Core FFO is tracking $6.27 this year and I model $6.70 next year. At 19.5 times that is $131, a market-like return from $127.
Key points
- $6.27 is the midpoint of 2026 Core FFO guidance, raised and narrowed on October 15.
- 5.9% cash same-store NOI growth in the September quarter, with occupancy still 95.1%.
- 20.3 times that 2026 FFO is what $126.94 already requires.
The call
The price needs about $6.70 of 2027 Core FFO at twenty times to hold still. That is a 7 percent lift from this year’s guide, with the ten-year yield at 5.2 percent.
I believe $6.70 is reachable from 7 percent cash same-store growth plus development, after a small SEGRO dilution. I apply 19.5 times, not 20, because rates have risen and the deal is still open. That is a $131 stock, a market-like return.
Core FFO per share, reported and my 2027 estimate- Reported / guidance
- My 2027 estimate
Company supplemental Oct 15 2026; 2026E midpoint of guidance; 2027E is mine.
Valuation
| Item | Figure |
|---|
| 2026 Core FFO (guide midpoint) | $6.27 a share |
| My 2027 Core FFO | $6.70 a share |
| Multiple on 2027 FFO | 19.5 times |
| 12-month target | $131 |
| Dividend last twelve months | $4.22 (3.3% yield) |
| Implied total return from $126.94 | about 6% |
Nineteen and a half times is a half-turn below the current 20.3 times 2026 FFO because the SEGRO share issue and higher rates cap the multiple. Being right on FFO and wrong on the multiple still leaves a high-single-digit total return with the dividend. Being wrong on occupancy costs more than being early on data-center power.
Risks
- Ten-year yields stay above 5 percent and warehouse cap rates follow, compressing the multiple.
- Occupancy slips below 95 percent as the occupancy guide already tightened at the top.
- SEGRO cash elections and share issuance prove more dilutive than the “broadly neutral” first-year claim.
What would change my mind
A 2027 Core FFO run-rate above $7.00 with occupancy holding 95.5 percent would justify 21 times and a buy.