Schroder Real Estate Net Asset Value(s)

 
TIDMSREI 
 
For release 30 January 2017 
 
Schroder Real Estate Investment Trust Limited 
 
ANNOUNCEMENT OF NAV AND DIVIDEND FOR QUARTER TO 31 DECEMBER 2016 
 
Schroder Real Estate Investment Trust (the 'Company'), the actively managed 
UK-focused REIT, announces its net asset value ('NAV') and dividend for the 
quarter to 31 December 2016. 
 
Net Asset Value 
 
The unaudited NAV as at 31 December 2016 was GBP320.3 million or 61.8 pence per 
share ('pps').  This reflects an increase of 1.1% per share compared with the 
NAV as at 30 September 2016, or a NAV total return, including the dividend of 
0.62 pps, of 2.2%.  A breakdown is set out below: 
 
                        GBPm    pps   Comments 
 
NAV as at 30          316.8   61.1 
September 2016 
 
Unrealised change in   5.3    1.0   Reflects a quarterly like-for-like 
valuation of direct                 increase in the value of the 
property portfolio                  underlying portfolio of 1.3% before 
                                    capital expenditure 
 
Capital expenditure   (1.7)  (0.3)  Relating to refurbishment work at 
                                    Augustine's Courtyard in Bristol, The 
                                    Arndale Centre in Leeds and St. 
                                    John's Retail Park in Bedford 
 
Net revenue            3.3    0.6   Results in quarterly dividend cover 
                                    of 105% 
 
Dividends paid        (3.2)  (0.6)  Reflects an annualised dividend of GBP 
                                    12.8 million or 2.48 pps 
 
Others                (0.2)    -    Adjustment for lease incentives 
 
NAV as at 31 December 320.3   61.8 
2016 
 
Dividend payment 
 
The Company announces an interim dividend of 0.62 pps for the period 1 October 
2016 to 31 December 2016.  The dividend payment will be made on 28 February 
2017 to shareholders on the register as at 10 February 2017.  The ex-dividend 
date will be 9 February 2017. 
 
The dividend of 0.62 pps will be designated 0.39 pps as an interim property 
income distribution ('PID') and 0.23 pps as an interim ordinary dividend. 
 
Performance versus MSCI (formerly IPD) Index 
 
The latest available performance data for the quarter to 30 September 2016 
showed that the Company's portfolio produced a total return of -0.5%, 
outperforming the MSCI peer group on a like-for-like basis, which delivered a 
return of -2.6%. 
 
Property portfolio 
 
As at 31 December 2016, the underlying portfolio comprised 47 properties valued 
at GBP453.6 million.  At the same date the portfolio produced a rent of GBP26.9 
million per annum reflecting a net initial yield of 5.6%.  The portfolio rental 
value is GBP34 million per annum, resulting in a reversionary yield of 7.5%. 
 
Over the quarter the void rate as a percentage of rental value reduced to 7.7%, 
compared with 9% as at 30 September on a like-for-like basis.  Following 
successful letting activity over the quarter, the average unexpired lease term, 
assuming all tenants vacate at the earliest opportunity, is seven years.  The 
tables below summarise the portfolio information as at 31 December 2016: 
 
        Sector weightings                      Weighting % 
 
                                        SREIT            MSCI Index* 
 
             Retail                      31.1               37.1 
 
             Offices                     40.3               32.0 
 
           Industrial                    23.2               21.0 
 
              Other                      5.4                 9.9 
 
* Latest available MSCI Index data as at 30 September 2016 
 
Regional weightings                            Weighting % 
 
                                        SREIT            MSCI Index* 
 
Central London                           7.8                15.5 
 
South East excluding Central             28.1               37.1 
London 
 
Rest of South                            8.4                15.4 
 
Midlands and Wales                       27.2               13.9 
 
North and Scotland                       28.5               18.1 
 
* Latest available MSCI Index data as at 30 September 2016 
 
Transactions 
 
During the quarter three small non-core secondary retail properties were sold 
for GBP4 million on completion of asset management initiatives.  The prices 
achieved were in line with the independent valuation as at 30 September 2016 
and reflected a low average net initial yield of 3.8%. 
 
Asset management 
 
During the quarter and since the quarter end 15 new leases and lease renewals 
have exchanged or completed.  Key activity includes: 
 
Cardiff, Haywood House North 
 
On 22 December the recently refurbished Haywood House North in Cardiff was let 
in its entirety to legal firm Slater & Gordon (UK) LLP at a rent of GBP294,964 
per annum.  Slater & Gordon have taken a ten year lease with a break option at 
year five and receive 12 months rent free. 
 
Manchester, City Tower (rents stated below reflect the Company's 25% share) 
 
During the quarter and since the quarter end, five separate letting 
transactions and rent reviews were completed at City Tower generating a 
combined rent of GBP130,662 per annum.  This compared to a combined rental value 
as at 30 September 2016 of GBP115,218 per annum. 
 
Debt 
 
The Company has two loan facilities from Canada Life and Royal Bank of Scotland 
('RBS') totalling GBP150.1 million with an average duration of approximately 9.2 
years and an average interest cost of 4.4%.  The loans are fully compliant with 
covenants. 
 
In addition to the properties secured against the Canada Life and RBS loan 
facilities, the Company has unsecured properties with a value of GBP76.9 million 
and cash of approximately GBP20 million.   This results in a loan to value ratio, 
net of cash, of approximately 29%. 
 
                                    -ENDS- 
 
For further information: 
 
Schroder Real Estate Investment Management   020 7658 6000 
Limited: 
Duncan Owen / Nick Montgomery 
 
Northern Trust:                              01481 745529 
Sam Walden / Fraser Hiddelston 
 
FTI Consulting:                              020 3727 1000 
Dido Laurimore / Ellie Sweeney 
 
 
 
END 
 

(END) Dow Jones Newswires

January 30, 2017 02:00 ET (07:00 GMT)