TIDMSERE
RNS Number : 6584F
Schroder Eur Real Est Inv Trust PLC
22 February 2018
22 February 2018
aNNOUNCEMENT OF NAV AND DIVID
Schroder European Real Estate Investment Trust plc ("SERE" or
the "Company"), the company investing in European growth cities,
today announces its unaudited net asset value ("NAV") for 31
December 2017, together with its first interim dividend for the
year ending 30 September 2018.
Net Asset Value (NAV)
The Company generated an unaudited NAV as at 31 December 2017 of
EUR180.1 million or 134.7 euro cents per share (119.6 pence per
share based on 31 December 2017 exchange rates). This represents an
uplift of 1.1% over the quarter and an NAV total return of
2.2%.
The table below provides a breakdown of the movement in NAV
during the reporting period:
EURm(1) Cps(2) %(3)
=============================== ========= ======== =====
NAV as at 1 October 2017 178.3 133.3
=============================== ========= ======== =====
Unrealised gain in valuation
of the property portfolio 1.9 1.4 1.1
=============================== ========= ======== =====
EPRA earnings 2.3 1.8 1.3
=============================== ========= ======== =====
Non-cash items (0.4) (0.3) (0.2)
=============================== ========= ======== =====
Approved dividend payable
(4) (2.0) (1.5) (1.1)
=============================== ========= ======== =====
NAV as at 31 December
2017 180.1 134.7 1.1
=============================== ========= ======== =====
(1) Management reviews the performance of the Company
principally on a proportionally consolidated basis. As a result,
figures quoted in this table include the Company's share of joint
ventures on a line-by-line basis and excludes non-controlling
interests in the Company's subsidiaries.
(2) Based on 133,734,686 shares
(3) % change based on the starting NAV at 1 October 2017
(4) This dividend is in respect of the fourth interim dividend
for the year ended 30 September 2017 that was fully approved by the
Board and thereafter announced to the market on 6 December 2017,
had an ex-dividend date of 4 January 2018, a record date of 5
January 2018, and a payment date of 19 January 2018. The Company
has followed IAS 10 and IAS 32 in its presentation and recognition
of the dividend.
As announced on 1 February 2018, French retailer Casino Group
has exercised a buy-back option on SERE's 70% share in two retail
assets in France. The sale price reflects a 10% premium to 31
December 2017 valuation and will take place on 31 July 2018. The
impact is not reflected in the NAV per 31 December 2017 although
valuing the two retail assets at the sale price would be accretive
to NAV by approximately EUR4.1 million, reflecting 3.1 euro cents
per share.
Interim Dividend
The Company announces an increase in its quarterly dividend to
1.85 euro cents per share, being the first interim dividend in
respect of the year ending 30 September 2018. The dividend reflects
a 23% increase against the previous quarters' dividend and an
annualised rate of 5.5% based on the euro equivalent of the issue
price as at admission of 137 euro cents per share, achieving the
target dividend stated at IPO. At current FX rates, the dividend
equates to 6.5% yield on GBP issue price of 100 pence per
share.
The dividend is 92% covered from net income received during the
quarter. Since the quarter end the Company has announced a number
of changes to the portfolio including the acquisition of Apeldoorn
for EUR20 million at a 10% income yield, which took the Company to
full investment, as well as the surrender of the City BKK lease at
Hamburg and the future sale of two retail properties in France. It
is expected the net income of the Company will fully cover the
dividends paid out by the Company during the financial year to
September 2018.
The interim dividend payment will be made on Friday, 13 April
2018 to shareholders on the register on the record date of Friday,
23 March 2018. In South Africa, the last day to trade will be
Monday, 19 March 2018 and the ex-dividend date will be Tuesday, 20
March 2018. In the UK, the last day to trade will be Wednesday, 21
March 2018 and the ex-dividend date will be Thursday, 22 March
2018.
The interim dividend will be paid in GBP to shareholders on the
UK register and Rand to shareholders on the South African register.
The exchange rate for determining the interim dividend paid in Rand
will be confirmed by way of an announcement on Monday, 5 March
2018. UK shareholders are able to make an election to receive
dividends in Euro rather than GBP should that be preferred. The
form for applying for such election can be obtained from the
Company's UK registrars (Equiniti Limited) and any such election
must be received by the Company no later than Friday, 23 March
2018. The exchange rate for determining the interim dividend paid
in GBP will be confirmed following the election cut off date by way
of an announcement on Monday, 26 March 2018.
