value of investment properties situated on land held under leaseholds is
£186 million (excluding head lease ROU assets) (2022: £209 million).
Further details on property valuation techniques, sustainability and climate change
considerations and related quantitative information are set out in Note 25.
13(ii) – Trading properties
| 2023 | 2022 | |
| £m | £m | |
At 1 January | 35 | 45 |
Exchange movement | – | 1 |
Property acquisitions | – | 1 |
Additions to existing trading properties | – | 62 |
| Disposals | (32) | (93) |
Decrease in provision for impairment during the year | – | 15 |
Transfer from investment properties | – | 4 |
At 31 December | 3 | 35 |
1
1 Proit o Profit on sale of trading properties of £3 million in the year (2022: £7 million) have been generated from total
proceeds of £35 million (2022: £100 million), see Note 4, less costs of £32 million (2022: £93 million),
see Note 5.
Trading properties were externally valued, as detailed in Note 13(i), resulting in no provision
for impairment during the year (2022: decrease of £15 million). Based on the fair value at
31 December 2023, the portfolio has unrecognised surplus of £1 million (2022: £2 million).
Further information on valuation techniques and related quantitative information is given
in Note 25.
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162
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Current | ||||
| Trade receivables | 63 | 60 | – | – |
| Other receivables | 112 | 114 | 40 | 25 |
Prepayments | 13 | 17 | – | – |
Amounts due from related parties | 7 | 8 | – | – |
Total current trade and other receivables | 195 | 199 | 40 | 25 |
| Non-current | ||||
| Other receivables | 2 | 40 | – | – |
| Amounts due from related parties | 6 | 41 | – | – |
Total non-current other receivables | 8 | 81 | – | – |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Due within one year | ||||
Trade payables | 10 | 10 | – | – |
Other payables | 165 | 159 | 15 | 27 |
Non-capital accruals | 108 | 70 | 48 | 20 |
Capital creditors and capital accruals | 223 | 218 | – | – |
Rent in advance | 107 | 102 | – | – |
Lease liabilities | 1 | 1 | – | – |
Total trade and other payables due within one year | 614 | 560 | 63 | 47 |
| Due after one year | ||||
Other payables | 1 | 1 | – | – |
Lease liabilities | 73 | 76 | – | – |
Loans due to subsidiaries | – | – | 2,088 | 2,063 |
Total other payables due after one year | 74 | 77 | 2,088 | 2,063 |
16. Net Borrowings
16(i) – Net borrowings by type
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Secured borrowings: | ||||
Euro mortgages | 1 | 1 | – | – |
Total secured (on land, buildings and other assets) | 1 | 1 | – | – |
| Unsecured borrowings: | ||||
| Bonds | ||||
6.75% bonds 2024 £82m | – | 82 | – | 82 |
1.250% bonds 2026 €650m | 562 | 571 | – | – |
2.375% bonds 2029 £350m | 349 | 348 | 349 | 348 |
1.875% bonds 2030 €500m | 430 | 436 | – | – |
0.50% bonds 2031 €500m | 430 | 437 | – | – |
5.75% bonds 2035 £200m | 199 | 199 | 199 | 199 |
2.875% bonds 2037 £400m | 396 | 396 | 396 | 396 |
5.125% bonds 2041 £350m | 343 | 344 | 343 | 344 |
2,709 | 2,813 | 1,287 | 1,369 | |
| Private placement notes | ||||
1.77% notes 2027 €400m | 348 | 354 | 348 | 354 |
1.82% notes 2028 €100m | 87 | 88 | 87 | 88 |
2.00% notes 2029 €150m | 130 | 133 | 130 | 133 |
2.27% notes 2032 €100m | 87 | 88 | 87 | 88 |
1.35% notes 2032 €150m | 130 | 132 | 130 | 132 |
2.37% notes 2033 €200m | 174 | 176 | 174 | 176 |
1.45% notes 2035 €50m | 43 | 44 | 43 | 44 |
3.87% notes 2037 €50m | 42 | 43 | 42 | 43 |
1.83% notes 2040 €190m (Series C) | 164 | 167 | 164 | 167 |
1.83% notes 2040 €60m (Series D) | 52 | 53 | 52 | 53 |
4.14% notes 2042 €175m | 152 | 155 | 152 | 155 |
1,409 | 1,433 | 1,409 | 1,433 | |
| Bank loans | ||||
Revolving credit facilities | 348 | 639 | 348 | 639 |
Term loans | 881 | (2) | 881 | (2) |
1,229 | 637 | 1,229 | 637 | |
Total unsecured | 5,347 | 4,883 | 3,925 | 3,439 |
Total borrowings | 5,348 | 4,884 | 3,925 | 3,439 |
Cash and cash equivalents | (376) | (162) | (294) | (72) |
Net borrowings | 4,972 | 4,722 | 3,631 | 3,367 |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
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163
Notes to the Financial Statements continued
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| Maturity p | £m | £m | £m | £m |
In one year or less | 1 | – | – | – |
In more than one year but less than two | 168 | 83 | 168 | 82 |
In more than two years but less tha | 2,057 | 1,562 | 1,495 | 991 |
In more tha | 1,729 | 1,662 | 869 | 789 |
In more than ten years | 1,393 | 1,577 | 1,393 | 1,577 |
In more than one year | 5,347 | 4,884 | 3,925 | 3,439 |
Total borrowings | 5,348 | 4,884 | 3,925 | 3,439 |
| Cash and cash equivalents | (376) | (162) | (294) | (72) |
Net borrowings | 4,972 | 4,722 | 3,631 | 3,367 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
In one year or less | 148 | 150 | 139 | 142 |
In more than one year but less than two | – | – | – | – |
In more than two years but less tha | 1,212 | 1,608 | 1,212 | 1,608 |
Total available undrawn borrowing facilities | 1,360 | 1,758 | 1,351 | 1,750 |
16(ii) – Net borrowings by interest rates
The weighted average interest rate pro ofile of Group and Company net borrowings after
derivative instruments is as follows:
| 2023 | |||||||
| Capped | Capped | Variable | |||||
| Interest rate p | Fixed rate | Fixed period | Fixed debt | strike | debt | debt/cash | Total |
| Group | % | years | £m | % | £m | £m | £m |
Borrowings | Weighted average after derivative instruments | ||||||
Sterling | 3.83 | 11.9 | 1,387 | – | – | 449 | 1,836 |
Euros | 1.68 | 6.1 | 2,223 | 2.46 | 1,152 | 137 | 3,512 |
Total borrowings | 2.51 | 8.3 | 3,610 | 2.26 | 1,152 | 586 | 5,348 |
| Cash and cash | |||||||
| equivalents | |||||||
Sterling | (361) | (361) | |||||
Euros | (15) | (15) | |||||
| Total cash and cash | |||||||
equivalents | (376) | (376) | |||||
Net borrowings | 3,610 | 1,152 | 210 | 4,972 |
| 2022 | |||||||
| Capped | Variable | ||||||
| Interest rate p | Fixed rate | Fixed period | Fixed debt | strike | Capped debt | debt/cash | Total |
| Group | % | years | £m | % | £m | £m | £m |
Borrowings | Weighted average after derivative instruments | ||||||
Sterling | 4.00 | 12.4 | 1,469 | – | – | (349) | 1,120 |
Euros | 1.67 | 7.6 | 2,259 | 1.93 | 701 | 804 | 3,764 |
Total borrowings | 2.58 | 9.5 | 3,728 | 1.93 | 701 | 455 | 4,884 |
| Cash and cash | |||||||
| equivalents | |||||||
Sterling | (146) | (146) | |||||
Euros | (16) | (16) | |||||
| Total cash and cash | |||||||
equivalents | (162) | (162) | |||||
Net borrowings | 3,728 | 701 | 293 | 4,722 |
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| 2023 | |||||||
| Capped | Capped | Variable | |||||
| Intere | Fixed rate | Fixed period | Fixed debt | strike | debt | debt/cash | Total |
| – Company | % | years | £m | % | £m | £m | £m |
Borrowings | Weighted average after derivative instruments | ||||||
Sterling | 3.83 | 11.9 | 1,387 | – | – | 449 | 1,836 |
Euros | 2.49 | 7.9 | 800 | 2.46 | 1,152 | 137 | 2,089 |
Total borrowings | 3.34 | 10.4 | 2,187 | 2.26 | 1,152 | 586 | 3,925 |
| Cash and cash | |||||||
| equivalents | |||||||
Sterling | (289) | (289) | |||||
Euros | (5) | (5) | |||||
| Total cash and cash | |||||||
equivalents | (294) | (294) | |||||
Net borrowings | 2,187 | 1,152 | 292 | 3,631 |
| 2022 | |||||||
| Capped | Variable | ||||||
| Intere | Fixed rate | Fixed period | Fixed debt | strike | Capped debt | debt/cash | Total |
| – Company | % | years | £m | % | £m | £m | £m |
Borrowings | Weighted average after derivative instruments | ||||||
Sterling | 4.00 | 12.4 | 1,469 | – | – | (349) | 1,120 |
Euros | 2.45 | 9.1 | 814 | 1.93 | 701 | 804 | 2,319 |
Total borrowings | 3.45 | 11.2 | 2,283 | 1.93 | 701 | 455 | 3,439 |
| Cash and cash | |||||||
| equivalents | |||||||
Sterling | (72) | (72) | |||||
| Total cash and cash | |||||||
equivalents | (72) | (72) | |||||
Net borrowings | 2,283 | 701 | 383 | 3,367 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Current | ||||
| Forward foreign exchange and currency swap contracts | ||||
– non-hedge | 8 | 11 | 8 | 11 |
Total current derivative assets | 8 | 11 | 8 | 11 |
| Non-current | ||||
Interest rate swap contracts – non-hedge | – | 1 | – | 1 |
Interest rate cap contracts – non-hedge | 37 | 56 | 37 | 56 |
| Forward foreign exchange and currency swap contracts | ||||
– non-hedge | 10 | 1 | 10 | 1 |
Total non-current derivative assets | 47 | 58 | 47 | 58 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
| Current | ||||
Interest rate swap contracts – non-hedge | 46 | – | 46 | – |
| Forward foreign exchange and currency swap contracts | ||||
– non-hedge | – | 1 | 6 | 14 |
| Forward foreign exchange and currency swap contracts | ||||
– hedge | 6 | 13 | – | – |
Total current derivative liabilities | 52 | 14 | 52 | 14 |
| Non-current | ||||
Interest rates swap contracts – non-hedge | 97 | 188 | 97 | 188 |
Total non-current derivative liabilities | 97 | 188 | 97 | 188 |
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Notes to the Financial Statements continued
Group | Company | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Notes | £m | £m | £m | £m | |
| Financial assets | |||||
| Financial assets at amortised cost | |||||
Loans due from subsidiaries | 7 | – | – | 5,012 | 4,471 |
| Lease incentives | 13 | 149 | 140 | – | – |
Trade receivables | 14 | 63 | 60 | – | – |
| Other current receivables | 14 | 42 | 58 | 40 | 25 |
Non-current receivables | 14 | 8 | 81 | – | – |
Cash and cash equivalents | 16 | 376 | 162 | 294 | 72 |
Financial assets at fair value through pro | |||||
Other investments | 10 | 9 | – | – | |
Non-hedge at FVPL | 17 | 55 | 69 | 55 | 69 |
703 | 579 | 5,401 | 4,637 | ||
| Financial liabilities | |||||
| Liabilities at amortised cost | |||||
| Trade and other payables | 15 | 580 | 534 | 2,151 | 2,110 |
Borrowings | 16 | 5,348 | 4,884 | 3,925 | 3,439 |
Used for hedging at FVOCI | 17 | 6 | 13 | – | – |
Non-hedge at FVPL | 17 | 143 | 189 | 149 | 202 |
6,077 | 5,620 | 6,225 | 5,751 |
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| 2023 | 2022 | |
| Total | Total | |
| £m | £m | |
| Group | ||
Gross currency assets | 6,374 | 6,159 |
Gross currency liabilities | (4,718) | (4,655) |
Net exposure | 1,656 | 1,504 |
| Company | ||
Gross currency assets | 2,650 | 2,372 |
Gross currency liabilities | (4,581) | (4,341) |
Net exposure | (1,931) | (1,969) |
| Average exchange | Currency contract | |||||||
| rates | (local currency) | Contract value | Fair value | |||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||
2023 | 2022 | m | m | £m | £m | £m | £m | |
| Group | ||||||||
| Economic cas | ||||||||
| hedges | ||||||||
Sell euros (buy sterling) | 1.13 | 1.13 | 458 | 438 | 404 | 387 | 10 | – |
Buy euros (sell sterling) | 1.16 | 1.16 | 964 | 463 | 831 | 399 | 8 | 11 |
| Net investment hedges | ||||||||
Sell euros (buy sterling) | 1.16 | 1.16 | 601 | 601 | 517 | 519 | (6) | (13) |
Total | 12 | (2) | ||||||
| Company | ||||||||
| Economic cas | ||||||||
| hedges | ||||||||
Sell euros (buy sterling) | 1.15 | 1.15 | 1,059 | 1,039 | 921 | 906 | 4 | (13) |
Buy euros (sell sterling) | 1.16 | 1.16 | 964 | 463 | 831 | 399 | 8 | 11 |
Total | 12 | (2) |
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Notes to the Financial Statements continued
| Group | ||
| 2023 | 2022 | |
| Euro forward foreign exchange | £m | £m |
Carrying amount (current liabilities, note 17(i)) | (6) | (13) |
Notional amount | 517 | 519 |
Maturity date | Jan 2024 | Jan 2023 |
Hedge ratio | 1:1 | 1:1 |
Change in discounted spot value of hedging instruments since 1 January – gain/(loss) | 9 | (33) |
Change in value of hedged item used to determine hed | (9) | 33 |
Weighted average hedged rate for the year (including forward points) | 1.15 | 1.17 |
| Group | ||
| 2023 | 2022 | |
| Private placement notes | £m | £m |
Carrying amount of private placement notes (non-current borrowings, note 16) | 1,409 | 1,433 |
| Carrying amount of private placement notes designated as net investment | ||
