Transforming segro s performance Property analysis 2011
CONTENTS Overview 02 Combined property portfolio and yield reconciliation 03 Summary analysis 04 Analysis of completed portfolio 05 Supplementary data 07 Customers 10 Development pipeline 11 Glossary of Terms 14 ABOUT SEGRO SEGRO is Europe s leading owner-manager and developer of industrial property. We serve over 1,600 customers across a range of industry sectors and geographies. Our portfolio comprises 5.1 billion of assets concentrated in and around major conurbations and transportation hubs such as airports, ports and motorway intersections. SEGRO is a Real Estate Investment Trust (REIT) and is listed on the London Stock Exchange. 1 www.segro.com
OVERVIEW Asset Type Geographic split Logistics Warehousing 17 Industrial 54 Offices and other business space 21 Land and development 8 Thames Valley and regions 35 Greater London, 34 France 8 Germany 9 Poland and Czech Republic 7 Benelux and other 7 Split by property portfolio value per financial statements. The buildings we provide include: 1. LOGISTICS WAREHOUSING 2. LIGHT INDUSTRIAL AND SMALL WAREHOUSE UNITS 1 3. MANUFACTURING FACILITIES 1 4. SELF STORAGE FACILITIES 1 5. TRADE COUNTERS 2 6. CAR SHOWROOMS 2 7. DATA CENTRES 2 8. RESEARCH AND DEVELOPMENT FACILITIES 2 9. SUBURBAN OFFICES 2 1 COLLECTIVELY REFERRED TO AS INDUSTRIAL IN THIS DOCUMENT. 2 COLLECTIVELY REFERRED TO AS OFFICES AND OTHER BUSINESS SPACE IN THIS DOCUMENT. 2 Property analysis booklet 31 December 2011
COMBINED PROPERTY PORTFOLIO AND YIELD RECONCILIATION AS AT 31 DECEMBER 2011 Combined property portfolio Continental Europe Total properties per financial statements (see below for analysis) 3,516.5 1,577.4 5,093.9 Add properties accounted as finance leases 11.3-11.3 Add valuation surplus not recognised on wholly owned trading properties 1-7.4 7.4 Add valuation surplus not recognised on joint venture trading properties 1-4.0 4.0 Other items (3.7) (0.1) (3.8) Combined property portfolio per external valuers reports 3,524.1 1,588.7 5,112.8 Less development properties (investment, trading and joint ventures) (165.1) (257.5) (422.6) Owner occupied properties (5.1) (1.4) (6.5) Net valuation of completed properties 3,353.9 1,329.8 4,683.7 Add notional purchasers costs 193.0 58.9 251.9 Gross valuation of completed properties including notional purchasers costs A 3,546.9 1,388.7 4,935.6 Total Income Gross passing rent 2 221.0 112.5 333.5 Less irrecoverable property costs (12.9) (5.4) (18.3) Net passing rent B 208.1 107.1 315.2 Adjustment for notional rent in respect of rent frees 29.3 5.6 34.9 Topped up net rent C 237.4 112.7 350.1 Yields Net initial yield 3 B/A 5.9 7.7 6.4 Topped up net initial yield 3 C/A 6.7 8.1 7.1 Net true equivalent yield 7.7 8.1 7.8 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. Analysis in financial statements: Investment properties completed 2,865.4 1,117.2 3,982.6 development 152.5 181.5 334.0 Trading properties completed 16.4 177.8 194.2 development 3.8 63.4 67.2 Owner occupied properties 5.1 1.4 6.5 Sub-total: wholly owned properties 3,043.2 1,541.3 4,584.5 Joint ventures: Investment properties completed 452.8 2.6 455.4 development 20.5 0.3 20.8 Trading properties completed - 23.4 23.4 development - 9.8 9.8 Sub-total: joint venture properties 473.3 36.1 509.4 Total 3,516.5 1,577.4 5,093.9 Note: all references to joint ventures within this document are to the Group s share thereof. 3 www.segro.com
