SEGRO: Finding Value In Quality Industrial Real Estate

Summary SEGRO is a century-old, pan-European industrial/logistics REIT with a £12.7B market cap and strong fundamentals. SEGXF boasts high-quality, non-reproducible urban assets, 95%+ occupancy, and a low LTV below 32%, but faces valuation headwinds. Despite a resilient 3.35% yield and 5-6% recent AFFO growth, current pricing offers limited risk-adjusted upside versus fair value. I assign a 'Hold' rating with a £6.6/share price target, awaiting a more attractive entry point for a 15% annualized return. Looking for more investing ideas like this one? Get them exclusively at Wolf of Value. Learn More » NVS/iStock via Getty Images I've been covering REITs for quite a few years, and it's fair to say that SEGRO ( SEGXF ) is a bit different than your typical warehouse and industrial REIT. First of all, the company has a massive age. It's This article was written by Wolf Report 35.46K Followers Follow Wolf Report is a senior analyst and private portfolio manager with over 10 years of generating value ideas in European and North American markets, and the owner of Wolf of Value, a service focusing on international dividend-paying value investments.He further covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles. I own the Canadian tickers of all Canadian stocks I write about. Please note that investing in European/Non-US stocks comes with withholding tax risks specific to the company's domicile as well as your personal situation. Investors should always consult a tax professional as to the overall impact of dividend withholding taxes and ways to mitigate these. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.