REG - SEGRO PLC - SEGRO & PURE DATA CENTRES GROUP ANNOUNCE £1BN JV

SEGROAnnouncement

25/03/2025 07:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250325:nRSY9602Ba&default-theme=true

RNS Number : 9602B  SEGRO PLC  25 March 2025

 

25 March 2025

SEGRO plc ("SEGRO")

segro and pure DATA CENTREs Group announce joint venture

to develop a c.£1BN fully fitted data centre
KEY MESSAGES:

·     SEGRO announces formation of joint venture with Pure Data Centres
Group Limited ("Pure DC"), owned by Oaktree, to create its first fully fitted
data centre, which it expects to pre-lease to a hyperscaler.

·    Innovative partnership to develop a 56MW data centre in Park Royal,
within a core London Availability Zone that has limited competing supply of
land and power.

·    Gross capital investment anticipated to be c.£1 billion (of which
SEGRO's cash equity contribution will be c.£150 million) and is expected to
deliver a 9 to 10 per cent net yield on cost.

·    Secretary of State for the Department of Science, Innovation &
Technology (DSIT), the Rt. Hon. Peter Kyle MP commented: "Private investment
like this innovative partnership between SEGRO and Pure DC will help us ensure
the UK has the digital infrastructure it needs to thrive…"

 

David Sleath, CEO of SEGRO, said:

"Building on our 20 years of experience in the powered shell data centre
market, we have been exploring how best to utilise our skills and 2.3GW
land-enabled power bank to maximise the opportunity in this fast-growing
sector.

"This innovative joint venture with Pure DC allows us to develop our first
fully fitted data centre, alongside a highly experienced partner with an
excellent track record of delivering world-class facilities to global
hyperscalers.

"We expect this project to deliver an attractive risk-adjusted return and it
will also help further strengthen SEGRO's expertise in this area, enabling us
to optimise and accelerate the significant value creation opportunity within
our portfolio."

Dame Dawn Childs, CEO of Pure DC, said:

"SEGRO choosing to enter into a joint venture with Pure DC for its first fully
fitted data centre development demonstrates our capability to create
world-class digital infrastructure.  Together we will develop a 56MW data
centre in central London capable of handling next-generation cloud and AI
workloads.

"This joint venture demonstrates Pure DC's ability to scale in a rapidly
expanding market, creating fresh opportunities for growth and investment. With
over 500MW of data capacity in development or operation, Pure DC brings deep
expertise building data centres and working alongside hyperscalers. SEGRO Park
Premier Road, Park Royal is one of London's most sought-after data centre
locations and will help support the UK's ambitions for digitalisation."

Secretary of State for the Department of Science, Innovation & Technology
(DSIT), the Rt. Hon. Peter Kyle MP said:

 "This announcement is another powerful endorsement of Britain as a home for
tech investment, which will not only bolster the local economy and create job
opportunities but also pave the way for a digital and AI-powered future.

 "Private investment like this innovative partnership between SEGRO and Pure
DC will help us ensure the UK has the digital infrastructure it needs to
thrive, helping us harness the power of technology to grow the economy and
raise living standards, the central missions in our Plan for Change."

 

Transaction summary

SEGRO announces the formation of SEGRO Pure Premier Park Data Centre Limited,
a 50:50 joint venture with Pure DC, a global data centre operator with over a
decade of experience in the design, build and operation of world-class data
centres for the most sophisticated hyperscale users.

The joint venture has been created with the intent to develop and deliver a
fully fitted data centre in Park Royal, West London. It brings together a
10-acre super-prime industrial site owned by SEGRO and 70MVA of power secured
by Pure DC. It represents a highly attractive and profitable opportunity to
deliver a data centre in a land and power-constrained key London Availability
Zone where there is strong underlying demand; and allows SEGRO to benefit from
Pure DC's technical expertise in data centre fit-out and track record of
working with hyperscalers.

This will be SEGRO's first fully fitted data centre project, building on our
experience of delivering powered shells to major data centre operators for
over 20 years. We see the potential for significant value creation utilising
our 2.3GW land-enabled power bank and will seek to optimise and accelerate
this over the coming years. The evolution of our data centre strategy to
include fully fitted data centres will ensure that we can best access the
demand in each of our markets and allows us to deploy capital at scale to
generate significant development profits. For each site, we will pursue the
model which offers the most attractive opportunity and risk-adjusted return.

Project details

The joint venture intends to develop a c.30,000 sq m fully fitted,
three-storey, data centre on the edge of SEGRO Park Premier Road, West London.
The data centre will be constructed to the highest sustainability standards,
in line with SEGRO's Mandatory Sustainability Policy and Pure DC's Healthier
Earth commitments and will deliver a highly energy efficient solution
(including a closed loop liquid cooling system to minimise the potential
impact on the local water supply).

SEGRO Park Premier Road is a super-prime West London industrial estate which
was acquired by SEGRO in 2009. The 10-acre plot that has been identified for
the development is on the edge of the estate where an older warehouse,
recently vacated by Matchesfashion, is currently located. SEGRO will
contribute the land to the joint venture and will carry out the site clearance
and remedial works.

Pure DC will be contributing 70MVA of secured power to enable delivery of a
56MW IT load data centre. Park Royal sits within a key London Availability
Zone where there is little competing land supply and limited power capacity,
so is expected to present a very attractive proposition for global
hyperscalers looking to grow their capacity in one of Europe's largest data
centre markets.

