TIDMSREI 
 
26 November 2019 
 
    CORRECTION: INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2019 
 
The following amendments have been made to the 'Interim Results' announcement 
released on 26 November 2019 at 07:00am (UK Time). 
 
  * The original RNS stated a NAV total return of 0.5% for the interim period 
    to September 2019. This is corrected to a NAV total return of 1.3% for the 
    interim period to September 2019. 
  * The NAV total return of 0.5% relates to the quarter to September 2019. 
 
All other details remain unchanged. 
 
 
 
                 Schroder Real Estate Investment Trust Limited 
 
                      ("SREIT"/ the "Company" / "Group") 
 
          INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2019 
 
          PROFITABLE DISPOSALS PROVIDE CAPACITY FOR NEW ACQUISITIONS 
 
                    REFINANCING UNDERPINS DIVID INCREASE 
 
Schroder Real Estate Investment Trust, the actively managed UK focussed REIT, 
today announces its unaudited half year results for the six months ended 30 
September 2019. 
 
Highlights 
 
  * GBP45 million of disposals during and post the period end, reflecting a 15% 
    net premium to the valuation at the start of the period, taking the total 
    disposals since 1 January 2019 to GBP95 million at an average net initial 
    yield of 3.0% 
  * Post period end refinancing capitalises on low long-term interest rates 
    reducing the cost of the long term debt from 4.4% to 2.5% and extending the 
    term from 8.5 years to an average 16.5 years. The interest saving of GBP2.5 
    million per annum will be paid to shareholders by way of an approximate 19% 
    dividend increase from 1 October 2019 
  * Following the cost of the refinancing and on completion of contracted 
    disposals, the Company has funding capacity of approximately GBP90 million 
    providing the potential for delivery of further sustainable net income 
    growth 
  * Sustained outperformance of real estate portfolio with a total return of 
    2.5% over the period versus the MSCI/IPD Benchmark Index of 1.0% 
 
Financial overview 
 
  * Net Asset Value ('NAV') of GBP354.3 million or 68.3 pps, reflecting a 
    decrease over the period of -0.6% (31 March 2019: GBP356.4 million) 
  * NAV total return, including dividends paid, of 1.3% (30 September 2018: 
    3.0%) 
  * Profit for the six months of GBP4.6 million (30 September 2018: GBP10.6 
    million), reflecting lower valuation gains on investment properties 
  * Adjusted EPRA earnings of GBP6.7 million (30 September 2018: GBP7.1 million) 
  * Dividend cover of 99% (30 September 2018: 107%) 
  * Loan to value ('LTV'), net of all cash, of 23.1% (31 March 2019: 22.1%), 
    which adjusted for post period end refinancing and disposals decreases to 
    approximately 22% 
 
Property portfolio overview 
 
  * 96% of the portfolio now located in Winning Cities, with increased exposure 
    to higher performing regional offices and industrial sector 
  * Active management of the portfolio provides visibility of new long leases 
    on completion of refurbishments at St John's Retail Park in Bedford, 
    Headingley Central in Leeds and City Tower in Manchester 
  * 26 new lettings, rent reviews and renewals completed during the period for 
    an additional GBP1.1 million of rent above the previous level. This activity 
    and disposals during and post the period end have maintained a stable void 
    rate of 7.3% (31 March 2019: 7.2%) 
  * Reversionary income yield of 7.2%, compared with the MSCI Benchmark of 
    5.3%, supporting income growth against a backdrop of slowing capital growth 
 
Commenting, Lorraine Baldry, Chairman of the Board, said: 
 
"This has been another busy period for the Company with a focus on activity 
that has improved shareholder total returns and strengthened the balance sheet. 
This should support future returns during a period of greater market 
uncertainty. Whilst the disposals of lower yielding assets will result in a 
temporary decline in net income prior to reinvestment, the Board is comfortable 
with this approach as the Company has approximately GBP90 million of funding to 
take advantage of more attractively priced investment opportunities supporting 
the delivery of a fully covered, sustainable and growing dividend policy." 
 
Duncan Owen, Global Head of Schroder Real Estate, added: 
 
"The activity during the interim period leaves the Company in a strong position 
with a low borrowing ratio and operational flexibility. There is additional 
investment capacity of approximately GBP90 million ahead of an expected market 
correction. Selectively deploying this capital over the course of 2020 into 
Winning Cities at higher yields should mean the Company is well placed to 
deliver continued, sustainable growth in net income." 
 
                                    -Ends- 
 
For further information: 
 
Schroder Real Estate Investment Management             020 7658 6000 
Duncan Owen / Nick Montgomery / Frank Sanderson 
 
Northern Trust                                         01481 745001 
Lisa Garnham 
 
FTI Consulting                                         020 3727 1000 
Dido Laurimore / Richard Gotla / Methuselah Tanyanyiwa 
 
A presentation for analysts and investors will be held at 08.45am today at the 
offices of Schroders plc, 1 London Wall Place, London, EC2Y 5AU. If you would 
like to attend, please contact Richard Gotla at FTI on +44 (0)20 3727 1000 or 
schroderrealestate.com 
 
Alternatively, the dial-in details are as follows:  +44 (0)330 336 9105 
 
Participant passcode:  5812389 
 
 
 
 
 
Schroder Real Estate Investment Trust Limited 
 
Interim Report and Consolidated Financial Statements 
For the period 1 April 2019 to 30 September 2019 
 
 
 
 
 
Contents 
 
 
 
 
 
Company Summary                                                             3 
 
Highlights                                                                  4 
Performance Summary                                                         5 
 
Chairman's Statement                                                        7 
 
Investment Manager's Report                                                 9 
 
Responsibility Statement of the Directors in respect of the                18 
Interim Report 
 
Independent Review Report                                                  19 
 
Condensed Consolidated Statement of Comprehensive Income                   20 
 
Condensed Consolidated Statement of  Financial Position                    21 
 
Condensed Consolidated Statement of Changes in Equity                      22 
 
Condensed Consolidated Statement of Cash Flows                             23 
 
Notes to the Interim Report                                                24 
 
Glossary                                                                   33 
Corporate Information                                                      34 
 
Schroder Real Estate Investment Trust Limited aims to provide shareholders with 
an attractive level of income together with the potential for income and 
capital growth through investing in UK commercial real estate. 
 
Company summary 
 
Schroder Real Estate Investment Trust Limited (the 'Company' and together with 
its subsidiaries the 'Group') is a real estate investment company with a 
premium listing on the Official List of the UK Listing Authority and whose 
shares are traded on the Main Market of the London Stock Exchange (ticker: 
SREI). 
 
The Company is a real estate investment trust ('REIT') and benefits from the 
various tax advantages offered by the UK REIT regime. The Company continues to 
be declared as an authorised closed-ended investment scheme by the  Guernsey 
Financial Services Commission under section 8 of the Protection of Investors 
(Bailiwick of Guernsey) Law, 1987, as amended and the Authorised Closed-ended 
Collective Investment Schemes Rules 2008. 
 
Objective 
 
The Company aims to provide shareholders with an attractive level of income and 
the potential for income and capital growth as a result of its investments in, 
and active management of, a diversified portfolio of UK commercial real 
estate. 
 
The Company's dividend policy is to pay a sustainable level of quarterly 
dividends to shareholders. It is intended that successful execution of the 
Company's strategy will enable a progressive dividend policy to be adopted. 
 
The portfolio is principally invested in the three main UK commercial real 
estate sectors of office, industrial and mixed-use, and may also invest in 
other sectors including, but not limited to, residential, leisure, healthcare 
and student accommodation. Over the property market cycle the portfolio aims to 
generate an above average income return with a diverse spread of lease 
expiries. 
 
A prudent level of gearing is used to enhance income and total returns for 
shareholders with the level dependent on the property cycle and the outlook for 
future returns. 
 
Investment strategy 
 
The current investment strategy is to grow income and enhance shareholder 
returns through a disciplined approach to acquisitions, proactive asset 
management and selling smaller, lower-yielding properties on completion of 
asset business plans. The issuance of new shares will also be considered if it 
is consistent with the strategy. 
 
Our objective is to own a portfolio of larger properties in Winning Cities and 
Regions with high growth diversified local economies, sustainable occupational 
demand and favourable supply and demand characteristics. These properties 
should offer good long-term fundamentals in terms of location and specification 
and be let at affordable rents with the potential for income and capital growth 
from good stock selection and asset management. 
 
Highlights 
 
Highlights for the period to 30 September 2019 
 
  * Sustained outperformance of real estate portfolio with a total return of 
    2.5% over the period versus the MSCI/IPD Benchmark Index of 1.0% 
  * NAV total return, including dividends paid, of 1.3% (30 September 2018: 
    3.0%) 
  * GBP45 million of disposals during and post the period end, reflecting a 15% 
    net premium to the valuation at the start of the period, taking the total 
    disposals since the beginning of 2019 to GBP95 million at an average net 
    initial yield of 3.0% 
  * Post period end refinancing capitalises on low long-term interest rates 
    reducing the cost of the long term debt from 4.4% to 2.5% and extending the 
    term from 8.5 years to an average 16.5 years. The interest saving of GBP2.5 
    million per annum will be paid to shareholders by way of an approximate 19% 
    dividend increase from 1 October 2019 
  * Following the refinancing, the Company has funding capacity of 
    approximately GBP90 million on completion of contracted disposals providing 
    the potential for delivery of further sustainable net income growth 
  * Loan to value ('LTV'), net of all cash, of 23.1% (31 March 2019: 22.1%), 
    which adjusted for post period end refinancing and disposals decreases to 
    approximately 22% 
 
Strategic 
 
  * 96% of the portfolio by value located in higher growth regions (March 2019: 
    93%)[1] 
  * NAV total return, including dividends paid, of 1.3% (30 September 2018: 
    3.0%) 
  * Underlying property portfolio total return of 2.5% (MSCI/IPD Benchmark 
    Index of 1.0%) 
  * Underlying property portfolio reversionary income yield of 7.2% (MSCI/IPD 
    Benchmark Index of 5.3%)[2] 
 
Performance 
 
  * Portfolio Total Return2 
      + 6 months 2.5% (MSCI/IPD Benchmark Index of 1.0%) 
      + 3 years 9.4% (MSCI/IPD Benchmark Index of 6.9%) 
      + Since IPO 7.7% (MSCI/IPD Benchmark Index of 6.6%) 
 
Financial 
 
  * Value of property assets and joint ventures of GBP462.7 million (31 March 
    2019: GBP496.7 million)[3] 
  * Net Asset Value ('NAV') of GBP354.3 million (31 March 2019: GBP356.4 million) 
  * Underlying earnings of GBP6.7 million (30 September 2018: GBP7.1 million)[4] 
  * Loan to value, net of cash 23.1% (31 March 2019: 22.1%) 
 
Performance Summary 
 
Financial summary 
 
                                        30 September  30 September 31 March 2019 
                                                2019          2018 
 
NAV                                          GBP354.3m       GBP357.7m       GBP356.4m 
 
NAV per ordinary share (pence)                  68.3          69.0          68.7 
 
EPRA NAV [5]                                 GBP354.3m       GBP357.7m       GBP356.4m 
 
Capital values 
 
                                        30 September  30 September 31 March 2019 
                                                2019          2018 
 
NAV total return5                               1.3%          3.0%          4.5% 
 
Profit for the period                          GBP4.6m        GBP10.6m        GBP15.9m 
 