Shares cannot be moved between the South African register and
the UK register between Monday, 5 March 2018 and Friday, 23 March
2018, both days inclusive. Shares may not be dematerialised or
rematerialised in South Africa between Tuesday, 20 March 2018 and
Friday, 23 March 2018, both days inclusive.
The Company has a total of 133,734,686 shares in issue on the
date of this announcement. The dividend will be distributed by the
Company (UK tax registration number 21696 04839) and is regarded as
a foreign dividend for shareholders on the South African register.
In respect of South African shareholders, dividend tax will be
withheld from the amount of the dividend noted above at the rate of
20% unless the shareholder qualifies for the exemption. Further
dividend tax information for South African shareholders will be
included in the exchange rate announcement to be made on Monday, 5
March 2018.
Property Portfolio
As at 31 December 2017, the Company owned nine properties,
independently valued at EUR213.7 million (independent valuation as
at 31 December 2017 reflecting the Company's ownership share in the
properties), up from EUR211.7 million as at 30 September 2017,
representing an increase of 0.9% net of capital expenditure.
The current valuation reflects an increase of 8.1% compared to
the combined purchase price of the nine assets in the portfolio.
The rent on all leases is indexed to inflation and individual asset
business plans are being implemented to improve future earnings and
capital growth potential.
The portfolio is 99% occupied and generates EUR14.4 million p.a.
of contracted rental income, representing a real estate net initial
yield of 5.6% on valuation and a geared property yield of over 8%.
The average unexpired lease term is 4.4 years to first break and
6.6 years to expiry.
The portfolio's country and sector allocations are set out in
the table below:
Country Portfolio Sector allocation Portfolio
allocation at 31 (% contracted at 31
(% contracted December rent) December
rent) 2017 2017
=============== ========= ================= =========
France 56% Office 54%
=============== ========= ================= =========
Germany 30% Retail 46%
=============== ========= ================= =========
Spain 14%
=============== ========= ================= =========
Total 100% Total 100%
=============== ========= ================= =========
Since quarter end, the company has committed to three
transactions:
- Purchase: As announced on 21 February 2018, the Company has
acquired a three storey office building and data center in
Apeldoorn, Netherlands, for an all-in cost of EUR22 million and
generating a net income yield of approximately 10%.
- Lease surrender: As announced on 9 February 2018, the Company
has agreed terms for City BKK to surrender its lease at the Hamburg
office asset in Germany, in return for a cash payment to the
Company of EUR3.9 million. This cash payment represents 4.7 years
of annual rental income from City BKK. Negotiating a surrender with
City BKK was a key initiative within the acquisition strategy. The
agreement gives SERE the opportunity to re-position the property
and re-lease the space into a strengthening office sub-market which
will also diversify the property's income profile.
- Sale: As announced on 1 February 2018, the Casino Group has
exercised a buy-back option for SERE's two retail assets in
Biarritz and Rennes with a combined value of EUR40.7 million for
SEREIT's 70% ownership. The strike/sale price is at 10% premium to
the current valuation and will complete on 31 July 2018. The
Company will continue to receive rental income from the properties
until the sale completes.
Investment Progress
Including the Apeldoorn acquisition in the first quarter of
2018, the Company has invested over EUR233 million since IPO,
constructing a property portfolio with a diversified income profile
across key growth cities in Continental Europe. A total of EUR73.4
million of debt has been drawn, equating to an LTV of ca 30% at an
average weighted interest rate of 1.31% p.a. and an average
weighted duration of approximately six and half years.
As of today, the Company's capital is fully deployed. The sale
of Rennes and Biarritz will provide the Company with investment
capacity of approximately EUR45m-EUR50m (including further
gearing). The Investment Manager is reviewing and in negotiations
on a number of new investment opportunities that could be suitable
for redeployment of this capital when it is received later in the
year.
Jeff O'Dwyer, Fund Manager at Schroder REIM, said:
"We are pleased to have increased the dividend again and in
doing so, achieving the target set at IPO. The Company is now fully
invested and our property portfolio, located across Europe's growth
cities, is already demonstrating good valuation performance. There
are a number of opportunities to grow returns through asset
management across the portfolio and we are encouraged by the speed
at which we are being able to unlock these, driven by our extensive
local market teams. Against a backdrop of positive economic
sentiment across Europe we look forward to the rest of 2018 with
confidence."
Enquiries:
Duncan Owen/Jeff O'Dwyer
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla Tel: 020 3727 1000
FTI Consulting
This information is provided by RNS
The company news service from the London Stock Exchange
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