TIDMSREI
RNS Number : 0602U
Schroder Real Estate Inv Trst Ld
21 November 2023
Schroder Real Estate Investment Trust Limited
('SREIT' / the 'Company' / 'Group')
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023
SECTOR LEADING LOW COST, LONG TERM DEBT PROFILE AND ASSET
MANAGEMENT INITIATIVES SUPPORTING FULLY COVERED DIVIDEND;
SIGNIFICANT PORTFOLIO REVERSION TO DRIVE FUTURE EARNINGS;
ANNOUCEMENT OF STRATEGIC EVOLUTION
Schroder Real Estate Investment Trust Limited, the actively
managed UK focused REIT, today announces its interim results for
the six months ended 30 September 2023. These are also available on
the Company's website, https://www.srei.co.uk and are available in
unedited full text on the national storage mechanism. The interim
results are also available as a PDF at the following link:
http://www.rns-pdf.londonstockexchange.com/rns/0602U_1-2023-11-20.pdf
Sector leading debt profile underpinning earnings and fully
covered dividend
- Net asset value ('NAV') declined marginally to GBP296.0
million or 60.5 pps (31 March 2023: GBP300.7 million, or 61.5 pps),
with a rise in real estate yields offset by a high income return
and estimated rental value ('ERV') growth of 2.4% (MSCI Benchmark:
1.7%)
- Dividends paid totalling GBP8.2 million, or 1.67 pps (30
September 2022: GBP7.8 million, or 1.60 pps), 102% covered by EPRA
earnings
- NAV total return 1.1% (30 September 2022: 0.8%)
- Long debt maturity profile of 10.2 years and a low average
interest cost of 3.5%, with 91% either fixed or hedged against
movements in interest rates
- Loan to value, net of all cash, of 36.6% (31 March 2023: 36.0%)
- Six month total return from the underlying portfolio of 1.9%
compared with the MSCI Benchmark at -0.6%
Increasing exposure to higher growth multi-let industrial
sector, with asset management initiatives capturing portfolio
reversion
- Sustained, long term outperformance of the underlying
portfolio with a total return of 6.7% per annum on a rolling three
year basis (MSCI Benchmark Index: 2.2% per annum)
- Like-for-like portfolio valuation declined 1.1%, net of capex,
as property valuations stabilised
- 56 new lettings, rent reviews and renewals across 505,782 sq
ft completed since the start of the period totalling GBP3.8 million
in annualised rental income, and 7% ahead of the opening ERV
- Attractive portfolio reversionary income yield of 8.1%, which
compares favourably with the Benchmark at 5.9%
- 99% of rent due collected
- Completion of Stanley Green Trading Estate 80,000 sq ft
operational net zero warehouse scheme in Manchester, with
approximately 60% of the GBP1.3 million ERV relating to the new
development let or in advanced negotiations
- Completed GBP4 million disposal of non-core office asset in
Rugby, in line with valuation at the start of the financial year,
with further disposals planned and in progress
Proposal to formally include sustainability at the centre of
Company's investment proposition, building on progress to date:
- Further improvement in the Company's Global Real Estate
Sustainability Benchmark ('GRESB') score, maintaining first
position amongst a group comprising six diversified REITs
- As announced separately today, the Company has issued a
circular proposing to formally include sustainability at the centre
of its investment proposition, with a focus on decarbonisation
strategies that improve existing buildings to achieve a Green
Premium and capitalise on mispricing
Board succession:
- Appointment of Sanjay Patel as an independent Non-executive
Director with effect from 1 January 2024
Alastair Hughes, Chair of the Board, commented:
"Although the short-term outlook clearly remains uncertain,
prudent steps taken by the Manager to secure low cost, long-term
debt for the Company, and increase exposure to higher growth
sectors, means the Company is well positioned to continue
outperforming the benchmark, deliver on its investment objective
and provide a progressive dividend over time.
"As announced separately today, the Company has issued a
circular proposing to formally include sustainability at the centre
of its investment proposition. As sustainability considerations
become even more important for investors and occupiers, we have a
strong conviction that it will clearly help to differentiate the
Company and drive more sustainable, risk-adjusted returns."
Nick Montgomery, Fund Manager, added:
"We continue to make good progress against our strategic
objectives to deliver dividend growth by improving the quality of
the underlying portfolio through a disciplined, research-led
approach to transactions, capital investment, active asset
management and operational excellence.
"In particular, we have increased our allocation to higher
growth sectors and larger assets with strong fundamentals. Asset
management initiatives have delivered rental growth ahead of the
MSCI Benchmark and we have a pipeline of positive activity
including regears with major tenants in return for sustainability
related asset improvements."
A webcast presentation for analysts and investors will be hosted
today at 9.00am GMT. In order to register, please visit:
https://registration.duuzra.com/form/feedback/SREIAnnualResultsJun23
For further information:
Schroder Real Estate Investment Management
Limited
Nick Montgomery / Bradley Biggins 020 7658 6000
Schroder Investment Management Limited
(Company Secretary)
Matthew Riley 020 7658 6000
--------------
FTI Consulting
Dido Laurimore / Richard Gotla / Oliver
Parsons 020 3727 1000
--------------
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END
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