EPRA earnings 5                                GBP6.7m         GBP3.9m        GBP12.0m 
 
Adjusted EPRA earnings                         GBP6.7m      GBP7.1m[6]       GBP15.2m6 
 
Share price and index 
 
                                        30 September  30 September 31 March 2019 
                                                2019          2018 
 
Share price (pence)                             55.4          59.9          55.4 
 
Share price discount to NAV                  (18.9%)       (13.2%)       (19.4%) 
 
FTSE All-Share Index                        4,061.74      4,127.91      3,978.28 
 
FTSE EPRA/NAREIT UK Real Estate             1,749.83      1,731.76      1,710.33 
Index 
 
Earnings and dividends 
 
                                       Six months to Six months to          Year 
                                        30 September  30 September   to 31 March 
                                               2019           2018          2019 
 
IFRS earnings per share (pence)                  0.9           2.0           3.1 
 
EPRA earnings per share (pence) 5                1.3           0.8           2.3 
 
Adjusted EPRA earnings per share                 1.3          1.46         2.9 6 
(pence) 
 
Dividends paid per share (pence) [7]            1.30          1.24          2.53 
 
Annualised dividend yield on 30                 4.7%          4.1%          4.6% 
September/ 
31 March share price 5 
 
 
Performance Summary (continued) 
 
Bank borrowings 
 
                                        30 September  30 September 31 March 2019 
                                                2019          2018 
 
On-balance sheet borrowings [8]              GBP129.6m       GBP160.1m       GBP158.6m 
 
Loan to value ratio, net of cash [9]       23.1%[10]         29.2%         22.1% 
 
Ongoing charges 
 
                                      Six months to  Six months to          Year 
                                       30 September   30 September   to 31 March 
                                               2019           2018          2019 
 
Ongoing charges (including fund only           1.4%           1.0%          1.1% 
expenses) [11] 
 
Ongoing charges (including fund and            2.3%           2.0%          2.2% 
property expenses) [12] 
 
Chairman's Statement 
 
Overview 
 
The strategy during the interim period was focused on delivering sustainable 
income growth and maximising total returns through active asset management, the 
refinancing of the Canada Life debt facility and the further crystallising of 
profits from low-yielding disposals. This focus mitigated the impact of ongoing 
market uncertainty, with a total return from the underlying portfolio of 2.5% 
compared with the MSCI Benchmark of 1.0%. 
 
A 0.4% decline in the value of the underlying portfolio led to a 0.6% decline 
in the Net Asset Value ('NAV') as at 30 September 2019 to GBP354.3 million, or 
68.3 pence per share ('pps'). Dividends of GBP6.7 million, or 1.3 pps, were paid 
during the period which resulted in a NAV total return of +1.3%. 
 
Following the period end, the Company completed a significant refinancing to 
reduce the Company's cost of debt compared with prevailing market rates and 
capitalise on historically low long-term interest rates. The interest saving of 
GBP2.5 million per annum is to be paid directly to shareholders via an 
approximate 19% dividend increase with effect from 1 October 2019, further 
building on the 5% dividend increase delivered in the financial year to March 
2019. 
 
Following the refinancing, and post-period end disposals, the Company has 
approximately GBP90 million of funding capacity which provides valuable 
operational flexibility including the ability to take advantage of lower asset 
pricing in the market with acquisitions. 
 
Strategy 
 
The Company has a clear investment strategy focused on delivering a sustainable 
income return from a diversified portfolio located in Winning Cities which are 
expected to generate higher levels of economic growth. This strategy, combined 
with active asset management, has generated 1.1% per annum of relative 
outperformance of the underlying portfolio compared with its MSCI peer group 
Benchmark since IPO in 2004. 
 
The extended economic and real estate market cycle, combined with the current 
political uncertainty, is leading to weaker overall returns from UK real 
estate, with average capital values falling by 1.1% over the period. As 
expected, structural changes are having the greatest impact on real estate 
returns, with unprecedented polarisation between the sectors. To illustrate, 
retailer failure and weaker consumer spending led to average retail values 
falling 5.3% over the period. This was in contrast to the industrial sector, 
where robust occupier demand led to rental growth and capital values increasing 
by 1.1%. The Company's low weighting to retail, and higher weighting to office 
and industrial compared to the Benchmark, continues to positively contribute to 
relative performance. 
 
Lower returns are now expected across all real estate sectors as investors 
downgrade growth expectations. Whilst the extent of any pricing correction may 
depend on the outcome of next month's UK general election, average values are 
forecast to fall in the remainder of 2019 and 2020. Against this backdrop the 
Company has capitalised on late cycle demand to sell GBP95 million of assets 
since the beginning of 2019 at an average net initial yield of 3.0%, with GBP45 
million of disposals during the period and since the period end. As a result, 
the Company has significant capacity of approximately GBP90 million in cash and 
undrawn debt facilities to take advantage of any market correction with 
opportunistic reinvestment. 
 
In addition to making disposals, the Manager has continued to invest in the 
existing portfolio in order to maximise returns and improve its defensive 
qualities. Our capital expenditure programme is being predominantly targeted at 
multi-let office and industrial refurbishments to increase rental values and 
support pre-let activity where tenants are committing to long leases offering 
fixed or inflation linked rental increases. The Gym Group fifteen year letting 
at the mixed-use Headingley Central in Leeds is an example of this, achieving a 
16% premium above the previous apportioned office rent and the occupier will 
further enhance the tenant mix. The Manager's report includes further detail on 
a growing pipeline of income-generating capital expenditure initiatives. 
 
Environmental, Social and Governance ('ESG') considerations are an increasingly 
important focus. In September 2019 the Company secured its second consecutive 
GRESB Benchmark Green Star in recognition of the portfolio's sustainability 
performance. The annual GRESB Benchmark assesses governance as well as 
implementation of relevant initiatives and encouragingly the Company improved 
its rating on both measures. The Manager is also 
 
Chairman's Statement (continued) 
 
focused on ensuring that its activities deliver a positive social impact, 
illustrated in the Manager's report by the collaborative working approach with 
the Council at City Tower in Manchester. 
 
Debt 
 
During the period, proceeds from recent disposals were used to repay the 
revolving credit facility with the Royal Bank of Scotland. This facility 
matures in July 2023 and has a margin of 1.6%, as well as the ability to be 
repaid and redrawn as often as required. The Company uses interest rate caps to 
mitigate against potential rising interest rates. 
 
As noted above, on 15 October 2019 the Company refinanced its GBP129.6 million 
term loan with Canada Life and extended its maturity with 50% of the loan 
maturing in 13 years and 50% of the loan maturing in 20 years. The transaction 
reduces the interest cost on the loan from 4.4% to approximately 2.5%, 
resulting in interest savings of approximately GBP2.5 million per annum. The 
interest savings will be used to increase the dividend by approximately 19%, 
starting at the period 1 October 2019. The refinancing incurred a negotiated 
break cost, and related fees, of approximately GBP26.1 million. 
 
Based on the period end valuation, and adjusting for refinancing and post 
period end disposals, the Company remains conservatively geared with a net Loan 
to Value ratio of approximately 22%. Our long-term target leverage range of 25% 
to 35% remains unchanged. 
 
Auditor 
 
Following a formal and competitive tender process, Ernst & Young LLP agreed to 
take up the position on 6 November 2019. The Board would like to thank KPMG for 
its professional service to the Company throughout its tenure in office. 
Shareholder approval to reappoint Ernst & Young LLP as the Company's auditor 
will be sought at the Company's next Annual General Meeting to be held in the 
autumn of 2020. 
 
Outlook 
 
This has been another busy period for the Company with a focus on activity that 
has improved shareholder total returns and strengthened the balance sheet. This 
should support future returns during a period of greater market uncertainty. 
Whilst the disposals of lower yielding assets will result in a temporary 
decline in net income prior to reinvestment, the Board is comfortable with this 
approach as the Company has approximately GBP90 million of funding to take 
advantage of more attractively priced investment opportunities supporting the 
delivery of a fully covered, sustainable and growing dividend policy. 
 
Lorraine Baldry 
 
Chairman 
 
Schroder Real Estate Investment Trust Limited 
 
25 November 2019 
 
Investment Manager's Report 
 
The Company's Net Asset Value ('NAV') as at 30 September 2019 was GBP354.3 
million, or 68.3 pence per share ('pps'), compared with GBP356.4 million, or 68.7 
pps, as at 31 March 2019. This reflected a decrease of 0.4 pps, or 0.6%, with 
the underlying movement in NAV per share set out in the table below: 
 
                                                        Pence per share ('pps') 
 
NAV as at 31 March 2019                                                    68.7 
 
Unrealised change in valuation of direct real estate portfolio and        (0.3) 
Joint Ventures 
 
Capital expenditure                                                       (0.5) 
 
Realised gains on disposal                                                  0.3 
 
Net revenue [13]                                                            1.3 
 
Dividends paid                                                            (1.3) 
 
Others                                                                      0.1 
 
NAV as at 30 September 2019                                                68.3 
 
The underlying portfolio, including capital expenditure, decreased in value by 
-0.4% over the period. Profitable disposals contributed positively to returns 
and reduced the overall portfolio capital value decline to 0.4%. This compared 
favourably with the MSCI Benchmark on a like-for-like basis at -1.1%. 
 
Our disposal programme resulted in a reduction in income over the period but 
this was mitigated by new lettings and rental growth of 0.2% compared with the 
MSCI Benchmark of -0.1%. Net revenue therefore totalled GBP6.7 million or 1.3 
pps. The NAV total return including dividends paid of 1.3 pps was 1.3%. 
 
On 15 October 2019, the Company refinanced its GBP129.6 million long-term debt 
with Canada Life. The transaction reduced the cost of this debt from 4.4% to 
2.5%, representing a GBP2.5 million per annum interest saving, and extended the 
term from 8.5 years to an average 16.5 years (50% of the loan maturing in 13 
years and 50% of the loan maturing in 20 years). The interest saving will be 
paid to shareholders as an increased dividend of GBP16 million per annum with 
effect from 1 October 2019. This is a 19% increase on the previous dividend and 
follows the 5% increase announced during the financial year to March 2019. The 
negotiated break cost and associated fees paid totalled GBP26.1 million which, 
together with a write off of GBP1.4m of previously unamortised loan costs, result 
in a pro forma NAV of GBP326.8 million or 63.0 pps. 
 
Strategy 
 
The strategy over the period remained focused on the following key objectives: 
 
  * Delivering sustainable net income growth; 
  * Focusing activity on higher growth Winning Cities and Regions; 
  * Owning assets with strong fundamentals in terms of location and 
    specification; 
  * The profitable realisation of assets to crystallise gains following 
    completion of asset management initiatives; and 
  * A disciplined approach to leverage, actively managing cost and using the 
    operational flexibility of the revolving credit facility. 
 
