British warehouse and logistics real estate firm Segro has turned down a £12.6 billion takeover bid from US rival Prologis, highlighting the rising competition among property landlords to capitalize on the booming demand for data centre infrastructure driven by artificial intelligence growth.
The offer, submitted by Prologis, the San Francisco-based global leader in warehousing real estate with a valuation of approximately $135 billion (£102 billion), represented what would have been the largest property acquisition in the UK’s financial markets. Prologis emphasized that its substantial financial resources would enable rapid advancement of Segro’s data centre construction ambitions, underlining the strategic importance of these facilities as technology companies increasingly deploy AI chips at scale.
Segro, listed on the FTSE 100 and owner of Europe’s largest cluster of data centres in Slough, Berkshire, has been actively expanding its portfolio in response to strong market demand. The company recently secured planning approval for a £1 billion data centre project in west London and is pursuing further developments across France, Germany, Italy, and Poland. Segro’s facilities also include logistics warehouses leased to firms such as Amazon, DHL, and Royal Mail.
While Prologis encouraged Segro’s shareholders to push the company’s board towards engagement, Segro’s directors unanimously and firmly rejected the bid. The board described the proposal as “opportunistically timed,” contending that it sought to exploit a disconnect between Segro’s current share price and the underlying strength and prospects of its business. They noted broader geopolitical tensions have depressed valuations in UK and European real estate sectors, creating volatility investors should consider.
Shares in Segro rose sharply following the announcement, gaining around 18 percent to approximately 869 pence per share—still below the 925 pence per share offered by Prologis. The market’s reaction reflected confidence in the company’s standalone growth strategy amid expanding demand for data centre capacity.
Segro’s chief executive, David Sleath, has previously highlighted the robust demand outlook for data centres and the company’s focus on securing planning permissions for a range of projects to meet this need. Meanwhile, Dan Letter, CEO of Prologis, recently described data centres as “one of the largest value creation opportunities” in his company’s history, illustrating the sector’s critical role in future logistics and infrastructure investment.
The rejection underscores the intensifying competition among commercial landlords to build and control data centre assets supporting the rapidly evolving AI landscape across Europe and globally.