For release
19 July 2021
Schroder Real Estate Investment
Trust Limited
LEI Number: 549300ZIJJTMTIIQJP67
ANNOUNCEMENT OF NAV AND DIVIDEND
FOR QUARTER TO 30 JUNE 2021
Schroder Real Estate Investment Trust
(the ‘Company’ or ‘SREIT’), the actively managed UK-focused REIT,
announces its net asset value (‘NAV’) and dividend for the quarter
to 30 June 2021.
Highlights
· Net asset value (‘NAV’) per
share increase of 4.1% and a NAV total return of 5.3% per share
based on dividends paid during the quarter.
· Further 3% quarterly dividend
increase to 0.675 pence per share
(‘pps’) for the period 1 April 2021
to 30 June 2021.
· The portfolio valuation
increased by 2.6% net of capital expenditure over the quarter,
driven by the performance of industrial, which represents the
largest component of the portfolio by value at 40.2%.
· Rent collection levels continue
to improve, with 90% of rent due for the quarter ending
30 September 2021 collected as at
16 July 2021, ahead of the equivalent
date in the previous quarter.
· High levels of earnings
enhancing asset management activity across the portfolio, with 14
leasing transactions generating £1.1 million per annum of rental
income. These reflected a £400,000 per annum like for like increase
compared with the rental income as at 31
March 2021.
· The Company’s strategy is
focused on the acceleration in structural changes and emerging
occupier trends through a fully integrated ESG approach, specialist
capabilities, hospitality mindset and operational excellence with
respect to tenant management to create sustainable income and long
term value.
Net Asset Value
The unaudited NAV as at 30 June
2021 was £309.1 million or 62.9 pps, a 4.1% per share
increase compared with the NAV as at 31
March 2021. During the quarter the Company paid a dividend
of 0.656 pps, which resulted in a NAV total return of 5.3%.
A breakdown of the quarterly NAV movement is set out below:
|
£m |
pps |
Comments |
| NAV as at 31 March
2021 |
296.8 |
60.4 |
|
| Unrealised net
increase in the valuations of the direct real estate portfolio and
Joint Ventures |
12.3 |
2.5 |
Reflecting a gross
portfolio capital value uplift of £12.3 million or 2.8%. |
| Capital expenditure
(direct portfolio and share of Joint Ventures) |
(0.9) |
(0.2) |
Capital expenditure
included the ongoing industrial planning application at Stanley
Green Trading Estate, Cheadle; industrial refurbishments across
multi-let estate; and works in connection with the BBC letting at
The Tun, Edinburgh. This resulted in a net portfolio capital value
uplift of 2.6%. |
| Realised gains on
disposals |
Nil |
Nil |
No disposals made
during the quarter. |
| Net revenue |
3.9 |
0.8 |
EPRA earnings. |
| Dividend paid |
(3.2) |
(0.7) |
Dividend for the
period 1 January 2021 to 31 March 2021 paid in June 2021 (at 0.656
pence per share). |
| Others |
0.3 |
0.1 |
All other items. |
| NAV as at 30 June
2021 |
309.1 |
62.9 |
A 4.1% increase in the
NAV per share over the quarter. The NAV per share movement includes
338,340 shares repurchased over the quarter at an average price of
40.3p. |
Dividend payment
The Company today announces an interim dividend of 0.675 pps for
the period 1 April 2021 to
30 June 2021. This equates to a 3%
increase compared with the prior quarter’s dividend level and
reflects progress with rent collection and active asset management.
The Board continues to target a sustainable and progressive
dividend policy.
The dividend payment will be made on 13
August 2021 to shareholders on the register as at
30 July 2021. The ex-dividend date
will be 29 July 2021. The
dividend of 0.675 pps will be wholly designated as an interim
property income distribution (‘PID’).
Rent collection
Rent collected that was payable in March
2021 for the quarter ended 30 June
2021 currently totals 88% of contracted rents.
Rent collection levels continue to improve and rent collected
that was payable for the quarter ending 30
September 2021 currently totals 90% of contracted rents. The
breakdown between sectors for rent collection is 97% for office,
99% for of industrial, 66% for retail and leisure, and 84% for
other.
The Company remains in active dialogue with its tenants for
outstanding rent as a result of which it continues to see improved
rent collection rates.
Investment management fee
As outlined in the year end results, with effect from
1 July 2021 the Investment Management
fee has reduced from 1.1% of NAV to a blended (not cliff edge),
tiered fee structure set out in the table below:
| £ NAV |
% p.a. on NAV |
| <£500 million |
0.9% |
| £500 million - £1 billion |
0.8% |
| > £1 billion |
0.7% |
Based on the NAV as at 30 June 2021 the fee is 0.9% which results in an
annualised saving to the Company of 0.2% or £618,200.
Performance versus latest available
MSCI Benchmark Index
Over the quarter to 31 March 2021,
the underlying portfolio produced a total return of 2.9%. This
compares favourably with the total return for the MSCI Benchmark of
1.9%. The portfolio’s quarterly income return of 1.6% compared with
the Benchmark at 1.1%. The MSCI Benchmark Index figures to
30 June 2021 will be available in
August 2021.
Property portfolio
As at 30 June 2021, the underlying
portfolio comprised 39 properties valued at £451.1 million. At the
same date the portfolio produced a rent of £28.8 million per annum
reflecting a net initial yield of 6.0%. The portfolio’s estimated
rental value is £31.4 million per annum, resulting in a
reversionary yield of 7.0%.
The void rate was 4.9% calculated as a percentage of rental
value. The average unexpired lease term, assuming all tenants
vacate at the earliest opportunity, is 5.1 years. The tables below
summarise the portfolio information as at 30
June 2021:
| Sector weightings |
Weighting
% |
|
SREIT |
MSCI Index* |
| Industrial |
40.2 |
28.5 |
| Offices |
33.4 |
27.2 |
| Retail Warehousing |
11.3 |
9.0 |
Retail
- Mixed-use retail
- Retail single use |
8.4
4.8
3.6 |
15.1
n/a
n/a |
| Other |
6.7 |
20.2 |
| Regional weightings |
Weighting
% |
|
SREIT |
MSCI Index* |
| Central London |
8.7 |
21.1 |
| South East excluding Central
London |
20.2 |
33.3 |
| Rest of South |
11.7 |
14.5 |
| Midlands and Wales |
24.1 |
12.4 |
| North |
32.8 |
13.8 |
| Scotland |
2.5 |
4.5 |
| Northern Ireland |
0.0 |
0.2 |
*Latest available Index data as at 31
March 2021
Balance sheet and debt
The Company has two loan facilities, a £129.6 million term loan
with Canada Life and a £52.5 million revolving credit facility
(‘RCF’) with Royal Bank of Scotland. As at 30 June
2021, £24.5 million of the RCF was drawn. Fully drawn, the
facilities have an average duration of approximately 13 years and
an average interest cost of 2.5%.
As at 30 June 2021, the Company
has cash of £11.8 million and unsecured property with a value of
£39.4 million. This results in a loan to value ratio, net of cash,
of 31.5%.
-ENDS-
For further information:
Schroder Real Estate Investment
Management Limited:
Nick Montgomery |
020 7658 6000 |
FTI Consulting:
Dido Laurimore / Richard Gotla / Ollie Parsons |
020 3727 1000 |