Investment Manager's Report (continued) 
 
 
Continued progress has been made executing this strategy which has delivered 
the following: 
 
  * Post-period end the refinancing of the principal loan facility capitalises 
    on low long-term interest rates and generates an immediate interest saving 
    of GBP2.5 million per annum. The interest saving will be paid to shareholders 
    as a 19% dividend increase with effect from 1 October 2019; 
  * GBP45 million of disposals during the period and since the period end, 
    reflecting a 15% net premium over the valuations at the start of the 
    period; 
  * Flexible debt and equity with funding capacity of approximately GBP90 million 
    on completion of contracted disposals which enables the dividend to be 
    sustained and capitalise on weaker market conditions and deliver 
    sustainable further income growth; 
  * Outperformance of the underlying real estate portfolio with a total return 
    of 2.5% compared with the MSCI Benchmark of 1.0%. The underlying portfolio 
    has outperformed over six months, one, three, five, ten years and since the 
    Company's IPO; 
  * 96% of the portfolio located in higher growth cities and towns [14] with an 
    overweight to high quality regional offices and multi-let industrial 
    estates with no City of London offices or shopping centre assets; 
  * A portfolio income return of 5.5% and reversionary income yield of 7.2%. 
    [15] This compared with 4.8% and 5.3% for the MSCI/IPD Benchmark 
    respectively. The higher reversion should lead to stronger relative returns 
    against the backdrop of slowing capital growth; and 
  * Active management of the portfolio provides visibility of new long leases 
    on completion of refurbishments at St. John's Retail Park in Bedford, 
    Headingley Central in Leeds and City Tower in Manchester. 
 
Market overview 
 
UK real estate capital values peaked in October 2018 and have subsequently 
fallen by 3.0% to the end of the period. This masks significant polarisation 
between the sectors with, for example, shopping centre values falling 21.5% 
from their peak in November 2017 to the end of September 2019. This is in 
contrast with average industrial values that increased 17.3% over the same 
period. Further capital value declines are expected but the structural changes 
leading to this polarisation are expected to intensify meaning that we expect a 
dislocation in the cycles driving underlying real estate sectors.[16] 
 
This slowdown in returns follows an unusually long period of sustained growth. 
The outlook for UK real estate markets in 2020 may be negatively impacted by 
political risks as well as macroeconomic factors. A risk of the UK leaving the 
EU without a deal could lead to a recessionary environment as companies delay 
investment decisions. An orderly Brexit transition should lead to continued 
growth with real assets benefiting from a low interest rate environment. This 
more uncertain outlook has driven a disciplined approach to selling 
low-yielding assets on completion of asset management initiatives. 
 
In general, office markets appear to be relatively well placed to withstand a 
period of economic weakness. Take-up was steady through 2019 with tech, media 
and serviced office providers offsetting reduced demand from financial 
services. In strong regional centres vacancy rates are close to their low point 
before the financial crisis and new building is limited. Cities such as 
Manchester, Leeds and Bristol are capturing higher levels of growth and 
diversified economies with constrained supply are performing well. 
 
The City of London office market is arguably most exposed to a hard Brexit 
which could cut demand from financial services occupiers. Serviced office 
providers such as WeWork have also been an important source of demand in 
certain London sub-markets and it is unclear how resilient they would be in a 
downturn. The Company has minimal exposure to the serviced office sector and no 
exposure to the City of London. 
 
Investment Manager's Report (continued) 
 
Industrial rental growth has eased to 3% this year from 5% in 2018, in part 
reflecting weaker demand from manufacturers who account for a quarter of space. 
Increased speculative development of large distribution units and retailer 
insolvencies have also added to supply. Rents on well-located, multi-let 
industrial estates are expected to rise further but at a slower rate, 
particularly in London following a 40% increase since 2014. This led the 
Company to sell low-yielding industrial assets such as the Booker Unit in Acton 
where the price reflected a net initial yield of 3.5%. 
 
The retail sector is weakening and while 2019 has seen fewer administrations 
than in 2018, several retailers have announced store closures and retailers are 
increasingly asking for reductions in rent. Average retail rents could fall 
over 20% as online sales are forecast to increase from 19% to 30% over five 
years. Lower rents are encouraging some retailers and leisure operators to 
expand and whilst this will benefit assets with good fundamentals, many retail 
assets will become functionally obsolete. The Company's retail exposure is 
resilient as it includes no shopping centres and a high proportion of mixed-use 
assets whose retail benefits from convenient locations. This has facilitated 
value enhancing capital expenditure initiatives such as the Lidl letting at St. 
John's Retail Park and The Gym letting at Headingley Central. 
 
Real estate portfolio 
 
As at 30 September 2019 the portfolio comprised 44 properties valued at GBP462.7 
million. This includes the assets that were unconditionally exchanged for 
disposal during the period, but not completed at period end, and the Company's 
share of joint venture properties at City Tower in Manchester and Store Street 
in London. 
 
The portfolio generates a rental income of approximately GBP26.7 million per 
annum, reflecting a net initial income yield of 5.4% which compares with the 
MSCI Benchmark (the 'Benchmark') at 4.8%. The portfolio also benefits from 
fixed contractual annual rental uplifts of GBP1.9 million over the next 24 
months. The independent valuers' estimate that the current rental value of the 
portfolio is GBP33.0 million per annum, reflecting a reversionary income yield of 
7.1%, which compares favourably with the Benchmark at 5.3%. 26 new lettings, 
rent reviews and renewals completed during the period for an additional GBP1.1 
million of rent. This activity combined with disposals during and post the 
period end have maintained a stable void rate of 7.3%.[17] The data tables 
below summarise the portfolio information as at 30 September 2019. 
 
                             Weighting (% of portfolio) 
 
Sector weightings by value                         SREIT          Benchmark 
 
City                                                 0.0                3.2 
 
Mid-town and West End                                7.9                5.6 
 
Rest of South East                                   6.7                9.3 
 
Office Rest of UK                                   21.5                7.1 
 
Offices                                             36.1               25.1 
 
South Eastern                                       12.9               16.9 
 
Industrial Rest of UK                               20.2                9.3 
 
Industrial                                          33.1               26.2 
 
South East                                           1.0                7.1 
 
Rest of UK                                     11.3 [18]                5.3 
 
Shopping centres                                     0.0                4.8 
 
Retail warehouse                                    11.8               12.3 
 
 
Investment Manager's Report 
(continued) 
 
Retail                                              24.1               29.4 
 
Other                                                6.7               19.3 
 
 
 
 
Regional weightings by value                        SREIT         Benchmark 
 
Central London [19]                                   7.9              13.4 
 
South East excluding Central                         22.4              39.0 
London 
 
Rest of South                                         6.7              15.3 
 
Midlands                                             28.2              11.2 
 
North                                                29.7              14.4 
 
Wales                                                 1.3               1.7 
 
Scotland                                              3.8               5.0 
 
The top ten properties comprised 59.5% of the portfolio value as at 30 
September 2019: 
 
Top ten properties                                   Value (GBPm)        (% of 
                                                                  portfolio) 
 
1   Manchester, City Tower (25% share)                     43.1          9.3 
 
2   London, Store Street, Bloomsbury (50%                  36.8          7.9 
    share) 
 
3   Milton Keynes, Stacey Bushes Industrial                36.6          8.2 
    Estate 
 
4   Leeds, Millshaw Industrial Estate                      34.5          7.5 
 
5   Leeds, Headingley Central                              28.7          6.2 
 
6   Bedford, St. John's Retail Park                        28.0          6.1 
 
7   Acton, Allied Way Industrial Estate                    18.9          4.1 
    [20] 
 
8   Uxbridge, 106 Oxford Road                              18.0          3.9 
 
9   Norwich, Union Park Industrial Estate                  17.6          3.8 
 
10  Luton, The Galaxy                                      12.0          2.6 
 
    Total as at 30 September 2019                         274.2         59.5 
 
Investment Manager's Report (continued) 
 
The top ten tenants represented 28% of the portfolio as a percentage of annual 
rent as at 30 September 2019: 
 
Top ten tenants                                         Rent p.a. (GBP000)        (% of 
                                                                           portfolio) 
 
1     University of Law Limited                                    1,578          5.9 
 
2     Buckinghamshire New University                               1,152          4.3 
 
3     Recticel Limited [21]                                          731          2.8 
 
4     Sportsdirect.com Retail                                        722          2.8 
 
5     The Secretary of State                                         715          2.7 
 
6     Booker Limited [22]                                            700          2.6 
 
7     TJX UK Limited T/A Homesense                                   505          1.9 
 
8     Jupiter Hotels Limited T/A Mercure                             461          1.7 
 
9     Cine UK Limited                                                451          1.7 
 
10    Premier Inn Hotels Limited                                     421          1.6 
 
      Total as at 30 September 2019                                7,436         28.0 
 
Portfolio performance 
 
A high level of asset management has led to continued outperformance of the 
underlying property portfolio compared with the MSCI Benchmark. The table below 
shows the performance to 30 September 2019 with the portfolio ranked on the 
17th percentile of the Benchmark since inception in 2004: 
 
            SREIT total return p.a. (%) MSCI/IPD Benchmark total        Relative p.a. (%) 
                                             return p.a. (%) 
 
Period           Six    Three    Since Six Months    Three Since IPO      Six    Three    Since 
              Months    years  IPO[23]               years             Months    years      IPO 
 
Office           2.4      8.9      8.3        2.1      7.0       7.8      0.2      1.8      0.4 
 
Industrial       6.3     19.6      9.7        3.3     14.8       8.9      2.9      4.2      0.7 
 
Retail          -1.9      1.8      4.9       -2.7      1.1       4.1      0.8      0.7      0.8 
 
Other            3.2      3.3      3.6        3.0      8.7       8.2      0.2     -5.0     -4.2 
 
All sectors      2.5      9.4      7.7        1.0      6.9       6.5      1.4      2.4      1.1 
 
 
Investment Manager's Report (continued) 
 
Asset management 
 
City Tower, Manchester (Office/Mixed-use - 25% share) 
 
Description: 610,000 sq ft of office, retail, leisure and hotel accommodation 
on a three acre island site in Manchester city centre. 
 
Valuation: GBP43.1 million at 30 September 2019 reflecting a net initial income 
yield of 5.1% and a reversionary yield of 6.8%. During the period the property 
delivered a 2.2% total return. 
 
Asset strategy: To continue to improve the office accommodation to take 
advantage of good levels of occupational demand and reposition the retail and 
leisure offer. 
 
Key activity: 
 
  * Ongoing office refurbishment resulting in 30,000 sq ft of new lettings and 
    regears with Jon Matthews Architects, TopDesk, Essential Consulting, Vision 
    Direct, London School of Commerce and Plexus Law. Healthy new tenant 
    interest in remaining vacant space totalling 73,500 sq ft with a rental 
    value of GBP415,000 per annum. 
  * Ancillary retail and leisure tenant mix, and income security, improved 
    through the surrender with Nobles Amusements and new lettings to Lidl (10 
    years), Freshly Chopped salads (10 years) and Gong Cha Bubble Tea (21 
    years). 
  * Jupiter Hotels Limited (hotel) and National Car Parks (parking) provide a 
    diverse, long income profile with inflation linked rent reviews and 
    expiries in 2060 and 2043 respectively. 
  * Ongoing focus to enhance the sustainability credentials of the asset, 
    including collaboration with the local Council on public realm 
    improvements, enhanced building efficiency through removal of historic 
    plant, upgrading lighting to LED during office refurbishments and creation 
    of improved tenant co-working facilities. 
 
Millshaw Industrial Estate, Leeds (Industrial) 
 
Description: 460,000 sq ft multi-let industrial estate comprising 27 units. 
Strategically located two miles south of Leeds city centre, the property is 
adjacent to White Rose Office Park and benefits from close proximity to the M62 
and M621 motorways. 
 
