TIDMSREI
RNS Number : 1137D
Schroder Real Estate Inv Trst Ld
01 March 2022
Schroder Real Estate Investment Trust Limited
('SREIT' or the 'Company')
ANNOUNCEMENT OF NAV AND DIVID FOR THE QUARTER TO 31 DECEMBER
2021
Schroder Real Estate Investment Trust ('SREIT' or the
'Company'), the actively managed UK-focused REIT, announces its net
asset value ('NAV') and dividend for the quarter to 31 December
2021.
Highlights
-- NAV of GBP345.9 million (30 September 2021: GBP323.4 million).
-- NAV per share increase of 7.0% and total return of 8.1%.
-- 6.3% increase to the quarterly dividend to 0.772 pence per share ('pps').
-- This reinstates the dividend back to its pre-pandemic level.
-- GBP19.85 million off-market acquisition of four industrial
assets in the northwest of England in December reflecting a 6.9%
net initial yield, delivered a 4.3% valuation increase as at 31
December 2021.
-- Rent collection levels stabilising at pre-pandemic levels,
with 96% of rent due for the quarter ending 31 March 2022
collected, in line with the equivalent date in the previous
quarter.
-- Post quarter end disposal of a Nottingham office building for
GBP13.0 million, representing a 39% premium to the 31 December 2021
valuation and a 4.5% net initial yield.
Nick Montgomery, Fund Manager of SREIT, commented: "This
performance is testament to the speed of recovery of the market
alongside the strategic steps we have taken to pivot the portfolio
towards higher growth sub-sectors. Having restored the dividend to
the pre-pandemic level, our focus is on delivering our pipeline of
portfolio activity, progressing our ambitious sustainability
strategy and continuing to grow net income."
Net asset value
The unaudited NAV as at 31 December 2021 was GBP345.9 million or
70.4 pps. This reflects an increase of 7.0% per share compared with
the NAV as at 30 September 2021. Taking into account the quarterly
dividend of 0.726 pps paid in December 2021 and relating to the
quarter to 30 September 2021, the NAV total return for the quarter
was 8.1%. A breakdown is set out below:
GBPm pps Comments
========================== ===== ===== ======================================
NAV as at 30 September
2021 323.4 65.8
========================== ===== ===== ======================================
Unrealised net increase
in the valuations of Portfolio like-for-like valuation
the direct real estate movement, net of capital expenditure,
portfolio and Joint of +5.0% over the quarter to
Ventures 25.6 5.2 31 December 2021
========================== ===== ===== ======================================
Includes asset management activity
across the multi-let industrial
portfolio to capture rental
Capital expenditure growth (Stacey Bushes, Milton
(direct portfolio and Keynes and Millshaw Industrial
share of Joint Ventures) (1.7) (0.3) Estate, Leeds)
========================== ===== ===== ======================================
Transaction costs incurred relating
to the industrial portfolio
Acquisition costs (1.3) (0.3) acquired in December 2021.
========================== ===== ===== ======================================
Net revenue 3.3 0.7 Quarterly EPRA earnings.
========================== ===== ===== ======================================
Dividend for the quarter ended
30 September 2021 paid in December
2021 (at 0.726 pence per share).
Fully covered over the quarter
Dividend paid (3.6) (0.7) on a cash basis.
========================== ===== ===== ======================================
Others 0.2 - All other items.
========================== ===== ===== ======================================
NAV as at 31 December Calculation based on 491,080,301
2021 345.9 70.4 shares.
========================== ===== ===== ======================================
As previously announced, the Company has completed the disposal
of an office building, The Arc in Nottingham, for GBP13.0 million,
which compares with the 31 December 2021 valuation of GBP9.35
million. The asset produced net income of GBP622,210 per annum and
the price reflected a net initial yield of 4.5%.
Dividend payment
The Company announces an interim dividend of 0.772 pence per
share ('pps') for the period 1 October 2021 to 31 December
2021.
This reflects a 6.3% increase compared with the prior quarter's
dividend and equates to 100% of the pre-Covid dividend on a pps
basis. The dividend will continue to be reviewed by the Board
targeting a sustainable and progressive dividend policy.
The dividend payment will be made on 25 March 2022 to
shareholders on the register at the record date of 11 March 2022.
The ex-dividend date will be 10 March 2022.
The dividend of 0.772 pps will be wholly designated as an
interim property income distribution ('PID').
Performance versus MSCI Benchmark Index
Over the quarter to 31 December 2021, the underlying portfolio
produced a total return of 6.4%. This compares favourably with the
total return for the MSCI Benchmark Index (the 'Benchmark') of
6.2%. The portfolio's quarterly income return of 1.5% compared with
the Benchmark at 1.0%.
For the calendar year 2021, the underlying portfolio produced a
total return of 19.2% compared with the Benchmark of 16.6%,
resulting in relative outperformance of 2.6%, driven by an income
return of 6.5% compared with the Benchmark of 4.2%. The Company has
outperformed the Benchmark over one, three, five, 10 years and
since IPO in 2004.
Property portfolio
As at 31 December 2021, and adjusting for the disposal of The
Arc office building in Nottingham, the underlying portfolio
comprised 42 properties valued at GBP500.0 million. At the same
date the portfolio produced a rent of GBP29.5 million per annum
reflecting a net initial yield of 5.5% which compares with the
Benchmark of 4.1%. The portfolio estimated rental value is GBP33.3
million per annum, reflecting a reversionary yield of 6.7%, which
compares with the Benchmark of 4.7%.
