Interim Management Statement

SEGRO PLC INTERIM MANAGEMENT STATEMENT 6 November 2008

SEGRO plc today announces its interim management statement for the nine months
ended 30 September 2008.

Key Points

  * Continuing robust performance from existing tenant base, despite worsening
    market environment
   
  * Maintaining good momentum in leasing activities, particularly in Europe
   
  * Development starts significantly reduced and focused on areas of highest
    market demand
   
  * Strong financial discipline with tight control of capital expenditure and
    costs
   
Occupier market conditions

  * The Group has continued to maintain good momentum in its leasing
    activities, letting a total of 457,000 sq m in the nine months to the end
    of September, compared with 397,000 sq m in the equivalent period last
    year. 174,000 sq m was let in the third quarter of the year (2007: 86,000
    sq m).
   
  * The overall vacancy rate was 9.5% at the end of September, a slight
    increase from the 9.3% seen at the end of June and entirely due to
    development completions in the period.
   
  * We have seen no increase in the level of tenant insolvencies and rents have
    continued to be paid in line with previous experience. Nonetheless, we are
    monitoring our customers carefully in anticipation of some weakness in the
    months ahead.
   
  * Enquiries for new space have slowed in the UK in the third quarter,
    although are still at similar levels seen in the corresponding periods in
    2006 and 2005; enquiry levels in Continental Europe have remained good,
    particularly in Poland.
   
Development activity

  * We have made good progress with our existing development schemes,
    comprising a combination of pre-lets and speculative product, underpinned
    by good demand. 308,000 sq m of developments have been completed in 2008
    (151,000 sq m in Q3), 68% of which has been let or sold, whilst 42% of the
    285,000 sq m of developments under construction, has already been pre-let
    or sold.
   
  * As noted at the time of our Half Year Results Announcement in August, new
    construction starts are being tightly controlled. Notwithstanding the
    current robust occupier demand being experienced in certain markets, we are
    being very cautious about any new speculative development starts.
   
Property values

  * As previously reported, SEGRO's UK investment property portfolio recorded a
    10.4% reduction in value for the six months ended 30th June 2008, partially
    offset by a surplus of 0.7% in Continental Europe.
   
  * Since then, the severe stress in global financial markets has continued to
    have a negative effect on investment market conditions, with property
    values showing further declines.
   
  * Whilst the next valuation of the Group's properties will not be until 31
    December, the Investment Property Databank (IPD) indicates that capital
    values of UK industrial properties have declined by 6.1% over the third
    quarter of 2008 (a decrease of 14.0% in capital values from December 2007).
    Due to the relative scarcity of transactions in the market, the IPD index
    may not be fully reflective of the "true market".
   
  * In Continental Europe, investment market conditions are also weakening.
    Accordingly, we expect there to be a softening of yields in Continental
    Europe in the second half of the year but, as with the UK, there is
    relatively limited market evidence to guide valuers.
   
Financial position:

  * In the nine months to the end of September, SEGRO has invested c.£179m in
    its development pipeline and has realised c.£264m of cash from disposals,
    leaving the Group with net debt of c.£2,190m.
   
  * Cash and un-drawn debt facilities at the end of September were c.£808m.
   
  * SEGRO has a widely diversified funding base. Approximately £1bn of
    borrowings are syndicated with a strong group of banks. A further £1.3
    billion of term funding is provided by 7 separate, unsecured fixed rate
    Sterling Eurobond issues held by institutional investors.
   
  * The average maturity of outstanding debt is 9.5 years and only £140m of the
    Group's committed facilities are due for repayment or rollover before the
    end of 2009.
   
Outlook

General economic conditions across the UK and Europe have deteriorated markedly
over recent months. Whilst we have made good progress with our own letting and
development programme, we are cautious about the outlook both for occupier
markets and investment markets. We anticipate some weakening in demand for
industrial space in the months ahead and expect property values to show further
declines until such time that debt markets stabilise.

In this environment, we are exercising strong financial discipline and expect
to commence relatively little by way of new developments, particularly those of
a speculative nature. We continue to pursue opportunities to generate cash from
disposals where acceptable prices can be achieved.