hedging instruments | 1,409 | 1,433 |
Hedge ratio | 1:1 | 1:1 |
| Change in carrying amount of USPP notes as a result of foreign currency movement | ||
since 1 January, recognised in OCI – gain/(loss) | 26 | (65) |
Change in value of hedged item used to determine hed | (26) | 65 |
Weighted average hedged rate for the year (including forward points) | 1.15 | 1.13 |
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interest rate | Notional principal amount | Fair value | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| % | % | £m | £m | £m | £m | |
| Group | ||||||
In one year or less | – | – | – | – | – | – |
In more than one year but less than two | 2.80 | – | 43 | – | – | – |
| In more than two years | ||||||
but less th | 3.92 | 3.58 | 100 | 144 | (1) | 1 |
In more tha | – | – | – | – | – | – |
Total | 143 | 144 | (1) | 1 | ||
| Company | ||||||
In one year or less | – | – | – | – | – | – |
In more than one year but less than two | 2.80 | – | 43 | – | – | – |
| In more than two years | ||||||
but less th | 3.92 | 3.58 | 100 | 144 | (1) | 1 |
In more tha | – | – | – | – | – | – |
Total | 143 | 144 | (1) | 1 | ||
| Recei | ||||||
| Group | ||||||
In one year or less | – | – | – | – | – | – |
In more than one year but less than two | – | – | – | – | – | – |
| In more than two years | ||||||
but less th | 1.82 | – | 87 | – | (6) | – |
In more tha | 1.86 | 1.85 | 565 | 664 | (136) | (188) |
Total | 652 | 664 | (142) | (188) | ||
| Company | ||||||
In one year or less | – | – | – | – | – | – |
In more than one year but less than two | – | – | – | – | – | – |
| In more than two years | ||||||
but less th | 1.82 | – | 87 | – | (6) | – |
In more tha | 1.86 | 1.85 | 565 | 664 | (136) | (188) |
Total | 652 | 664 | (142) | (188) | ||
Average strike price | Notional principal amount | Fair value | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| % | % | £m | £m | £m | £m | |
| Group | ||||||
In one year or less | 3.73 | – | 202 | – | – | – |
In more than one year but less than two | 2.91 | – | 300 | – | 3 | – |
| In more than two years | ||||||
but less th | 2.57 | 2.72 | 215 | 172 | 4 | 4 |
In more tha | 1.50 | 1.68 | 435 | 529 | 30 | 52 |
Total | 1,152 | 701 | 37 | 56 | ||
| Company | ||||||
In one year or less | 3.73 | – | 202 | – | – | – |
In more than one year but less than two | 2.91 | – | 300 | – | 3 | – |
| In more than two years | ||||||
but less th | 2.57 | 2.72 | 215 | 172 | 4 | 4 |
In more tha | 1.50 | 1.68 | 435 | 529 | 30 | 52 |
Total | 1,152 | 701 | 37 | 56 |
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Notes to the Financial Statements continued
2023 | 2022 | |||||
| Gross | Loss | Net carrying | Gross | Loss | Net carrying | |
| amount | allowance | amount | amount | allowance | amount | |
| £m | £m | £m | £m | £m | £m | |
0 – 30 days | 7 | (1) | 6 | 2 | – | 2 |
30 – 60 days | 1 | – | 1 | 2 | – | 2 |
60 – 90 days | 1 | – | 1 | 2 | – | 2 |
90 – 180 days | 5 | (3) | 2 | 5 | (3) | 2 |
>180 days | 4 | (3) | 1 | 4 | (4) | – |
Past due | 18 | (7) | 11 | 15 | (7) | 8 |
Not due | 55 | (3) | 52 | 54 | (2) | 52 |
Total trade receivables | 73 | (10) | 63 | 69 | (9) | 60 |
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2023 | 2022 | |||||||||||
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| interest | Under | 1–2 | 2–5 | Over | interest | Under | 1–2 | 2–5 | Over | |||
| rate | 1 year | years | years | 5 years | Total | rate | 1 year | years | years | 5 years | Total | |
| % | £m | £m | £m | £m | £m | % | £m | £m | £m | £m | £m | |
| Group | ||||||||||||
| Non-derivat | ||||||||||||
| Trade and other payables | 468 | – | – | – | 468 | 421 | – | – | – | 421 | ||
Lease liabilities | 3.90 | 4 | 4 | 12 | 118 | 138 | 3.90 | 4 | 4 | 13 | 124 | 145 |
Variable rate debt instruments | 5.04 | 59 | 251 | 1,166 | – | 1,476 | 4.08 | 23 | 27 | 700 | – | 750 |
Fixed rate debt instruments | 2.35 | 99 | 97 | 1,264 | 3,065 | 4,525 | 2.43 | 104 | 183 | 1,209 | 3,430 | 4,926 |
Net settled interest rate swaps | 3.18 | 14 | 7 | 12 | 7 | 40 | 1.08 | 8 | 5 | 16 | – | 29 |
| Gross settled foreign exchange | ||||||||||||
| – Forward and currency swap contracts | ||||||||||||
– Inlowing | (571) | – | – | – | (571) | (556) | – | – | – | (556) | ||
– Outlowing | 577 | – | – | – | 577 | 580 | – | – | – | 580 | ||
Total | 650 | 359 | 2,454 | 3,190 | 6,653 | 584 | 219 | 1,938 | 3,554 | 6,295 |
2023 | 2022 | |||||||||||
| Weighted | Weighted | |||||||||||
| average | average | |||||||||||
| interest | Under | 1–2 | 2–5 | Over | interest | Under | 1–2 | 2–5 | Over | |||
| rate | 1 year | years | years | 5 years | Total | rate | 1 year | years | years | 5 years | Total | |
| % | £m | £m | £m | £m | £m | % | £m | £m | £m | £m | £m | |
| Company | ||||||||||||
| Non-derivat | ||||||||||||
| Trade and other payables | 37 | 2,088 | – | – | 2,125 | 22 | 2,063 | – | – | 2,085 | ||
Variable rate debt instruments | 5.04 | 59 | 251 | 1,166 | – | 1,476 | 4.08 | 23 | 27 | 700 | – | 750 |
Fixed rate debt instruments | 2.95 | 80 | 80 | 666 | 2,180 | 3,006 | 3.05 | 86 | 164 | 593 | 2,519 | 3,362 |
Net settled interest rate swaps | 3.18 | 14 | 7 | 12 | 7 | 40 | 1.08 | 8 | 5 | 16 | – | 29 |
| Gross settled foreign exchange | ||||||||||||
| – Forward and currency swap contracts | ||||||||||||
– Inlowing | (571) | – | – | – | (571) | (556) | – | – | – | (556) | ||
– Outlowing | 577 | – | – | – | 577 | 580 | – | – | – | 580 | ||
Total | 196 | 2,426 | 1,844 | 2,187 | 6,653 | 163 | 2,259 | 1,309 | 2,519 | 6,250 |
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Notes to the Financial Statements continued
| Number | Par value | |
| of shares | of shares | |
| Issued and fully paid | million | £m |
Ordinary shares of 10p each at 1 January 2023 | 1,209 | 121 |
Issue of shares – scrip dividend | 18 | 2 |
Issue of shares – other | 1 | – |
Ordinary shares of 10p each at 31 December 2023 | 1,228 | 123 |
| Number | Par value | |
| of shares | of shares | |
| Issued and fully paid | million | £m |
Ordinary shares of 10p each at 1 January 2022 | 1,202 | 120 |
Issue of shares – scrip dividend | 6 | 1 |
Issue of shares – other | 1 | – |
Ordinary shares of 10p each at 31 December 2022 | 1,209 | 121 |
| 2023 | 2022 | |
| number | number | |
At 1 January | 1,034,807 | 867,794 |
Shares granted DSBP | 479,754 | 451,613 |
Shares vested | (327,180) | (264,600) |
Shares expired/lapsed | – | (20,000) |
At 31 December | 1,187,381 | 1,034,807 |
| 2023 | 2022 | |
| number | number | |
At 1 January | 3,986,588 | 3,791,289 |
Shares granted LTIP | 1,639,625 | 973,654 |
Shares vested | (745,044) | (778,355) |
Shares expired/lapsed | (212,848) | – |
At 31 December | 4,668,321 | 3,986,588 |
Date of grant | 26 March 2020 | 29 March 2021 | 5 May 2022 | 24 March 2023 |
Market price used for award | 786.8p | 933.0p | 1,162.5p | 737.8 p |
Risk-free interest rate | 0.12% | 0.13% | 1.68% | 3.33% |
Dividend yield | 2.6% | 2.4% | 1.9% | 3.1% |
Volatility | 17.1% | 22.3% | 24.7% | 28.3% |
Term | 3 years | 3 years | 3 years | 3 years |
Fair value per share | 654.4p | 375.3p | 493.1p | 338.9p |
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| 2023 | 2022 | |
| GROUP AND COMPANY | £m | £m |
Balance at 1 January | 3,449 | 3,371 |
Premium arising on the issue of shares – scrip dividend | 127 | 78 |
Premium arising on the issue of shares – other | 1 | – |
Balance at 31 December | 3,577 | 3,449 |
| 2023 | 2022 | |
| GROUP | £m | £m |
| Properties | 236 | 439 |
| Joint | ||||
| ventures and | ||||
| associates | ||||
| Group | at share | 2023 | 2022 | |
| £m | £m | £m | £m | |
Not later than one year | 478 | 128 | 606 | 551 |
Later than one year, not later than two years | 410 | 113 | 523 | 487 |
Later than two years, not later than three years | 357 | 96 | 453 | 404 |
Later than three years, not later than four years | 316 | 83 | 399 | 346 |
Later than four years, not later tha | 280 | 65 | 345 | 304 |
Later t | 2,062 | 235 | 2,297 | 2,046 |
Balance at 31 December | 3,903 | 720 | 4,623 | 4,138 |
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Notes to the Financial Statements continued
23. Related Party Transactions
Group
Transactions during the year between the Group and its joint ventures are disclosed below:
| 2023 | 2022 | |
| £m | £m | |
Dividends received | 38 | 9 |
| Assets sold to joint ventures | 18 | 215 |
Management fee income | 29 | 30 |
Performance fee income | 89 | – |
1
1 During the year investment properties with a carrying value of £18 million were sold to SELP (2022: £215 million).
Total proceeds (and total cash proceeds) received by SEGRO was £18 million (2022: £218 million). The
transaction resulted in the net assets of the Group increasing by £nil (2022: £3 million). The net cash impact
on a proportionally consolidated basis was an inl nflow of £9 million (2022: in 2: inflow £109 million) once the 50%
ownership in SELP is taken into account.
Amounts due from joint ventures and associates are disclosed in Note 14. Investments in
joint ventures and associates at 31 December 2023 of £1,636 million disclosed in Note 7
(2022: £1,768 million) includes shareholder loans of £89 million (2022: £90 million).
Transactions between the Company and its subsidiaries eliminate on consolidation and
are not disclosed in this Note.
Company
Amounts due from subsidiaries are disclosed in Note 7 and amounts due to subsidiaries are
disclosed in Note 15.
None of the above Group or Company balances are secured.
| 2023 | 2022 | |
| £m | £m | |
Salaries and short-t | 5 | 5 |
Share-based payments | 3 | 3 |
Total remuneration | 8 | 8 |
24. Notes to the Cash Flow Statements
24(i) – Reconciliation of cash generated from operations
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Operating (loss)/proit | (180) | (1,694) | 700 | 650 |
| Adjustments for: | ||||
Depreciation of property, plant and equipment and amortisation of intangibles | 6 | 4 | – | – |
Share of loss from joint ventures and associates after tax | 76 | 144 | – | – |
(39) | (9) | – | – | |
Revaluation de | 647 | 1,970 | – | – |
Dividends and other income | – | – | (852) | (706) |
Other provisions | 8 | (6) | – | (1) |
Increase in impairment of loan held with associate | 28 | – | – | – |
Increase in impairment of subsidiaries | – | – | 136 | 44 |
546 | 409 | (16) | (13) | |
| Changes in working capital: | ||||
Decrease in trading properties | 33 | 33 | – | – |
Increase in debtors and tenant incentives | (22) | (6) | – | (2) |
Increase/(decrease) in creditors | 27 | 43 | (1) | (1) |
Net cash | 584 | 479 | (17) | (16) |
24(ii) – Deposits
Term deposits for a period of three months or less are included within cash and cash equivalents.
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24(iii) – Analysis of net debt
Management dein efines net debt as total borrowing less cash and cash equivalents.
Cash movements | Non-cash movements | ||||||
| At 1 | Cost of | Other | |||||
| January | Cash | Cash | Exchange | early close | non-cash | At 31 December | |
| 2023 | inlow | movement | out of debt | adjustments | 2023 | ||
| £m | £m | £m | £m | £m | £m | £m | |
| Group | |||||||
Bank loans and loan capital | 4,928 | 961 | (445) | (58) | 1 | – | 5,387 |
Capitalis | (44) | – | (3) | – | – | 8 | (39) |
Total borrowings | 4,884 | 961 | (448) | (58) | 1 | 8 | 5,348 |
Cash and cash equivalents | (162) | (214) | – | – | – | – | (376) |
Net debt | 4,722 | 747 | (448) | (58) | 1 | 8 | 4,972 |
| Company | |||||||
Bank loans and loan capital | 3,466 | 961 | (445) | (33) | 1 | – | 3,950 |
Capitalis | (27) | – | (3) | – | – | 5 | (25) |
Total borrowings | 3,439 | 961 | (448) | (33) | 1 | 5 | 3,925 |
Cash and cash equivalents | (72) | (222) | – | – | – | – | (294) |
Net debt | 3,367 | 739 | (448) | (33) | 1 | 5 | 3,631 |
1
1 Proceeds from borrowings of £961 million (Company: £961 million).
2 Group cash out flow of £448 million (Company: £448 million), comprises repayment of borrowings of £444
million (Company: £444 million), cash settlement for early repayment of debt of £1 million (Company: £1 million)
and capitalised ed finance costs of £3 million (Company: £3 million).
