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Update from Schroder Real Estate

Schroder Real Estate buys office property in Edinburgh and Nottingham

Schroder Real Estate (SREI) released the following update:

“This is an update due to the market uncertainty relating to covid-19. The company would like to highlight that against this backdrop its strategy remains robust and unchanged. A significant number of disposals were completed at premium prices last year and the term loan with Canada Life was refinanced and extended in October 2019. The Company is now well positioned and the highlights are as follows:

  • Disposals completed – £95m of disposals completed in 2019 at an average net initial yield of 3.0%.
  • Debt refinanced – £129.6m debt refinanced in October 2019 generating an immediate saving of £2.5m per annum with improved covenant terms and a weighted term of 16.5 years.
  • Increased dividend – 19% increase to dividend delivered to shareholders in 2019 at 3.086 pence per share per annum.
  • Robust balance sheet – low net loan to value of 21% as at 31 December 2019.
  • The Company has a diversified portfolio – 39 assets with approximately 300 tenants with a focus on regional offices in Winning Cities and industrial warehousing.
  • Reinvestment capacity of £90m – comprising cash and undrawn debt facilities for future opportunistic reinvestment and income enhancing capital expenditure initiatives. This is post all refinance and sales costs.

The manager is focused on active management to improve the defensive characteristics of the portfolio. Recent activity with new lettings was announced two weeks ago and further asset management initiatives are ongoing.

In light of the rapidly evolving situation, all forthcoming RICS independent valuations as at 31 March 2020 will include a statement highlighting material valuation uncertainty – such wording to be applied to all independent valuations at least in the UK. Accordingly, the Company’s Independent Valuers have informed us that that the industry standard wording for our independent valuation as at 31 March 2020 will include a statement highlighting material valuation uncertainty.”

SREI: Update from Schroder Real Estate

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