Schroder Eur Real Est Inv Trust PLC Net Asset Value and Dividend (3915W)

TIDMSERE

RNS Number : 3915W

Schroder Eur Real Est Inv Trust PLC

09 February 2017

9 February 2017

ANNOUNCEMENT OF NAV AND DIVIDEND

Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in European growth cities, today announces its unaudited net asset value for the three months to 31 December 2016 together with its first interim dividend for the period to 30 September 2017.

Net Asset Value

The Company generated an unaudited net asset value ("NAV") as at 31 December 2016 of EUR174.6 million or 130.6 cents per share (110.0 pence per share). This reflects an increase of 0.5 cents per share compared with the NAV as at 30 September 2016.

A breakdown of the NAV increase over the quarter is set out below, split between pre and post the impact of the equity placing completed in October 2016:

 
                                          EURm(1)     cps 
---------------------------------------  --------  -------- 
 NAV as at 30 September 2016               157.8    130.1* 
---------------------------------------  --------  -------- 
 Unrealised gain in property valuation      0.4      0.3* 
---------------------------------------  --------  -------- 
 Operating profit                           1.1      0.9* 
---------------------------------------  --------  -------- 
 Approved dividend payable                 (1.2)    (1.0)* 
---------------------------------------  --------  -------- 
 Other                                      0.1      0.1* 
---------------------------------------  --------  -------- 
 NAV as at 31 December 2016 excl. 
  equity raise impact                      158.2    130.4* 
---------------------------------------  --------  -------- 
 Equity raise impact                       16.4      0.2** 
---------------------------------------  --------  -------- 
 NAV as at 31 December 2016                174.6    130.6** 
---------------------------------------  --------  -------- 
 

(1) Management reviews the performance of the Company principally on a proportionally consolidated basis. As a result, figures quoted in this table include the Company's share of joint ventures on a line-by-line basis and excludes non-controlling interests in the Company's subsidiaries.

* Reflects a base of 121,234,686 shares pre capital raise

** Reflects a base of 133,734,686 shares post capital raise

Interim Dividend

The Company announces a first interim dividend for the year to 30 September 2017 of 1.0 euro cents per share. The dividend represents an annualised rate of 3.0% based on the euro equivalent of the issue price as at admission.

The dividend is fully covered from income receivable from the committed portfolio. Once fully invested, including the debt being drawn, the Company's objective is to pay an annualised euro dividend yield of 5.5% based on the euro equivalent of the issue price as at admission.

The interim dividend payment will be made on 17 March 2017 to shareholders on the register on the record date of 3 March 2017. In South Africa, the last day to trade will be 28 February 2017 and the ex-dividend date will be 1 March 2017. In the UK, the last day to trade will be 1 March 2017 and the ex-dividend date will be 2 March 2017.

The interim dividend will be paid in GBP to shareholders on the UK register and Rand to shareholders on the South African register. The exchange rate for determining the interim dividend paid in Rand will be confirmed by way of an announcement on 21 February 2017. UK shareholders are able to make an election to receive dividends in Euro rather than GBP should that be preferred. The form for applying for such election can be obtained from the Company's UK registrars (Equiniti Limited) and any such election must be received by Equiniti no later than 3 March 2017. The exchange rate for determining the interim dividend paid in GBP will be confirmed following the election cut off date by way of an announcement on 6 March 2017.

Shares cannot be moved between the South African register and the UK register between 21 February 2017 and 3 March 2017, both days inclusive. Shares may not be dematerialised or rematerialised in South Africa between 1 March 2017 and 3 March 2017, both days inclusive.

The Company has a total of 133,734,686 shares in issue on the date of this announcement. The dividend will be distributed by the Company (UK tax registration number 21696 04839) and is regarded as a foreign dividend for shareholders on the South African register. In respect of South African shareholders, dividend tax will be withheld from the amount of the dividend noted above at the rate of 15% unless the shareholder qualifies for the exemption. Further dividend tax information for South African shareholders will be included in the exchange rate announcement to be made on 21 February 2017.

Property Portfolio

As at 31 December 2016, the Company owned seven properties independently valued at EUR148.5 million (EUR148.2 million as at 30 September 2016), representing a like for like increase of 0.2% over the quarter. In addition, the portfolio delivered a net property income of EUR2.2 million over the quarter, resulting in an ungeared property income return of 1.5% and a total return of 1.7% over the quarter.

The current valuation reflects an increase of 4.9% compared to the combined purchase price of the seven asset portfolio. Over 60% of the transaction costs have been recovered through valuation uplifts since acquisition.

In addition, the Company committed to acquire a EUR30 million high yielding office building in Saint Cloud, Paris which completed on 2 February 2017. This purchase will increase the portfolio value to approximately EUR180 million.

Including Saint Cloud, the occupancy rate of the portfolio is approximately 100%. The portfolio generates EUR12.2 million p.a. contracted rental income, representing a net initial property yield of 6.3% and a geared property yield of over 8%. The average unexpired lease term is 5.0 years to first break and 7.1 years to expiry.

The portfolio's country and sector allocations, pre and post the Saint Cloud acquisition are set out in the table below.

 
Country          Portfolio   Portfolio   Sector          Portfolio   Portfolio 
 allocation       at 31       including   allocation      at 31       including 
 (% contracted    Dec '16     St Cloud    (% contracted   Dec '16     Saint 
 rent)                                    rent)                       Cloud 
---------------  ---------  -----------  --------------  ---------  ----------- 
France           52%         65%         Office          48%         63% 
---------------  ---------  -----------  --------------  ---------  ----------- 
Germany          48%         35%         Retail          52%         37% 
---------------  ---------  -----------  --------------  ---------  ----------- 
Total            100%        100%        Total           100%        100% 
---------------  ---------  -----------  --------------  ---------  ----------- 
 

Investment Progress

The Company's shares began trading on 9 December 2015. Total capital of EUR183.3 million (GBP136.7 million) has been raised at the initial public offer and subsequent placings up to 31 December 2016. The Company has invested over EUR185 million and has drawn EUR48.7 million of debt across three loan facilities. The loans have an average duration of 8 years and an average interest cost of 1.19% p.a.

The Company has remaining investment capacity of approximately EUR60 million and a pipeline of suitable opportunities in growth cities.

Tony Smedley, Head of Continental European Investment at Schroder REIM, said:

"Today's announcement is further evidence of the good progress we are making in delivering on our strategy to provide investors with exposure to high quality income producing real estate in Europe's growth markets. We are pleased with the performance of the portfolio to date as well as our debt strategy, which is very accretive to shareholder returns."

SERE will host a live webcast for investors and analysts on Monday 13 February at 1230GMT/12.30SAST. To register please use the following link: http://bit.ly/2kl1SCq.

Enquiries:

Duncan Owen/Tony Smedley

   Schroder Real Estate Investment Management Limited        Tel: [phone] 

Ria Vavakis

   Schroder Investment Management Limited                            Tel: [phone] 
   Dido Laurimore/Richard Gotla                                                Tel: [phone] 

FTI Consulting

This information is provided by RNS

The company news service from the London Stock Exchange

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February 09, 2017 02:00 ET (07:00 GMT)