3 Total other non-cash adjustment of £8 million (Company: £5 million) relates to the amortisation of issue costs
24(iv) – Analysis of v) – Analysis of financial liabilities and assets arising from ng from financing activities
For the year ended 31 December 2023
Cash movements | Non-cash movements | |||||||
| Cost of | ||||||||
| At 1 | Net | early | Other | At 31 | ||||
| January | Cash | Cash | Exchange | fair value | close of | non-cash | December | |
| 2023 | movement | changes | debt | adjustments | 2023 | |||
| £m | £m | £m | £m | £m | £m | £m | £m | |
Total borrowings (Note 16) | 4,884 | 961 | (448) | (58) | – | 1 | 8 | 5,348 |
| Derivatives: (Net) Fair value | ||||||||
| of forward foreign | ||||||||
| exchange and currency | ||||||||
swap contracts (Note 17) | 2 | – | (2) | (9) | (3) | – | – | (12) |
| Lease liabilities (Note 15) | 77 | – | (5) | (1) | – | – | 3 | 74 |
| Total ne | ||||||||
liabilities arising from | 4,963 | 961 | (455) | (68) | (3) | 1 | 11 | 5,410 |
3
1 Exchange movement of £67 million from borrowings and forward foreign exchange and currency swap
contracts consists of: Foreign exchange gain on eec ffective hedge relationships recognised in OCI of £35 million,
foreign exchange gain arising on translation of borrowings held in international operations recognised in OCI of
£25 million and foreign exchange gain recognised within the Income Statement of £7 million. See Note 17(iv).
2 Total net fair value gain of £24 million arising from derivatives per Note 9 also includes fair value gain from
interest rate swaps and caps of £21 million.
3 Lease liabilities cash outl flows of £5 million consists of: £3 million interest payment and £2 million principal
elements payment.
For the year ended 31 December 2022
Cash movements | Non-cash movements | ||||||
| Net | Other | At 31 | |||||
| At 1 January | Cash | Cash | Exchange | fair value | non-cash | December | |
| 2022 | out | movement 1 | changes | adjustments | 2022 | ||
| £m | £m | £m | £m | £m | £m | £m | |
Total borrowings (Note 16) | 3,406 | 2,752 | (1,451) | 168 | – | 9 | 4,884 |
Derivatives: (Net) Fair value of forward foreign | |||||||
| exchange and currency | |||||||
swap contracts (Note 17) | (32) | 15 | – | 17 | 2 | – | 2 |
Lease liabilities (Note 15)³ | 76 | – | (5) | 4 | – | 2 | 77 |
| Total ne | |||||||
liabilities arising from | 3,450 | 2,767 | (1,456) | 189 | 2 | 11 | 4,963 |
2
1 Exchange movement of £185 million from borrowings and forward foreign exchange and currency swap
contracts consists of: Foreign exchange loss on ee n effective hedge relationships recognised in OCI of £98 million
and foreign exchange loss arising on translation of borrowings held in international operations recognised in
OCI of £83 million and foreign exchange loss recognised within the Income Statement of £4 million. See Note
17(iv).
2 Total net fair value loss of £199 million arising from derivatives per Note 9 also includes fair value loss from
interest rate swaps and caps of £197 million.
3 Lease liabilities cash outl flows of £5 million consists of: £3 million interest payment and £2 million principal
elements payment.
Company
The Company’s inancial liabilities and assets arising from inancing activities comprise
Company total borrowings shown in Note 24(iii) of £3,925 million (2022: £3,439 million) and
the Group derivatives shown in the table above of £12 million (asset) (2022: £2 million liability).
25. Property Valuation Techniques, Sustainability and Climate Change Considerations
and Related Quantitative Information
All of the Group’s properties are level 3, as deine fined by IFRS 13, in the fair value hierarchy as at
31 December 2023 and there were no transfers between levels during the year. Level 3 inputs
used in valuing the properties are those which are unobservable, as opposed to level 1 (inputs
from quoted prices) and level 2 (observable inputs either directly, i.e. as prices, or indirectly, i.e.
derived from prices).
Valuation techniques
Based on dierent ap n different approaches for dierent p es for different properties, the following valuation techniques can
be used for the same class of assets:
The yield methodology valuation technique is used when valuing the Group’s assets which
uses market rental values capitalised with a market capitalisation rate. The resulting valuations
are cross-checked against the initial yields and the fair market values per square metre derived
from actual market transactions for similar assets.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
175
Notes to the Financial Statements continued
For properties under construction and the majority of land held for development, properties
are valued using a residual method valuation. Under this methodology, the valuer assesses the
investment value (using the above mentioned methodology for completed buildings).
Deductions are then made for the total estimated costs to complete, including notional nal finance
costs and developer’s pro ofit, to take into account the hypothetical purchaser’s management of
the remaining development process and their perception of risk with regard to construction
and the property market (e.g. as regards potential cost overruns and letting risk). Land values
are cross-checked against the rate per hectare derived from actual market transactions. Other
land is also valued on this comparative basis. Land values per hectare range from £0.1 million
– £41.5 million (2022: £0.1 million – £43.3 million) for the UK and £0.1 million – £12.7 million
(2022: £0.1 million – £16.0 million) for Continental Europe.
Sustainability valuation considerations
The Group’s valuers, CBRE, note in their valuation report that the impact of sustainability factors
on valuations have been considered. In a valuation context, ‘sustainability’ encompasses a
wide range of physical, social, environmental, and economic factors that can ae c factors that can affect value of an
asset, even if not explicitly recognised. The valuers consider the following areas to have the
most potential to impact on the value of an asset: Energy Performance; Green Certiic tification;
Sources of Fuel and Renewable Energy Sources and Physical Risk/Climate Risk. The valuers
have considered in particular the EPC ratings and have discussed with management the
appropriate capital expenditure which will be required to obtain the necessary EPC rating to
attract and maintain the tenants required in the future. The valuers are also aware of the impact
Climate risk legislation
The UK Government and the EU is currently producing legislation on the transition to net zero.
The UK Government is currently producing legislation which enforces the transition to net zero
by 2050, and the stated 78 per cent reduction of greenhouse gases by 2035. This is
understood to include an update to the Minimum Energy Eicie ergy Efficiency Standards, stated to
increase the minimum requirements for non-domestic properties from an E to a B in 2030. The
UK Government also intends to introduce an operational rating. It is not yet clear how this will
be legislated, but fossil fuels used in building, such as natural gas for heating, are incompatible
with the UK’s commitment to be Net Zero Carbon by 2050. This upcoming legislation could
have a potential impact to future asset value.
The introduction of mandatory climate-related disclosures in the UK and EU (including ‘Task
Force on climate-related Financial Disclosures’ (TCFD) in the UK and ‘Sustainable Finance
Disclosure Regulations’ (SFDR) and ‘Corporate Sustainability Reporting Directive’ (CSRD) in the
EU), including the assessment of physical and transition climate risks, may potentially have an
impact on how the market views such risks and incorporates them into the sale and letting of
assets.
Sustainability and climate risk legislation has an impact on the value of an asset, even if not
explicitly recognised. Valuers rel d. Valuers reflect markets, they do not lead them. Where the valuers
recognise the value impacts of sustainability and legislation, they are rele ation, they are reflecting their
understanding of how market participants include sustainability and legislation requirements
in their bids and the impact on market valuations.
Sensitivity analysis
An increase/decrease to ERV will increase/decrease valuations, while an increase/decrease to
yield will decrease/increase valuations. Sensitivity analysis showing the impact on valuations of
changes in yields and ERV on the property portfolio (including joint ventures and associates at
share) and the impact on valuations of changes in development costs on the development
property and land portfolio (including joint ventures and associates at share) is shown below.
On the basis inl s inflation has fallen during the latter half of 2023 and the expectation interest rates
may have peaked, management expect market conditions to be less volatile and consider a
+/- 25bp change in yield, a +/- 5% change in ERV and a +/- 10% change in development costs
to be reasonably possible changes to the assumptions.
| Impact on valuation of | Impact on valuation of 5% | Impact on valuation of | ||||||
| 25bp change in | change in estimated | 10% change in estimated | ||||||
| equivalent yield | rental value (ERV) | development costs | ||||||
| Group | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
| £m | £m | £m | £m | £m | £m | £m | ||
| 2023 | ||||||||
Completed property | 15,255 | (742) | 819 | 570 | (563) | – | – | |
| Development property | ||||||||
and land | 2,507 | (210) | 225 | 310 | (310) | (385) | 385 | |
| Group total property | ||||||||
portfolio | 1 7,7 | 6 2 | (952) | 1,044 | 880 | (873) | (385) | 385 |
| Impact on valuation of | Impact on valuation of 5% | Impact on valuation of 10% | |||||
| 25bp change in equivalent | change in estimated rental | change in estimated | |||||
| yield | value (ERV) | development costs | |||||
| Group | Increase | Decrease | Increase | Decrease | Increase | Decrease | |
| £m | £m | £m | £m | £m | £m | £m | |
| 2022 | |||||||
Completed property | 15,191 | (793) | 883 | 580 | (576) | – | – |
| Development property | |||||||
and land | 2,734 | (226) | 245 | 295 | (295) | (321) | 321 |
| Group total property | |||||||
portfolio | 17,925 | (1,019) | 1,128 | 875 | (871) | (321) | 321 |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
176
There are inter-relationships between all these inputs as they are determined by market
conditions. The existence of an increase in more than one input would be to magnify the
impact on the valuation. The impact on the valuation will be mitigated by the inter-relationship
of two inputs in opposite directions, for example, an increase in rent may be oset by an e offset by an
increase in yield. The yield sensitivity is based on the equivalent yield which closely aligns with
the net true equivalent yield inputs shown in the table below. The table below includes the
Group’s wholly-owned and joint venture and associate assets at share in order to include the
entire portfolio. The equivalent analysis for the range of inputs on a wholly-owned basis would
Valuation | Inputs | |||||||
| Combined | Net true | Net true | ||||||
| Land & | property | equivalent | equivalent | |||||
| Completed | development | portfolio | ERV | ERV range | yield | yield range | ||
2023 | By asset type | £m | £m | £m | £ per sq m | £ per sq m | % | % |
| Big box warehouses | ||||||||
,000 sq m | 2,257 | – | 2,257 | 59.2 | 34.8-185.7 | 5.3 | 4.5-6.8 | |
| Big box warehouses | ||||||||
,000 sq m | 2,580 | – | 2,580 | 67.1 | 36.5-203.3 | 5.5 | 4.5-6.8 | |
| Urban warehouses | ||||||||
6,553 | – | 6,553 | 156.0 | 26.3-387.5 | 5.2 | 4.3-9.7 | ||
| Urban warehouses | ||||||||
3,508 | – | 3,508 | 230.2 | 43.8-497.4 | 5.0 | 4.3-9.1 | ||
High value and other uses of industrial land | 357 | – | 357 | 2 07.5 | 52.2-538.2 | 7.2 | 4.3-10.6 | |
15,255 | 2,507 | 1 7,762 | 98.0 | 26.3-538.2 | 5.3 | 4.3-10.6 | ||
| By ownership | ||||||||
| Wholly-owned | 12,463 | 2,384 | 14,847 | 147.4 | 26.3-538.2 | 5.2 | 4.3-10.6 | |
Joint ventures and associates | 2,792 | 123 | 2,915 | 58.3 | 36.5-133.5 | 5.5 | 4.5-8.5 | |
Group Total | 15,255 | 2,507 | 17,762 | 98.0 | 26.3-538.2 | 5.3 | 4.3-10.6 | |
1
2
2
3
4
5
1 Land and development valuations by asset type are not available as land sites are not categorised by asset type.
Combined property portfolio column will not cast down but row does cast across.
2 On a fully occupied basis.
3 In relation to the completed properties only.
4 High value and other uses of industrial land includes oi s offices and retail uses, such as trade counters, car
showrooms and self-storage facilities.
5 Included in the completed portfolio, the wholly-owned assets are: big box > 35,000 sq m £1,026 million; big box
< 35,000 sq m £1,073 million; urban warehouses > 3,500 sq m £6,502 million; urban warehouses < 3,500 sq m
£3,508 million; and other uses £354 million.
Valuation | Inputs | |||||||
| Combined | Net true | Net true | ||||||
| Land & | property | equivalent | equivalent | |||||
| Completed | development | portfolio | ERV | ERV range | yield | yield range | ||
2023 | By geography | £m | £m | £m | £ per sq m | £ per sq m | % | % |
Greater London | 5,859 | 241 | 6,100 | 231.2 | 63.4-497.4 | 4.9 | 4.3-8.3 | |
Thames Valley | 2,523 | 708 | 3,231 | 233.9 | 80.7-538.2 | 5.6 | 4.6-10.6 | |
National Logistics | 1,253 | 597 | 1,850 | 95.0 | 45.0-203.3 | 5.5 | 5.3-6.9 | |
| Northern Europe | ||||||||
Germany | 1,664 | 308 | 1,972 | 72.8 | 26.3-165.5 | 4.9 | 4.3-7.9 | |
Netherlands | 189 | 12 | 201 | 75.6 | 48.8-118.6 | 5.2 | 4.7-8.5 | |
| Southern Europe | ||||||||
France | 1,674 | 353 | 2,027 | 7 7.8 | 40.9-210.9 | 5.5 | 4.6-9.7 | |
Italy/Spain | 1,311 | 202 | 1,513 | 57. 5 | 34.8-170.2 | 5.4 | 4.7-6.3 | |
| Central Europe | ||||||||
Poland | 684 | 82 | 766 | 48.8 | 36.5-143.5 | 6.5 | 6.0-6.8 | |
Czech Republic | 98 | 4 | 102 | 75.1 | 66.0-99.1 | 6.1 | 6.1-6.1 | |
Group Total | 15,255 | 2,507 | 17,762 | 98.0 | 26.3-538.2 | 5.3 | 4.3-10.6 | |
| Investment properties | ||||||||
| – Group (Note 13(i)) | 14,843 | |||||||
| Investment properties | ||||||||
– Joint ventures and associates (Note 7(ii)) | 2,915 | |||||||
| Trading properties | ||||||||
| – Group (Note 13(ii)) | 4 | |||||||
Group Total | 17,762 | |||||||
| 1 On a fully occupied basis. |
1
1
2
3
4
2 In relation to the completed properties only.
3 Excludes head lease ROU assets of £71 million.
4 Includes valuation surplus not recognised on trading properties of £1 million.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
177
Notes to the Financial Statements continued
Valuation | Inputs | |||||||
| Combined | Net true | Net true | ||||||
| Land & | property | equivalent | equivalent | |||||
| Completed | development | portfolio | ERV | ERV range | yield | yield range | ||
2022 | By asset type | £m | £m | £m | £ per sq m | £ per sq m | % | % |
| Big box warehouses | ||||||||
,000 sq m | 2,076 | 2,076 | 54.6 | 32.7-169.5 | 4.8 | 3.9-6.2 | ||
| Big box warehouses | ||||||||
,000 sq m | 2,651 | 2,651 | 63.6 | 36.1-203.3 | 4.9 | 3.7-6.4 | ||
| Urban warehouses | ||||||||
6,465 | 6,465 | 144.0 | 36.1-387.5 | 4.8 | 3.8-9.5 | |||
| Urban warehouses | ||||||||
3,628 | 3,628 | 220.9 | 43.5-387.5 | 4.6 | 3.9-8.9 | |||
High value and other uses of industrial land | 371 | 371 | 191.5 | 52.0-527.4 | 6.8 | 3.6-9.7 | ||
15,191 | 2,734 | 17,925 | 93.4 | 32.7-527.4 | 4.8 | 3.6-9.7 | ||
| By ownership | ||||||||
| Wholly-owned | 12,311 | 2,592 | 14,903 | 143.7 | 32.7-527.4 | 4.8 | 3.6-9.7 | |
Joint ventures and associates | 2,880 | 142 | 3,022 | 54.2 | 36.1-133.6 | 4.8 | 3.7-9.5 | |
Group Total | 15,191 | 2,734 | 17,925 | 93.4 | 32.7-527.4 | 4.8 | 3.6-9.7 | |
1
2
2
3
4
5
1 Land and development valuations by asset type are not available as land sites are not categorised by asset type.
Combined property portfolio column will not cast down but row does cast across.