SUMMARY ANALYSIS AS AT 31 DECEMBER 2011 Lettable area sq m Completed Owner occupied Land & development Combined property portfolio Net initial yield 2 Net true equivalent yield 2 Valuation movement 1 2 Vacancy by ERV 2 By geography Thames Valley and Regions Slough Trading Estate 619,709 934.3 5.0 49.0 988.3 6.2 7.7 (2.0) 5.4 Rest of Thames Valley 216,925 361.7-14.8 376.5 5.7 8.3 (3.0) 13.9 Midlands & North 487,146 222.4 0.1 6.0 228.5 7.0 9.7 (17.6) 18.5 South & West 271,646 202.0-4.5 206.5 6.8 8.4 (6.9) 4.9 1,595,426 1,720.4 5.1 74.3 1,799.8 6.3 8.2 (5.1) 9.3 Greater London Heathrow wholly owned 176,051 201.8-5.5 207.3 3.4 7.8 (9.6) 26.0 Heathrow joint ventures 3 235,456 452.8-20.5 473.3 5.9 7.3 1.9 6.9 Park Royal 408,492 513.8-47.6 561.4 5.2 6.9 1.4 11.0 Rest of Greater London 395,561 465.1-17.2 482.3 6.1 7.6 (2.5) 9.1 1,215,560 1,633.5-90.8 1,724.3 5.4 7.3 (1.1) 11.3 2,810,986 3,353.9 5.1 165.1 3,524.1 5.9 7.7 (3.2) 10.2 Continental Europe By geography France 667,672 383.8-6.5 390.3 7.5 8.4 0.2 2.9 Germany 1,013,462 367.8-87.1 454.9 8.5 8.0 (10.9) 4.1 Poland and Czech Republic 617,021 270.5-78.0 348.5 8.3 8.5 2.7 3.4 Benelux and Other 385,803 307.7 1.4 85.9 395.0 6.5 7.5 (15.4) 16.0 2,683,958 1,329.8 1.4 257.5 1,588.7 7.7 8.1 (6.6) 6.4 Group total 5,494,944 4,683.7 6.5 422.6 5,112.8 6.4 7.8 (4.2) 9.1 1 The valuation movement percentage is based on the difference between the opening and closing valuations for completed properties, allowing for capital expenditure, acquisitions and disposals. 2 In relation to the completed properties only. 3 Comprises APP and Big Box joint ventures and includes 14 by value which is outside Heathrow. 4 Property analysis booklet 31 December 2011
ANALYSIS OF COMPLETED PORTFOLIO AS AT 31 DECEMBER 2011 Valuation Yields by asset type 31 December 2011 Net initial yield Net true equivalent yield By asset type Logistics warehousing 6.2 6.8 Industrial 5.7 7.9 Offices and other business space 6.2 7.6 5.9 7.7 Continental Europe By asset type Logistics warehousing 7.7 8.2 Industrial 8.2 8.2 Offices and other business space 6.2 7.0 7.7 8.1 Group By asset type Logistics warehousing 7.3 7.8 Industrial 6.2 8.0 Offices and other business space 6.2 7.5 6.4 7.8 By ownership Wholly owned 6.4 7.9 Joint ventures 6.0 7.3 Group total 6.4 7.8 5 www.segro.com
ANALYSIS OF COMPLETED PORTFOLIO AS AT 31 DECEMBER 2011 Rental data Lettable area sq m Vacancy by ERV Gross passing rent Topped up rent Topped up rent 1 per sq m ERV 2 ERV per sq m 2 By asset type Logistics warehousing 224,285 9.5 14.7 15.1 73.6 16.5 73.6 Industrial 2,156,712 12.2 140.5 160.8 86.9 188.1 87.2 Offices and other business space 429,989 5.3 65.8 74.4 183.5 71.8 167.0 2,810,986 10.2 221.0 250.3 101.7 276.4 98.3 By geography Thames Valley and Regions 1,595,426 9.3 121.7 137.9 98.3 147.0 92.1 Greater London 1,215,560 11.3 99.3 112.4 106.2 129.4 106.5 2,810,986 10.2 221.0 250.3 101.7 276.4 98.3 Continental Europe By asset type Logistics warehousing 1,421,382 3.8 49.5 52.8 38.8 54.4 38.3 Industrial 1,147,606 6.7 51.2 52.8 48.5 51.1 44.6 Offices and other business space 114,970 15.6 11.8 12.5 129.8 12.8 110.8 2,683,958 6.4 112.5 118.1 46.4 118.3 44.1 By geography France 667,672 2.9 29.5 31.7 48.9 32.1 48.0 Germany 1,013,462 4.1 35.8 37.0 37.9 36.3 35.8 Poland and Czech Republic 617,021 3.4 21.7 23.0 38.5 22.8 37.0 Benelux and Other 385,803 16.0 25.5 26.4 81.1 27.1 70.3 2,683,958 6.4 112.5 118.1 46.4 118.3 44.1 Group By asset type Logistics warehousing 1,645,667 5.2 64.2 67.9 43.4 70.9 43.1 Industrial 3,304,318 11.0 191.7 213.6 72.7 239.2 72.4 Offices and other business space 544,959 6.8 77.6 86.9 173.2 84.6 155.2 Completed portfolio 5,494,944 9.1 333.5 368.4 73.6 394.7 71.8 By ownership Wholly owned 5,205,932 9.3 303.1 336.1 70.9 355.6 68.3 Joint ventures 289,012 6.7 30.4 32.3 121.1 39.1 135.3 Completed portfolio 5,494,944 9.1 333.5 368.4 73.6 394.7 71.8 1 In respect of occupied space only. 2 On a fully occupied basis. Note that the vacancy rate excluding short term lettings for the Group at 31 December 2011 is 11.0 (December 2010: 13.5). 6 Property analysis booklet 31 December 2011