The void rate was 6.9% calculated as a percentage of rental
value, of which 1.2% is under offer. The average unexpired lease
term, assuming all tenants vacate at the earliest opportunity, is
5.4 years. The tables below summarise the portfolio information as
at 31 December 2021, adjusted for the Nottingham disposal:
Sector weightings Weighting (%)
====================== ============================
SREIT MSCI Benchmark Index*
====================== ===== =====================
Industrial 46.5 33.1
====================== ===== =====================
Offices 28.1 25.0
====================== ===== =====================
Retail warehouse 11.5 9.0
====================== ===== =====================
Retail 7.6 12.5
Retail ancillary to
main use 4.4
Retail single use 3.2
====================== ===== =====================
Other 6.3 16.6
====================== ===== =====================
Unattributable - 3.7
====================== ===== =====================
Regional weightings Weighting (%)
SREIT MSCI Benchmark Index*
Central London 7.9 16.1
Southeast excluding
Central London 20.1 38.0
Rest of South 10.7 14.9
Midlands and Wales 21.7 12.9
North 37.3 13.7
Scotland 2.3 4.3
Northern Ireland 0.0 0.2
* Figures may not sum to 100.0 due to rounding.
Portfolio activity
Since 30 September 2021, the Company has completed 21 new
lettings, renewals and reviews across 128,600 sq ft of space. These
transactions were completed at 4% ahead of 30 September 2021 ERVs,
generating GBP1.1 million per annum of contracted rent, which
represents an additional GBP500,000 per annum of rental income
compared to the previous position.
Transactions
As previously reported, in December 2021 the Company acquired an
off-market portfolio of four industrial assets in the northwest of
England for GBP19.85 million. Combined, the assets generate initial
rental income of GBP1.5 million per annum, equating to a 6.9% net
initial yield and a low capital value equating to GBP53 per sq ft.
The portfolio was revalued at GBP20.7 million as at 31 December
2021, reflecting a 4.3% uplift.
The portfolio comprises a well located, multi-let industrial
estate in Birkenhead valued at GBP12.5 million as at 31 December
2021, together with single let assets in Haydock and Sandbach with
a combined value of GBP8.2 million as at 31 December 2021. The
assets are let off an average rent of GBP3.40 per sq ft, which
provides scope for growth and good initial progress has been made
with lettings under offer at Birkenhead. The portfolio acquisition
increases SREIT's industrial weighting from 42% as at 30 September
2021 to 47%, with the majority of this in good quality, multi-let
estates. Following the disposal of the Nottingham office, a number
of potential acquisitions are under consideration.
Balance sheet and debt
As at 31 December 2021, the Company had cash of GBP12.5 million
and a loan to value ratio, net of cash, of approximately 32%.
Following the disposal of Nottingham, the net LTV has reduced to
approximately 30%.
The Company has two loan facilities, a GBP129.6 million term
loan with Canada Life and a GBP52.5 million revolving credit
facility ('RCF') with Royal Bank of Scotland International. As at
31 December 2021, GBP45.7 million of the RCF was drawn. Fully
drawn, the facilities have an average duration of approximately 11
years and an average interest cost of 2.3%.
Sustainability
Three Green Stars awarded in annual GRESB survey
The Company retained its three star rating in the 2021 GRESB
global sustainability benchmark assessment for real estate assets.
Participation in the GRESB survey is part of the Company's broader
ESG and positive impact strategy which is fully integrated at all
stages of our investment process.
Further information can be found within the Company's latest
SREIT Annual Sustainability Report (for year ended 31 March 2021)
at:
https://www.schroders.com/en/sysglobalassets/investment-trusts/sereit/sreit_sustainability_report_march-2021.pdf
.
Net Zero Carbon pathway
The Company, together with Schroder Real Estate as Investment
Manager, is focussed on delivering continued improvements in the
sustainability performance of the portfolio. In December 2020,
Schroders issued its Net Zero Carbon Pathway, a commitment made in
September 2019 as part of the UK Better Buildings Partnership
Climate Commitment.
The Company will publish its own net zero carbon pathway in 2022
to align the fund with Schroders' commitment and the Paris 1.5 deg
C ambition.
Further information can be found within the Schroder Real Estate
Pathway to Net Carbon Zero document at:
https://www.schroders.com/en/sysglobalassets/email/uk/realestate/2020/schroder-real-estate-net-zero-carbon-pathway-december-2020_1621372_v1.pdf
.
-ENDS-
For further information:
Schroder Real Estate Investment Management
Limited:
Nick Montgomery / Bradley Biggins
/ Matthew Riley 020 7658 6000
FTI Consulting:
Dido Laurimore / Richard Gotla / Ollie
Parsons 020 3727 1000
--------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
STRBKFBQKBKBABB
(END) Dow Jones Newswires
March 01, 2022 02:00 ET (07:00 GMT)
Invista Fnd Tst (AQSE:SREI.GB)
Historical Stock Chart
From Sep 2024 to Oct 2024
Invista Fnd Tst (AQSE:SREI.GB)
Historical Stock Chart
From Oct 2023 to Oct 2024