2 On a fully occupied basis.
3 In relation to the completed properties only.
4 High value and other uses of industrial land includes oi s offices and retail uses, such as trade counters, car
showrooms and self-storage facilities.
5 Included in the completed portfolio, the wholly-owned assets are: big box > 35,000 sq m £832 million; big box
< 35,000 sq m £1,127 million; urban warehouses > 3,500 sq m £6,356 million; urban warehouses < 3,500 sq m
£3,628 million; and other uses £368 million.
Valuation | Inputs | |||||||
| Combined | Net true | Net true | ||||||
| Land & | property | equivalent | equivalent | |||||
| Completed | development | portfolio | ERV 1 | ERV range | yield | yield range | ||
2022 | By geography | £m | £m | £m | £ per sq m | £ per sq m | % | % |
Greater London | 6,065 | 347 | 6,412 | 222.1 | 57.3-387.5 | 4.6 | 3.9-7.8 | |
Thames Valley | 2,325 | 686 | 3,011 | 213.5 | 80.7-527.4 | 5.3 | 4.7-9.7 | |
National Logistics | 1,167 | 554 | 1,721 | 91.3 | 45.0-203.3 | 5.3 | 5.0-6.2 | |
| Northern Europe | ||||||||
Germany | 1,664 | 335 | 1,999 | 66.2 | 36.1-167.6 | 4.3 | 3.7-6.2 | |
Netherlands | 170 | 12 | 182 | 67.3 | 49.7-102.2 | 4.8 | 4.1-9.5 | |
| Southern Europe | ||||||||
France | 1,771 | 463 | 2,234 | 74.9 | 40.7-465.5 | 4.8 | 3.6-9.2 | |
Italy/Spain | 1,225 | 261 | 1,486 | 54.3 | 32.7–188.7 | 4.6 | 4.1-6.3 | |
| Central Europe | ||||||||
Poland | 702 | 71 | 773 | 47.3 | 36.1-136.7 | 5.9 | 5.4-6.4 | |
Czech Republic | 102 | 5 | 107 | 72.2 | 62.8-100.9 | 5.5 | 5.3-5.5 | |
Group Total | 15,191 | 2,734 | 17,925 | 93.4 | 32.7-527.4 | 4.8 | 3.6-9.7 | |
| Investment properties | ||||||||
| – Group (Note 13(i)) | 14,866 | |||||||
| Investment properties | ||||||||
– Joint ventures and associates (Note 7(ii)) | 3,022 | |||||||
| Trading properties | ||||||||
| – Group (Note 13(ii)) | 37 | |||||||
Group Total | 17,925 |
1
2
3
4
1 On a fully occupied basis.
2 In relation to the completed properties only.
3 Excludes head lease ROU assets of £73 million.
4 Includes valuation surplus not recognised on trading properties of £2 million.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
178
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
Airport Property GP (No. 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, U | |||
Airport Property H1 Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, U | |||
| Airport Property Partnership***, | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, U | |||
Allnatt London Properties Limited** | England | Direct | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, U | |||
Amdale Holdings Limited NV | Belgium | Indirect | Boulevard Louis Schmidt 87, 1040 | |
| Etterbeek, Belgium | ||||
Beira Investments Sp z.o.o. | Poland | Indirect | Pl. Andersa 3, 61-894 Poznań, | |
| Poland | ||||
| Bilton Homes Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Bilton Limited** | England | Direct | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Bonsol S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, 20090 | |
Brixton (Axis Park) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| Brixton (Fairway Units 7-11) 1 Limited | England | Indirect | c/o BDO LLP, Temple Square, | |
| and Wales | Temple Street, Liverpool, L2 5RH, | |||
| United Kingdom | ||||
| Brixton (Great Western, Southall) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
Brixton (Hatton Cross) 1 Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Brixton (Heathrow Estate) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom |
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
Brixton (Metropolitan Park) 1 Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Brixton (Origin) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| Brixton Asset Management UK | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
Brixton Greenford Park Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Brixton Limited** | England | Direct | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Brixton Nominee 8 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
| St Helier, JE2 3QA, Jersey | ||||
Brixton Nominee 9 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
| St Helier, JE2 3QA, Jersey | ||||
Brixton Nominee 26 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee 27 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee 38 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee 39 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee 40 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee 41 (Jersey) Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee Axis Park 1 Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee Axis Park 2 Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee Polar Park 1 Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
Brixton Nominee Polar Park 2 Limited | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
| Brixton Nominee Premier Park 1 | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
| Limited | ||||
| Brixton Nominee Premier Park 2 | Jersey | Indirect | 3rd Floor, One The Esplanade, | |
| Limited | ||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | |
| Limited | and Wales | Temple Street, Liverpool, L2 5RH, | ||
| United Kingdom | ||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | |
| Holdings Limited | and Wales | Temple Street, Liverpool, L2 5RH, | ||
| United Kingdom | ||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | |
| Limited | and Wales | Temple Street, Liverpool, L2 5RH, | ||
| United Kingdom |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
179
Notes to the Financial Statements continued
| holding if | Direct/ | ||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Brixton North | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
Brixton Premier Park Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, U | ||||
Brixton Properties Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, U | ||||
Brixton Sub-Holdings Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, U | ||||
| B-Serv Limited | England | Indirect | c/o BDO LLP, Temple Square, | ||
| and Wales | Temple Street, Liverpool, L2 5RH, | ||||
| United Kingdom | |||||
| Coventry & Warwickshire | England | Indirect | Lumonics House Valley Drive, | ||
| Development Partnership LLP | and Wales | Swift Valley, Rugby, Warwickshire, | |||
| CV21 1TQ, Unite | |||||
CWDP Investment Limited** | England | Indirect | Lumonics House Valley Drive, | ||
| and Wales | Swift Valley, Rugby, Warwickshire, | ||||
| CV21 1TQ, Unite | |||||
| Dagenham Park Management | England | Indirect | 1 New Burlington Place, London, | ||
| Company Limited**, | and Wales | W1S 2HR, United Kingdom | |||
De Hoek-Noord S-Park B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||
| 8th Floor, 1082 | |||||
| Netherlands | |||||
| Devon Nominees (No. 1) Limited | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| Devon Nominees (No. 2) Limited | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| Devon Nominees (No. 3) Limited | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| Gateway Rugby Management | England | Indirect | 1 New Burlington Place, London, | ||
| Company Limited**, | and Wales | W1S 2HR, United Kingdom | |||
Granby Investment Sp. z.o.o. | Poland | Indirect | ul. Marszałkowska 126/134, | ||
| 00-008 Warszawa, Poland | |||||
Gront Four s.r.o. | Czech | Indirect | Praha 1, Na Příkopě 9/392 a 11/393, | ||
| Republic | PSČ 110 | 00, Cze |
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
Helios Northern Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
HelioSlough Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Holbury Investments Sp. z.o.o. | Poland | Indirect | Pl. Andersa 3, 61-894 Poznań, | |
| Poland | ||||
IFP S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, 20090 | |
Impianti FTV S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, 20090 | |
Karnal Investment Sp z.o.o. | Poland | Indirect | ul. Marszałkowska 126/134, | |
| 00-008 Warszawa, Poland | ||||
LogPoint Ruhr GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | |
| Düsseldorf, Germany | ||||
| London Distribution Park No.2 LLP | England | 50 | Indirect | 1 New Burlington Place, London, |
| and Wales | W1S 2HR, United Kingdom | |||
Lynford Investments Sp z.o.o. | Poland | Indirect | ul. Marszałkowska 126/134, | |
| 00-008 Warszawa, Poland | ||||
Ożarów Biznes Park Sp.z.o.o | Poland | Indirect | Pl. Andersa 3, 61-894 Poznań, | |
| Poland | ||||
| Premier Greenford GP Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| Property Management Company | England | 72 | Indirect | 1 New Burlington Place, London, |
| (Croydon) Limited | and Wales | W1S 2HR, United Kingdom | ||
Reprendre Racines SAS | France | 49 | Indirect | 27 rue Camille Desmoulins, 92130, |
| Issy-les-Moulineaux, Paris, France | ||||
| Roxhill (Maidstone) Limited | England | 50 | Indirect | BDO LLP, Temple Square, Temple |
| and Wales | Street, Liverpool, L2 5RH, United | |||
| Kingdom | ||||
Roxhill Management Rugby Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
Roxhill Warth 2 Limited** | England | 28 | Indirect | Lumonics House Valley Drive, |
| and Wales | Swift Valley, Rugby, Warwickshire, | |||
| CV21 1TQ, Unite | ||||
Roxhill Warth 3 Limited** | England | 50 | Indirect | Lumonics House Valley Drive, |
| and Wales | Swift Valley, Rugby, Warwickshire, | |||
| CV21 1TQ, Unite | ||||
| SEGRO Rugby LLP***, | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (225 Bath Road) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Acton Park Estate) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (BA World Cargo) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Barking 1) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Barking 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
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| holding if | Direct/ | ||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |
SEGRO (Barking 3) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Barking) Limited | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Beddington Lane) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Belvedere Estate) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Birmingham) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Blanc Mesnil) SARL | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |
SEGRO (Bonded Stores) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Brackmills) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Bracknell) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Clapham North) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Colnbrook) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Coronation Road) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| SEGRO (Coventry Gateway | England | Indirect | 1 New Burlington Place, London, | ||
| Management | and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Coventry M6 J2) Limited | England | Indirect | Lumonics House Valley Drive, | ||
| and Wales | Swift Valley, Rugby, Warwickshire, | ||||
| CV21 1TQ, Unite | |||||
SEGRO (Coventry) Limited** | England | Indirect | Lumonics House Valley Drive, | ||
| and Wales | Swift Valley, Rugby, Warwickshire, | ||||
| CV21 1TQ, Unite | |||||
SEGRO (Dagenham) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| SEGRO (Deptford Trading Estate) | England | Indirect | 1 New Burlington Place, London, | ||
| Limited** | and Wales | W1S 2HR, United Kingdom | |||
SEGRO (D-Link House) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (East Plus) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (East Plus) Trading Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO (Electra Park) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| SEGRO (EMG Management | England | 82 | Indirect | 1 New Burlington Place, London, | |
| Company) Limited**, | and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Plot 5) Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
| SEGRO (EMG Rail Freight Terminal) | England | Indirect | 1 New Burlington Place, London, | ||
| Limited** | and Wales | W1S 2HR, United Kingdom | |||
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
SEGRO (EMG Unit 1) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Unit 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Unit 4) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Unit 8) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Unit 11) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG Unit 12) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (EMG) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Faggs Road) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Fairways Industrial Estate) | England | Indirect | 1 New Burlington Place, London, | |
| Limited | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Gatwick) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (GL) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Grange Park) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Great Cambridge Industrial | England | Indirect | 1 New Burlington Place, London, | |
| Estate) Limited** | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Hatton Farm Site A) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Hatton Farm Site B) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Hatton Farm Site C) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Hayes) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Heathrow Cargo Area) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
| SEGRO (Heathrow International) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Heathrow Park) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Iver 1) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Junction 15) Limited | England | Indirect | Lumonics House Valley Drive, | |
| and Wales | Swift Valley, Rugby, Warwickshire, | |||
| CV21 1TQ, Unite | ||||
SEGRO (Kettering) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Lee Park Distribution) Limited**England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
181
Notes to the Financial Statements continued
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
| SEGRO (Loop) Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| and Wales | Temple Street, Liverpool L2 5RH, | |||
| United Kingdom | ||||
| SEGRO (Nelson Trade Park) Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| and Wales | Temple Street, Liverpool L2 5RH, | |||
| United Kingdom | ||||
| SEGRO (New Cross Business Centre) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Newport Pagnell) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Northampton Gateway | England | Indirect | 1 New Burlington Place, London, | |
| Management Company) Limited | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (NFTE & Mercury) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Parc des Damiers) SAS | France | Indirect | 20 Rue Brunel, 75017, Paris, France | |
SEGRO (Perivale Park) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Plot 4 Northampton) | England | Indirect | 1 New Burlington Place, London, | |
| Limited | and Wales | W1S 2HR, United Kingdom | ||
| SEGRO (Plot 7 Northampton) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Poyle 14) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Pur | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Radlett) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rainham 1) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rainham 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Rainham, Enterprise 1) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
| SEGRO (Rainham, Enterprise 2) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
| SEGRO (Reading) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rockware Avenue) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rugby Gateway 1) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rugby Gateway 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rugby Gateway 3) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rugby Gateway 4) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Rugby Gateway 5) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom |
| holding if | Direct/ | |||
Company Name | Jurisdiction | not 100% | Indirect | Registere |
| SEGRO (Rushden) Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| and Wales | Temple Street, Liverpool L2 5RH, | |||
| United Kingdom | ||||
SEGRO (Skyline) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Spacewaye Park) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Spain Energy) S.L. | Spain | Indirect | Avenida Diagonal, 467 – 08036, | |
| Barcelona, Spain | ||||
SEGRO (Stansted Cargo) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Stansted Fedex) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Stockley Close) Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| and Wales | Temple Street, Liverpool, L2 5RH, | |||
| United Kingdom | ||||
SEGRO (The Portal) Limited | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Tilbury 2) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Tottenham) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (Trilogy) Management | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| Comp | and Wales | Temple Street, Liverpool L2 5RH, | ||
