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Announcement of NAV and dividend

Released 07:00 10-Sep-2019

RNS Number : 7192L
Schroder Eur Real Est Inv Trust PLC
10 September 2019

10 September 2019


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 30 June 2019, together with its third interim dividend for the year ending 30 September 2019:

- Unaudited NAV as at 30 June 2019 of €183.3 million or 137.1 cents per share; an uplift of 0.3% over the quarter;

- NAV total return of 1.7% over the quarter;

- A third interim dividend of 1.85 euro cents per share will be paid for year ending 30 September 2019, in-line with the target dividend stated at IPO of an annualised rate of 5.5% on the IPO issue price and approximately 6.0% as of 6 September 2019 based on the closing share price.

Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, added:

"Our focus continues to be on delivering an asset management programme that will further strengthen the income, portfolio diversity and shareholder returns.  For example, the pre-let redevelopment at the Paris office, Boulogne-Billancourt, will be transformational for the Company. The high quality portfolio and diversified geography, tenant and sector profile means the Company is well positioned across the strongest cities in Continental Europe."

Net Asset Value

The table below provides a breakdown of the movement in NAV during the reporting period:





Brought forward NAV as at 1 April 2019




Unrealised gain in valuation of the property portfolio




Capital expenditure




EPRA earnings




Non-cash items




Dividend paid




NAV as at 30 June 2019





(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 1st April 2019

Interim dividend

The third interim dividend of 1.85 euro cents per share for the year ending 30 September 2019 represents an annualised rate of 5.5% based on the Euro IPO issue price of 137 euro cents per share. This is in line with the Company's target dividend, which is based on paying a sustainable dividend based on the annualised income expected to be generated from the portfolio. Based on the GBP IPO issue price of 100 pence per share the annualised yield is 6.8% (based on FX rates as at 30 June 2019).

The dividend is 100% covered from income received during the quarter. Dividends for the first nine months of the financial year are 106% covered from net income received.

The interim dividend payment will be made on Monday, 21 October 2019 to shareholders on the register on the record date of Friday, 4 October 2019. In South Africa, the last day to trade will be Tuesday, 1 October 2019 and the ex-dividend date will be Wednesday, 2 October 2019. In the UK, the last day to trade will be Wednesday, 2 October 2019 and the ex-dividend date will be Thursday, 3 October 2019.

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, 23 September 2019. 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, 4 October 2019. 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, 7 October 2019.

Shares cannot be moved between the South African register and the UK register between Monday, 23 September 2019 and Friday, 4 October 2019, both days inclusive. Shares may not be dematerialised or rematerialised in South Africa between Wednesday, 2 October 2019 and Friday, 4 October 2019, 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, 23 September 2019.

Property portfolio

As at 30 June 2019, the Company owned 13 properties located in growth cities of Continental Europe, independently valued at €241.6 million at a blended net initial yield of 6.2%. Over the quarter, the portfolio value, net of capex, increased by 0.5%. The portfolio generated a net property rental income of €3.9 million, representing an ungeared quarterly property income return of 1.6% (equating to 6.7% on an annualised basis).

The annual contracted rent is €17.4 million, with an average unexpired lease term to first break and expiry of 4.8 years and 6.2 years.

The country and sector allocations for the portfolio as at 30 June 2019 are set out in the table below:





























The Company has three urban retail assets in the portfolio in Berlin, Frankfurt and Seville. The Berlin and Frankfurt investments are 100% occupied on long term leases. The Seville investment is a shopping centre that we are continuing to actively manage to optimise income and value.

Asset Management update

During the period the Company completed two asset management initiatives:

·      At its Paris office investment Boulogne-Billancourt, the Company has signed heads of terms for a conditional long term lease commitment with existing tenant Alten in conjunction with the advancement of feasibility, design and planning to refurbish the building to grade A standard. If concluded, it has the potential to be accretive to the company, delivering both NAV return upside and improving the longer-term income and portfolio profile. The construction period is forecast to take 15-18 months and Alten will relocate during that period. Whilst a number of options are being considered, it is likely that the Company will fund this project using debt, which would take the overall gearing level to circa 35% LTV, which is within the Company's gearing target.


·      In Hamburg, the Company has secured a new tenant on a seven year lease, for an additional 640 sqm of space. It follows the completion of two new leases with tenants in the education and IT sectors for over c. 40% of space announced in the Half Year results, all achieved above target. Advanced discussions are ongoing for a further floor, which will leave three floors, equating to c. 2,000 sqm or 27% of property by ERV, remaining to be leased.


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  

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Announcement of NAV and dividend - RNS