SUPPLEMENTARY DATA AS AT 31 DECEMBER 2011 Valuation data completed properties Investment properties Trading properties Valuation Joint ventures Total Value per sq m Valuation movement 1 By asset type Logistics warehousing 137.7-83.8 221.5 987.6 (0.3) Industrial 1,837.9 13.2 367.5 2,218.6 1,028.7 (3.8) Offices and other business space 2 905.3 7.0 1.5 913.8 2,137.0 (2.5) 2,880.9 20.2 452.8 3,353.9 1,195.0 (3.2) By geography Thames Valley and Regions 1,705.4 15.0-1,720.4 1,081.5 (5.1) Greater London 1,175.5 5.2 452.8 1,633.5 1,343.8 (1.1) 2,880.9 20.2 452.8 3,353.9 1,195.0 (3.2) Continental Europe By asset type Logistics warehousing 523.4 76.3 25.8 625.5 440.0 0.8 Industrial 434.2 108.4 0.8 543.4 474.0 (11.1) Offices and other business space 2 159.0-1.9 160.9 1,407.6 (15.8) 1,116.6 184.7 28.5 1,329.8 496.0 (6.6) By geography France 359.5 24.3-383.8 574.8 0.2 Germany 247.6 120.2-367.8 362.9 (10.9) Poland and Czech Republic 245.6 24.9-270.5 438.4 2.7 Benelux and Other 263.9 15.3 28.5 307.7 801.1 (15.4) 1,116.6 184.7 28.5 1,329.8 496.0 (6.6) Group total 3,997.5 204.9 481.3 4,683.7 853.5 (4.2) 1 The valuation movement percentage is based on the difference between the opening and closing valuations, allowing for capital expenditure and disposals. 2 At a Group level Offices are valued at 750.7 million, with a net initial yield of 6.3 and true equivalent yield of 7.7. Data Centres are valued at 230.7 million, with a net initial yield of 6.2 and true equivalent yield of 7.0. 7 www.segro.com
SUPPLEMENTARY DATA AS AT 31 DECEMBER 2011 Take-up and pre-lets analysis Area (000 s sq m) Rent pa () 2 Take-up 1 Space returned Take-up 1 Space returned 2011 2010 2011 2010 2011 2010 2011 2010 212.5 298.1 207.9 267.3 21.9 26.3 16.2 20.2 Continental Europe 257.9 261.9 93.6 237.2 11.6 11.4 4.8 9.1 Group total 470.4 560.0 301.5 504.5 33.5 37.7 21.0 29.3 Pre-lets completed (9.1) (5.2) Pre-lets signed for delivery in later periods 14.0 10.2 Rental income contracted in the period 38.4 42.7 1 Take-up excludes lease renewals, break options not exercised and income from short term license agreements. 2 Annualised rental income, after the expiry of any rent free periods. Gross and net rental income in the period Gross rental income () 2011 Net rental income () 2011 Thames Valley and Regions 129.5 109.3 Greater London 112.2 89.4 241.7 198.7 Continental Europe France 30.2 26.8 Germany 37.1 31.8 Poland and Czech Republic 21.4 18.4 Benelux and Other 28.7 22.5 117.4 99.5 Group total 359.1 298.2 Group Wholly owned Investment properties 308.4 257.2 Trading properties 17.7 14.0 326.1 271.2 Joint venture Investment properties 31.2 25.3 Trading properties 1.8 1.6 Group total 359.1 298.1 8 Property analysis booklet 31 December 2011
SUPPLEMENTARY DATA AS AT 31 DECEMBER 2011 Weighted average lease length 1 Lease length 6.7 9.1 Continental Europe 4.4 6.3 Group total 6.0 8.2 1 Weighted by topped up net rent. Break years Expiry years Reconciliation between passing rent and ERV Continental Europe Total gross passing rent as at 31 December 2011 221.0 112.5 333.5 ERV of space occupied on a short term basis 6.2 1.4 7.6 Rent frees on let properties at 31 December 2011 29.3 5.6 34.9 ERV of vacant properties 28.3 7.5 35.8 Reversion to ERV of occupied properties (8.4) (8.7) (17.1) ERV of entire portfolio 276.4 118.3 394.7 Group Lease expiries & break options