| United Kingdom | ||||
SEGRO (Tudor) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (UK Energy) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
| SEGRO (UK Logistics) Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | |
| and Wales | Temple Street, Liverpool L2 5RH, | |||
| United Kingdom | ||||
| SEGRO (Victoria Industrial Estate) | England | Indirect | 1 New Burlington Place, London, | |
| Limited** | and Wales | W1S 2HR, United Kingdom | ||
SEGRO (Waltham Assets) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Wapping) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S2HR, United Kingdom | |||
SEGRO (Watchmoor) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Welham Green) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO (Westway Estate) Limited** | England | Indirect | 1 New Burlington Place, London, | |
| and Wales | W1S 2HR, United Kingdom | |||
SEGRO Achte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | |
| Düsseldorf, Germany | ||||
| SEGRO Achtzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | |
| GmbH | Düsseldorf, Germany |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
182
| holding if | Direct/ | ||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |
SEGRO Administration Limited | England | Direct | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO APP 1 Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO APP 2 Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO APP 3 Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO APP 4 Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO APP Management Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO Asset Management Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||
| 8th Floor, 1082MA Amsterdam, | |||||
| Netherlands | |||||
SEGRO Belgium NV | Belgium | Indirect | Boulevard Louis Schmidt 87, 1040 | ||
| Etterbeek, Belgium | |||||
| SEGRO Benelux B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||
| 8th Floor, 1082 | |||||
| Netherlands | |||||
SEGRO Benelux 2 B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||
| 8th Floor, 1082 | |||||
| Netherlands | |||||
SEGRO Bobigny SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO Bourget SASU | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO Capital S.á r.l. | Luxembourg | Indirect | 35-37 Avenue de la Liberté, L-1931, | ||
| Luxembourg | |||||
SEGRO CHUSA Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO CL1 SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
| SEGRO Communities Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | ||
| and Wales | Temple Street, Liverpool L2 5RH, | ||||
| United Kingdom | |||||
| SEGRO Croydon (Mitcham) | England | Indirect | 1 New Burlington Place, London, | ||
| Limited** | and Wales | W1S 2HR, United Kingdom | |||
SEGRO Czech Republic s.r.o. | Czech | Indirect | Praha 1, Na Příkopě 9/392 a 11/393, | ||
| Republic | PSČ 110 | 00, Cze | |||
| SEGRO Dreiundzwanzigste | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Grundbesitz GmbH | Düsseldorf, Germany | ||||
| SEGRO Dreizehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| GmbH | Düsseldorf, Germany | ||||
SEGRO Dritte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany | |||||
| SEGRO Einundzwanzigste | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Grundbesitz GmbH | Düsseldorf, Germany | ||||
SEGRO Elfte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany |
| holding if | Direct/ | ||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |
SEGRO Erste Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany | |||||
SEGRO Europe Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | ||
| and Wales | Temple Street, Liverpool L2 5RH, | ||||
| United Kingdom | |||||
| SEGRO European Logistics | Luxembourg | 50 | Indirect | 35-37 Avenue de la Liberté, L-1931, | |
| Partnership S.á r.l. | Luxembourg | ||||
SEGRO Finance Limited | England | Direct | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO Fixtures GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany | |||||
SEGRO France Energy SAS | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO France SA | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |
SEGRO Fünfte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany | |||||
| SEGRO Fünfundzwanzigste | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Grundbesitz GmbH | Düsseldorf, Germany | ||||
| SEGRO Fünfzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| GmbH | Düsseldorf, Germany | ||||
SEGRO Gennevilliers SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO Germany GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||
| Düsseldorf, Germany | |||||
SEGRO Glinde B.V. | Netherlands | Indirect | 8th Floor, 1082 | Gustav Mahlerplein 62, ITO-toren, | |
| Netherlands | |||||
SEGRO Gobelins SCI | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |
SEGRO Holdings France SAS | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |
SEGRO Industrial Estates Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO Insurance Limited | Isle of Man | Direct | Third Floor, St George’s Court, | ||
| Upper Church Street, Douglas, | |||||
| IM1 1EE, Isle of Man | |||||
SEGRO Investments Limited** | England | Indirect | 1 New Burlington Place, London, | ||
| and Wales | W1S 2HR, United Kingdom | ||||
SEGRO Investments Spain S.L. | Spain | Direct | Avenida Diagonal, 467 – 08036, | ||
| Barcelona, Spain | |||||
SEGRO Italy S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, 20090 | ||
SEGRO Logistics Nord SCI | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |
SEGRO Logistics Park Aulnay SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO Logistics Sud SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||
SEGRO Luge S.à r.l. | Luxembourg | Indirect | 15 Boulevard F.W. Rai | ||
| Luxembourg, L - 2411, | |||||
| Luxembourg | |||||
SEGRO Luxembourg S.à r.l. | Luxembourg | Indirect | 35-37 Avenue de la Liberté, L-1931, | ||
| Luxembourg | |||||
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
183
Notes to the Financial Statements continued
| holding if | Direct/ | ||||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |||
| SEGRO Management Limited | England | Indirect | C/O BDO LLP, 5 Temple Square, | ||||
| and Wales | Temple Street, Liverpool L2 5RH, | ||||||
| United Kingdom | |||||||
SEGRO Management NV | Belgium | Indirect | Boulevard Louis Schmidt 87, 1040 | ||||
| Etterbeek, Belgium | |||||||
SEGRO Netherlands B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||||
| 8th Floor, 1082 | |||||||
| Netherlands | |||||||
SEGRO Netherlands Holding B.V. | Netherlands | Indirect | Gustav Mahlerplein 62, ITO-toren, | ||||
| 8th Floor, 1082MS Amsterdam, | |||||||
| Netherlands | |||||||
(UK branch) | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, U | ||||||
SEGRO Neunte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Neunzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| GmbH | Düsseldorf, Germany | ||||||
SEGRO Overseas Holdings Limited | England | Direct | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO Parc des Petits Carreaux | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO plc, French branch | France | Direct | 20 Rue Brunel, | 75 | 017, Paris, France | ||
SEGRO Plessis SCI | France | Indirect | 20 | Rue Brunel, 75017, Paris, France | |||
SEGRO Poland Sp z.o.o. | Poland | Indirect | Pl. Andersa 3, 61-894 Poznań, | ||||
| Poland | |||||||
SEGRO Properties Limited | England | Direct | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO Properties Spain S.L. | Spain | Direct | Avenida Diagonal, 467 – 08036, | ||||
| Barcelona, Spain | |||||||
SEGRO Reisholz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
SEGRO Sechste Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Sechzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| GmbH | Düsseldorf, Germany | ||||||
SEGRO Siebte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Siebzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| GmbH | Düsseldorf, Germany | ||||||
SEGRO Slough Spare Limited** | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO Spain Management S.L. | Spain | Indirect | Avenida Diagonal, 467 – 08036, | ||||
| Barcelona, Spain | |||||||
SEGRO Spain Spare 1 S.L. | Spain | Direct | Avenida Diagonal, 467 – 08036, | ||||
| Barcelona, Spain | |||||||
SEGRO Spain Spare 2 S.L. | Spain | Direct | Avenida Diagonal, 467 – 08036, | ||||
| Barcelona, Spain | |||||||
SEGRO Spain Spare 3 S.L. | Spain | Direct | Avenida Diagonal, 467 – 08036, | ||||
| Barcelona, Spain | |||||||
| holding if | Direct/ | ||||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | |||
SEGRO Spare 1 Limited** | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO STE Limited | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO Trading (France) SNC | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Urban Logistics LR1 SCI | France | Indirect | 20 Rue | Brunel, | 75 | 017, Paris, France | |
SEGRO Urban Logistics MR1 SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Urban Logistics PR1 SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Urban Logistics PR2 SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Urban Logistics PR3 SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Vierte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Vierundzwanzigste | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Grundbesitz GmbH | Düsseldorf, Germany | ||||||
| SEGRO Vierzehnte Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| GmbH | Düsseldorf, Germany | ||||||
| SEGRO V-Park Grand Union LLP | England | 50 | Indirect | 1 New Burlington Place, London, | |||
| and Wales | W1S 2HR, United Kingdom | ||||||
SEGRO Wissous SCI | France | Indirect | 20 Rue Brunel, 75017, Paris, France | ||||
SEGRO Zehnte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Zwanzigste Grundbesitz | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| GmbH | Düsseldorf, Germany | ||||||
SEGRO Zweite Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
| SEGRO Zweiundzwanzigste | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Grundbesitz GmbH | Düsseldorf, Germany | ||||||
SEGRO Zwölfte Grundbesitz GmbH | Germany | Indirect | Fichtenstrasse 33, 40233, | ||||
| Düsseldorf, Germany | |||||||
SELP (Alpha Holdings) S.á r.l. | Luxembourg | 50 | Indirect | L-1618, | |||
| Luxembourg | |||||||
SELP (Alpha JV) S.á r.l. | Luxembourg | 50 | Indirect | L-1618, | |||
| Luxembourg | |||||||
SELP Finance S.á r.l. | Luxembourg | 50 | Indirect | 35-37 Avenue de la Liberté, L-1931, | |||
| Luxembourg | |||||||
SELP Investments S.á r.l. | Luxembourg | 50 | Indirect | 35-37 Avenue de la Liberté, L-1931, | |||
| Luxembourg | |||||||
SELP Management Limited | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
Slough Trading Estate Limited | England | Direct | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
Smartparc SEGRO Spondon Limited | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
Steamhouse Group Limited** | England | Indirect | 1 New Burlington Place, London, | ||||
| and Wales | W1S 2HR, United Kingdom | ||||||
Tenedor S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, 20090 | ||||
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
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184
| holding if | Direct/ | |||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | ||
| The UK Logistics (Nominee 1) | England | Indirect | 1 New Burlington Place, London, | |||
| Limited | and Wales | W1S 2HR, United Kingdom | ||||
| The UK Logistics (Nominee 2) | England | Indirect | 1 New Burlington Place, London, | |||
| Limited | and Wales | W1S 2HR, United Kingdom | ||||
| The UK Logistics General Partner | England | Indirect | 1 New Burlington Place, London, | |||
| Limited** | and Wales | W1S 2HR, United Kingdom | ||||
| The UK Logistics Limited | England | Indirect | 1 New Burlington Place, London, | |||
| Partnership | and Wales | W1S 2HR, United Kingdom | ||||
| T | England | Indirect | C/O BDO LLP, 5 Temple Square, | |||
| and Wales | Temple Street, Liverpool L2 5RH, | |||||
| United Kingdom | ||||||
UK Logistics Properties No 1 Unit Trust | Jersey | Indirect | Ogier House, The Esplanade, | |||
UK Logistics Properties No 2 Unit Trust | Jersey | Indirect | Ogier House, The Esplanade, | |||
UK Logistics Trustees Limited | Jersey | Indirect | Ogier House, The Esplanade, | |||
UK Property Unit Trust No. 41 | Jersey | Indirect | 47 Esplanade, St Helier, JE1 0BD, | |||
| Jersey | ||||||
UK Property Unit Trust No. 42 | Jersey | Indirect | 47 Esplanade, St Helier, JE1 0BD, | |||
| Jersey | ||||||
UK Property Unit Trust No. 43 | Jersey | Indirect | 47 Esplanade, St Helier, JE1 0BD, | |||
| Jersey | ||||||
UK Property Unit Trust No. 44 | Jersey | Indirect | 47 Esplanade, St Helier, JE1 0BD, | |||
| Jersey | ||||||
UK Property Unit Trust No. 45 | Jersey | Indirect | 47 Esplanade, St Helier, JE1 0BD, | |||
| Jersey | ||||||
Unitair General Partner Limited** | England | Indirect | 1 New Burlington Place, London, | |||
| and Wales | W1S 2HR, United Kingdom | |||||
| Unitair Limited Partnership***, | England | Indirect | 1 New Burlington Place, London, | |||
| and Wales | W1S 2HR, United Kingdom | |||||
Vailog Colleferro S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||
20 | 0 | |||||
Vailog ER 1 S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||
20 | 0 | |||||
Vailog ER 2 S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||
20 | 0 | |||||
Vailog ER 3 S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||
20 | 0 | |||||
Vailog ER 4 S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||
20 | 0 | |||||
| holding if | Direct/ | |||||||||||
Company Name | Jurisdiction | not 100% | Indirect | Registere | ||||||||
Vailog S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||||||||
20 | 0 | |||||||||||
| Woodside GP Limited | England | 33.33 | Indirect | 1 New Burlington Place, London, | ||||||||
| and Wales | W1S 2HR, United Kingdom | |||||||||||
Zinc One S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||||||||
20 | 0 | |||||||||||
Zinc Six S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||||||||
20 | 0 | |||||||||||
Zinc Seven S.R.L. | Italy | Indirect | Strada 3 Palazzo B3, | |||||||||
20 | 0 | |||||||||||
Vailog ER 5 S.R.L. | Italy | Indirect | Strad | |||||||||
20 | 0 | |||||||||||
| Milan, Italy | ||||||||||||
Vailog France SCI | France | Indirect | 20 | Rue Brunel, 75017, Paris, France |
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
185
Notes to the Financial Statements continued
Supplementary Notes Not Part of Audited Financial Statements
Table 1: EPRA performance measures summary
Notes
2023 2022
£m
Pence
per share £m
Pence
per share
EPRA Earnings Table 4 413 33.9 374 31.0
EPRA NTA Table 5 11,162 907 11,717 966
EPRA NRV Table 5 12,317 1,001 12,879 1,062
EPRA NDV Table 5 11,310 919 12,170 1,004
EPRA LTV Table 6 36.9% 34.2%
EPRA net initial yield Table 7 4.0% 3.7%
EPRA topped-up net initial yield Table 7 4.3% 3.9%
EPRA vacancy rate Table 8 5.0% 4.0%
EPRA cost ratio (including vacant
property costs) Table 9 24.0% 20.3%
EPRA cost ratio (excluding vacant
property costs) Table 9 21.9% 18.5%
Table 2: Income Statement, proportionally consolidated
Notes
2023 2022
Group
£m
Joint
ventures and
associates
£m
Total
£m
Group
£m
Joint
ventures and
associates
£m
Total
£m
Gross rental income 2,7 547 134 681 488 119 607
Property operating expenses 2,7 (85) (9) (94) (76) (9) (85)
Net rental income 462 125 587 412 110 522
Joint venture management feeincome
1
2,7 29 (12) 17 30 (13) 17
Management and development fee income 2,7 4 2 6 5 2 7
Net solar energy income 2,7 1 – 1 1 – 1
Administrative expenses 2,7 (63) (2) (65) (59) (3) (62)
Adjusted operating proit before
interest and tax 433 113 546 389 96 485
Net inance costs (including
adjustments) 2,7 (106) (20) (126) (74) (17) (91)
Adjusted proit before tax 327 93 420 315 79 394
Tax on adjusted proit 2,7 (10) (11) (21) (11) (8) (19)
Adjusted earnings before
non-controlling interests 317 82 399 304 71 375
Non-controlling interest on adjusted proit 2,7 – – – (1) – (1)
Adjusted earnings after tax and
non-controlling interests (A) 317 82 399 303 71 374
Number of shares, million 12 1,220.0 1,206.6
Adjusted EPS, pence per share 32.7 31.0
Number of shares, million 12 1,223.4 1,210.0
Adjusted EPS, pence per share –
diluted 32.6 30.9
EPRA earnings
Adjusted earnings after tax and
non-controlling interests (A) 317 82 399 303 71 374
Joint venture performance fee income (net) 2 79 (37) 42 – – –
Impairment loss on loan due from
associates 2 (28) – (28) – – –
EPRA earnings after tax and
non-controlling interests 368 45 413 303 71 374
Number of shares, million 12 1,220.0 1,206.6
EPRA, EPS, pence per share 33.9 31.0
Number of shares, million 12 1,223.4 1,210.0
EPRA, EPS, pence per share – diluted 33.8 30.9
1 Joint venture management fee income includes the cost of such fees borne by the joint ventures which are
shown in Note 7 within net rental income.
