Schroder European Real Estate underlying properties deliver 7.7% total return – Schroder European Real Estate (SERE) delivered the following operational highlights over its financial year to 30 September 2019:
- Agreed a conditional new long-term lease and capex programme at the Group’s largest asset, Boulogne-Billancourt office in Paris, providing future potential capital value and income upside;
- Portfolio allocation to higher growth logistics sector increased to 20% (30 Sept 2018: 13%) with the acquisition of a French logistics asset for €18.2m;
- Underlying property portfolio total return of 7.7% (excluding the impact of transaction costs) (30 September 2018: 10.8%);
- 100% of the portfolio’s 13 institutional grade properties located in cities and regions of Continental Europe that are in the top two quartiles of forecast economic growth;
- Portfolio valued at €242.7m (on a proportionally consolidated basis), reflecting an uplift of approximately 9.0% on purchase price;
- Conclusion of 18 new leases and re-gears with a total annual rental income of €1.6 million, generating a c.2% increase in annualised income on a like-for-like basis and secured at a weighted lease term of circa 9 years. The overall unexpired lease term across the portfolio is 5.0 years to first break and 6.4 years to expiry;
- Achieved a Global Real Estate Sustainability Benchmark (GRESB) Green Star for 2019
Jeff O’Dwyer, SERE’s manager, noted: “Property markets in our target cities are performing well. Whilst there are pockets of weakness, such as in the retail shopping centre sector, our limited exposure to underperforming parts of the market and balanced portfolio helps mitigate us against these. Alongside progressing the Paris redevelopment and other initiatives to further improve our income profile, the ambition for 2020 is that we will grow the portfolio via new acquisitions in our target ‘winning cities’, benefiting from both the macro trends supporting attractive real estate returns, as well as the Company’s extensive local market expertise.”
Top 10 property locations at 30 September 2019:
|
Rank |
Property |
Country |
Sector |
€m |
% of total |
|
1 |
Paris (B-B) |
France |
Office |
41.6 |
17% |
|
2 |
Paris (SC) |
France |
Office |
37.9 |
16% |
|
3 |
Berlin |
Germany |
Retail |
26.9 |
11% |
|
4 |
Seville |
Spain |
Retail |
23.5 |
10% |
|
5 |
Apeldoorn |
Netherlands |
Mixed |
20.0 |
8% |
|
6 |
Rennes |
France |
Industrial |
17.6 |
7% |
|
7 |
Stuttgart |
Germany |
Office |
17.2 |
7% |
|
8 |
Hamburg |
Germany |
Office |
16.7 |
7% |
|
9 |
Frankfurt |
Germany |
Retail |
11.5 |
5% |
|
10 |
Venray |
Netherlands |
Industrial |
10.3 |
4% |
|
|
Top ten properties |
|
|
223.2 |
92% |
SERE: Schroder European Real Estate underlying properties deliver 7.7% total return