UK real estate firm Segro is looking to expand its data center business, and is looking to move beyond powered shells into fully fitted-out data centers and targeting hyperscalers directly.

The company, which leases to multiple operators in the west London data center hub of Slough, currently only provides powered shells to customers.

However, in its most recent earnings results, the company said it sees potential to “create significant additional value” in developing fully-fitted data centers.

Segro is considering this change in “select” locations with multiple projects currently under “active consideration” – though details weren’t shared.

In the earnings results announcement this week, Segro CEO, David Sleath, said: “We have created the largest data center hub in Europe and are increasingly excited about the exceptional value creation opportunity from our pipeline of 2.3GW European data center sites in core availability zones. We plan to pursue the most attractive risk-adjusted returns on each opportunity, including initially working with partners to develop fully-fitted data centers.”

Segro has been providing powered shells to data center customers for around 20 years, and the company said it has some 500MW of data center capacity in operation or development around Slough. It added that the data center opportunity within its portfolio equates to more than 1.8GW of further potential additional capacity across the UK and Continental Europe.

“Our preferred data center model to date has been to develop pre-let powered shells,” the company said in its earnings results. “We provide the real estate and arrange, with our partners, the power capacity and our customers fit out and operate or sub-lease the space themselves. We expect this approach will continue to be used for certain opportunities within our pipeline.”

The company continued: “However…we see significant potential to create value through developing fully-fitted data centers, initially working alongside partners who will provide the operational expertise. As always we will take a disciplined approach to our capital allocation choices, seeking to deliver the most attractive risk-adjusted returns on every opportunity.”

Segro also noted that all of its lettings to date have been to colocation providers so far, but the company was “having active conversations with hyperscalers for some of our larger sites.”

The transport & logistics and manufacturing sectors were the largest takers of space within Segro’s footprint during 2024, followed by the technology, media, and telecoms sector, which was largely driven by data center operators taking additional space.

Data centers currently total around 8 percent of the company’s headline rent income, which totaled £628 million ($791.8m) in 2024.

2024 also saw Segro sell a land holding in Europe that had obtained planning permission and secured a large allocation of power, but in a location “not aligned” with the company’s focus on core availability zones. It also sold two leased data centers in Slough to the occupier.

There was been a one percent increase in Segro’s corporate customer emission intensity during 2024, largely due to its data center customers, which “accounted for the majority of the increase in our absolute emissions.”

“Data center customers are on their own net-zero journey with commitments to reach 100 percent renewable energy by 2030,” the company said, “and we will continue to work closely with our customers to do what we can to help them make good progress on that commitment.”