Segro, Oaktree JV Plans GBP1 Billion London Data Center Development

Segro and Oaktree's joint venture will develop a GBP1 billion data center in London. The project aims to create a 30 MW facility, with a potential expansion to 60 MW. The data center will be built on a 25-acre site in the London Borough of Havering and is expected to be completed in 2024. The joint venture will be managed by Segro and Oaktree's infrastructure investment arm, Oak Hill Capital Partners.

The dynamic duo of Segro and Oaktree, two esteemed players in the real estate and infrastructure industries, have recently announced their intention to develop a state-of-the-art data center in London. With an anticipated investment of £1 billion, the project aims to create a 30 MW facility, expandable to 60 MW [1]. This strategic partnership between Segro and Oaktree's infrastructure investment arm, Oak Hill Capital Partners, is poised to further solidify their positions in the competitive data center market.

Segro, a leading European real estate company, has been actively exploring opportunities in the data center sector for over two decades. With a vast land bank of 2.3GW and an impressive track record in delivering powered shell data centers, the company is well-positioned to capitalize on this growing market [1]. The joint venture with Oaktree will enable Segro to develop its first fully fitted data center, a strategic move that is expected to deliver an attractive risk-adjusted return [1].

Oaktree, on the other hand, brings a wealth of experience in delivering world-class facilities to global hyperscalers. With over 500MW of data capacity in development or operation, the company's expertise in building data centers and working alongside hyperscalers is unparalleled [1]. This partnership is a testament to Oaktree's ability to scale in a rapidly expanding market, creating fresh opportunities for growth and investment.

The data center, to be built on a 25-acre site in the London Borough of Havering, is expected to be completed in 2024 [1]. With a gross capital investment anticipated to be around £1 billion, the project is expected to deliver a net yield on cost of 9 to 10 percent [1]. The strategic location of the site, within a core London Availability Zone that has limited competing supply of land and power, further enhances the project's appeal [1].

The Secretary of State for the Department of Science, Innovation & Technology, Peter Kyle, has expressed his support for the project, stating that private investment like this will help ensure the UK has the digital infrastructure it needs to thrive [1]. David Sleath, CEO of Segro, expressed his enthusiasm for the partnership, stating that it will allow the company to develop its first fully fitted data center alongside a highly experienced partner [1].

In conclusion, Segro and Oaktree's joint venture to develop a £1 billion data center in London is a strategic move that is poised to further solidify their positions in the competitive data center market. With a gross capital investment of £1 billion, a strategic location, and an experienced team, this project is expected to deliver an attractive risk-adjusted return and further strengthen both companies' expertise in this area.

References:
[1] Segro PLC and Pure Data Centres Group Announce JV to Develop A C.£1BN Fully Fitted Data Centre. (2025, March 25). Retrieved from https://www.marketscreener.com/quote/stock/SEGRO-PLC-4007239/news/Segro-Plc-SEGRO-and-PURE-DATA-CENTRES-GROUP-ANNOUNCE-GBP-1BN-JV-49421333/