TIDMSERE
RNS Number : 0475F
Schroder Eur Real Est Inv Trust PLC
05 March 2020
5 March 2020
ANNOUNCEMENT OF NAV AND DIVIDEND
-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 EUR184.0 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 EUR246.3 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:
EURm(1) Cps(2) %(3)
Brought forward NAV as at 1 October 2019 182.1 136.2
Unrealised gain in valuation of the property
portfolio 3.6 2.7 2.0
Capital expenditure (0.9) (0.7) (0.5)
EPRA earnings 2.2 1.7 1.2
Non-cash items (0.5) (0.4) (0.3)
Dividend paid (2.5) (1.9) (1.4)
NAV as at 31 December 2019 184.0 137.6 1.0
(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
EUR246.3 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 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 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:
Country Allocation Sector Allocation
France 44% Office 47%
Germany 30% Retail 26%
Netherlands 17% Industrial 19%
Spain 9% Mixed 8%
Total 100% Total 100%
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.
E nquiries:
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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END
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