Gross passing rent subject to break options Thames Valley and Regions 4.2 9.8 4.4 6.7 8.1 Greater London 4.4 5.2 7.2 8.5 6.0 Continental Europe 2012 2013 2014 2015 2016 8.6 15.0 11.6 15.2 14.1 France 2.0 10.0 7.9 2.6 0.7 Germany 3.9 2.2 2.0 1.3 1.0 Poland and Czech Republic 1.0 3.2 1.4 0.3 0.8 Benelux and Other 5.8 1.4 3.3 2.2 0.7 12.7 16.8 14.6 6.4 3.2 Group total break options 21.3 31.8 26.2 21.6 17.3 Gross passing rent subject to lease expiry Thames Valley and Regions 8.1 8.5 7.1 12.4 8.6 Greater London 5.2 8.6 8.0 7.5 6.0 Continental Europe 13.3 17.1 15.1 19.9 14.6 France 1.8 1.8 2.2 4.0 4.9 Germany 2.5 0.4 0.2 0.7 1.5 Poland and Czech Republic 1.1 3.2 2.4 2.8 3.2 Benelux and Other 0.9 0.9 0.5 0.7 2.4 6.3 6.3 5.3 8.2 12.0 Group total lease expiries assuming no breaks are exercised 19.6 23.4 20.4 28.1 26.6 Deduction assuming all breaks are exercised - (3.4) (5.5) (8.4) (13.3) Group total expiries and potential breaks 40.9 51.8 41.1 41.3 30.6 9 www.segro.com
CUSTOMERS AS AT 31 DECEMBER 2011 By Customer type (Topped up net rent by customer industry) Agriculture and food 5 Automotive 5 Building and construction 5 Chemicals and commodities 4 Engineering and electrical 11 Finance and media 6 Communications and technology 11 Leisure and entertainment 2 Retail 15 Timber, paper & printing 2 Transport and distribution 23 Utilities and services 10 Unclassified 1 Top 30 customers* Customer (by topped up rent) Neckermann.de GmbH Telefonica O2 Thales Properties Limited Alcatel-Lucent British Airways Plc Krauss-Maffei Mars Chocolate Limited UCB SA Royal Mail Group Limited Jacobs Engineering Limited Ducros Express Fluor Limited Equinix Tesco Group Barclays Bank Plc Sainsbury's Supermarkets DAHER International Federal Express Group Cisco Systems Casino Harris Systems Limited Lonza Biologics Plc DHL Solutions British Sky Broadcasting Limited Worldwide Flight Services Intel Corporation Smiths News Group Deutsche Poste (DHL) Research In Motion Limited HJ Heinz Company Limited Customer type Retail Communications and technology Engineering and electrical Communications and technology Transport and distribution Engineering and electrical Agriculture and food Chemicals and commodities Transport and distribution Engineering and electrical Transport and distribution Engineering and electrical Communications and technology Retail Finance and media Retail Transport and distribution Transport and distribution Communications and technology Retail Engineering and electrical Chemicals and commodities Transport and distribution Finance and media Transport and distribution Communications and technology Finance and media Transport and distribution Communications and technology Agriculture and food * The top 30 customers represent annual topped up rent of 99.4 million in aggregate, 26.9 of the Group's total topped up net rent at 31 December 2011. 10 Property analysis booklet 31 December 2011
DEVELOPMENT PIPELINE AS AT 31 DECEMBER 2011 Hectarage ha Space to be built sq m Current book value 1 Estimated cost to completion 2 Total estimated book value at completion ERV when complete 3 Indicative yield 4 Current projects 10.3 42,170 39.9 25.0 64.9 6.9 10.6 Continental Europe 38.7 162,322 41.9 91.9 133.8 12.0 9.0 49.0 204,492 81.8 116.9 198.7 18.9 9.5 Percentage pre-let 78 Potential projects 33.4 183,309 68.9 202.1 271.0 28.0 10.3 Continental Europe 195.9 900,785 101.1 397.5 498.6 49.5 9.9 229.3 1,084,094 170.0 599.6 769.6 77.5 10.1 Development Pipeline 43.7 225,479 108.8 227.1 335.9 34.9 10.4 Continental Europe 234.6 1,063,107 143.0 489.4 632.4 61.5 9.7 278.3 1,288,586 251.8 716.5 968.3 96.4 10.0 Residual land bank 5 129.4 56.3 56.3 Continental Europe 233.5 114.5 114.5 362.9 170.8 170.8 Total development pipeline & residual land bank 173.1 165.1 392.2 Continental Europe 468.1 257.5 746.9 Group total 641.2 422.6 1,139.1 Analysed as Wholly owned 390.4 Joint ventures 32.2 Group total 422.6 1 Includes land plus all costs incurred to date which are revalued during the development period. 