Segro CEO Declares Urban AI Data Center Deployment a Critical Priority
David Sleath, the chief executive of industrial property giant Segro, has issued a stark warning that the rollout of artificial intelligence data centers in the United Kingdom's urban hubs represents a matter of life and death. In an exclusive interview with City AM, Sleath emphasized that developing these facilities within city environments is absolutely critical for supporting advanced technological applications, including life-saving AI-guided surgical procedures.
Unprecedented Demand and Strategic Importance
Sleath described the current demand for AI data center infrastructure as "almost inconceivable" to meet fully. This surge is reflected in record-high planning applications across the UK last year, a trend that has significantly propelled Segro's business operations. The company's portfolio, which famously includes the Slough Trading Estate—home to Europe's largest data center cluster—has been a primary beneficiary of this technological boom.
Originally established as the Slough Estates Group, Segro has a storied history of developing warehouse spaces for major corporations like Netflix and Amazon, and even once owned the property featured in the iconic British television series The Office. Today, the firm is at the forefront of the industrial property sector's adaptation to the AI revolution.
The Critical Need for Proximity in AI Infrastructure
Sleath explained a fundamental distinction in AI data center requirements. While the large-scale facilities used for training complex language models can be situated in remote locations, the hubs that facilitate real-time user interaction with AI must be located in close proximity to urban populations. "If you're operating a financial trading desk, you cannot tolerate delays while data travels hundreds of miles and returns," Sleath stated. "You require millisecond-level response times."
He further illustrated the urgency with a medical example: "For a surgeon utilizing AI to guide precise incisions, low latency is non-negotiable. Consequently, there is immense demand for data centers focused on user interface, as opposed to remote training facilities, that need to be immediately accessible."
Navigating Political and Environmental Challenges
The construction of data centers in urban areas frequently encounters resistance from local residents and council authorities. Sleath cited ongoing disputes, such as one in Hackney concerning the redevelopment of a former brewery site, as examples of this pushback. He characterized the urban deployment of data centers as a "delicate political choice," acknowledging that public concerns over substantial energy and water consumption are "fair and reasonable questions for society and local communities to raise."
Strong Financial Performance Underpins Confidence
Segro reinforced its positive outlook by increasing its dividend following the announcement of robust annual profits. The group reported an 8.3 percent rise in profit, reaching £509 million, attributed to a strong recovery in demand and improved occupancy rates. Shares in the FTSE 100-listed company saw a two percent increase following the release of these financial results.
Sleath expressed unwavering confidence in sustained high demand, citing the extreme difficulty of securing space for large warehouses and industrial complexes in densely developed metropolitan areas like London and Paris. "We are absolutely convinced that, due to societal evolution, there is a growing necessity for more of this space nearby," he asserted. "It seems almost inconceivable to me that there will be an adequate supply of suitable sites to satisfy this escalating demand."
