Prologis’s seismic takeover of SEGRO could be a catalyst for a “more dynamic” UK REIT market and bring more investment into the UK, according to analysts.
SEGRO’s board last week recommended Prologis’s fourth and final offer for approval, bringing an end to the UK firm’s resistance. The proposal comprises 0.092 Prologis shares, with a 25% cash element, at a price of 1,031.7p per share, valuing SEGRO at £14bn.
At the time of recommendation, SEGRO accounted for about 25% of the EPRA UK index. It is by far the largest UK REIT subject to a merger or acquisition to date and the fourth listed REIT to be consumed into a larger international REIT in recent years.
Andrew Gill, fund manager at TIME Investments, whose funds hold a position in both SEGRO and Prologis, said: “Prologis’s bid at a 39% premium to SEGRO’s pre-announcement share price, and at a 14% premium to NAV [net asset value], firmly highlights how UK property assets are being undervalued.”
He added: “At first glance, this feels like a significant blow to the UK REIT sector, losing the largest listed property company and UK ownership of irreplaceable assets such as Slough Trading Estate.”
SEGRO’s Slough Estate
But Gill said the sale could be the catalyst for a “more dynamic” UK REIT market.
“SEGRO was a dominant part of the sector, often being the sole REIT holding for non-specialist investors. Its exit could spread capital across a number of other industrial and logistic REITs that specialise in urban logistics, multi-let industrial estates and regional warehousing, improving value and liquidity.
“At least £3.5bn of cash will have to find a home, as well as holders who aren’t able to hold Prologis’s secondary UK listing – this could be a permanent re-rating for other UK REITs and a tailwind to valuations.”
Charles Ferguson-Davie, chief executive and chief investment officer at investment manager Moorfield Group, agreed that the recommended deal demonstrated that listed UK real estate had been mispriced.
At first glance, this feels like a significant blow to the UK REIT sector
Andrew Gill, TIME Investments
“Despite the shares having traded at a persistent discount, the intrinsic value was there all along,” he said. “We have argued for a while that this is an attractive point in the cycle to put money into UK real estate, and a deal on this scale backs that up, even if it is a shame to see another UK company consumed.
“This transaction should give confidence to others about allocating capital to the UK.”
Inclusive of the dividend, the recommended proposal equates to a 16% premium to SEGRO’s latest NAV. Matthew Saperia, real estate analyst at Peel Hunt, said that figure represented “the highest NAV premium in recent M&A deals”.
He added: “This reflects the nature of the company, its scale, track record, irreplaceable portfolio and strong growth outlook.”
SEGRO has a 117m sq ft portfolio that includes a substantial data centre pipeline spanning the UK and continental Europe, featuring 2.5 gigawatts of total potential capacity, and a 3.0-gigavolt-ampere secure power bank.
Its attractiveness to Prologis is clear, according to Andrew Saunders, equity analyst at Shore Capital. “SEGRO is a unique business with a rich pedigree and high-quality portfolio carefully assembled in the UK and Europe over many decades – along with an attractive pipeline of data centres and traditional warehousing,” he said.
“However, we think there are many wider attractions that being part of Prologis can offer shareholders, including significantly greater scale, global reach, bigger balance sheet, third-party capital and more highly resourced capabilities in development, data centres and power sourcing.”
The potential takeover still represents another blow to the London Stock Exchange, although as part of the deal Prologis has also committed to a secondary London Stock Exchange listing. If completed, the deal will add to the £48bn of London-listed companies lost to foreign takeovers so far in 2026.
Prologis, the world’s largest logistics real estate company, is a behemoth in comparison, with a market cap of over £105bn to SEGRO’s modest £13bn, meaning the odds were always stacked against SEGRO’s board.
The proposed takeover is widely viewed as a good sign for the industrial sector, however. Nick Cripps, head of international capital markets at Panattoni, said it confirmed “deep demand for well-located industrial and logistics space”.
“When such a well-informed global player is willing to pay a premium for UK and European exposure on this scale, it reinforces the view that international capital still considers this region as one of the most attractive places to invest in the asset class. We are seeing the lines between logistics, advanced manufacturing and data centres blurring, which is driving strong demand for modern, high-specification warehouse assets,” Cripps added.
Prologis’s deadline to announce a firm intention to make an offer or walk away has extended, giving the California-based firm until 5pm on 12 August to make a firm offer.
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