2 Estimated costs to completion include estimated finance charges which are capitalised to the end of the construction period. 3 ERV based upon market rents as at 31 December 2011. 4 Indicative yield is the expected gross yield based on estimated rental value when fully let, divided by the current book value, plus estimated remaining costs to complete. 5 Comprises predominantly of non core land for disposal. Note that, as developments are revalued during the construction phase, yields will tend towards the yield for a completed investment property as each property nears completion. 11 www.segro.com
DEVELOPMENT PIPELINE AS AT 31 DECEMBER 2011 Projects completed in 2011 Customer Asset class Space completed sq m Let space sq m Total ERV ERV of let space Completed/ Comments West London, Southall - Western Point GeoPost Industrial 3,400 3,400 Sold May 11 Slough Trading Estate, Farnham Road Selco Trade counter 3,679 3,679 June 11 Enfield, Building 5 GeoPost Industrial 3,490 3,490 Sept 11 Poyle, Horton Road Heathrow Cargo Handling Industrial 5,712 5,712 Oct 11 Slough Trading Estate, Building 309 KFC Industrial 245 245 Oct 11 Slough Trading Estate, Building 635 Selig Industrial 7,009 7,009 Dec 11 23,535 23,535 3.3 3.3 Percentage let 100 100 Continental Europe Czech Republic, Ostrava Adler/ Templin Industrial 8,715 8,715 Jan 11 Germany, Hamburg Takko Logistics 20,700 20,700 Jun 11 Poland, Silesia - Gliwice HL Displays Logistics 9,708 9,708 Jan 11 Poland, Lodz - Rokicinska ABB Industrial 3,245 1,822 Mar 11 Poland, Silesia - Gliwice General Motors/ S&T Logistics 25,875 22,600 Dec 11 Daewoo/ Muller/ Kaufland France, Gonesse Aeropark Casino Logistics 27,988 27,988 Aug 11 Poland, Tychy Navo/ Nexteer Logistics 15,865 11,706 Sept 11 Belgium, Rumst Cummins Office 1,250 1,250 JV share, Dec 11 113,346 104,489 5.7 5.2 Percentage let 92 91 Group total 136,881 128,024 9.0 8.5 Total percentage let 94 95 12 Property analysis booklet 31 December 2011
DEVELOPMENT PIPELINE AS AT 31 DECEMBER 2011 Current projects as at 31 December 2011 Customer Asset class Space to be built sq m Expected start Expected completion wholly owned Slough Trading Estate Infinity Data Centre 11,428 Nov-11 Nov-12 Slough Trading Estate - Farnham Road Family Bargains Industrial 1,214 Aug-11 Feb-12 Slough Trading Estate - Ajax Avenue Data centre operator Data Centre 5,628 Jun-11 Feb-12 Slough Trading Estate - Galvin Road Speculative development Industrial 3,055 Nov-11 Jun-12 Slough Trading Estate - Galvin Road Speculative development Industrial 2,846 Jul-11 Feb-12 Slough Trading Estate - Yeovil Road Ragus Sugars Industrial 3,274 Mar-11 Jan-12 Slough Trading Estate - Bath Road Lonza Industrial 5,517 Apr-11 May-12 32,962 joint ventures APP - Portal, Heathrow DB Schenker Industrial 9,918 Jan-12 Sep-12 APP - Portal, Heathrow Rolls-Royce Industrial 8,498 Feb-12 Dec-12 At share 9,208 Continental Europe wholly owned France, Paris - La Courneuve Speculative development Industrial 8,243 Jul-11 May-12 Poland, Silesia - Gliwice French sports retailer Logistics 31,290 Dec-11 Sep-12 Poland, Poznan - Komorniki Eurocash Office 1,235 Sep-11 Jan-12 Poland - Lodz OPEK Logistics 7,606 Dec-11 Jun-12 Poland - Tychy Zabka Logistics 18,861 Sep-11 Feb-12 Germany - Krefeld Wir Packens/ Spec Logistics 11,275 Jan-12 Jul-12 Germany - Frankfurt Pro Tex/ Spec Logistics 14,270 Nov-11 Jul-12 Germany - Berlin Speculative development Industrial 12,151 Oct-11 May-12 Germany - Dusseldorf Speculative development Industrial 12,239 Sep-11 Apr-12 Italy - Vimercate Esprinet/ Spec Office 11,168 Jun-11 Nov-12 Italy - Vimercate Alcatel-Lucent Office 33,984 Sep-11 Dec-13 162,322 Group total 204,492 Percentage let 78 13 www.segro.com
