Schroder Real Estate Net Asset Value and Dividend Declaration
07 February 2018 - 6:00PM
UK Regulatory
TIDMSREI
For release 7 February 2018
Schroder Real Estate Investment Trust Limited
ANNOUNCEMENT OF NAV AND DIVIDEND FOR QUARTER TO 31 DECEMBER 2017
Schroder Real Estate Investment Trust (the 'Company'), the actively managed
UK-focused REIT, announces its net asset value ('NAV') and dividend for the
quarter to 31 December 2017.
Net Asset Value
The unaudited NAV as at 31 December 2017 was GBP345.5 million or 66.6 pence per
share ('pps'). This reflects an increase of 1.4% per share compared with the
NAV as at 30 September 2017, or a NAV total return, including the dividend of
0.62 pps, of 2.3%. A breakdown is set out below:
GBPm pps Comments
NAV as at 30 340.6 65.7
September 2017
Unrealised change in 8.4 1.6 Reflects a quarterly like-for-like
valuation of direct increase in the value of the
property portfolio underlying portfolio of 1.8% before
capital expenditure. Note that this
includes the underlying valuation
movement in the joint ventures.
Capital expenditure (2.4) (0.5) Capital expenditure including the
Premier Inn at Leeds Arndale Centre
of GBP1.2 million and Stacey Bushes
Industrial Estate in Milton Keynes of
GBP0.3 million.
Realised gains on 0.5 0.1 Profit on the disposal of No. 1
disposal Riverside Exchange in Sheffield.
Net revenue 1.6 0.3 Net revenue impacted by one-off
abortive transaction costs of GBP1.5
million.
Dividends paid (3.2) (0.6) Reflects an annualised dividend of GBP
12.8 million or 2.48 pps.
NAV as at 31 December 345.5 66.6
2017
Quarterly dividend cover, ignoring one-off abortive transaction costs, was
97%. Dividend cover was also negatively impacted by 11% as a result of the
accounting treatment of the rent free relating to the Sheffield office
disposal.
Dividend payment
The Company announces an interim dividend of 0.62 pence per share ('pps') for
the period 1 October 2017 to 31 December 2017. The dividend payment will be
made on 7 March 2018 to shareholders on the register as at 16 February 2018.
The ex-dividend date will be 15 February 2018. The dividend of 0.62 pps will
be designated 35 pps as an interim property income distribution ('PID') and 27
pps as an interim ordinary dividend.
Performance versus MSCI Index
Over the quarter to 31 December 2017 the underlying portfolio produced a total
return of 3% compared with the MSCI Index at 3.3%. For calendar 2017 the
underlying portfolio produced a total return of 12.9% compared with MSCI of
10.8%.
Property portfolio
As at 31 December 2017, the underlying portfolio comprised 44 properties valued
at GBP468.1 million. At the same date the portfolio produced a rent of GBP26.9
million per annum reflecting a net initial yield of 5.4%. The portfolio rental
value is GBP33.4 million per annum, resulting in a reversionary yield of 7.1%.
As at 31 December 2017 the void rate was 6.6% and the average unexpired lease
term, assuming all tenants vacate at the earliest opportunity, was 6.9 years.
The tables below summarise the portfolio information as at 31 December 2017:
Sector weightings Weighting %
SREIT MSCI Index*
Retail 30.2 35.9
Offices 37.3 30.8
Industrial 26.1 23.3
Other 6.4 10.0
* Latest available MSCI Index data as at 30 September 2017
Regional weightings Weighting %
SREIT MSCI Index*
Central London 7.6 14.5
South East excluding Central 29.2 38.4
London
Rest of South 6.9 15.8
Midlands and Wales 27.5 14.1
North and Scotland 28.8 17.2
* Latest available MSCI Index data as at 30 September 2017
Asset management
Milton Keynes, Stacey Bushes Industrial Estate
During the quarter four lettings and lease renewals completed at a total rent
of GBP164,000 per annum, reflecting rents of between GBP5.75 and GBP7.95 per sq ft.
The estate provides further income growth potential with an average rent and
rental value of GBP5 and GBP6 per sq ft respectively. After adjusting for
refurbishment expenditure, this contributed to a 7% increase in the capital
value over the quarter to GBP27.8 million.
Leeds, Headingley Arndale Centre
The lease to Premier Inn Hotels Limited completed in December following
completion of the works to convert part of the asset from office to hotel use.
Premier Inn took a twenty year lease at a rent of GBP421,400 per annum with
inflation linked rent reviews. The Premier Inn is expected to positively
impact footfall and, after adjusting for capital expenditure, contributed to a
1.8% increase in the value over the quarter to GBP28.7 million.
Debt
The Company has two loan facilities from Canada Life and Royal Bank of Scotland
('RBS') totalling GBP150.1 million with an average duration of approximately 8.2
years and an average interest cost of 4.4%. The loans are fully compliant with
their covenants.
In addition to the properties secured against the Canada Life and RBS loan
facilities, the Company has unsecured properties with a value of GBP77.3 million
and cash of approximately GBP30.4 million. This results in a loan to value
ratio, net of cash, of approximately 25.6%.
-ENDS-
For further information:
Schroder Real Estate Investment Management 020 7658 6000
Limited:
Duncan Owen / Nick Montgomery
Northern Trust: 01481 745529
James Machon / Fraser Hiddelston
FTI Consulting: 020 3727 1000
Dido Laurimore / Ellie Sweeney/Richard Gotla
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