TIDMSERE
RNS Number : 7192L
Schroder Eur Real Est Inv Trust PLC
10 September 2019
10 September 2019
ANNOUNCEMENT OF NAV AND DIVIDEND
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 EUR183.3 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:
EURm(1) Cps(2) %(3)
Brought forward NAV as at 1 April 2019 182.8 136.7
Unrealised gain in valuation of the property
portfolio 1.7 1.3 1.0
Capital expenditure (0.7) (0.6) (0.5)
EPRA earnings 2.5 1.9 1.4
Non-cash items (0.5) (0.3) (0.2)
Dividend paid (2.5) (1.9) (1.4)
NAV as at 30 June 2019 183.3 137.1 0.3
(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
EUR241.6 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 EUR3.9 million,
representing an ungeared quarterly property income return of 1.6%
(equating to 6.7% on an annualised basis).
The annual contracted rent is EUR17.4 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:
Country Allocation Sector Allocation
France 43% Office 46%
Germany 30% Retail 26%
Netherlands 17% Industrial 20%
Spain 10% Mixed 8%
Total 100% Total 100%
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.
Enquiries:
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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END
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