The joint venture will develop the data centre, combining SEGRO's expertise in
planning and development and Pure DC's experience of delivering operational
data centres. The fitout will include mechanical & electrical elements and
long lead equipment such as power distribution, cabling and cooling systems.
It will not include IT equipment (racking, servers etc) which will be provided
by the customer in line with normal market practice.

The joint venture expects to sign a long-term (15 years or more) net lease
with a global hyperscaler. Construction will start once planning has been
obtained, lease commitments have been secured and financing has been arranged.

The development of this project is expected to generate hundreds of jobs
during its multi-year construction phase, which will be complemented by a
comprehensive package of support designed to upskill the local community, with
an emphasis on fostering a diverse and inclusive future workforce for the
technology sector.

Data centres are critical to the digital economy, creating highly skilled job
opportunities in London and across the UK, providing the essential
infrastructure that drives technological innovation, growth, and contributes
to building a more inclusive digital society.

In line with SEGRO's Responsible SEGRO framework, which prioritises investment
in local communities, the joint venture aims to establish a range of projects
that will bring employment, educational, and environmental benefits to the
surrounding area.

Funding and returns

SEGRO and Pure DC are expected to each retain a 50 per cent share in the
project through to completion. No management or incentive fees are payable to
either party. The gross capital investment is anticipated to be approximately
£1 billion and is projected to deliver an unlevered net yield on cost (based
on future rents and costs, excluding finance cost as per the data centre
market convention) of 9 to 10 per cent.

In addition to contributing land, SEGRO's estimated cash equity contribution
to the joint venture is expected to be around £150 million over the total
construction period. The remaining construction costs will be financed by
non-recourse bank financing, prior to the commencement of the construction.

Timeline

The clearance of the site will begin, planning will be submitted and marketing
of the data centre capacity will commence now that the joint venture has been
agreed. It is anticipated that the construction of the shell will commence in
2026 with the fully fitted space available for customer use from 2029.

 

WEBCAST / CONFERENCE CALL FOR INVESTORS AND ANALYSTS:

SEGRO and Pure DC Group will be hosting a call to discuss the announcement at
08:00 (UK time) on Tuesday 25 March. The presentation will be made available
at segro.com/investors shortly before the call.

Link: https://www.investis-live.com/segro/67e16d2754528c000e65d042/hthrt
(https://url.uk.m.mimecastprotect.com/s/lJtsCj2xWC3WzG8H7svUmCVX3?domain=investis-live.com)

 The dial in details will be as follows:                                        An audio recording of the conference call will be available until 1 April 2025

                                                                              on:
 Dial-in:                          +44 800 358 1035

                                                                              UK:                                  +44 20
                                      +44                                       3936 3001
 20 3936 2999

                                                                              Access code:                   906146
 Access code:                278854

 

 

CONTACT DETAILS FOR INVESTORS & ANALYSTS:
 SEGRO  Soumen Das                     Tel: + 44 (0) 20 7451 9110

(after 11am)
        (Chief Financial Officer)
        Claire Mogford                 Mob: +44 (0) 7710 153 974

        (Head of Investor Relations)   Tel: +44 (0) 20 7451 9048

(after 11am)

CONTACT DETAILS FOR MEDIA:
 FTI Consulting (SEGRO)  Richard Sunderland/ Ellie Sweeney/ Eve Kirmatzis  Tel: +44 (0) 20 3727 1000
 Pure DC                 Chris Talago                                      Tel: +44 (0) 7535 864 029

                                                                           chris.talago@puredc.com (mailto:chris.talago@puredc.com)
 FGS Global (Oaktree)    Rory King/ Aidan McGrattan/ Hannan Ratcliff       Tel: +44 (0) 20 7251 3801

                                                                           rory.king@fgsglobal.com (mailto:rory.king@fgsglobal.com)

 

About SEGRO

SEGRO is a UK Real Estate Investment Trust (REIT), listed on the London Stock
Exchange and Euronext Paris, and is a leading owner, manager and developer of
modern warehouses and industrial property. It owns or manages 10.3 million
square metres of space (111 million square feet) valued at £20.3 billion at
31 December 2024 serving customers from a wide range of industry sectors. Its
properties are located in and around major cities and at key transportation
hubs in the UK and in seven other European countries.

For over 100 years SEGRO has been creating the space that enables
extraordinary things to happen. From modern big box warehouses, used primarily
for regional, national and international distribution hubs, to urban
warehousing (including data centres) located close to major population centres
and business districts, it provides high-quality assets that allow its
customers to thrive.

A commitment to be a force for societal and environmental good is integral to
SEGRO's purpose and strategy. Its Responsible SEGRO framework focuses on three
long-term priorities where the company believes it can make the greatest
impact: Championing Low-Carbon Growth, Investing in Local Communities and
Environments and Nurturing Talent.

Striving for the highest standards of innovation, sustainable business
practices and enabling economic and societal prosperity underpins SEGRO's
ambition to be the best property company.

See www.SEGRO.com for further information.

 

About Pure Data Centres Group

Pure DC develops and operates data centres for some of the world's largest
technology companies which meet today's digital demands. Pure DC currently has
over 500MW of IT capacity live or under development across the UK, Europe, the
Middle East and Asia, including London, Dublin and Jakarta sites.

Pure DC benefits from the expertise and investment backing of funds managed by
Oaktree Capital Management, L.P. ("Oaktree"), a leader among global investment
managers specialising in alternative investments.

Pure DC is a leader in developing and operating sustainable data
infrastructure and believes that data centres are an essential service which
can be a force for good, creating employment opportunities, supporting local
communities and investing in environmental restoration.

See www.puredc.com for further information.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  JVEZZGZFGDRGKZZ