2 Group net debt:EBITDA ratio as deined in the glossary was 10.4 times at 31 December 2023 (2022: 11.7 times).
Group net debt being £4,972 million (2022: £4,722 million), per Note 16. Group EBITDA being £477 million (2022:
£402 million) which takes Adjusted operating proit before interest and tax, less share of joint ventures and
associates’ adjusted proit, of £433 million (2022: £389 million) shown in the table above, adding back
depreciation and amortisation charges of £6 million (2022: £4 million) per Note 24(i) and includes dividends
received from joint ventures and associates of £38 million (2022: £9 million) per Note 7(iii).
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
186
Table 3: Balance Sheet, proportionally consolidated
Notes
2023 2022
Group
£m
Joint
ventures
and
associates
£m
Total
£m
Group
£m
Joint
ventures
and
associates
£m
Total
£m
Investment properties 13,7 14,914 2,915 17,829 14,939 3,022 17,961
Trading properties 13,7 3 – 3 35 – 35
Total properties 14,917 2,915 17,832 14,974 3,022 17,996
Investment in joint ventures
andassociates 7 1,636 (1,636) – 1,768 (1,768) –
Other net liabilities (677) (235) (912) (647) (283) (930)
Net borrowings 16,7 (4,972) (1,044) (6,016) (4,722) (971) (5,693)
Total shareholders’ equity
1
10,904 – 10,904 11,373 – 11,373
EPRA adjustments 12 258 344
Adjusted NAV 12 11,162 11,717
Number of shares, million 12 1,230.7 1,212.5
Adjusted NAV, pence
pershare 12 907 966
1 After non-controlling interests.
The portfolio valuation deicit of 4.0 per cent shown on page 36 of the Strategic Report cannot
be directly derived from the Financial Statements and is calculated to be comparable with
published MSCI Real Estate indices against which SEGRO is measured. Based on the Financial
Statements there is a valuation deicit of £809 million (see Note 8) and property value of
£17,762 million (see Note 25) giving a valuation deicit of 4.4 per cent. The primary dierences
are that the portfolio valuation deicit shown on page 36 of £749 million excludes the impact of
rent free incentives (£10 million, 0.1 per cent), capitalised interest (£68 million, 0.4 per cent) and
other movements (-£18 million, -0.1 per cent ).
Total assets under management of £20,677 million (2022: £20,947 million) includes Group total
properties of £14,847 million (2022: £14,903 million) (see Note 25) and 100 per cent of total
properties owned by joint ventures and associates of £5,830 million (2022: £6,044 million) (see
Note 7(ii)).
Table 4: EPRA Earnings
Notes
2023
Group
£m
2022
Group
£m
Equity shareholder earnings per IFRS income statement (253) (1,927)
Adjustments to calculate EPRA Earnings, exclude:
Valuation deicit on investment properties 8 647 1,970
Proit on sale of investment properties and other investment income 8 (46) (9)
Proit on sale of trading properties 13 (3) (7)
Decrease in provision for impairment of trading properties 8 – (15)
Tax on proits on disposals
1
(1) 15
Cost of early close out debt 9 1 –
Net fair value (gain)/loss on interest rate swaps and other derivatives 9 (24) 199
Deferred tax credit in respect of EPRA adjustments
1
(29) (63)
Adjustments to the share of loss from joint ventures and associates after
tax 7 121 215
Non-controlling interests in respect of the above 2 – (4)
EPRA earnings 413 374
Basic number of shares, million 12 1,220.0 1,206.6
EPRA Earnings per Share (EPS) (pence) 33.9 31.0
Company speciic adjustments:
Joint venture performance fee income (net after tax) 2 (42) –
Impairment loss on loan due from associate 2 28 –
Adjusted earnings 399 374
Adjusted EPS (pence) 12 32.7 31.0
1 Total tax credit in respect of adjustments per Note 2 of £20 million (2022: £48 million) comprises tax credit on
proits on disposals of £1 million (2022: £15 million charge), deferred tax credit of £29 million (2022: £63 million)
and tax charge on joint venture performance fee income of £10 million (2022: £nil). The tax charge on joint
venture performance fee income is recognised within the Company speciic adjustments in the table above.
2 See Note 2 for further details on the Company speciic adjustments to exclude the net impact of joint venture
performance fees and impairment of loan from associate from Adjusted earnings.
3 Adjustments to the share of loss from joint ventures and associates after tax above of £121 million (2022: £215
million) includes the impact of the performance fee expense of £45 million (2022: £nil) and an associated tax
credit of £8 million (2022: £nil) which are shown as a Company speciic adjustment in the table above within
'Joint venture performance fee income (net after tax)'. The Adjustments to share of loss from joint ventures and
associates per Note 7(i) of £158 million (2022: £215 million) excludes the impact of the performance fee.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
187
Notes to the Financial Statements continued
Table 5: EPRA Net asset measures
The European Public Real Estate Association (‘EPRA’) best practice recommendations (BPR) for
inancial disclosures by public real estate companies sets out three net asset value measures:
EPRA net tangible assets (NTA), EPRA net reinstatement value (NRV) and EPRA net disposal
value (NDV).
The EPRA Net Tangible Assets (NTA) metric is considered to be most consistent with the nature
of SEGRO’s business as a UK REIT providing long-term progressive and sustainable returns.
EPRA NTA acts as the primary measure of net asset value and is also referred to as Adjusted Net
Asset Value (or Adjusted NAV).
A reconciliation of the three EPRA NAV metrics from IFRS NAV is shown in the table below.
As at 31 December 2023
EPRA measures
EPR A NTA
£m
EPRA NRV
£m
EPRA NDV
£m
Equity attributable to ordinary shareholders 10,904 10,904 10,904
Fair value adjustment in respect of interest rate derivatives – Group 106 106 –
Fair value adjustment in respect of trading properties – Group 1 1 1
Deferred tax in respect of depreciation and valuation surpluses
– Group
1
89 178 –
Deferred tax in respect of depreciation and valuation surpluses
– Joint ventures and associates
1
92 184 –
Intangible assets (30) – –
Fair value adjustment in respect of debt – Group – – 357
Fair value adjustment in respect of debt – Joint ventures and associates – – 48
Real estate transfer tax
2
– 944 –
Net assets 11,162 12,317 11,310
Diluted shares (million) 1,230.7 1,230.7 1,230.7
Diluted net assets per share 907 1,001 919
1 50 per cent of deferred tax in respect of depreciation and valuation surpluses has been excluded in calculating
EPRA NTA in line with option 3 of EPRA BPR guidelines.
2 EPRA NTA and EPRA NDV relect IFRS values which are net of purchasers’ costs. Purchasers’ costs are added
back when calculating EPRA NRV.
As at 31 December 2022
EPRA measures
EPR A NTA
£m
EPRA NRV
£m
EPRA NDV
£m
Equity attributable to ordinary shareholders 11,373 11,373 11,373
Fair value adjustment in respect of interest rate derivatives – Group 131 131 –
Fair value adjustment in respect of trading properties – Group 2 2 2
Deferred tax in respect of depreciation and valuation surpluses
– Group
1
104 208 –
Deferred tax in respect of depreciation and valuation surpluses
– Joint ventures and associates
1
119 238 –
Intangible assets (12) – –
Fair value adjustment in respect of debt – Group – – 672
Fair value adjustment in respect of debt – Joint ventures and associates – – 123
Real estate transfer tax
2
– 927 –
Net assets 11,717 12,879 12,170
Diluted shares (million) 1,212.5 1,212.5 1,212.5
Diluted net assets per share 966 1,062 1,004
1 50 per cent of deferred tax in respect of depreciation and valuation surpluses has been excluded in calculating
EPRA NTA in line with option 3 of EPRA BPR guidelines.
2 EPRA NTA and EPRA NDV relect IFRS values which are net of purchasers’ costs. Purchasers’ costs are added
back when calculating EPRA NRV.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
188
Table 6: EPRA LTV, Proportional consolidation
Notes
2023 2022
Group
£m
Joint
ventures
and
associates
£m
Total
£m
Group
£m
Joint
ventures
and
associates
£m
Total
£m
Borrowings
1,2
2,652 100 2,752 2,085 15 2,100
Bonds
1,2
2,735 978 3,713 2,843 996 3,839
Exclude:
Cash and cash equivalents 16 (376) (28) (404) (162) (32) (194)
Net Debt (before capitalised
inance costs) (a) 5,011 1,050 6,061 4,766 979 5,745
Foreign currency derivatives 17 (12) – (12) 2 – 2
Net payables
3
485 64 549 362 57 419
Adjusted Net Debt (b) 5,484 1,114 6,598 5,130 1,036 6,166
Investment properties at fair
value (excluding head lease
ROU asset) 13 14,843 2,915 17,758 14,866 3,022 17,888
Trading properties 13 3 – 3 35 – 35
Total Property Value (c) 14,846 2,915 17,761 14,901 3,022 17,923
Head lease ROU asset 13 71 – 71 73 – 73
Unrecognised valuation surplus
on trading properties 13 1 – 1 2 – 2
Other interest in property 26 – 26 30 – 30
Intangibles 30 – 30 12 – 12
Adjusted Total Property
Value (d) 14,974 2,915 17,889 15,018 3,022 18,040
LTV (a/c) 33.8% 34.1% 32.0% 32.1%
EPRA LTV (b/d) 36.6% 36.9% 34.2% 34.2%
1 Total Group borrowings as at 31 December 2023 per Note 16 of £5,348 million (2022: £4,884 million) consists of:
Nominal value of borrowings from inancial institutions of £2,652 million (2022: £2,085 million) less unamortised
inance costs of £13 million (2022: £14 million) and nominal value of bond loans of £2,735 million (2022: £2,843
million) less unamortised inance costs of £26 million (2022: £30 million).
2 JV borrowings as at 31 December 2023 per Note 7 of £1,072 million (2022: £1,003 million) at share consists of:
Nominal value of borrowings from inancial institutions of £100 million (2022: £15 million) less unamortised
inance costs of £1 million (2022: £2 million) and nominal value of bond loans of £978 million (2022: £996 million)
less unamortised inance costs of £5 million (2022: £6 million).
3 Group net payables is calculated as the net position of the following line items shown on the Balance Sheet:
Non-current other receivables, current trade and other receivables, current tax assets, non-current trade and
other payables, non-current tax liabilities, current trade and other payables and current tax liabilities.
Table 7: EPRA net initial yield and topped-up net initial yield
Combined property portfolio including
joint ventures and associates at share – 2023 Notes
UK
£m
Continental
Europe
£m
Total
£m
Total properties per inancial statements Table 3 11,180 6,652 17,832
Add valuation surplus not recognised on trading
properties
1
13 1 – 1
Less head lease ROU assets 13 – (71) (71)
Combined property portfolio per external valuers’
reports 11,181 6,581 17,762
Less land and development properties (investment,
trading, joint ventures and associates) (1,546) (961) (2,507)
Net valuation of completed properties 9,635 5,620 15,255
Add notional purchasers’ costs 654 290 944
Gross valuation of completed properties including
notional purchasers’ costs A 10,289 5,910 16,199
Income
Gross passing rent
2
393 266 659
Less irrecoverable property costs (2) (10) (12)
Net passing rent B 391 256 647
Adjustment for notional rent in respect of rent free
periods 25 33 58
Topped up net rent C 416 289 705
Including ixed/minimum uplifts
4
8 1 9
Total topped up net rent 424 290 714
Yields – 2023 Notes
UK
£m
Continental
Europe
£m
Total
£m
EPRA net initial yield
3
B/A 3.8 4.3 4.0
EPRA topped-up net initial yield
3
C/A 4.0 4.9 4.3
Net true equivalent yield 5.2 5.4 5.3
1 Trading properties are recorded in the Financial Statements at the lower of cost and net realisable value,
therefore valuations above cost have not been recognised.
