Schroder European REIT reports 3.2% NAV total return

Schroder European REIT has reported a NAV total return of 3.2% for the year to 30 September 2021.

The group’s NAV was down 1.1% to 149.2 euro cents per share, due to a write down in the valuation of a shopping centre asset in Saville. The group paid a dividend of 7.12 euro cents and a special dividend of 4.75 euro cents following the profitable sale and refurbishment of Boulogne-Billancourt office asset in Paris.

The group said it intends to declare a further special dividend targeting around 4.75 euro cents at its next interim results.

Financial highlights

  • NAV of €199.5m or 149.2 euro cents (2020: €201.8m or 150.9 euro cents);
  • Underlying EPRA earnings of €6.6m (2020: €8.6m), which will increase with the redeployment of Paris office sale proceeds;
  • Loan to value of 16% net of cash and 28% gross of cash (2020: 24% net of cash and 28% gross of cash) at a weighted average total interest rate of 1.4% and a weighted average loan duration of 2.9 years, with the earliest loan maturity in 2023;
  • Dividend cover of 69% for the ordinary dividends (2020: 112%), with a portion of the net sale proceeds from the disposal in Paris to be allocated towards covering the shortfall in income in the short term;
  • Over €40m, excluding debt, of investment firepower available and strong pipeline of acquisition opportunities.

Operational highlights

  • 1.7%, or €3.5m, increase in the like for like portfolio value to €215.7m
  • Two acquisitions completed totalling approximately €10m – a logistics investment in Nantes, France for €6.2m, reflecting a net initial yield of 5.5%; and an additional floor totalling 1,050 sqm in the Paris Saint-Cloud office investment in Paris
  • Concluded 11 new leases and re-gear events generating approximately €700,000 of annual contracted rent at a weighted average unexpired lease term of four years
  • Rent collection of 93% during the period, including 95% for most recent quarter.

Sir Julian Berney Bt., chairman, said: “The company continues to be a unique and compelling proposition for investors and is well placed to benefit from the trends that have accelerated as a result of the pandemic. These include changes in occupier demand, delivering operational excellence and ensuring that sustainability priorities are instilled within the company’s investment process.

“We continue to work with the Investment Manager in the deployment of capital into new investments and earnings enhancing initiatives to further diversify the portfolio and move the dividend cover back to 100%. We will continue to employ a highly disciplined and patient approach.

The board does not believe that the current share price reflects the robust performance of the business and in particular the attractive dividend yield, opportunity to benefit from special dividends and the Winning Cities and Regions exposure.”

SERE : Schroder European REIT reports 3.2% NAV total return

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