Segro Develops Major Data Centre in London to Meet Growing Demand

Segro has unveiled plans for a significant development—a £1 billion data centre project located west of London. This venture marks the company’s first fully-fitted data centre, driven by an increasing need for computing power in today’s digital economy.

The project will span 30,000 square metres over three storeys, situated on Segro’s industrial site in Park Royal. This landmark development is a joint effort between Segro and Pure Data Centres, a company supported by Oaktree Capital Management. It is expected to be a catalyst in enhancing the region’s infrastructure for cloud computing and artificial intelligence.

As the demand for data storage and processing facilities surges, this development is strategically timed. The companies involved anticipate submitting an application for planning permission in the latter half of this year, with groundbreaking planned for the next year. Notably, the site has already secured a grid connection, which is essential for operation.

Strategically designed to attract large providers in the cloud computing sector, known as “hyperscalers,” the data centre aims for tenants like Amazon and Microsoft. The plan includes a long-term lease of at least 15 years, assuring stable revenue for the partnership.

Both Segro and Pure Data Centres are each contributing £150 million in cash, with the remaining funds for the development expected to be sourced through debt financing. The anticipated return on cost ranges between 9% and 10%, significantly exceeding the average net yield of 6.9% from distribution warehouses in the previous year.

As part of a broader strategy, this significant investment not only promises to bolster the local economy but is also poised to create numerous job opportunities, paving the way for a digitally driven future.