Valuation: GBP34.5 million at 30 September 2019 reflecting a net initial income 
yield of 4.8% and a reversionary yield of 6.3%. During the period the property 
delivered an 8.7% total return. 
 
Asset strategy: To refurbish units to drive further rental income growth and 
progress planning for higher value alternative uses given the prominent site 
frontage to the Leeds ring road. 
 
Key activity: 
 
  * New lease completed to JD Sport Gyms at a rent of GBP201,800 per annum 
    following change of planning use and landlord works. 
  * Refurbished four units and completed four new lettings at record rents of 
    up to GBP7.25 per sq ft which compares to the estate's average rent and 
    rental value of GBP4.36 per sq ft and GBP5.00 per sq ft respectively. 
  * Rent reviews completed with Group HES and DHL, resulting in rental uplifts 
    of 14.2% and 26.7% respectively, reflecting a combined increase in rent of 
    GBP38,878 per annum. 
  * The estate is fully let with the opportunity to grow rents further due to 
    limited supply of industrial space in Leeds, particularly for units above 
    20,000 sq ft. 
  * Ongoing refurbishment programme results in building energy efficiency 
    improvements in particular through installation of LED lighting and 
    efficient heating systems. The addition of JD Gyms to the scheme also 
    provides a health and well-being amenity for existing tenants. 
 
Investment Manager's Report (continued) 
 
Leeds, Headingley Central (Retail/Mixed-use) 
 
Description: Mixed-use 90,000 sq ft town centre scheme anchored by core 
convenience retail and leisure operators including Premier Inn Hotels, 
Sainsbury's and Boots with a new pre-let to The Gym Group. 
 
Valuation: GBP28.7 million at 30 September 2019 reflecting a net initial income 
yield of 3.7% and a reversionary yield of 6.0%. During the period the property 
delivered a 1.2% total return. 
 
Asset strategy: To improve tenant mix and to convert the upper floor offices to 
alternative uses which are complementary to the ground floor retail and leisure 
to create a vibrant and sustainable scheme. 
 
Key activity: 
 
  * The first phase of the asset strategy involved converting an eight storey 
    office into a Premier Inn hotel that completed in 2017 increasing the 
    previous income of GBP45,000 per annum to GBP421,400 per annum with CPI-linked 
    reviews. 
  * In August the remaining offices, totalling 33,500 sq ft, were vacated by 
    the tenant which had a rent of GBP327,360 per annum. An agreement for lease 
    for 21,000 sq ft has been exchanged with The Gym Limited, one of the UK's 
    largest gym operators. The lease is for a fifteen year term without break 
    option at a rent of GBP240,000 per annum. The lease has fixed uplifts of 10% 
    at years five and ten and the tenant will receive nine months rent free. 
  * Planning consent for gym use has been received and the agreement is subject 
    to carrying out refurbishment works at a cost of approximately GBP1.8 
    million. This has been offset by a dilapidations payment received during 
    the period from the outgoing office tenant of GBP750,000 (i.e. a net 
    refurbishment cost of GBP1.05 million). 
  * The letting further improves tenant mix and footfall which will benefit the 
    retail and leisure tenants that include Sainsbury's, Boots, Costa Coffee 
    and Pizza Express. The remaining 12,500 sq ft of vacated office space is 
    being marketed for office and alternative uses. 
  * Units 30-31 have been let to Heavenly Desserts on a ten year lease, without 
    breaks, at GBP32,500 per annum. The tenant received a 22.5 months tenant 
    incentive. The remaining three vacant retail units are being marketed with 
    a rental value of GBP220,000 per annum. 
  * These lettings support the recent rebranding of the asset from the Arndale 
    Centre to Headingley Central to enhance asset perception and continued 
    efforts to create a mixed-use, sustainable scheme. 
  * Ongoing sustainability initiatives include the installation of EV car 
    charging, LED lighting and new bicycle bays. The Company is committed to 
    community engagement working closely with local action groups and charities 
    including the Headingley Development Trust ('HDT') and Sunshine & Smiles. 
    The Company is proud to sponsor Headingley Wonder Day and an anti-graffiti 
    initiative led by HDT. 
 
Disposals overview 
 
Since the beginning of 2019 the Company has completed, or contracted to 
complete, on disposals totalling GBP95 million at an average net initial yield of 
3.0 %. These disposals have crystallised profits from asset management and 
supported performance. The table below sets out the disposals that have 
contracted during the period, and since the period end, at a combined premium 
of 15% net of capex over the period: 
 
Investment Manager's Report (continued) 
 
Completion Date  Address               Sector                March 19    Net sale 
                                                             valuation   price 
                                                             (GBPm)        (GBPm) 
 
01-Oct-19        Edinburgh, Haston     Office                5.5         6.5 
                 House 
 
08-Oct-19        Alfreton, Recticel    Industrial            10.2        10.4 
                 Unit 
 
15-Nov-19        Acton, Allied Way     Industrial            17.2        18.9 
                 Industrial Estate 
 
22-Nov-19        Hinckley, Coventry    Land                  2.0         2.2 
                 Road 24 
 
12-Dec-19        Peterborough, Finmere Industrial            3.8         7.0 
                 Park [24] 
 
                 Total                                       38.7        45.0 
 
Finance 
 
As noted above, on 15 October 2019 the Company refinanced its principal GBP129.6 
million loan with Canada Life to take advantage of low long-term interest 
rates. 
 
The Company also has a GBP52.5 million revolving credit facility with Royal Bank 
of Scotland ('RBS') that matures in July 2023. The RCF is an efficient and 
flexible funding source with a margin of 1.6% and the ability to be repaid and 
redrawn as often as required. The Company uses interest rate caps to mitigate 
the potential of rising interest rates. 
 
The table below provides the details for both loans adopting the portfolio 
valuation as at 30 September 2019, utilising the refinancing terms: 
 
Lender Loan  Maturity   Interest LTV     LTV      Interest ICR      Forward Forward 
       (GBPm)             rate (%) ratio   ratio    cover    ratio    looking looking 
       [25]                      [26]    covenant ratio    covenant ICR     ICR ratio 
                                 (%)     (%)      (%)[27]  (%)      ratio   covenant 
                                                                    (%)     (%) 
                                                                    [28] 
 
Canada 129.6 50%: 15/04 2.5 [29] 43.3    65       269      185      473     185 
Life         /2032 
             50%: 15/10 
             /2039 
 
RBS    0.0   03/07/2023 2.4 [30] 0.0     65 [31]  1155     185      1675    250 
 
Following the Canada Life refinancing, and taking into account the post period 
end disposals, the Company's consolidated net loan to value is approximately 
22%. 
 
Responsible investing with impact 
 
The Board and the Manager believe corporate social responsibility is key to 
long-term future business success. A successful sustainable investment 
programme should deliver enhanced returns to investors, improved business 
 
Investment Manager's Report (continued) 
 
performance to occupiers and deliver tangible positive impacts to local 
communities, the environment and wider society. 
 
Schroder Real Estate's sustainability programme is continually evolving 
reflecting progression with industry sustainability targets, available 
technologies and the regulatory environment. Our programme looks to continually 
improve the sustainability credentials of the Company's portfolio. In 2019, the 
Company's work has again been recognised with the achievement of a Green Star 
in the annual Global Real Estate Sustainability Benchmark survey and an EPRA 
Best Practise Sustainability Reporting Gold Award for the year end accounts. 
 
Schroder Real Estate is evolving its investment philosophy to incorporate 
impact investing at the heart of its investment management activities. Impact 
investing involves proactively taking action to improve social and 
environmental outcomes. Schroders has identified four pillars of impact and 
mapped these to the UN Sustainable Development Goals. 
 
We are working to understand the opportunities and deliver positive impact 
through our activities within the built environment to communities and the 
environment. In relation to the environment, positive action is needed as the 
built environment is generally accepted to be responsible for 40% of global 
carbon emissions. In recognition of the role and responsibilities of the real 
estate industry and property owners, Schroder Real Estate signed the Better 
Buildings Partnership Climate Commitment in September. This initiative supports 
the drive to net zero carbon in buildings and the first stage of this is to set 
out our pathway to net zero in 2020. 
 
This commitment is a natural extension of Schroder Real Estate's sustainability 
programme which includes targets to reduce energy consumption and greenhouse 
gas emissions. Please refer to the Company's Annual Sustainability Report for 
more information on the sustainability strategy. We will report on the 
Company's progress with this impact programme in next year's Annual Report. 
 
Outlook 
 
The outlook for the UK real estate market remains uncertain given slowing 
economic growth and current political situation. Recent activity has improved 
the Company's defensive characteristics as well as increased shareholder total 
returns through profitable disposals and the higher dividend. 
 
Importantly, the activity during the interim period leaves the Company in a 
strong position with a low borrowing ratio and operational flexibility. There 
is additional investment capacity of approximately GBP90 million ahead of an 
expected market correction. Selectively deploying this capital over the course 
of 2020 into Winning Cities at higher yields should mean the Company is well 
placed to deliver continued, sustainable growth in net income. 
 
Duncan Owen 
Schroder Real Estate Investment Management Limited 
 
25 November 2019 
 
Responsibility Statement of the Directors in respect of the Interim Report 
 
We confirm that to the best of our knowledge: 
 
* the condensed set of financial statements has been prepared in accordance 
with IAS 34 Interim Financial Reporting; and 
 
* the interim management report (comprising the Chairman's and the Investment 
Manager's report) includes a fair review of the information required by: 
 
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an 
indication of important events that have occurred during the first six months 
of the financial year and their impact on the condensed set of financial 
statements; and a description of the principal risks and uncertainties for the 
remaining six months of the year; and 
 
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related 
party transactions that have taken place in the first six months of the current 
financial year and that have materially affected the financial position or 
performance of the entity during that period; and any changes in the related 
party transactions described in the last annual report that could do so. 
 
We are responsible for the maintenance and integrity of the corporate and 
financial information included on the Company's website, and for the 
preparation and dissemination of financial statements.  Legislation in Guernsey 
governing the preparation and dissemination of financial statements may differ 
from legislation in other jurisdictions. 
 
By order of the Board 
 
Lorraine Baldry 
 
Chairman 
 
25 November 2019 
 
Independent Review Report to Schroder Real Estate Investment Trust Limited 
 
Introduction 
We have been engaged by Schroder Real Estate Investment Trust Limited (the 
"Company"), to review the Unaudited Condensed Consolidated Financial Statements 
("Interim Financial Statements") in the Interim Report and Consolidated 
Financial Statements for the six months ended 30 September 2019 which comprise 
the Unaudited Condensed Consolidated Statement of Comprehensive Income, 
Unaudited Condensed Consolidated Statement of Financial Position, Unaudited 
Condensed Consolidated Statement of Changes in Equity, Unaudited Condensed 
Consolidated Statements of Cash Flows, and related notes 1 to 15. We have read 
the other information contained in the Interim Report and Consolidated 
Financial Statements and considered whether it contains any apparent 
misstatements or material inconsistencies with the information in the Interim 
Financial Statements. 
 
This report is made solely to the Company in accordance with guidance contained 
in International Standard on Review Engagements 2410 (UK and Ireland) ("ISRE 
2410") "Review of Interim Financial Information Performed by the Independent 
Auditor of the Entity" issued by the Auditing Practices Board. To the fullest 
extent permitted by law, we do not accept or assume responsibility to anyone 
other than the Company, for our work, for this report, or for the conclusions 
we have formed. 
 
