Schroder Real Estate grows NAV 5.6% during H1

Schroder Real Estate Investment Trust has announced its interim results for the six-months ended 30 September 2015. During the period, the company’s NAV increased by 5.6% to 60.9p (31 March 2015: 57.7p), whilst the underlying EPRA earnings per share increased by 9% year-on-year to 1.2p (six months to 30 September 2014: 1.1p). The company says that its underlying portfolio delivered a total return of 7.5%, outperforming the Investment Property Databank (‘IPD’) Benchmark Index of 6.8%. Profit before tax of £23 million was down 36% year-on-year (six months to 30 September 2014: £36 million) but 22% head of the six months to 31 March 2015 (£18.8m).

In terms of operational developments, the company completed its conversion to UK REIT status as of 1 May 2015. The company says this will reducing the overall burden of UK taxation and increasing net income and overall profitability. They believe this also has the potential to attract a wider investor base. Two acquisitions were made during the period totaling £54.5m with an average net initial yield of 6.8%. The acquisitions were funded by a combination of previously raised equity and a £20.5m revolving credit facility. The company says that asset management activity reduced the portfolio void rate to 8.1% compared with 9.2% as at 31 March 2015. The company expect further reductions upon the completion of contracted lettings.