Ian Coull, Chief Executive said:

"Our carefully planned development programme which has been concentrated in
attractive markets, coupled with our active approach to asset and customer
management, has enabled us to continue delivering excellent letting results.
Nonetheless we are cautious about the near term outlook for our markets and for
property values.

Looking further ahead, I believe there will be some very attractive investment
opportunities in the coming years. We are managing the business in a cautious
and disciplined manner to ensure that SEGRO is well placed to take full
advantage of such opportunities."

Ends

CONFERENCE CALL FOR INVESTORS AND ANALYSTS

There will be a conference call for investors and analysts at 9:30 AM today
GMT, hosted by Ian Coull, Chief Executive, and David Sleath, Finance Director.

To participate in the call, please dial:

UK             Tel: [phone]        
International  Tel: [phone]     
US             Tel: [phone]      

For further information please contact:

SEGRO                     Tel: [phone]      Tamarin Shore             
Maitland                  Tel: + 44 207 379 5151     Colin Browne / Liz Morley 

About SEGRO

SEGRO is the leading provider of Flexible Business Space in Europe.
Headquartered in the UK, SEGRO is listed on the London Stock Exchange and on
Euronext in Paris. The Company is a UK Real Estate Investment Trust (REIT) with
operations in ten countries, serving a diversified base of 1,700 customers
operating in a wide range of sectors, representing both small and large
businesses, from start-ups to global corporations. With property assets of £5.1
billion as at 30 June 2008 and around 5.0 million sq m of business space, SEGRO
has an annual rent roll of approximately £290 million (Note: these metrics
include trading properties, development assets and the Group's share of joint
ventures).   www.segro.com  

APPENDIX

Details of recent transactions and performance in 2008 include:

UK

Lettings

  * c.114,000 sq m of space has been let in the nine months to the end of
    September (2007: c.152,000 sq m).

  * c.40,000 sq m of space was let in the third quarter, the same as in the
    comparable period in 2007.
   
  * Pre-let of c.10,800 sq m data centre facility to Equinix (London) Limited
    in October 2008.
   
Vacancy Rates

  * The vacancy rate improved marginally to 11.1% compared to the position at
    the end of June.
   
Development

  * c.18,000 sq m of developments have been completed so far this year of which
    58% have been pre-let or sold.
   
  * c.59,000 sq m of space is currently under construction of which c.66% has
    already been pre-let or sold.
   
Disposals

  * c.108,000 sq m of non-core industrial assets were disposed of in August and
    September for £110m at 2.8% less than the June 2008 book value (comprising
    63,000 sq m to The Crown Estate and c.45,000 sq m to a client of Protego
    Real Estate Investors LLP).
   
CONTINENTAL EUROPE

Lettings

  * c. 293,000 sq m of space has been let in the nine months to the end of
    September (2007: 214,000 sq m) of which c.119,000 sq m was let in the third
    quarter (2007: 46,000 sq m).
   
  * Letting highlights in the third quarter included 17,000 sq m to Ernst &
    Young in Pegasus Park 1 (Belgium), 20,750 sq m to Hammer GmbH in Krefelder
    (Germany), 17,500 sq m let to ABX Logistics in Alzenau (Germany), 10,600 sq
    m to Cerva Logistics in the Czech Republic, 12,200 sq m to Cosmetic Essence
    in Strykow F (Poland), and 15,700 sq m to Żabka Polska in Komorniki 2A
    (Poland).
   
  * Of the 46,000 sq m pre-lets signed in the third quarter, c.30,000 sq m were
    in Poland. In addition, a 6,000 sq m pre-let was signed with SAP at
    Vimercate Energy Park (Italy).
   
Vacancy Rates

The vacancy rate increased from 6.8% in June to 7.9% at the end of September
due to development completions in the third quarter.

Development

  * c.290,000 sq m of developments have been completed, with c.68% already
    pre-let or sold.
   
  * c.226,000 sq m of additional space is under construction, of which c.36%
    has already been pre-let or sold; of this, approximately 110,000 sq m is in
    Central Europe of which c.35% has been pre-let or sold. We continue to
    experience good levels of enquiries for new space in most Continental
    European markets.
   
Disposals

  * Sale of c.29,200 sq m logistics scheme in Hungary on 5th November to SEB
    for c.€20m.
   
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Note: Lettings include licenses