SEGRO : 2023 Annual Report and Accounts

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.

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

Governance

An overview of our corporate governance structure, policies and practices as well as the key activities undertaken by the Board and its Committees.

What we do

SEGRO owns, manages and develops modern and sustainable warehouse space across Europe.

Our portfolio includes both urban and big box warehouses*.

some thoughts on the outlook for 2024 and beyond.

Urban warehouses

66%

asset type by value

Urban warehouses are located in, or close to, population centres and business districts and provide flexible 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

32%

asset type by value

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.

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

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.

*Other 2% - includes offices 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 fit for the future and delivers long-term benefits for all of our stakeholders.

Scan the QR code to watch our video and learn more about our business

www.segro.com/ara23/what-we-do

We create the space

that enables extraordinary things to happen.

Annual Report & Accounts 2023

How our governance activities enable extraordinary things

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

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

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

Net investment

£575m

2022: £1.3bn

2022: £98m

Development completions

625,700 sq m

2022: 639,200 sq m

Uplift from rent reviews and renewals

31%

2022: 23%

Overview

Strategic Report

Governance

Annual Report & Accounts 2023

Increase in solar capacity

34%

2022: 24%

Employee volunteering days

707

2022: 387

Overview

Strategic Report

Governance

Annual Report & Accounts 2023

Where we do it and who we do it for

Our market-leading

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,

as well as our 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 location scoring data tool, which incorporates thousands of data

points across an ever-evolving European market.

Geographical split by value (SEGRO share)

operating platform supports our customers across Europe, using local insights and data to identify emerging trends.

Our portfolio is located in densely populated and supply- constrained cities, as well as key transportation corridors

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

and logistics hubs across eight European countries.

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

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 Netflix

17 Leroy Merlin

18 Cyrus One

19 Ocado

20 Tesco Group

Annual Report & Accounts 2023

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

different sectors supported

Restricted land availability limits supply response Biased towards urban warehousing where there are significant barriers to entry due to land supply and increasingly challenging planning regimes

66%

of our portfolio is in supply constrained urban areas

Market-leadingpan-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

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

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 profile that provides us with plenty of firepower

34%

OverviewStrategic Report

Strategic report

Governance

In this section:

We describe how our market has been influenced by macro issues such as inflation, 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 differentiate 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.

Find out more on page 12

Our strategy

Our clear and consistent strategy is central to our ambition of becoming the best property company.

Our business model

At the heart of how we do business lies a deep understanding of our customers' needs. We rely on different 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

Find out more on page 16

Responsible SEGRO

Responsible SEGRO lies at the heart of our strategy. It focuses on three priorities which we have identified 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.

Overview

Strategic Report

Governance

Annual Report & Accounts 2023

Chief Executive's statement

We continue to create the space that delivers growth.

Delivering increased dividends

27.8p

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 reflect current financial 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 benefited from exceptional occupier demand during the pandemic;

- Significant 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, certified 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 significant progress in gaining visibility of, and influencing, the carbon emissions of our customers;

- Good progress with our Community Investment Plans, providing tangible economic and social benefits 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 final dividend.

Adjusted net asset value per share was down

6.1 per cent to 907 pence (31 December 2022:

966 pence), reflecting 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 offset by rental value (ERV) growth of 6.0 per cent, resulting from asset management initiatives and by development profits.

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 benefits 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-pandemiclevels of take-up,proving resilient in the face of cost challenges (rising input costs, wage inflation 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 -

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, flexible and highly sustainable space to improve operational efficiency 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, financial 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.