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NAV and Dividend

Released 07:00 05-Mar-2020

RNS Number : 0475F
Schroder Eur Real Est Inv Trust PLC
05 March 2020

5 March 2020




-Portfolio valuation gain underpins NAV uplift-


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 31 December 2019, together with its first interim dividend for the year ending 30 September 2020:


-     Unaudited NAV as at 31 December 2019 of €184.0 million or 137.6 cents per share, an uplift of 1.0% over the quarter;


-     NAV total return of 2.4% over the quarter and 5.9% over the last 12 months;


-     Portfolio valuation, net of capex, increased by 1.1% over the quarter to €246.3 million;


-     A first interim dividend of 1.85 euro cents per share will be paid for the year ending 30 September 2020, in line with the target dividend stated at IPO of an annualised rate of 5.5% on the IPO issue price;


-     Significant asset management successes, including:

·    In Hamburg, the Company has secured a new tenant on a five year lease, for an additional 670 sqm of space; and

·    Lease renewals agreed with two existing tenants at St Cloud, Paris, covering 3,150 sqm of floor space, at rents above the previous level paid.


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

"Our strategy of investing in a diversified real estate portfolio in winning cities such as Paris, Berlin, Hamburg and Frankfurt has again supported an uplift in NAV and portfolio valuation and a stable and attractive dividend.  We are making good progress on the planning, design and financing for the re-development of our largest asset in Boulogne-Billancourt, Paris. Successful completion will deliver profitable growth for the Company and will improve the building's sustainability credentials and income quality."


Net Asset Value

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






Brought forward NAV as at 1 October 2019




Unrealised gain in valuation of the property portfolio




Capital expenditure




EPRA earnings




Non-cash items




Dividend paid




NAV as at 31 December 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 1 October 2019


Interim dividend

The first interim dividend of 1.85 euro cents per share for the year ending 30 September 2020 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 dividend based on the longer term sustainable rental income expected to be generated from the portfolio. Based on the GBP IPO issue price of 100 pence per share the annualised yield is 6.4% (based on FX rates as at 31 December 2019).


The dividend is 88% covered from income received during the quarter. As previously noted, we expect dividend cover to reduce whilst we undertake asset management activity across the portfolio, the most significant of which is the refurbishment of our Paris office property Boulogne-Billancourt. These initiatives are expected to improve the longer term income profile of the Company and its dividend cover.


The interim dividend payment will be made on Tuesday, 14 April 2020 to shareholders on the register on the record date of Friday, 27 March 2020. In South Africa, the last day to trade will be Tuesday, 24 March 2020 and the ex-dividend date will be Wednesday, 25 March 2020. In the UK, the last day to trade will be Wednesday, 25 March 2020 and the ex-dividend date will be Thursday, 26 March 2020.


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, 9 March 2020. 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, 27 March 2020. 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, 30 March 2020.


Shares cannot be moved between the South African register and the UK register between Monday, 9 March 2020 and Friday, 27 March 2020, both days inclusive. Shares may not be dematerialised or rematerialised in South Africa between Wednesday, 25 March 2020 and Friday, 27 March 2020, 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, 9 March 2020.


Property portfolio

As at 31 December 2019, the Company owned 13 properties located in growth cities of Continental Europe, independently valued at €246.3 million at a blended net initial yield of 5.9%. Over the quarter, the portfolio value, net of capex, increased by 1.1%. 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 5.0 years and 6.3 years.


The country and sector allocations for the portfolio as at 31 December 2019 are set out in the table below:






























Asset Management update

During the period the Company completed the following key asset management initiatives:


-     At its Paris office investment Boulogne-Billancourt, where the Company has signed a conditional long term lease commitment with the existing tenant Alten, progress has been made with planning, detailed design and debt financing. Initial planning approval has been received, with final planning confirmation expected in April following the statutory consultation period. A fixed price construction contract is expected to be finalised during Q2 2020, with the main works starting from June 2020 and expected to last c. 18 months. The intention is for the Company to fund this project using debt, which would take the overall gearing level to circa 35% LTV (net of cash), within its stated range. The Company is engaged in positive discussions with several lenders, with a view to finalising loan terms in Q2 2020.


-     In Hamburg, the Company has secured a new tenant, world leading food delivery specialist Takeaway, on a five-year lease, for an additional 670 sqm of space, on the ground floor.  In total, 2,892 sqm (60%) of the City BKK space has been leased, at a 17% premium to the target rent, with positive discussions ongoing with potential tenants for the remaining three floors.


-     At its St.Cloud office asset in Paris, the Company has agreed a new six-year lease with Outscale, an existing tenant, for c. 2,500 sqm across floors six, seven and eight, commencing in April 2020. Previously occupying c. 1,695 sqm, the new rent is 15% above the previous rent.  A new lease has also been agreed with another existing tenant, Institute Curie, who currently occupy the ground floor, for 531 sqm of office space on level one, on a three-year term.



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/Methuselah Tanyanyiwa             Tel: 020 3727 1000

FTI Consulting  

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NAV and Dividend - RNS