DEVELOPMENT PIPELINE AS AT 31 DECEMBER 2011 Basis points A unit that is equal to 1/100th of 1 per cent. Combined property portfolio Consists of the completed portfolio, the development portfolio and owner occupied properties. Completed portfolio The completed investment and trading properties and the Group s share of joint ventures completed investment and trading properties. Development pipeline The Group s current programme of developments authorised or in the course of construction at the balance sheet date, together with potential schemes not yet commenced on land owned or controlled by the Group. Development portfolio Includes land and development property (both investment and trading) and the Group s share of joint venture land and development property. EPRA The European Public Real Estate Association, a real estate industry body who have issued Best Practices Recommendations in order to provide consistency and transparency in real estate reporting across Europe. Estimated cost to completion Costs still to be expended on a development or redevelopment to practical completion (not to complete lettings), including attributable interest. Estimated rental value (ERV) The estimated annual market rental value of lettable space as determined biannually by the Company s valuers. This will normally be different from the rent being paid. Gross rental income Contracted rental income recognised in the period, including surrender premiums and interest receivable on finance leases. Lease incentives, initial costs and any contracted future rental increases are amortised on a straight line basis over the lease term. Hectares (Ha) The area of land measurement used in this analysis. The conversion factor used, where appropriate, is 1 hectare = 2.471 acres. 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 financial and operating policies essential to the operation, performance and financial position of the venture require each partner s consent. Net 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. Net initial yield Annualised current 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 Net Equivalent Yield assuming rent is received quarterly in advance. 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 off service charge expenses). Pre-let A lease signed with an occupier prior to completion of a development. REIT A qualifying entity which has elected to be treated as a Real Estate Investment Trust for tax purposes. In the, such entities must be listed on a recognised stock exchange, must be predominantly engaged in property investment activities and must meet certain ongoing qualifications. SEGRO plc and its subsidiaries achieved REIT status with effect from 1 January 2007. Square metres (sq m) The area of buildings measurements used in this analysis. The conversion factor used, where appropriate, is 1 square metre = 10.639 square feet. 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. Trading property Property being developed for sale or one which is being held for sale after development is complete. 14 Property analysis booklet 31 December 2011
SEGRO plc Cunard House 15 Regent Street London SW1Y 4LR Tel: +44 (0)20 7451 9100 Fax: +44 (0)20 7451 9150