Directors' responsibilities 
The Interim Report and Consolidated Financial Statements are the responsibility 
of, and have been approved by, the directors. The directors are responsible for 
preparing the Interim Report and Consolidated Financial Statements in 
accordance with the Disclosure Guidance and Transparency Rules ("DTR") of the 
United Kingdom's Financial Conduct Authority ("FCA"). As disclosed in note 1, 
the annual financial statements of the Group are prepared in accordance with 
International Financial Reporting Standards ('IFRS') as issued by the 
International Accounting Standards Board.   The Interim Financial Statements 
have been prepared in accordance with International Accounting Standard 34, 
"Interim Financial Reporting," 
 
Our responsibility 
Our responsibility is to express to the Company a conclusion on the Interim 
Financial Statements in the Interim Report and Consolidated Financial 
Statements based on our review. 
 
Scope of Review 
We conducted our review in accordance with ISRE 2410, "Review of Interim 
Financial Information Performed by the Independent Auditor of the Entity" 
issued by the Auditing Practices Board for use in the United Kingdom. A review 
of interim financial information consists of making enquiries, primarily of 
persons responsible for financial and accounting matters, and applying 
analytical and other review procedures. A review is substantially less in scope 
than an audit conducted in accordance with International Standards on Auditing 
(UK) and consequently does not enable us to obtain assurance that we would 
become aware of all significant matters that might be identified in an audit. 
Accordingly, we do not express an audit opinion. 
 
Conclusion 
Based on our review nothing has come to our attention that causes us to believe 
that the Interim Financial Statements in the Interim Report and Consolidated 
Financial Statements for the six months ended 30 September 2019 are not 
prepared, in all material respects, in accordance with International Accounting 
Standard 34 and the DTR of the United Kingdom's FCA. 
 
Ernst & Young LLP 
 
Guernsey, Channel Islands 
 
 
25 November 2019 
 
Condensed Consolidated Statement of Comprehensive Income 
 
                                               Six months    Six months                  Year 
                                                       to            to                    to 
 
                                               30/09/2019    30/09/2018            31/03/2019 
 
                                       Notes         GBP000          GBP000                  GBP000 
 
                                              (unaudited)   (unaudited)            (audited) 
 
Rental income                                      11,755        12,528                25,278 
 
Other income                                        1,089            39                 1,339 
 
Property operating expenses                       (1,237)       (1,040)               (2,375) 
 
Net rental and related income,                     11,607        11,527                24,242 
excluding joint ventures 
 
Share of net rental income in joint                 1,290         1,512 3,311 
ventures 
 
Net rental and related income,                     12,897        13,039                27,553 
including joint ventures 
 
Profit on disposal of investment         5          1,536             2                 2,156 
property 
 
Net valuation (loss)/gain on             5        (3,507)         7,286                 1,556 
investment property 
 
Expenses 
 
Investment management fee                2        (1,802)       (1,551)               (3,363) 
 
Valuers' and other professional fees                (849)         (726)               (1,633) 
 
Administrator's fee                      2           (60)          (60)                 (120) 
 
Auditor's remuneration                               (66)          (66)                 (128) 
 
Directors' fees                                      (75)          (75)                 (150) 
 
Other expenses                                       (42)         (140)                 (202) 
 
Total expenses                                    (2,894)       (2,618)               (5,596) 
 
Net operating profit before net                     6,742        16,197                22,358 
finance costs 
 
Refinancing costs                        9              -       (3,128)               (3,128) 
 
Finance costs payable                             (3,323)       (3,369)               (6,807) 
 
Net finance costs                                 (3,323)       (6,497)               (9,935) 
 
Share of net rental income in joint      6          1,290         1,512                 3,311 
ventures 
 
Share of net valuation (loss)/gain in    6           (94)         (617)                   167 
joint ventures 
 
Profit and total comprehensive income               4,615        10,595                15,901 
for the period attributable to the 
equity holders of the parent 
 
Basic and diluted earnings per share     3           0.9p          2.0p                  3.1p 
 
All items in the above statement are derived from continuing operations. The 
accompanying notes 1 to 15 form an integral part of the condensed interim 
financial statements. 
 
Condensed Consolidated Statement of Financial Position 
 
                                                                             Restated 
 
                                     Notes     30/09/2019     30/09/2018   31/03/2019 
                                                     GBP000           GBP000         GBP000 
 
                                              (unaudited)    (unaudited)    (audited) 
 
Investment property                    5          331,695        417,783      352,186 
 
Investment in joint ventures           6           80,071         78,381       80,165 
 
Non-current assets                                411,766        496,164      432,351 
 
Trade and other                        7           49,360         18,067       49,689 
receivables 
 
Cash and cash equivalents              8           23,348          8,881       21,042 
 
Investment property held for sale      5            8,373          2,000       18,911 
[32] 
 
Current assets                                     81,081         28,948       89,642 
 
Total assets                                      492,847        525,112      521,993 
 
Issued capital and reserves                       380,703        384,187      382,828 
 
Treasury shares                                  (26,452)       (26,452)     (26,452) 
 
Equity                                            354,251        357,735      356,376 
 
Interest-bearing loans and             9          127,406        157,973      156,230 
borrowings 
 
Lease liability                        5            2,655              -            - 
 
Non-current liabilities                           130,061        157,973      156,230 
 
Trade and other payables              10            8,535          9,404        9,387 
 
Current liabilities                                 8,535          9,404        9,387 
 
Total liabilities                                 138,596        167,377      165,617 
 
Total equity and liabilities                      492,847        525,112      521,993 
 
Net Asset Value per ordinary share    11              68.3p       69.0p         68.7p 
 
 
The financial statements on pages 19-32 were approved at a meeting of the Board 
of Directors held on 25 November 2019 and signed on its behalf by: 
 
Lorraine Baldry 
 
Chairman 
 
The accompanying notes 1 to 15 form an integral part of the condensed interim 
financial statements 
 
 
Condensed Consolidated Statement of Changes in Equity 
 
For the period from 1 April 2018 to 30 September 2018 (unaudited) 
 
                                   Notes     Stated    Treasury   Revenue      Total 
                                            Capital       share   reserve 
                                                        reserve 
 
                                               GBP000        GBP000      GBP000       GBP000 
 
Balance as at 31 March 2018                 219,090    (26,452)   160,932    353,570 
 
Profit and total comprehensive                    -           -    10,595     10,595 
income for the period 
 
Dividends paid                     4              -           -   (6,430)    (6,430) 
 
Balance as at 30 September                  219,090    (26,452)   165,097    357,735 
2018 
 
 
 
For the year ended 31 March 2019 (audited) and for the period from 1 April 2019 
to 30 September 2019 (unaudited) 
 
                                     Notes     Stated  Treasury   Revenue      Total 
                                              Capital     share   reserve 
                                                        reserve 
 
                                                 GBP000      GBP000      GBP000       GBP000 
 
Balance as at 31 March 2018                   219,090  (26,452)   160,932    353,570 
 
Profit and total comprehensive                      -         -    15,901     15,901 
income for the year 
 
Dividends paid                       4              -         -  (13,095)   (13,095) 
 
Balance as at 31 March 2019                   219,090  (26,452)   163,738    356,376 
 
Profit and total comprehensive                      -         -     4,615      4,615 
income for the period 
 
Dividends paid                       4              -         -   (6,740)    (6,740) 
 
Balance as at 30 September 2019               219,090  (26,452)   161,613    354,251 
 
 
The accompanying notes 1 to 15 form an integral part of the condensed interim 
financial statements. 
 
Condensed Consolidated Statement of Cash Flows 
 
                                               Six months  Six months       Year 
                                                       to          to         to 
 
                                               30/09/2019  30/09/2018 31/03/2019 
 
                                                     GBP000        GBP000       GBP000 
 
                                              (unaudited) (unaudited) (audited) 
 
Operating activities 
 
 
Profit for the period/year                          4,615      10,595     15,901 
 
Adjustments for: 
 
Profit on disposal of investment                  (1,536)         (2)    (2,156) 
property 
 
Net valuation (loss)/gain on investment             3,507     (7,286)    (1,556) 
property 
 
Share of profit of joint ventures                 (1,195)       (895)    (3,478) 
 
Net finance cost                                    3,323       3,369      9,935 
 
Operating cash generated before changes in          8,714       5,781     18,646 
working 
capital 
 
(Increase)/decrease in trade and other                328     (3,664)      (179) 
receivables 
 
Increase/(decrease) in trade and other              (852)         648      1,105 
payables 
 
Cash generated from operations                      8,190       2,765     19,572 
 
Finance costs paid                                (3,189)     (3,298)    (6,541) 
 
Net cash from operating activities                  5,001       (533)     13,031 
 
Investing Activities 
 
Proceeds from sale of investment                   34,378           -     12,447 
property 
 
Additions to investment property                  (2,623)     (1,142)    (2,761) 
 
Acquisition of investment property                      -    (22,377)   (23,191) 
 
Investment in joint ventures                            -     (1,250)    (2,250) 
 
Net income distributed from joint                   1,290       1,512      3,311 
ventures 
 
Net cash (used in)/from investing                  33,045    (23,257)     12,444 
activities 
 
Financing Activities 
 
Repayment of external debt                       (29,000)           -          - 
 
Additions to debt                                       -       9,883      8,500 
 
Refinancing fees paid                                   -           -    (4,168) 
 
Dividends paid                                    (6,740)     (6,430)   (13,095) 
 
Net cash from/(used in) financing                (35,740)       3,453    (8,763) 
activities 
 
Net (decrease)/increase in cash and cash            2,306    (20,337)    (8,176) 
equivalents for  the period/year 
 
Opening cash and cash equivalents                  21,042      29,218     29,218 
 
Closing cash and cash equivalents                  23,348       8,881     21,042 
 
 
The accompanying notes 1 to 15 form an integral part of the condensed interim 
financial statements. 
 
Notes to the Interim Report 
 
1. Significant accounting policies 
 
Schroder Real Estate Investment Trust Limited ("the Company") is a closed-ended 
investment company incorporated in Guernsey. The condensed interim financial 
statements of the Company for the period ended 30 September 2019 comprise the 
Company, its subsidiaries and its interests in joint ventures (together 
referred to as the "Group"). 
 
Statement of compliance 
 
The condensed interim financial statements have been prepared in accordance 
with the Disclosure Guidance and Transparency Rules of the United Kingdom 
Financial Conduct Authority and IAS 34 Interim Financial Reporting. They do not 
include all the information required for the full annual financial statements, 
and should be read in conjunction with the consolidated financial statements of 
the Group as at and for the year ended 31 March 2019. The condensed interim 
financial statements have been prepared on the basis of the accounting policies 
set out in the Group's annual financial statements for the year ended 31 March 
2019. The financial statements for the year ended 31 March 2019 have been 
prepared in accordance with International Financial Reporting Standards 
("IFRS") as issued by the International Accounting Standards Board. The Group's 
annual financial statements refer to new Standards and Interpretations. 
Management's assessment of IFRS 16 has resulted in an adjustment in the 
recognition of the fair value of a head lease relating to The Galaxy, Luton 
which can be seen in note 5. 
 
