20 March 2024
SCHRODER EUROPEAN REAL ESTATE
INVESTMENT TRUST PLC
("SEREIT"/ the "Company" /
"Group")
ANNOUNCEMENT OF NAV AND
DIVIDEND
Schroder European Real Estate
Investment Trust plc, the company investing in European growth
cities and regions, provides a business update and announces its
unaudited net asset value ("NAV") as at 31 December 2023, together
with its first interim dividend for the year ending 30 September
2024:
·
Unaudited NAV as at 31 December 2023 of €166.9
million or 124.8 cps (30 September 2023: €171.4 million or 128.2
cps), driven primarily by an unrealised reduction in the valuation
of the investment property portfolio
·
NAV total return of -1.5% for the quarter and
-3.2% for the twelve months to 31 December 2023
·
Underlying adjusted quarterly earnings from
operational activities ("EPRA earnings") of €2.2 million (quarter
ended 30 September 2023: €2.2 million)
·
A first interim dividend of 1.48 euro cents per
share declared for the quarter, 110% covered by EPRA earnings for
the period
·
The direct property portfolio was independently
valued at €210.2 million, reflecting a like-for-like decrease over
the quarter of -1.8%, or -€3.9 million, primarily driven by
continued outward yield movement, particularly for offices and
select industrial assets
·
Successfully completed the early refinancing of
the St Cloud, Paris office loan, extending the term by three years
based on a margin of 1.9%. The Company remains well positioned with
a strong balance sheet, with an available cash balance of
approximately €27 million and loan to value ratio ("LTV") of 24%
net of cash and 33% gross of cash
·
The Company continues to review select
sustainability-led capex initiatives in the portfolio, which should
optimise earnings growth and asset liquidity
·
The portfolio benefits from 96% occupancy,
diversified across c.50 tenants. Two office lettings concluded post
period end, enhancing income security and highlighting the demand
for affordable and accessible offices:
o New
540 sqm, 6/9/12 year letting in the St Cloud, Paris office
investment, in line with the 31 December 2023 ERV
o A
c.2,000 sqm six year lease renewal and floor expansion (additional
646 sqm) in the Hamburg office, in line with the 31 December 2023
ERV.
Sir Julian Berney Bt., Chairman,
commented:
"The Company is very well placed,
with one of the strongest balance sheets - a net LTV of 24% and €27
million in cash - and dividend covers amongst the UK-listed peer
group. The Board continues to assess opportunities to grow earnings
and the evolution of the strategy to maximise shareholder returns
and liquidity. The current share price discount does not reflect
the strength of the portfolio, growth city exposure and local
expertise of the investment manager."
Net
Asset Value
The table below provides a breakdown
of the movement in NAV during the reporting period:
|
|
€m(1)
|
Cps(2)
|
%(3)
|
|
Brought forward NAV as at 1 October 2023
|
171.4
|
128.2
|
|
|
Unrealised loss in the valuation of
the property portfolio
|
(3.9)
|
(2.9)
|
(2.3)
|
|
Transaction costs of investments
made in the quarter
|
_
|
_
|
_
|
|
Capital expenditure
|
(0.4)
|
(0.3)
|
(0.2)
|
|
EPRA earnings
|
2.2
|
1.6
|
1.2
|
|
Non-cash items
|
(0.4)
|
(0.3)
|
(0.2)
|
|
Dividend paid
|
(2.0)
|
(1.5)
|
(1.2)
|
|
NAV
as at 31 December 2023
|
166.9
|
124.8
|
(2.7)
|
(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) Percentage (%) change based on starting NAV as at 1 October
2023.
Interim dividend
The Company continues to pay a fully
covered dividend. The first interim dividend of 1.48 euro cents per
share for the year ending 30 September 2024 represents an
annualised rate of circa 7.8% based on the 15 March share price (c.
65 pence sterling).
The quarterly dividend is 110%
covered by EPRA earnings for the quarter. The average dividend
cover for the last nine months to end of December 2023 is
109%.
The interim dividend payment will be
made on Friday 10 May 2024 to shareholders on the register on the
record date of Friday 12 April 2024. In South Africa, the last day
to trade will be Tuesday 9 April 2024 and the ex-dividend date will
be Wednesday 10 April 2024. In the UK, the last day to trade will
be Wednesday 10 April 2024 and the ex-dividend date will be
Thursday 11 April 2024.
The interim dividend will be paid in
British pound sterling ("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 South
African Rand ("Rand") will be confirmed by way of an announcement
on Monday 25 March 2024. 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 12 April 2024. 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 15 April
2024.
Shares cannot be moved between the
South African register and the UK register between Monday 25 March
2024 and Friday 12 April 2024, both days inclusive. Shares may not
be dematerialised or rematerialised in South Africa between
Wednesday 10 April 2024 and Friday 12 April 2024, 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 25 March 2024.
Property portfolio
As at 31 December 2023, the direct
property portfolio was independently valued at €210.2 million,
reflecting a net initial yield of 6.7%. In addition, the Company
also has a 50% interest in a joint venture in Seville which
continues to be recognised at nil interest.
Over the quarter, the portfolio
value decreased by 1.8%, or €3.9 million. This change was primarily
driven by continued outward yield movement, particularly for
offices and select industrial. The portfolio value (net of capex
and tenant incentives) reduced by around 2.1%, or €4.4
million.
100% of the rent has been collected
and full rent collection has now been maintained since Q1 2021
(excluding Seville). Portfolio occupancy remains high at 96%
with an average unexpired term to break of 3.8 years.
Post period end, the portfolio
income profile has been enhanced with the completion of two
leases:
1. St Cloud, Paris - a new 6/9/12 year
lease over 540 sqm at an ERV of €240 sqm p.a to a medical advisory
company; and
2. Tritower C, Hamburg - a c. 2,000
sqm lease renewal and floor expansion for 6 years at an ERV of
c.€200 sqm p.a.
The above leases will be reflected
in the Q1 2024 quarterly valuations. Additionally, good progress
continues to be made re-gearing the Lidl supermarket lease in
Frankfurt on a long-term basis.
Enquiries:
Jeff
O'Dwyer
Schroder
Real Estate Investment Management Limited
Tel: 020 7658 6000
Shilla
Pindoria
Schroder
Investment Management
Limited
Tel: 020 7658 6000
Dido
Laurimore/Richard Gotla/Ollie Parsons
FTI
Consulting
Tel: 020 3727 1000