2 Gross passing rent excludes short-term lettings and licences.
3 In accordance with the Best Practices Recommendations of EPRA.
4 Certain leases contain clauses which guarantee future rental increases, whereas most leases contain ive-yearly,
upwards only rent review clauses (UK) or indexation clauses (Continental Europe).
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
189
Notes to the Financial Statements continued
Table 8: EPRA vacancy rate
2023
£m
2022
£m
Annualised estimated rental value of vacant premises 44 32
Annualised estimated rental value for the completed property portfolio 879 797
EPRA vacancy rate
1,2
5.0% 4.0%
1 Vacancy rate percentages have been calculated using the igures presented in the table above in millions
accurate to one decimal place.
2 There are no signiicant or distorting factors inluencing the EPRA vacancy rate.
Table 9: Total cost ratio/EPRA cost ratio
Total cost ratio Notes
2023
£m
2022
£m
Costs
Property operating expenses
1
5 85 76
Administrative expenses 6 63 59
Share of joint venture and associates property operating and
administrative expenses 7 23 25
Less:
Joint venture management fees income, management fees and other
costs recovered through rents but not separately invoiced
2
(36) (37)
Total costs (A) 135 123
Gross rental income
Gross rental income 4 547 488
Share of joint venture and associates gross rental income 7 134 119
Less:
Other costs recovered through rents but not separately invoiced
2
(3) (3)
Total gross rental income (B) 678 604
Total cost ratio (A)/(B)
3
19.9% 20.3%
Total costs (A) 135 123
Share-based payments 6 (10) (9)
Total costs after share-based payments (C) 125 114
Total cost ratio after share-based payments (C)/(B)
3
18.4% 18.8%
EPRA cost ratio
Total costs (A) 135 123
Impairment loss on loan due from associates 2 28 –
EPRA total costs including vacant property costs (D) 163 123
Group vacant property costs 5 (14) (10)
Share of joint venture and associates vacant property costs 7 (1) (1)
EPRA total costs excluding vacant property costs (E) 148 112
Total gross rental income (B) 678 604
Total EPRA cost ratio (including vacant property costs) (D)/(B)
3
24.0% 20.3%
Total EPRA cost ratio (excluding vacant property costs) (E)/(B)
3
21.9% 18.5%
1 Property operating expenses are net of costs capitalised in accordance with IFRS of £12 million (2022: £11
million) (see Note 5 for further detail on the nature of costs capitalised).
2 Total deduction of £36 million (2022: £37 million) from costs includes: joint venture management fees income of
£29 million (2022: £30 million) and management fees and other costs recovered through rents but not
separately invoiced, including joint ventures and associates, of £7 million (2022: £7 million). These items have
been represented as an oset against costs rather than a component of income in accordance with EPRA BPR
Guidelines as they are reimbursing the Group for costs incurred. Gross rental income of £547 million (2022:
£488 million) does not include joint venture management fees income of £29 million (2022: £30 million) and
management fees income of £4 million (2022: £4 million). These fees are not required to be included in the total
deduction to income of £3 million (2022: £3 million).
3 Cost ratio percentages have been calculated using the igures presented in the table above in millions accurate
to one decimal place.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
190
Table 10: EPRA capital expenditure analysis
2023 2022
Wholly
owned
£m
Joint
ventures and
associates
£m
Total
£m
Wholly
owned
£m
Joint
ventures and
associates
£m
Total
£m
Acquisitions 403 10 413 800
1
176 976
Development 443 84 527 718
2
69 787
Capitalised interest
4
64 4 68 22 2 24
Investment properties:
Incremental lettable
space 1 – 1 11 2 13
No incremental lettable
space 53 13 66 42 7 49
Tenant incentives
3
37 9 46 39 10 49
Total 1,001 120 1,121 1,632 266 1,898
1 Being £403 million investment property and £nil trading property (2022: £799 million and £1 million
respectively) see Note 13.
2 Being £443 million investment property and £nil trading property (2022: £656 million and £62 million
respectively) see Note 13.
3 Includes tenant incentives and letting fees.
4 Capitalised interest on development expenditure.
5 Total acquisitions completed in 2023 shown on page 39 of the Strategic Report, being land acquisitions of £404
million, excludes share of assets acquired by SELP from SEGRO of £9 million, (see Note 23).
Total disposals completed in 2023 of £356 million shown on page 39 of the Strategic Report
includes: Carrying value of investment properties disposed by SEGRO Group of £287 million
(see Note 13) and proit generated on disposal of £39 million (see Note 8); proceeds from the
sale of trading properties by SEGRO Group of £35 million (see Note 4); carrying value of lease
incentives and letting fees disposed by SEGRO Group and joint ventures and associates (at
share) of £4 million; and excludes 50 per cent of the disposal proceeds for assets sold by
SEGRO to SELP JV of £9 million (see Note 23).
Table 11: Like-for-like net rental income
(including JVs and associates at share)
2023
£m
2022
£m
Change
%
3
UK 313 297 5.3
Continental Europe 195 180 8.5
Like-for-like net rental income before other items
1
508 477 6.5
Other
2
(5) (4)
Like-for-like net rental income (after other) 503 473 6.3
Development lettings 52 10
Properties taken back for development 13 19
Like-for-like net rental income plus developments 568 502
Properties acquired 5 4
Properties sold 5 11
Net rental income before surrenders, dilapidations and exchange 578 517
Lease surrender premiums and dilapidation income 2 3
Other items and rent lost from lease surrenders 7 6
Impact of exchange rate dierence between periods – (4)
Net rental income (including joint ventures and associates at share) 587 522
SEGRO share of joint venture management fees (12) (13)
Net rental income after SEGRO share of joint venture fees 575 509
1 Like-for-like change by Business Unit: Greater London 7.3%, Thames Valley 3.5%, National Logistics 0.3%,
Northern Europe 11.3%, Southern Europe 7.3%, Central Europe 7.5%.
2 Other includes the corporate centre and other costs relating to the operational business which are not
speciically allocated to a geographical Business Unit.
3 Percentage change has been calculated using numbers accurate to one decimal place.
4 The like-for-like net rental growth metric is based on properties held throughout both 2023 and 2022 on a
proportionally consolidated basis. The value of these properties as at 31 December 2023 on a proportional basis
was £13,149 million (2022: £13,916 million). This provides details of net rental income growth excluding the
distortive impact of acquisitions, disposals and development completions. Where an asset has been sold into a
joint venture (sales to SELP, for example) the 50 per cent share owned throughout the period is included in like-
for-like calculation, with the balance shown as disposals.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
191
Notes to the Financial Statements continued
Table 12: Top 10 estates as at 31 December 2023 (by value, including joint ventures and associates at share)
Ownership
% Location
Lettable area
(100%) sq m
Headline
rent
£m
Occupancy
by ERV
%
WAULT
years
1
Asset type
UK
Slough Trading Estate and SEGRO V-Park Leigh Road at Slough Trading
Estate 100 Slough 607,408 109.6 96.7 10.6 Multi-let urban warehouse estate
SEGRO Logistics Park East Midlands Gateway 100 Midlands 456,684 35.3 100.0 12.7 Big box warehouse park
SEGRO Park Premier Road 100 Park Royal 78,720 14.4 88.5 4.9 Multi-let urban warehouse estate
SEGRO Park Greenford Ocham Drive and Auriol Drive 100 Park Royal 79,488 13.6 91.6 4.9 Multi-let urban warehouse estate
SEGRO Park Heathrow, Shoreham Road 100 Heathrow 93,704 21.7 100.0 0.9 Multi-let cargo facility
SEGRO Park Greenford Central 100 Park Royal 70,027 9.5 80.8 1.6 Multi-let urban warehouse estate
SEGRO Park North Feltham 100 Heathrow 57,947 10.8 96.8 4.3 Multi-let urban warehouse estate
SEGRO Park Coventry 100 Midlands – – n/a n/a Big box warehouse park
SEGRO Park Hurricane Way 100 Heathrow 61,753 9.2 100.0 5.1 Multi-let urban warehouse estate
SEGRO Park Perivale 100 Park Royal 56,901 8.2 86.6 3.7 Multi-let urban warehouse estate
Continental Europe
SEGRO Airport Park Berlin 50 / 100 Germany 154,191 9.4 97.6 5.9 Multi-let urban warehouse and Big box estate
SEGRO Parc des Petits Carreaux 100 France 141,826 13.8 94.7 3.3 Multi-let urban warehouse estate
CSG Logistics Park 50 / 100 Italy 474,160 15.3 100.0 6.4 Big box warehouse park
SEGRO Logistics Park Krefeld-Süd 50 Germany 235,977 6.8 100.0 6.4 Big box warehouse park
SEGRO Park Düsseldorf-Süd 100 Germany 88,806 7.2 99.6 4.8 Multi-let urban warehouse estate
Novara Logistics Park 100 Italy 189,028 6.1 100.0 12.6 Big box warehouse park
Rome South Logistics Park 50 Italy 243,873 5.5 100.0 15.3 Big box warehouse park
Bologna Interporto 50 / 100 Italy 219,600 6.6 100.0 5.0 Big box warehouse park
Les Gobelins 100 France – – n/a n/a Multi-let urban warehouse estate
SEGRO Logistics Park Aulnay 100 France 47,288 4.9 100.0 5.8 Big box warehouse park
1 Weighted average unexpired lease term to earlier of break or expiry.
2 This is currently a development so no lettable area or headline rent.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
192
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Group Income Statement
Net rental income 462 412 341 302 280
Joint venture management fee income 29 30 26 22 20
Management and development fee
income
3
4 5 5 3 1
Net solar energy income
2,3
1 1 1 – –
Administrative expenses (63) (59) (59) (52) (51)
Share of joint ventures and associates’
Adjusted proit after tax 82 71 69 61 54
Net inance costs (including adjustments) (106) (74) (40) (40) (37)
Adjusted proit before tax 409 386 343 296 267
Adjustments to the share of (loss)/proit
from joint ventures and associates after tax (158) (215) 392 175 149
Proit on sale of investment properties 39 9 53 5 7
Valuation (deicit)/surplus on investment
properties (647) (1,970) 3,617 971 477
Proit on sale of trading properties 3 7 7 1 7
Decrease/(increase) in provision for
impairment of trading properties and other
interests in property – 15 (1) (1) 1
Other investment income 7 – – 14 4
Net fair value gain/(loss) on interest rate
swaps and other derivatives 24 (199) (82) 14 8
Cost of early close out of debt (1) – – (11) (18)
Joint venture performance fee
4
89 – 26 – –
Impairment loss on loan due from associate (28) – – – –
(Loss)/proit before tax (263) (1,967) 4,355 1,464 902
Group Balance Sheet
Investment properties (including assets
held for sale) 14,914 14,939 15,492 10,671 8,402
Trading properties 3 35 45 52 20
Total directly owned properties 14,917 14,974 15,537 10,723 8,422
Property, plant and equipment 28 23 22 27 23
Investments in joint ventures and
associates 1,636 1,768 1,795 1,423 1,121
Other assets 349 421 344 405 384
Cash and cash equivalents 376 162 85 89 133
Total assets 17,306 17,348 17,783 12,667 10,083
Borrowings (5,348) (4,884) (3,406) (2,413) (1,943)
Deferred tax liabilities (192) (226) (274) (87) (54)
Other liabilities and non-controlling
interests (862) (865) (667) (508) (408)
Total equity attributable to owners
of the parent 10,904 11,373 13,436 9,659 7,678
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Total movement in equity attributable to
owners of the parent
(Loss)/proit attributable to equity
shareholders (253) (1,927) 4,060 1,427 858
Other equity movements (216) (136) (283) 554 256
Data per ordinary share (pence)
Earnings per share
Basic earnings per share (20.7) (159.7) 339.0 124.1 79.3
Adjusted earnings per share – basic 32.7 31.0 28.0 25.4 24.4
Net assets per share basic
Basic net assets per share 889 941 1,118 811 700
Adjusted NAV per share – diluted
1
907 966 1,137 814 700
Dividend per share 27.8 26.3 24.3 22.1 20.7
1 Adjusted NAV is calculated in accordance with EPRA BPR guidelines and aligns with EPRA NTA metric that was
introduced in 2020, the 2019 igure has been restated to align with this deinition.
2 Net solar income is calculated as Solar energy income shown in Note 4, less Solar energy shown in Note 5.
3 The composition of gross and net rental income changed in 2022 to provide a better measure of the underlying
rental income from the property portfolio. Management and development fee income; service charge income
and expense; and solar energy income and expense are now presented outside of gross and net rental income.
There was no impact on Adjusted operating proit before interest and tax from this change and the prior year
comparatives in the table above have been represented to relect this change.
4 As set out in Note 2, SELP performance fees are now recognised outside of Adjusted proit, the 2021
comparative has been represented to relect this change.
Five-year inancial results
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
193
Financial calendar and shareholder information
February 2024
Announcement of Full-Year Results: 16 February 2024
March 2024
Ex-dividend date for inal dividend: Property Income Distribution 14 March 2024
Record date: Property Income Distribution 15 March 2024
April 2024
Final date for Scrip election: Property Income Distribution 12 April 2024
Annual General Meeting: 18 April 2024
May 2024
Payment: Property Income Distribution 3 May 2024
July 2024
Announcement of Half-Year Results: Provisional 26 July 2024
September 2024
Payment: Property Income Distribution and/or Dividend September 2024
Further information
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
194
Shareholder enquiries
Our Registrar, Equiniti Limited (Equiniti), provides a range of services to our shareholders. If you
have any questions about your shareholding or if you require further guidance (e.g. to notify a
change of address) please contact our Registrar on the details below or register for a free
Shareview portfolio at www.shareview.co.uk or by scanning the QR code provided.
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA.
Telephone: +44 (0) 371 3842 186
Electronic communications
Shareholders have the opportunity to elect to receive shareholder communications
electronically, e.g. Annual Reports, Notice of the Annual General Meeting and Proxy Forms.