Going concern 
 
The Directors have examined significant areas of possible financial risk 
including cash and cash requirements and the debt covenants, in particular the 
loan to value covenants and interest cover ratios on the loans with Canada Life 
and Royal Bank of Scotland ("RBS"). As at the period end, the undrawn capacity 
of the RBS facility was GBP52.5 million. The RCF is an efficient and flexible 
source of funding due to the margin of 1.6% and the ability to be repaid and 
redrawn as often as required. Following the September period end, in October 
2019 the Group completed a refinancing activity relating to the facility held 
with Canada Life. This GBP129.6 million fixed rate loan will now attract a total 
interest rate of 2.5% per annum, compared to a previous 4.4%, resulting in an 
immediate interest saving of GBP2.5 million per annum. 
 
The Directors have not identified any material uncertainties which would cast 
significant doubt on the Group's ability to continue as a going concern for a 
period of not less than twelve months from the date of the approval of the 
condensed interim financial statements. The Directors have satisfied themselves 
that the Group has adequate resources to continue in operational existence for 
the foreseeable future. 
 
After due consideration, the Board believes it is appropriate to adopt the 
going concern basis in preparing the condensed interim financial statements. 
 
Use of estimates and judgments 
 
The preparation of financial statements requires management to make judgements, 
estimates and assumptions that affect the application of policies and the 
reported amounts of assets and liabilities, income and expenses. Actual results 
may differ from these estimates. The estimates and underlying assumptions are 
reviewed on an ongoing basis. Revisions to accounting estimates are recognised 
in the period in which the estimates are revised and in any future periods 
affected.  There have been no changes in the judgements and estimates used by 
management as disclosed in the last annual report and financial statements for 
the year ended 31 March 2019. 
 
Segmental reporting 
 
The Directors are of the opinion that the Group is engaged in a single segment 
of business, being property investment and in one geographical area, the United 
Kingdom. There is no one tenant that represents more than 10% of group 
revenues. The chief operating decision maker is considered to be the Board of 
Directors who are provided with consolidated IFRS information on a quarterly 
basis. 
 
Notes to the Interim Report (Continued) 
 
2. Material agreements 
 
Schroder Real Estate Investment Management Limited is the Investment Manager to 
the Company. 
 
The Investment Manager is entitled to a fee, together with reasonable expenses 
incurred in the performance of its duties. The fee is payable monthly in 
arrears and shall be an amount equal to one twelfth of the aggregate of 1.1% of 
the NAV of the Company. The Investment Management Agreement can be terminated 
by either party on not less than twelve months written notice or on immediate 
notice in the event of certain breaches of its terms or the insolvency of 
either party. The total charge to profit during the period was GBP1,802,000 (year 
to 31 March 2019: GBP3,363,000) (6 months to 30 September 2018: GBP1,551,000). At 
the period end GBP497,000 (31 March 2019: GBP287,000; 30 September 2018: GBP581,000) 
was outstanding. 
 
The Board appointed Northern Trust International Fund Administration Services 
(Guernsey) Limited as the Administrator to the Company with effect from 25 July 
2007. The Administrator is entitled to an annual fee equal to GBP120,000 of which 
GBP30,000 (31 March 2019: GBP30,000; 30 September 2018: GBP30,000) was outstanding at 
the period end. 
 
3. Basic and Diluted Earnings per share 
 
The basic and diluted earnings per share for the Group is based on the profit 
for the period of GBP4,615,000 (31 March 2019: GBP15,901,000; 30 September 2018: GBP 
10,595,000) and the weighted average number of ordinary shares in issue during 
the period of 518,513,409 (31 March 2019: 518,513,409 and 30 September 2018: 
518,513,409) 
 
EPRA earnings reconciliation 
 
As recommended by the European Public Real Estate Association ('EPRA'), EPRA 
performance measures are disclosed in the section below. 
 
                                             Six months to  Six months     Year to 
                                                30/09/2019          to  31/03/2019 
                                                            30/09/2018 
 
                                                      GBP000        GBP000        GBP000 
 
Profit after tax                                     4,615      10,595      15,901 
 
Adjustments to calculate EPRA Earnings 
exclude: 
 
Profit on disposal of investment                   (1,536)         (2)     (2,156) 
property 
 
Net valuation (gain)/loss on investment              3,507     (7,286)     (1,556) 
property 
 
Share of valuation loss/(gain) in joint                 94         617       (167) 
ventures 
 
EPRA earnings                                        6,680       3,924      12,022 
 
Company adjustments [33]                                 -       3,128       3,128 
 
Adjusted EPRA earnings                               6,680       7,052      15,150 
 
Weighted average number of ordinary            518,513,409 518,513,409 518,513,409 
shares 
 
EPRA earnings per share (pence)                        1.3         0.8         2.3 
 
Adjusted EPRA earnings per share (pence)               1.3         1.4         2.9 
 
 
EPRA earnings per share reflects the underlying performance of the Group 
calculated in accordance with the EPRA guidelines. EPRA earnings represents the 
net income generated from the operational activities of the Group. It excluded 
all capital components not relevant to the underlying net income performance of 
the portfolio, such as the realised and unrealised fair value gains or losses 
on investment properties. 
 
Notes to the Interim Report (continued) 
 
4. Dividends paid 
 
                                          Number of              01/04/2019 to 
 
In respect of                             ordinary          Rate    30/09/2019 
 
                                          shares         (pence)          GBP000 
 
Quarter ended 31 March 2019 (paid 7 June  518.51            0.65         3,370 
2019)                                     million 
 
Quarter ended 30 June 2019 (paid 16       518.51            0.65         3,370 
August 2019)                              million 
 
                                                            1.30         6,740 
 
 
 
                                          Number of              01/04/2018 to 
 
In respect of                             ordinary          Rate    30/09/2018 
 
                                          shares         (pence)          GBP000 
 
Quarter ended 31 March 2018 (paid 31 May  518.51            0.62         3,215 
2018)                                     million 
 
Quarter ended 30 June 2018 (paid 31       518.51            0.62         3,215 
August 2018)                              million 
 
                                                            1.24         6,430 
 
 
 
                                         Number of 
                                                                    01/04/2018 
                                                                            to 
 
In respect of                            ordinary           Rate    31/03/2019 
 
                                         shares          (pence)          GBP000 
 
Quarter ended 31 March 2018 (paid 31 May 518.51 million     0.62         3,215 
2018) 
 
Quarter ended 30 June 2018 (paid 31      518.51 million     0.62         3,215 
August 2018) 
 
Quarter ended 30 Sept 2018 (paid 5       518.51 million     0.64         3,295 
December 2018) 
 
Quarter ended 31 Dec 2018 (paid 15 March 518.51 million     0.65         3,370 
2019) 
 
                                                            2.53        13,095 
 
 
A dividend for the quarter ended 30 September 2019 of 0.65p (GBP3.4 million) was 
approved on 25 November 2019 and will be paid on 18 December 2019. 
 
5. Investment property and Investment property held for sale 
 
For the period 1 April 2018 to 30 September 2018 (unaudited) 
 
                                                 Leasehold   Freehold    Total 
 
                                                      GBP000       GBP000     GBP000 
 
Fair value as at 1 April 2018                       37,180    351,796  388,976 
 
Acquisitions of investment property                      -     22,377   22,377 
 
Additions                                               52      1,090    1,142 
 
Realised gain on disposals                               -          2        2 
 
Net valuation (loss)/gain on investment property      (81)      7,367    7,286 
 
Fair value as at 30 September 2018                  37,151    382,632  419,783 
 
The balance above includes: 
 
                                                 Leasehold   Freehold Total  GBP 
                                                      GBP000       GBP000      000 
 
Investment property                                 37,151    380,632  417,783 
 
Investment property held for sale                        -      2,000    2,000 
 
Fair value as at 30 September 2018                  37,151    382,632  419,783 
 
 
 
 
 
 
Notes to the Interim Report (continued) 
5. Investment property and Investment property held for sale (continued) 
 
For the year 1 April 2018 to 31 March 2019 (audited) 
 
                                                   Leasehold  Freehold    Total 
 
                                                        GBP000      GBP000     GBP000 
 
Fair value as at 1 April 2018                         37,180   351,796  388,976 
 
Reclassification between freehold and leasehold        5,600   (5,600)        - 
 
Additions                                                 88    25,864   25,952 
 
Gross proceeds on disposals                                -  (47,543) (47,543) 
 
Realised gain on disposals                                 -     2,156    2,156 
 
Net valuation (loss)/gain on investment property     (3,046)     4,602    1,556 
 
Fair value as at 31 March 2019                        39,822   331,275  371,097 
 
The balance above includes: 
 
                                                 Leasehold   Freehold Total  GBP 
                                                      GBP000       GBP000      000 
 
Investment property                                 39,822    312,364  352,186 
 
Investment property held for sale                        -     18,911   18,911 
 
Fair value as at 31 March 2019                      39,822    331,275  371,097 
 
For the period 1 April 2019 to 30 September 2019 (unaudited) 
 
                                                 Leasehold   Freehold    Total 
 
                                                      GBP000       GBP000     GBP000 
 
Fair value as at 1 April 2019                       39,822    331,275  371,097 
 
Additions                                               31      2,592    2,623 
 
Gross proceeds on disposals                              -   (34,336) (34,336) 
 
Realised gain on disposals                               -      1,536    1,536 
 
Fair value leasehold adjustment *                    2,655          -    2,655 
 
Net valuation (loss)/gain on investment property   (1,405)    (2,102)  (3,507) 
 
Fair value as at 30 September 2019                  41,103    298,965  340,068 
 
* Further to the new IFRS 16 requirements, there has been an adjustment to 
include the fair value of the leasehold element of The Galaxy, Luton. The 
corresponding lease liability is included on the balance sheet under 
non-current liabilities. 
 
The balance above includes: 
 
                                                 Leasehold   Freehold Total  GBP 
                                                      GBP000       GBP000      000 
 
Investment property                                 41,103    290,592  331,695 
 
Investment property held for sale                        -      8,373    8,373 
 
Fair Value as at 30 September 2019                  41,103    298,965  340,068 
 
Two of the investment properties have been determined to meet the criteria of a 
held for sale asset at the period end with a total value of GBP8,373,000 (31 
March 2019: GBP18,911,000; 30 September 2018: GBP2,000,000). The 31 March 2019 held 
for sale balance has been restated.  The held for sale assets were previously 
included in investment property and therefore the statement of financial 
position has been restated accordingly. 
 
The fair value of investment property, as determined by the valuer, totals GBP 
376,425,000 (31 March 2019: GBP417,550,000; 30 September 2018: GBP431,475,000). Of 
this amount, GBP18,875,000 is in relation to the unconditional exchange of 
contracts for Allied Industrial Estate, Acton and GBP10,400,000 is in relation to 
the unconditional exchange 
 
Notes to the Interim Report (continued) 
 
5. Investment property and Investment property held for sale (continued) 
 
of contracts for The Reticel Unit, Alfreton (March 2019: GBP36,100,000 in 
relation to the unconditional exchange of contracts for Victory House, 
Brighton). As at 30 September 2019, GBP9,737,000 (31 March 2019: GBP10,352,000; 30 
September 2018: GBP11,692,000) in connection with lease incentives is included 
within trade and other receivables and a further adjustment of GBP2,655,000 is 
included in non-current liabilities (31 March 2019: GBPnil; September 2018: GBPnil) 
relating to the fair value of the leasehold. 
 
