Investors shouldn't sell Segro for short-term gain

Investors shouldn’t sell Segro for short-term gain as Prologis’s unsolicited bid reshapes expectations for the London-listed logistics property sector. The U.S. logistics company has proposed an all-share deal valuing Segro at just above net asset value (NAV), after the shares fell over the prior four years from above 1,400p in 2021 amid rising interest rates. As of mid-June, Segro was trading at under 750p, creating a discount to NAV while NAV itself had dropped by more than a quarter. Segro’s board called the approach “opportunistic,” citing the business’s attractive fundamentals and “strong prospects.” Commentators point to historically wide sector discounts, with a weighted average discount above 30% and still the cheapest quartile since 1990. Prologis’s bid follows a broader pattern of takeover interest in discounted property names, though concerns remain over Europe’s slower growth and limited demand for some spaces.