Slough aims to shed its image crisis Come friendly bombs and fall on Slough! It isn't fit for humans now. It was 1937 when John Betjeman wrote his brutal assessment of the small town to the west of London. Slough has been suffering an image crisis ever since. Sitting in his office on the fringe of the Slough Trading Estate, David Sleath, has a riposte to those who wish to keep labelling the area as an outmoded industrial outpost of the UK capital. "Believe it or not, more companies have their European headquarters here than in Wales and Scotland put together," he says. Mr Sleath, chief executive of Segro, the owner of the 619,700 sq m trading estate, is overseeing a wholesale transformation of Europe's largest portfolio of industrial property. On Monday, the company announced the €180.6m acquisition of 13 logistics terminals close to Paris and Lyon - the latest in a string of deals as it forges ahead with a £1.5bn capital recycling programme. Since starting the overhaul in November, Segro has sold £400m worth of low-yielding warehouses, logistics parks and badly located trading estates. The plan is to turn the old industrial estate model on its head by swapping heavy manufacturing for offices and data centres. At the heart of that ambitious goal is the rebranding of the Slough estate, made famous in recent years as the stamping ground of Ricky Gervais's cretinous office manager, David Brent, in television comedy The Office. The vision is to replace the old, corrugated sheds, which once also housed the film studio where the TV programme Thunderbirds was made, with a low-slung glass and white-steel office complex, fit for purpose as the business hub of the Thames Valley. More of our tenants are from thought-led or high-tech industries. Smoke-stacks and heavy-metal bashing are things of the past," Mr Sleath says. He says the boom in data centres on the Slough estate is testament to the shift in use of industrial property. From zero a decade ago, the estate now has 15 data centres and another two under construction. One of the benefits is that data centre operators typically sign up for much longer lease agreements than other tenants. On the estate, the average lease length is 8.5 years, while the average for data centres is 17 years. As with office and retail property landlords, the owners of large industrial estates have struggled during the downturn because of high levels of vacant supply and downsizing across other business sectors. The effect has been to dent total returns to investors. However, Segro has underperformed its peers. Returns on invested capital - a key measure of financial performance - have averaged 4 per cent since 2004, compared with 6.9 per cent for the commercial property sector, according to data from JPMorgan Chase. The share price of the company, which trades at a 36 per cent discount to its net asset value, reflects this. "We have been saying for a while that some of Segro's assets are not high yielding enough," says Osmaan Malik, a property analyst at JPMorgan. The whole sector has been blighted by high vacancy and the rental growth just isn't there, so you need to change the portfolio to improve the yield. What they are doing now is absolutely right, though. It just might take a while," he adds. Mr Sleath agrees that the company has a way to go before achieving his goal of turning the real estate investment trust into a reit more akin to the US model. "We want to be a reit which does exactly what it says on the tin: a low-risk property portfolio which gives our investors exposure to rent through dividends," he says.