The fair value of investment property has been determined by Knight Frank LLP, 
a firm of independent chartered surveyors, who are registered independent 
appraisers. The valuation has been undertaken in accordance with the RICS 
Valuation - Global Standards 2017, which incorporates the International 
Valuation Standards, and the RICS National Supplement effective from January 
2019, issued by the Royal Institution of Chartered Surveyors (the "Red Book"). 
 
The properties have been valued on the basis of "Fair Value" in accordance with 
the RICS Valuation - Professional Standards VPS4(7.1) Fair Value and VPGA1 
Valuations for Inclusion in Financial Statements which adopt the definition of 
Fair Value used by the International Accounting Standards Board. 
 
The valuation has been undertaken using appropriate valuation methodology and 
the Valuer's professional judgement. The Valuer's opinion of Fair Value was 
primarily derived using recent comparable market transactions on arm's length 
terms, where available, and appropriate valuation techniques (The Investment 
Method). 
 
The properties have been valued individually and not as part of a portfolio. 
 
All investment properties are categorised as Level 3 fair values as they use 
significant unobservable inputs. There have not been any transfers between 
Levels during the year. Investment properties have been classed according to 
their real estate sector. Information on these significant unobservable inputs 
per class of investment property is disclosed below: 
 
Quantitative information about fair value measurement using unobservable inputs 
(Level 3) as at 30 September 2019 (unaudited) 
 
                           Industrial Retail (incl       Office       Other        Total 
                                            retail 
                                        warehouse) 
 
Fair value                    153,125      106,500       96,700      20,100      376,425 
(GBP'000) 
 
Area ('000                      1,737          556          463         177        2,933 
sq ft) 
 
Net passing  Range      GBP0 - GBP11.45 GBP  GBP0 - GBP38.50    GBP6.15 - GBP    GBP6.65 -GBP  GBP0 - GBP38.50 
rent psf per Weighted            4.75       GBP11.30 29.10 GBP14.71       13.00        GBP7.75 
annum        average                                                  GBP7.82 
 
Gross ERV    Range          GBP3.75 - GBP    GBP7.40 - GBP    GBP9.75 - GBP    GBP8.18 -GBP    GBP3.75 - GBP 
psf per      Weighted           13.00 37.75 GBP14.49        27.00       13.00  37.75 GBP9.21 
annum        average            GBP5.60                    GBP16.66       GBP8.46 
 
Net initial  Range         0% - 6.59%    0% -9.02%      2.10% -       4.73%   0% - 9.02% 
yield (1)    Weighted           5.05%        5.53%  8.74% 6.60%      -7.54%        5.66% 
             average                                                  6.46% 
 
Equivalent   Range      4.05% - 7.03%  5.08%-9.95%  5.65%-9.08%       4.73% 4.05%-9.95% 
yield        Weighted           5.82%        6.49%        7.17%      -8.04%        6.41% 
             average                                                  6.71% 
 
Notes:  (1) Yields based on rents receivable after deduction of head rents, but 
gross of non-recoverables. 
 
Notes to the Interim Report (continued) 
 
5. Investment property and Investment property held for sale (continued) 
 
Quantitative information about fair value measurement using unobservable inputs 
(Level 3) as at 31 March 2019 (audited) 
 
                        Industrial Retail (incl       Office     Leisure         Total 
                                         retail 
                                     warehouse) 
 
Fair value                 146,350      111,450      139,500      20,250       417,550 
(GBP000) 
 
Area ('000                   1,737          553          634         177         3,101 
sq ft) 
 
Net passing Range      GBP0 - GBP10.84  GBP0 - GBP38.50  GBP0 - GBP25.72 GBP0 - GBP13.00 GBP0 - GBP38.50 GBP 
rent per sq Weighted         GBP4.58       GBP12.63       GBP11.50       GBP7.92          7.62 
ft per      average 
annum 
 
Gross ERV   Range        GBP3.75 - GBP    GBP7.40 - GBP    GBP9.50 - GBP    GBP8.18 -GBP     GBP3.75 - GBP 
per sq ft   Weighted         12.77 38.50 GBP14.73 27.50 GBP16.46       13.00   38.50 GBP9.64 
per annum   average          GBP5.58                                 GBP9.07 
 
Net initial Range       0% - 6.75%    0% -9.54%   0% - 8.98%       4.73%    0% - 8.98% 
yield (1)   Weighted         5.09%        5.87%        4.89%      -7.68%         5.30% 
            average                                                6.49% 
 
Equivalent  Range          4.44% - 5.35%-10.09% 5.15%-10.53%       4.73% 4.44%-10.53% 
yield       Weighted   8.05% 5.95%        6.38%        6.75%      -7.83%         6.36% 
            average                                                6.59% 
 
Notes: (1) Yields based on rents receivable after deduction of head rents, but 
gross of non-recoverables. 
 
Sensitivity of measurement to variations in the significant unobservable inputs 
 
The significant unobservable inputs used in the fair value measurement 
categorised within Level 3 of the fair value hierarchy of the Group's property 
portfolio, together with the impact of significant movements in these inputs on 
the fair value measurement, are shown below: 
 
Unobservable input        Impact on fair value      Impact on fair value 
                          measurement of            measurement of 
                          significant increase in   significant decrease in 
                          input                     input 
 
Passing rent              Increase                  Decrease 
 
Gross ERV                 Increase                  Decrease 
 
Net initial yield         Decrease                  Increase 
 
Equivalent  yield         Decrease                  Increase 
 
There are interrelationships between the yields and rental values as they are 
partially determined by market rate conditions. 
 
Notes to the Interim Report (continued) 
 
5. Investment property and Investment property held for sale (continued) 
 
The sensitivity of the valuation to changes in the most significant inputs per 
class of investment property are shown below: 
 
Estimated movement in fair     Industrial     Retail      Office      Other     Total 
value of investment properties      GBP'000      GBP'000       GBP'000      GBP'000     GBP'000 
at 30 September 2019 
(unaudited) 
 
Increase in ERV by 5%               7,383      4,626       4,133        665    16,807 
 
Decrease in ERV by 5%             (7,147)    (4,504)     (4,087)      (406)  (16,144) 
 
Increase in net initial yield     (7,229)    (4,607)     (3,529)      (749)  (15,930) 
by 0.25% 
 
Decrease in net initial yield       7,983      5,044       3,807        809    17,403 
by 0.25% 
 
 
 
Estimated movement in fair value Industrial    Retail    Office     Other     Total 
of investment properties at 31         GBP000      GBP000      GBP000      GBP000      GBP000 
March 2019 (audited) 
 
Increase in ERV by 5%                 7,147     5,236     6,003       549    18,935 
 
Decrease in ERV by 5%               (6,860)   (4,490)   (5,846)     (526)  (17,722) 
 
Increase in net initial yield by    (6,846)   (4,550)   (6,781)     (750)  (18,799) 
0.25% 
 
Decrease in net initial yield by      7,552     4,955     7,512       811    20,659 
0.25% 
 
6. Investment in joint ventures 
 
For the period 1 April 2018 to 30 September 2018 (unaudited) 
 
                                                                              GBP000 
 
Opening balance as at 1 April 2018                                          77,748 
 
Purchase of units in City Tower Unit Trust to fund capital                   1,250 
expenditure 
 
Share of profit for the period                                                 895 
 
Distributions received                                                     (1,512) 
 
Amounts recognised as joint ventures at 30 September 2018                   78,381 
 
For the year 1 April 2018 to 31 March 2019 (audited) 
 
                                                                             GBP000 
 
Opening balance as at 1 April 2018                                         77,748 
 
Purchase of units in City Tower Unit Trust to fund capital expenditure      2,250 
 
Share of profit for the period                                              3,478 
 
Distribution received                                                     (3,311) 
 
Amounts recognised as joint ventures at 31 March 2019                      80,165 
 
For the period 1 April 2019 to 30 September 2019 (unaudited) 
 
                                                                             GBP000 
 
Opening balance as at 1 April 2019                                         80,165 
 
Share of profit for the period                                              1,196 
 
Distributions received                                                    (1,290) 
 
Amounts recognised as joint ventures at 30 September 2019                  80,071 
 
Notes to the Interim Report (continued) 
 
7. Trade and other receivables 
 
                                                      Six months to            Six months to    Year to 
                                                         30/09/2019               30/09/2018 31/03/2019 
 
                                                               GBP000                     GBP000       GBP000 
 
Rent receivable                                               2,609                    1,873        866 
 
Sundry debtors and prepayments             12,966                   16,194                       12,604 
 
Receivable relating to disposals                             33,785                        -     36,219 
 
                                                             49,360                   18,067     49,689 
 
Sundry debtors and other receivables includes GBP9,737,000 (31 March 2019: GBP 
10,352,000, 30 September 2018: GBP11,692,000) in respect of lease incentives. 
 
8.   Cash and cash equivalents 
 
As at 30 September 2019 the group had GBP23.3 million in cash (31 March 2019: GBP 
21.0 million, 30 September 2018: GBP8.9 million) of which GBP3.6 million is held 
within the Canada Life security pool. (31 March 2019: GBP0.3 million, 30 
September 2018: GBPnil). 
 
9.   Interest-bearing loans and borrowings 
 
The Group entered into a GBP129.6 million loan facility with Canada Life on 16 
April 2013 that had 20% of the loan maturing on 15 April 2023 and with the 
balance of 80% maturing on 15 April 2028, with a fixed interest rate of 4.77%. 
On the 2 July 2018, the 20% of the Canada Life loan maturing on 15 April 2023 
was refinanced extending the maturity date, increasing the length of the loan 
to that of the 80%, maturing on the 15 April 2028 making it coterminous with 
the 80% balance. The interest rate for this element of the loan was amended to 
3.00% from 4.77%. 
 
On 2 July 2018, the Company refinanced its existing GBP20.5 million revolving 
credit facility with Royal Bank of Scotland. The RCF with RBS was increased 
from GBP20.5 million to GBP32.5 million.  In January 2019 the RCF limit was further 
increased from GBP32.5 million to GBP52.5 million.  As at 30 September 2019 this 
facility was completely undrawn following a repayment of the balance of GBP29 
million on 4 July 2019. 
 
The existing RCF had been due to expire in July 2019, but was extended and now 
expires in July 2023. The interest rate is based on the loan to value ratio as 
below: 
 
  * LIBOR + 1.60% if loan to value is less than or equal to 60% 
  * LIBOR + 1.85% if loan to value is greater than 60% 
 
During the period the loan to value has remained less than 60%. Since this loan 
has variable interest, an interest rate cap for 100% of the loan was entered 
into, which comes into effect if GBP 3 month LIBOR reaches 1.5%.  As at the 
reporting date GBP 3 month LIBOR has not reached 1.5%. 
 
As at 30 September 2019 the group has a loan balance of GBP129.6 million and GBP2.2 
million of unamortised arrangement fees (31 March 2019: GBP158.6 million and GBP2.4 
million of unamortised arrangement fees, September 2018: GBP160.1 million and GBP 
2.1 million of unamortised arrangement fees). 
 
Fair values are based on the present value of future cash flows discounted at a 
market rate of interest. Issue costs are amortised over the period of the 
borrowings. As at 30 September 2019 the fair value of the Group's GBP129.6 
million loan with Canada Life was GBP150.6 million (31 March 2019: GBP143.3 
million, 30 September 2018: GBP145.3 million). 
 