You can elect to receive email notiications of shareholder communications by registering for a
Shareview portfolio as detailed above, where you can also submit proxy votes for shareholder
meetings and update your bank details for dividend payments. Receiving the Company’s
communications electronically allows the Company to communicate with its shareholders
in a more environmentally friendly, cost eective and timely manner.
AGM
The 2024 AGM will be held at 11.00 a.m. on 18 April 2024 at RSA House, 8 John Adam Street,
London WC2N 6EZ.
Please check our 2024 Notice of Meeting for the most up to date information. Shareholders are
also advised to check our website at www.SEGRO.com, which will be updated if there are any
changes to the arrangements.
ShareGift
ShareGift is a charity (registered under the name The Orr Mackintosh Foundation, registered
charity number 1052686) which specialises in accepting donations of small numbers of shares
which are uneconomic to sell on their own. Shares which have been donated to ShareGift are
aggregated and sold when practicable, with the proceeds passed on to a wide range of UK
charities. ShareGift can also help with larger donations of shares. Further details about
ShareGift can be obtained from its website at www.sharegift.org or by writing to ShareGift
at ShareGift, PO Box 72253, London, SW1P 9LQ, email: help@sharegift.org, telephone:
+44 (0)207 930 3737.
Dividends
A requirement of the REIT regime is that a REIT must distribute to shareholders by way of
dividend at least 90 per cent of its proits from its tax-exempt UK property rental business
(calculated under UK tax principles after the deduction of interest and capital allowances and
excluding chargeable gains). Such distributions are referred to as Property Income
Distributions, or PIDs. Any further distributions may be paid as ordinary dividends, which are
derived from proits earned by its UK, non-REIT taxable business, as well as its overseas
operations (including the SIIC in France and SOCIMI in Spain).
Withholding tax – PIDs
SEGRO is required to withhold tax at source from its PIDs at the basic tax rate (20 per cent). UK
shareholders need take no immediate action (unless they qualify for exemption as described
below) and will receive with each dividend payment a tax deduction certiicate stating the
amount of tax deducted.
UK shareholders who fall into one of the classes of shareholder able to claim an exemption
from withholding tax may be able to receive a gross PID payment if they have submitted a valid
relevant Exemption Declaration form, either as a beneicial owner of the shares, or as an
intermediary if the shares are not registered in the name of the beneicial owner, to Equiniti. The
Exemption Declaration form is available at www.SEGRO.com under Investors/Shareholder
Information/REIT. A valid declaration form, once submitted, will continue to apply to future
payments of PIDs until rescinded, and so it is a shareholder’s responsibility to notify SEGRO if
their circumstances change and they are no longer able to claim an exemption from
withholding tax.
Shareholders resident outside the UK may be able to claim a full or partial refund of
withholding tax (either as an individual or as a company) from HMRC, subject to the terms of a
double tax treaty, if any, between the UK and the country in which the shareholder is resident.
Ordinary dividends
Ordinary, non-PID dividends will be treated in exactly the same way by shareholders as ordinary
dividends paid before the Company became a REIT. From 6 April 2016 the notional 10 per cent
tax credit has been abolished and replaced with a tax-free dividend allowance, which will apply
to the ordinary, non-PID dividends received by UK resident shareholders who are subject to UK
income tax. This allowance does not apply to the PID element of dividends. Further information
is available from HMRC at https://www.gov.uk/tax-on-dividends.
Chequeless dividends from January 2021
Since January 2021, SEGRO has withdrawn the option for shareholders to receive payments by
cheque. For more information on how to receive dividends directly into your bank or building
society account, please visit www.SEGRO.com/investors/shareholder-information/shareholder-faq.
Scrip Dividend
Shareholders approved the re-introduction of a scrip dividend option (Scrip) in respect of cash
dividends (including those treated as Property Income Distributions) at the 2021 AGM. This
authority will expire at the 2024 AGM.
The Board has decided to recommend the renewal of the Directors’ authority to oer a Scrip
which, if approved by shareholders at the forthcoming AGM, will allow shareholders who elect
to receive the Scrip to take the inal dividend in shares rather than in cash. If shareholders
approve the re-introduction of the Scrip, it will run from three years ending on the earlier of
18 April 2027 and the beginning of the third AGM of the Company following the date of the
2024 AGM.
Details of the proposed Scrip, together with information on how shareholders can elect to
receive it subject to shareholder approval, will be provided in the Notice of Meeting and full
terms and conditions of the Scrip will be set out in the Scrip Dividend Scheme Booklet, which
will be available on the Company’s website www.SEGRO.com.
Shareholder information
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
195
Associates: An entity in which the Group has signiicant inluence but not control or joint
control. This is generally the case where the Group holds between 20 per cent and 50 per cent
of the voting rights.
BREEAM: BREEAM provides sustainability assessment and certiication for real estate assets.
Completed portfolio: The completed investment properties and the Group’s share of joint
ventures and associates’ completed investment properties. Includes properties held
throughout the period, completed developments and properties acquired during the period.
Covered land: Income-producing assets acquired with the explicit intention to redevelop
them in the short to medium term.
Development pipeline: The Group’s current programme of developments authorised or in the
course of construction at the Balance Sheet date (Current Pipeline), together with projects that
are conditional (for example, on achieving planning permission or inal signing of the contract)
but in a suiciently advanced stage that we expect to commence development within the next
12 months (Near-term Pipeline) and potential schemes not yet commenced on land owned or
controlled by the Group (Future Pipeline).
Earnings before interest, tax, depreciation and amortisation (EBITDA): Adjusted operating
proit before interest and tax, adding back depreciation and amortisation charges, less share of
joint ventures' and associates' adjusted proit and including dividends received.
EPRA: The European Public Real Estate Association, a real estate industry body, which has
issued Best Practices Recommendations in order to provide consistency and transparency in
real estate reporting across Europe.
Equivalent yield: The internal rate of return from an investment property, based on the value of
the property assuming the current passing rent reverts to ERV and assuming the property
becomes fully occupied over time. It assumes that rent is received annually in arrears.
ESG: Environmental, Social and Governance issues.
Estimated cost to completion: Costs still to be expended on a development or
redevelopment to practical completion, including attributable interest.
Estimated rental value (ERV): The estimated annual market rental value of lettable space as
determined biannually by the Group’s valuers. This will normally be dierent from the rent
being paid.
Gearing: Net borrowings divided by total shareholders’ equity excluding intangible assets and
deferred tax provisions.
GRESB: An organisation which provides independent benchmarking of ESG metrics for the
property industry.
Green lease clause: A clause added to our leases that require our customers to provide us
with their energy usage data and, where possible, source their energy via a renewable tari.
Gross rental income: Contracted rental income recognised in the period in the Income
Statement, including surrender premiums. Lease incentives, initial costs and any contracted
future rental increases are amortised on a straight-line basis over the lease term.
Headline rent: The annual rental income currently receivable on a property as at the Balance
Sheet date (which may be more or less than the ERV) ignoring any rent-free period.
Hectares (Ha): The area of land measurement used in this analysis. The conversion factor
used, where appropriate, is 1 hectare = 2.471 acres.
IAS: International Accounting Standards, the standards under which SEGRO reports its
inancial accounts.
IFRS: International Financial Reporting Standards, the standards under which SEGRO reports
its inancial accounts.
Investment property: Completed land and buildings held for rental income return and/or
capital appreciation.
Joint venture: An entity in which the Group holds an interest and which is jointly controlled by
the Group and one or more partners under a contractual arrangement whereby decisions on
inancial and operating policies essential to the operation, performance and inancial position
of the venture require each partner’s consent.
Life cycle assessments: Life cycle assessment (LCA) is a methodology for assessing the
environmental impacts associated with all the stages of the life cycle of a building.
Loan to value (LTV): Net borrowings excluding capitalised transaction costs divided by the
carrying value of total property assets (investment, owner occupied, trading properties and, if
appropriate, assets held for sale on the Balance Sheet) and excludes head lease ROU asset.
This is reported on a ‘look-through’ basis (including joint ventures and associates at share).
MSCI: MSCI Real Estate calculates indices of real estate performance around the world.
Net debt:EBITDA ratio: Net debt divided by EBITDA.
Net initial yield: Passing rent less non-recoverable property expenses such as empty rates,
divided by the property valuation plus notional purchasers’ costs. This is in accordance with
EPRA’s Best Practices Recommendations.
Net rental income: Gross rental income less ground rents paid, net service charge expenses
and property operating expenses.
Net true equivalent yield: The internal rate of return from an investment property, based on
the value of the property assuming the current passing rent reverts to ERV and assuming the
property becomes fully occupied over time. It assumes that rent is received quarterly in
advance.
Glossary of terms
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
196
Passing rent: The annual rental income currently receivable on a property as at the Balance
Sheet date (which may be more or less than the ERV). Excludes rental income where a rent-free
period is in operation. Excludes service charge income (which is netted o against service
charge expenses).
Pre-let: A lease signed with an occupier prior to commencing construction of a building.
REIT: A qualifying entity which has elected to be treated as a Real Estate Investment Trust for
tax purposes. In the UK, such entities must be listed on a recognised stock exchange, must be
predominantly engaged in property investment activities and must meet certain ongoing
qualiications. SEGRO plc and its UK subsidiaries achieved REIT status with eect from
1January2007.
Rent-free period: An incentive provided usually at commencement of a lease during which a
customer pays no rent. The amount of rent free is the dierence between passing rent and
headline rent.
Rent roll: See Passing Rent.
Reversion: The dierence between in place contracted rents and estimated market rental
value (ERV).
SELP: SEGRO European Logistics Partnership, a 50-50 joint venture between SEGRO and the
Public Sector Pension Investment Board (PSP Investments) established in 2013 to own big box
warehouses in Continental Europe.
SIIC: Sociétés d’Investissements Immobiliers Cotées are the French equivalent of UK Real
Estate Investment Trusts (see REIT).
Speculative development: Where a development has commenced prior to a lease agreement
being signed in relation to that development.
SPPICAV: Société de Placement à Prépondérance Immobilière à Capital Variable is a French
equivalent of UK Real Estate Investment Trusts (see REIT).
Square metres (sq m): The area of buildings measurements used in this analysis. The
conversion factor used, where appropriate, is one square metre = 10.7639 square feet.
Takeback: Rental income lost due to lease expiry, exercise of break option, surrender or
insolvency.
Topped up net initial yield: Net initial yield adjusted to include notional rent in respect of let
properties which are subject to a rent-free period at the valuation date. This is in accordance
with EPRA’s Best Practices Recommendations.
Total accounting return (TAR): A measure of the Group’s return, calculated as the change in
adjusted NAV per share during the period adding back dividends paid during the period
expressed as a percentage of adjusted NAV per share at the beginning of the period.
Total property return (TPR): A measure of the ungeared return for the portfolio and is
calculated as the change in capital value, less any capital expenditure incurred, plus net
income, expressed as a percentage of capital employed over the period concerned, as
calculated by MSCI Real Estate and excluding land.
Total shareholder return (TSR): A measure of return based upon share price movement over
the period and assuming reinvestment of dividends.
Trading property: Property being developed for sale or one which is being held for sale after
development is complete.
Yield on cost: The expected gross yield based on the estimated current market rental value
(ERV) of the developments when fully let, divided by the book value of the developments at the
earlier of commencement of the development or the Balance Sheet date plus future
development costs and estimated inance costs to completion.
Yield on new money: The yield on cost excluding the book value of land if the land is owned
by the Group in the reporting period prior to commencement of the development.
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
197
Go Online
To keep up to date with SEGRO, you can source facts and igures about the Group through the
various sections on our website at www.SEGRO.com and sign up for email alerts for fast
communication of breaking news.
Financial reports, shareholder information and property analysis are frequently updated and
our current share price is always displayed on the Home Page.
As well as featuring detailed information about available property throughout the portfolio,
www.SEGRO.com now also includes a dedicated property search function making it easy for
potential customers, or their agents, to ind business space that its their requirement exactly.
SEGRO’s performance in areas such as sustainability and customer care are also featured on
our website.
We would encourage shareholders to consider electing to receive shareholder
communications, including the Annual Report and Accounts, electronically as set out on page
195. As part of our commitment to become net-zero, we want to reduce the amount of paper
we use.
Other Publications
Additional disclosures on our property portfolio can be found in the 2023 Property Analysis
Report at www.SEGRO.com/investors/reports-presentations
Our ESG policies, reporting guidelines, assurance statements and further case studies can be
found at www.SEGRO.com.
SEGRO plc
1 New Burlington Place
London W1S 2HR
T +44(0)20 7451 9100
www.SEGRO.com/investors
The Annual Report contains certain forward-looking statements with respect to SEGRO’s
expectations and plans, strategy, management objectives, future developments and
performances, costs, revenues and other trend information. All statements other than historical
fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are
statements of future expectations and these are subject to assumptions, risks and
uncertainties. Many of these assumptions, risks and uncertainties relate to factors that are
beyond SEGRO’s ability to control or estimate precisely and which could cause actual results or
developments to dier materially from those expressed or implied by these forward-looking
statements. Certain statements have been made with reference to forecast process changes,
economic conditions and the current regulatory environment. Any forward-looking statements
made by or on behalf of SEGRO are based upon the knowledge and information available to
Directors on the date of this Annual Report. Accordingly, no assurance can be given that any
particular expectation will be met and SEGRO’s shareholders are cautioned not to place undue
reliance on the forward-looking statements. Additionally, forward-looking statements regarding
past trends or activities should not be taken as a representation that such trends or activities
will continue in the future. The information contained in this Annual Report is provided as at the
date of this Annual Report and is subject to change without notice. Other than in accordance
with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority), SEGRO does not
undertake to update forward-looking statements including to relect any new information or
changes in events, conditions or circumstances on which any such statement is based. Past
share performance cannot be relied on as a guide to future performance. Nothing in this
Annual Report should be construed as a proit estimate or forecast.
The information in this Annual Report does not constitute an oer to sell or an invitation to buy
securities in SEGRO plc or an invitation or inducement to engage in or enter into any contract
or commitment of other investment activities.
Forward-Looking Statements Find out more
Overview Strategic Report Governance Financial Statements Further Information SEGRO plc
Annual Report & Accounts 2023
198
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