Core Insights - SEGRO reported a "very strong year" in 2025, highlighting record leasing activity, like-for-like rental growth, and improving occupier sentiment that has continued into early 2026 [5] Financial Performance - Loan-to-value ratio ended at 31% and net debt to EBITDA decreased to 8.4x from 8.6x [1] - Adjusted NAV per share increased by 2% and adjusted earnings per share rose by 6.1%, driven by higher net rental income and cost discipline [2] - Full-year dividend declared at £0.311, also up 6.1% year-over-year [2] Portfolio and Occupancy - Portfolio valuation grew by 1% on a like-for-like basis, marking the first positive valuation movement for both the U.K. and continental Europe since early 2022 [2] - Overall occupancy increased by 90 basis points to 94.9%, primarily driven by continental Europe [3] Leasing Activity - SEGRO signed a record £99 million of new headline rent in 2025, including £33 million from development signings [4] - Achieved a 36% uplift on rent reviews and renewals, with an average of 46% in the U.K. [3] - U.K. occupancy rose by 50 basis points to 93.1%, supported by development deals [6] Development and Capital Allocation - SEGRO invested £413 million into development in 2025, with £387 million in development capex and £26 million in land acquisitions [10] - Guidance for 2026 development capex is set between £450 million and £550 million [11] - Expected disposals in 2026 to be at or above 1% to 2% of portfolio value [12] Data Center Strategy - SEGRO views data centers as an "exceptional opportunity," driven by cloud adoption and AI workloads [13] - The powered land bank across key European availability zones totals over 2.5 GW, with 0.5 GW operational capacity [14] - Focus on fully fitted projects is expected to generate development profits up to three times those of powered shells [17]

Financial Data and Key Metrics Changes - The company reported a GAAP EPS loss of $0.15 per share, an improvement from a loss of $0.56 per share in Q3 of the previous year [12] - Adjusted EBITDA for Q3 totaled $125 million, nearly double the $66 million reported in Q3 of last year, with year-to-date adjusted EBITDA increasing by 6% to $371 million [12] - Investment management fees increased by 8% in the quarter and 23% year-to-date, reflecting growth in the investment management business [12] Business Line Data and Key Metrics Changes - Assets under management (AUM) grew to $31 billion in Q3, an 11% increase year-over-year, while fee-bearing capital rose to $9.7 billion, a 10% increase [5] - The company deployed or committed approximately $900 million in Q3, bringing total capital deployment to $3.5 billion year-to-date [6] - The credit team originated $600 million in new rental housing construction loans in Q3, totaling $2.6 billion for the year [6] Market Data and Key Metrics Changes - The rental housing sector continues to experience a supply-demand imbalance, with strong demand and occupancy rates over 94% [15] - Same-store NOI for the U.S. market-rate portfolio grew by 2.4%, with revenues up 1.3% and expenses down due to favorable property taxes [15] - In Ireland, same-property occupancy increased by 1.7%, leading to revenue and NOI growth of 6% [17] Company Strategy and Development Direction - The company is focused on expanding its investment management platform and monetizing non-core assets, with a pending acquisition of Toll Brothers Apartment Living platform expected to add $5 billion to AUM [9][10] - The strategy includes targeting rental housing, with over 70% of AUM expected to be attributable to this sector [10] - The company aims to capitalize on the structural undersupply of housing, positioning itself to benefit from long-term rental demand [10] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in the cost and availability of capital, with lower borrowing costs supporting higher transaction levels [10] - The company anticipates continued growth in its investment management business while successfully monetizing non-core assets [17] - Management expressed confidence in the strength of rental fundamentals and the ongoing demand for rental housing [10] Other Important Information - The Board of Directors is evaluating a proposal for a potential take-private transaction, with a special committee formed for this purpose [3] - The company has successfully generated $470 million in cash from asset sales year-to-date, exceeding its target of $400 million for the year [9] Q&A Session Summary Question: Cap rates for multifamily in various markets - Management indicated that cap rates vary widely, trading in the high 4s to high 5s, depending on asset age and sub-market conditions [19][20] Question: Impact of government shutdown on affordable multifamily portfolio - Management reported no significant impact from the government shutdown, attributing any NOI weakness to expense-driven factors [25][26] Question: Fundraising and market share - Management noted challenges in capital raising for private equity firms but highlighted success in capital deployment, particularly in Asia and North America [27][28] Question: Loan origination volume in Q3 - Management acknowledged a seasonal slowdown in Q3 origination volumes but emphasized a strong pipeline and continued activity in the loan space [33][35] Question: Growth of the U.K. single-family rental platform - Management reported good growth in the U.K. platform, with nearly 1,300 homes committed and expectations for further acquisitions in Q4 [36][38] Question: U.K. office occupancy decline - Management explained that the decline was due to lease move-outs, with expectations for occupancy to improve as backfills are completed [39][41]