TIDMSERE
RNS Number : 2264E
Schroder Eur Real Est Inv Trust PLC
10 March 2022
10 March 2022
ANNOUNCEMENT OF NAV AND DIVID
Schroder European Real Estate Investment Trust plc ("SERE" or
the "Company") provides a business update and announces its
unaudited net asset value ("NAV") as at 31 December 2021, together
with its first interim dividend for the year ending 30 September
2022:
- Unaudited NAV as at 31 December 2021 increased by 0.8% to
EUR201.2 million or 150.4 cents per share
- NAV total return amounted to 2.1% over the quarter and 4.5%
for the twelve months to 31 December 2021
- A first interim dividend of 1.85 euro cents per share to be
paid for the year ending 30 September 2022
- Property portfolio is independently valued at EUR221.4
million, reflecting a like-for-like increase of the directly held
properties over the quarter of 2.2%, or EUR4.4 million
- Key portfolio level initiatives during the period included:
o the strategic purchase of a 3,800 sqm industrial warehouse in
Venray, the Netherlands, increasing the portfolio's industrial
weighting to c.23%
o The Paris Boulogne-Billancourt refurbishment remains on budget
from both a cost and timing perspective. The remaining 40% (c.EUR40
million) of the sale price is due to be received during 2022, with
the proceeds partially used to fund the remaining c.EUR16 million
refurbishment cost
o rent collection during the quarter, and January and February
2022, of 96%
- The Company has an investable cash balance of approximately
EUR30 million and a loan to value ratio on the total portfolio of
approximately 18% net of cash and 28% gross of cash
Net Asset Value
The table below provides a breakdown of the movement in NAV
during the reporting period:
EURm (1) Cps (2) % (3)
Brought forward NAV as at 1 October 2021 199.5 149.2
Unrealised gain in the valuation of the
property portfolio 4.4 3.2 2.3
Transaction costs of investments made (0.2) (0.1) (0.1)
Capital expenditure (0.1) (0.1) (0.1)
EPRA earnings prior to extraordinary items 1.6 1.2 0.8
Extraordinary items (4) (0.9) (0.7) (0.5)
Non-cash items (0.6) (0.4) (0.3)
Dividend paid (2.5) (1.9) (1.3)
NAV as at 31 December 2021 201.2 150.4 0.8
(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 exclude non-controlling
interests in the Company's subsidiaries.
(2) Based on 133,734,686 shares.
(3) % change based on starting NAV 1 October 2021.
(4) Reflects a EUR 634,000 exceptional tax provision which is
currently subject to arbitration, together with one-off service
charge-related costs at the Frankfurt and Hamburg assets totalling
EUR 295,000
Interim dividend
The Company continues to pay a full dividend equating to the
pre-covid dividend level. The first interim dividend of 1.85 euro
cents per share for the year ending 30 September 2022 represents an
annualised rate of 6.2% based on the current share price (5) . As
announced previously, the Company allocates a portion of the
forward funded net sales proceeds from the Paris
Boulogne-Billancourt asset towards covering the dividend income
shortfall whilst it is being refurbished and pending the
reinvestment of the remainder of the sale proceeds.
Dividend cover from income for the quarter ended 31 December
2021 was 64% excluding extraordinary items incurred in the quarter.
These comprised a withholding tax provision of EUR634,000 and
one-off service charge-related costs relating to the Group's
Frankfurt and Hamburg assets. Including both these items, the
dividend cover is 27%.
The interim dividend payment will be made on Wednesday, 20 April
2022 to shareholders on the register on the record date of Friday,
1 April 2022. In South Africa, the last day to trade will be
Tuesday, 29 March 2022 and the ex-dividend date will be Wednesday,
30 March 2022. In the UK, the last day to trade will be Wednesday,
30 March 2022 and the ex-dividend date will be Thursday, 31 March
2022.
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, 14 March
2022. 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, 1 April 2022.
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, 4 April 2022.
Shares cannot be moved between the South African register and
the UK register between Monday, 14 March 2022 and Friday, 1 April
2022, both days inclusive. Shares may not be dematerialised or
rematerialised in South Africa between Wednesday, 30 March 2022 and
Friday, 1 April, 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, 14
March 2022 .
Rent collection
Approximately 96% of the rent due for the quarter ended 31
December 2021 has been collected which is ahead of the average
amount collected in the previous financial year of 93%. As at 8
March 2022, 96% of the rent due for January 2022 and February 2022
has been collected.
(5) Share price 99p as at 8 March 2022 and an exchange rate of
GBP1 to EUR1.2025
Property portfolio
As at 31 December 2021, the property portfolio was independently
valued at EUR221.4 million, reflecting a NIY of 5.8%.
The value for directly held properties increased over the
quarter by 2.2% or EUR4.4 million (net of Capex, 2.1% or EUR4.1
million). This was driven by yield compression across the office,
retail and logistics assets within the portfolio, reflecting the
benefit of having a multiple sector focused portfolio and
management expertise, as well as the strength of those individual
assets. The increase excludes the impact of both a recently
acquired industrial warehouse in Venray, Netherlands (valued at
EUR1.65 million) and from the Seville Shopping centre where the
Company continues to recognise its 50% interest in a joint venture
at nil interest.
The majority of the valuation uplift was driven by:
- Improved yield re-rating at the Berlin retail DIY investment,
delivering a valuation increase of EUR1.8 million, or 6.2%
- Improved yield re-rating at the Hamburg office investment,
delivering a valuation increase of EUR1.2 million, or 5.2%
- Improved yield re-rating at the Rennes logistics investment,
delivering a valuation increase of EUR0.9 million, or 4.8%.
The Company continues to recognise its 50% interest in its
Seville joint venture at nil interest.
The portfolio valuation excludes Paris, Boulogne-Billancourt,
which has been treated as disposed in the Financial accounts. The
majority of the profit from the refurbishment and sale has already
been recognised in the financial accounts. The remaining
approximately EUR4 million of potential development profit pending
(pre-tax), which may be released as the refurbishment is
completed.
Transactions & asset management update
Key portfolio level initiatives during the period included:
- In Venray, the Netherlands, SERE acquired a freehold 3,800 sqm
warehouse, fully let to So Expo, a design and construction
specialist focused on exhibition trade shows, with approximately 8
years remaining on the lease term. The purchase price was c.EUR1.7
million including costs and reflected a net initial yield of
c.5.5%, with significant reversion potential. The asset adjoins the
Company's existing Venray logistics investment and further
increases the portfolio's logistics weighting
- In Paris, the refurbishment of the Boulogne-Billancourt office
investment remains within cost and programme with completion
expected towards the end of Q2 2022. The remaining 40% (c.EUR40
million) of the purchase price will be received during 2022, with
the proceeds used, in part, to fund the remaining c.EUR16 million
refurbishment cost
- In Frankfurt, discussions continue with the anchor tenant Lidl
regarding a longer term extension
Balance sheet and debt
As at 31 December 2021, the Company has investable cash of
approximately EUR30 million. The loan to value ratio of the
portfolio amounts to approximately 18% net of cash and 28% gross of
cash. This capital is available for new earnings-enhancing
initiatives including acquisitions.
The Company has seven loans secured by individual assets or
groups of assets, with no cross-collateralisation between loans and
no recourse to the Company. The average weighted total interest
rate of the loans is 1.4% per annum and the earliest scheduled loan
maturity is in 2023. With the exception of Seville, all loans are
currently in compliance with their covenants. The Seville loan is
subject to a cash trap and is being managed under an LTV covenant
waiver to facilitate a sale.
Enquiries:
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/Ollie Parsons
FTI Consulting Tel: 020 3727 1000
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