Notes to the Interim Report (continued) 
 
10.  Trade and other payables 
 
                                                  Six months to         Six months to    Year to 
                                                     30/09/2019            30/09/2018 31/03/2019 
 
                                                           GBP000                  GBP000       GBP000 
 
Rent received in advance                                  3,998                 4,938      4,532 
 
Rental deposits                                           1,276                 1,105      1,193 
 
Interest payable                                          1,254                 1,391      1,391 
 
Other payables and accruals               2,007                 1,970                      2,271 
 
                                                          8,535                 9,404      9,387 
 
11.  NAV per ordinary share 
 
The NAV per ordinary share is based on the net assets of GBP354,251,000 (31 March 
2019: GBP356,376,000, 30 September 2018: 357,735,000) and 518,513,409 ordinary 
shares in issue at the Statement of Financial Position reporting date (31 March 
2019: 518,513,409 and 30 September 2018: 518,513,409). 
 
12.  Financial risk factors 
 
The Directors are of the opinion that there have been no significant changes to 
the financial risk profile of the Group since the end of the last annual 
financial reporting period ended 31 March 2019 of which it is aware. 
 
The main risks arising from the Group's financial instruments and properties 
are market price risk, credit risk, liquidity risk and interest rate risk. The 
Group is only directly exposed to sterling and hence is not exposed to currency 
risks. The Board regularly reviews and agrees policies for managing each of 
these risks. 
 
13.  Related party transactions 
 
Material agreements are disclosed in note 2. The Directors' remuneration for 
the period for services to the Group was GBP75,000 (31 March 2019: GBP150,000, 30 
September 2018: GBP75,000). Transactions with joint ventures are disclosed in 
note 6. 
 
14.  Capital Commitments 
 
At 30 September 2019 the Group had capital commitments for capital expenditure 
of GBP9.9 million (31 March 2019: GBP9.4 million, 30 September 2018: GBP2.0 million). 
 
15.  Post balance sheet events 
 
Since the end of the period the Group has completed on the sale of four 
properties and has exchanged to sell one other. 
 
On 1 October Haston House, Edinburgh was sold for GBP6.5 million; on 8 October 
the Recticel Unit, Alfreton was sold for GBP10.4 million; on 15 November the 
Allied Industrial Estate, Acton was sold for GBP18.9 million; and on 22 November 
Coventry Road, Hinckley was sold for GBP2.2 million. 
 
On 18 November Finmere Park, Peterborough exchanged for GBP6.9 million with 
completion set for 12 December 2019. 
 
On 14 October an amount of GBP5.0 million was drawn down on the revolving credit 
facility with RBS. The remaining balance of GBP47.5 million remains undrawn. 
 
On 15 October the loan of GBP129.6m with Canada Life was refinanced. A break cost 
inclusive of fees of GBP26.1m was paid and a sum of GBP1.4m of previously 
unamortised loan costs was written off. 
 
Glossary 
 
Alternative performance Alternative performance measure 
measure ("APM") 
 
Annualised dividend     being the dividend paid during the period annualised and 
yield                   expressed as a percentage of the period end share price. 
 
Articles                means the Company's articles of incorporation, as amended 
                        from time to time. 
 
Companies Law           means The Companies (Guernsey) Law, 2008. 
 
Company                 is Schroder Real Estate Investment Trust Limited. 
 
Directors               means the directors of the Company as at the date of this 
                        document. 
 
Disclosure Guidance and means the disclosure guidance and transparency rules 
Transparency Rules      contained within the FCA's Handbook of Rules and Guidance. 
 
Earnings per share      is the profit after taxation divided by the weighted 
("EPS")                 average number of shares in issue during the period. 
                        Diluted and Adjusted EPS are derived as set out under NAV. 
 
Estimated rental value  is the Group's external valuers' reasonable opinion as to 
("ERV")                 the open market rent which, on the date of valuation, 
                        could reasonably be expected to be obtained on a new 
                        letting or rent review of a property. 
 
EPRA                    is European Public Real Estate Association. 
 
EPRA Earnings           is the earnings excluding all capital components not 
                        relevant to the underlying net income performance of the 
                        portfolio, such as the realised and unrealised fair value 
                        gains or losses on investment properties. 
 
EPRA Earnings per share is the EPRA earnings divided by the weighted average 
                        number of shares in issue during the period. 
 
EPRA NAV                is the NAV calculated under IFRS adjusted to reflect the 
                        fair value of financial instruments, debt and deferred 
                        taxation. 
 
FCA                     is the UK Financial Conduct Authority. 
 
Gearing                 is the Group's net debt as a percentage of adjusted net 
                        assets. 
 
Group                   is the Company and its subsidiaries. 
 
Initial yield           is the annualised net rents generated by the portfolio 
                        expressed as a percentage of the portfolio valuation. 
 
Interest cover          is the number of times Group net interest payable is 
                        covered by Group net rental income. 
 
Listing Rules           means the listing rules made by the FCA under Part VII of 
                        the UK Financial Services and Markets Act 2000, as 
                        amended. 
 
Market Abuse Regulation means regulation (EU) No.596/2014 of the European 
                        Parliament and of the Council of 16 April 2014 on market 
                        abuse. 
 
MSCI                    (formerly Investment Property Databank or 'IPD') is a 
                        Company that produces an independent benchmark of property 
                        returns. 
 
Net Asset Value or NAV  is shareholders' funds divided by the number of shares in 
                        issue at the period end. 
 
NAV total return        is calculated taking into account both capital returns and 
                        income returns in the form of dividends paid to 
                        shareholders. 
 
Net rental income       is the rental income receivable in the period after 
                        payment of ground rents and net property outgoings. 
 
REIT                    is Real Estate Investment Trust. 
 
Reversionary yield      is the anticipated yield, which the initial yield will 
                        rise to once the rent reaches the estimated rental 
                        value. 
 
Corporate information 
 
 
Registered Address                           Independent Auditor 
PO Box 255                                   Ernst & Young LLP 
Trafalgar Court                              PO Box 9, Royal Chambers 
Les Banques                                  St Julian's Avenue 
St. Peter Port                               St. Peter Port 
Guernsey GY1 3QL                             Guernsey GY1 4AF 
 
Directors                                    Property Valuers 
Lorraine Baldry (Chairman)                   Knight Frank LLP 
Stephen Bligh                                55 Baker Street 
Graham Basham                                London 
Alastair Hughes                              W1U 8AN 
(All Non-Executive Directors) 
                                             Sponsor and Broker 
Investment Manager and Accounting Agent      J.P. Morgan Securities plc 
Schroder Real Estate Investment Management   25 Bank Street 
Limited                                      Canary Wharf 
1 London Wall Place                          London 
London                                       E14 5JP 
EC2Y 5AU 
                                             Tax Advisers 
Secretary and Administrator                  Deloitte LLP 
Northern Trust International Fund            2 New Street Square 
Administration Services (Guernsey) Limited   London 
PO Box 255                                   EC4A 3BZ 
Trafalgar Court 
Les Banques                                  Receiving Agent and UK 
St Peter Port                                Transfer/Paying Agent 
Guernsey GY1 3QL                             Computershare Investor 
                                             Services 
Depositary                                   (Guernsey) Limited 
Northern Trust (Guernsey) Limited            Queensway House 
PO Box 255                                   Hilgrove Street 
Trafalgar Court                              St Helier 
Les Banques                                  Jersey 
St Peter Port                                JE1 1ES 
Guernsey GY1 3QL 
 
Solicitors to the 
Company                as to Guernsey Law: 
as to English Law:     Mourant Ozannes 
Stephenson Harwood LLP Royal Chambers 
1 Finsbury Circus      St Julian's Avenue 
London                 St. Peter Port 
EC2M 7SH               Guernsey GY1 4HP 
 
 
ISA 
The Company's shares are eligible for 
Individual Savings Accounts (ISAs). 
 
FATCA GIIN 
5BM7YG.99999.SL.831 
 
 
[1] Winning Cities defined as higher growth regions. Source: Oxford Economics/ 
Schroders 
 
[2] Source: MSCI property level returns gross of fees on a like-for-like basis 
including direct and indirect property investments. Past performance is not a 
guide to future performance and may not be repeated. 
 
[3] This includes the assets that were unconditionally exchanged for disposal 
during the period, but not completed at period end, and the Company's share of 
joint venture properties at City Tower in Manchester and Store Street in 
London. 
 
[4] Adjusted EPRA Earnings. 
 
[5] This is an Alternative Performance Measure ('APM') as defined in the 
glossary 
 
[6] Adjusted for one-off refinancing costs. 
 
[7] Based on the dividends paid during the period. 
 
[8] On-balance sheet borrowings reflect the loan facilities with Canada Life 
and RBS excluding the deduction of finance costs. 
 
[9] Cash excludes rent deposits, service charges and floats held with managing 
agents. 
 
[10] Adjusting for the refinancing and post period end disposals, the Loan to 
Value ratio, net of cash, is approximately 22%. 
 
[11] Ongoing charges calculated in accordance with AIC recommended methodology, 
as a percentage of average NAV during the year. Fund only expenses exclude all 
property operating expenses, valuers' and professional fees in relation to 
properties. 
 
[12] Ongoing charges exclude all exceptional costs, when incurred, and interest 
during the period. 
 
[13] Net Revenue is defined as profit less capital items. 
 
[14] Source: Oxford Economics/Schroders. 
 
15 Like-for-like with MSCI i.e. ignoring standard acquisition costs. 
 
[16] All figures source CBRE UK Monthly Index 
 
[17] Calculated as percentage of Estimated Rental Value. 
 
[18] 49% of the 11.3% comprises retail as part of mixed-use assets such as City 
Tower in Manchester and Headingley Central in Leeds. 
 
[19] Note Central London is defined by MSCI as City, Mid-Town, West End and 
Inner London. 
 
[20] This asset sale unconditionally exchanged on 16 May 2019 with completion 
on 15 November 2019 for GBP18.875 million. 
 
[21] Single tenant of a distribution building in Alfreton which was sold on 8 
October 2019. 
 
[22] Single tenant of a cash and carry warehouse in Acton which was sold on 15 
November 2019. 
 
[23] The Company listed in July 2004. 
 
[24] These assets unconditionally exchanged post period end. 
 
[25] Balance as at 30 September 2019; Post period end GBP5 million drawn from the 
RBS facility. 
 
26 Loan to Value ('LTV') is the loan balance divided by the property value as 
at 30 September 2019. 
 
[27] For the quarter preceding the Interest Payment Date ('IPD'), ((rental 
income received - void rates, void service charge and void insurance)/interest 
paid). 
 
[28] For the four quarters following the IPD, ((rental income to be received - 
void rates, void service charge and void insurance)/interest paid). 
 
[29] Fixed total interest rate for the loan term. 
 
[30] Total interest rate as at 30 Sept 2019 comprising 3 months LIBOR and the 
margin of 1.6% at an LTV below 60% and a margin of 1.90% above 60% LTV. 
 
[31] This covenant drops to 60% after year three of the five-year term. 
 
[32] Please see note 5 for details of the reclassification in the 31 March 2019 
figures. 
 
[33] The Company adjustments relate to one-off costs. 
 
 
 
END 
 

(END) Dow Jones Newswires

November 26, 2019 07:24 ET (12:24 GMT)

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