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To be released 10 December 2012
Schroder Real Estate Investment Trust Limited
("SREIT" / "Company" / "Group")
SREIT EXCHANGES CONTRACTS TO SELL STAKE IN MINERVA HOUSE, LONDON SE1 FOR £30 MILLION REFLECTING A YIELD OF 5.37%
Schroder Real Estate Investment Trust Limited (the "Company") announces that it has exchanged unconditional contracts to sell its 50% interest in Minerva House, London SE1, for £30 million, with completion scheduled for 17 December 2012.
The sale of the Company's 50% stake for £30 million reflects a net initial yield of 5.37% and compares to a value as at 30 September 2012 of £29.25 million, a premium to valuation of £0.75 million or 2.6%. Both the Company and its joint venture partner are selling their entire holding.
Minerva House comprises a 91,748 sq ft office building located on the south bank of the River Thames. The property is let to Winckworth Sherwood LLP and Ipsos Mori UK Limited, and the Company 50% share of the rental income is £1.7 million per annum.
The disposal is consistent with the Company's strategy of selling low yielding property where value created through asset management can be crystallised. In this case, over the seven years of ownership the Company has undertaken a number of value enhancing activities including refurbishing the property and restructuring the leases.
On completion of the disposal, the Company will have cash of approximately £52.6 million and a net loan to value ratio, assuming the portfolio valuation as at 30 September 2012, of approximately 30%.
The Company intends to use proceeds to reduce debt, and a further announcement will be made in this regard later in the month.
Commenting, Duncan Owen of Schroder Property Investment Management Limited said:
"This disposal has enabled the Company to crystallise a very strong performance during the period of ownership. This has arisen following the completion of a series of asset management activities through which we were able to increase length of leases and improve the rental income received by 25%."
For further information:
Schroder Property Investment Management Limited
Duncan Owen / Nick Montgomery
020 7658 6000
Dido Laurimore / Daniel O'Donnell
020 7831 3113
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