SREI Schroder Real Estate Investment Trust Limited

For release 9 November 2020

Schroder Real Estate Investment Trust Limited
("SREIT"/ the "Company" / "Group")

ASSET MANAGEMENT AND RENT COLLECTION UPDATE

Schroder Real Estate Investment Trust, the actively managed UK-focused REIT, provides an update on rent collection and recent asset management activity across its portfolio.

16 new lettings, renewals and reviews have completed across the portfolio since the last asset management update on 14 September 2020, which increases contracted rental income by £1.3 million per annum.  A further update on activity will be included in the Company’s interim results which will be announced on 17 November 2020.

London, Bloomsbury, University of Law (office)

The Company owns a 50% interest in an office building on Store Street in Bloomsbury, totalling 85,900 sq ft, which is let to the University of Law until December 2026.   The rent review dated 17 December 2019 has been settled at a rent of £1,850,000 per annum (the Company’s 50% share) or £42.12 per sq ft, which compares favourably with the prior rent of £1,434,500 per annum or £32.66 per sq ft.  This delivers an annualised rental increase of £415,500 or 29%.  The Company will receive £326,708 of back rent and, as part of the settlement, the tenant has received a three month rent free period.  The new rent reflects a yield of 4.9% based on the independent valuation as at 30 June 2020. 

The asset is located in an increasingly desirable area which will benefit from the new Crossrail station at Tottenham Court Station and infrastructure improvements relating to Camden Council’s ‘West End Project’, including highway improvement measures to Tottenham Court Road and Gower Street, as well as a new pocket park at nearby Alfred Place.  Combined with proximity to Kings Cross and the University of Central London (‘UCL’), this has led to increasing tenant demand in Bloomsbury and underpins future redevelopment value.

Edinburgh, The Tun (office)

The Tun comprises a 42,050 sq ft office in Edinburgh city centre.  Since acquisition in August 2018, good progress has been made with asset management, including a recent lease extension with the anchor tenant, the BBC.

The Company has completed a lease extension with the General Medical Council (‘GMC’) which extends its lease from September 2021 to September 2026.  The new lease has a rental increase from the current level of £55,000 per annum or £20.00 per sq ft, to £74,816 per annum or £27.50 per sq ft in September 2021 when the tenant will receive three months rent free.

Following the GMC rental increase and other contracted rental activity, the asset will generate a yield of 7.4% based on the independent valuation as at 30 June 2020. 

Rent collection

The rent collected in September 2020 for the quarter ending 31 December 2020 currently totals 84% of contracted rents, ahead of the equivalent date in the previous quarter.  The breakdown between sectors is 93% of office rent collected, 97% of industrial rent collected, 56% of retail and leisure rent collected, and 96% of other rent collected. The Company remains in active dialogue with its tenants for all rents due to be paid.

-ENDS-

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