Schroder Real Estate Inv Trst Ld Net Asset Value & Dividend-Quarter to 30 June 2017 (4409L)

TIDMSREI

RNS Number : 4409L

Schroder Real Estate Inv Trst Ld

19 July 2017

For release 19 July 2017

Schroder Real Estate Investment Trust Limited

ANNOUNCEMENT OF NAV AND DIVIDEND FOR QUARTER TO 30 JUNE 2017

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 30 June 2017.

Net Asset Value

The unaudited NAV as at 30 June 2017 was GBP335.7 million or 64.8 pence per share ('pps'). This reflects an increase of 1.1% per share compared with the NAV as at 31 March 2017, or a NAV total return, including the dividend of 0.62 pps, of 2.12%. A breakdown is set out below:

 
                         GBPm     pps    Comments 
----------------------  ------  ------  -------------------------------- 
 NAV as at 31 
  March 2017             332.6   64.1 
----------------------  ------  ------  -------------------------------- 
                                         Reflects a quarterly 
                                          like-for-like increase 
                                          in the value of the underlying 
                                          portfolio of 1.3% before 
                                          capital expenditure. 
                                          Note that this includes 
 Unrealised                               the underlying valuation 
  change in valuation                     movement in the joint 
  of direct property                      ventures, shown separately 
  portfolio               5.2     1.0     below 
----------------------  ------  ------  -------------------------------- 
                                         Capital expenditure including 
                                          the Premier Inn at Leeds 
                                          Arndale Centre of GBP2 
                                          million and St. John's 
                                          Retail Park in Bedford 
 Capital expenditure     (2.7)   (0.5)    of GBP260,000 
----------------------  ------  ------  -------------------------------- 
                                         Driven by a 1.2% increase 
 Unrealised                               in the value of the University 
  gain on joint                           of Law building on Store 
  ventures                0.4     0.1     Street in Bloomsbury 
----------------------  ------  ------  -------------------------------- 
                                         Results in quarterly 
 Net revenue              3.4     0.7     dividend cover of 105% 
----------------------  ------  ------  -------------------------------- 
                                         Reflects an annualised 
                                          dividend of GBP12.8 million 
 Dividends paid          (3.2)   (0.6)    or 2.48 pps 
----------------------  ------  ------  -------------------------------- 
 NAV as at 30 
  June 2017              335.7   64.8 
----------------------  ------  ------  -------------------------------- 
 

Dividend payment

The Company announces an interim dividend of 0.62 pence per share ('pps') for the period 1 April 2017 to 30 June 2017. The dividend payment will be made on 31 August 2017 to shareholders on the register as at 11 August 2017. The ex-dividend date will be 10 August 2017.

The dividend of 0.62 pps will be designated 0.35 pps as an interim property income distribution ('PID') and 0.27 pps as an interim ordinary dividend.

Performance versus MSCI (formerly IPD) Index

The latest available performance data for the quarter to 31 March 2017 showed that the Company's portfolio produced a total return of 4.2%, outperforming the MSCI peer group on a like-for-like basis, which delivered a return of 2.2%.

Property portfolio

As at 30 June 2017, the underlying portfolio comprised 45 properties valued at GBP459.2 million. At the same date the portfolio produced a rent of GBP27.2 million per annum reflecting a net initial yield of 5.6%. The portfolio rental value is GBP33.4 million per annum, resulting in a reversionary yield of 7.3%.

As at 30 June 2017 the void rate was 6.2% compared with 6% as at 31 March 2017. Following 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 30 June 2017:

 
Sector weightings      Weighting % 
------------------  ------------------ 
                    SREIT  MSCI Index* 
------------------  -----  ----------- 
      Retail        30.5      36.6 
------------------  -----  ----------- 
     Offices        38.8      31.3 
------------------  -----  ----------- 
    Industrial      24.9      21.9 
------------------  -----  ----------- 
      Other          5.8      10.2 
------------------  -----  ----------- 
 

* Latest available MSCI Index data as at 31 March 2017

 
Regional weightings       Weighting % 
---------------------  ------------------ 
                       SREIT  MSCI Index* 
---------------------  -----  ----------- 
Central London          7.8      14.8 
---------------------  -----  ----------- 
South East excluding 
 Central London        28.8      38.0 
---------------------  -----  ----------- 
Rest of South           6.8      15.6 
---------------------  -----  ----------- 
Midlands and Wales     27.2      14.1 
---------------------  -----  ----------- 
North and Scotland     29.4      17.5 
---------------------  -----  ----------- 
 

* Latest available MSCI Index data as at 31 March 2017

Transactions

During the quarter the disposals of the St. Augustine's Courtyard office in Bristol and a high street leisure unit in Watford completed at a combined price of GBP14.2 million. Both disposals had exchanged unconditionally prior to 31 March 2017.

Asset management

The Company's industrial assets contributed positively to performance over the quarter, driven by letting activity at higher rents:

Milton Keynes, Stacey Bushes Industrial Estate

During the quarter four lettings and lease renewals completed at a total rent of GBP170,000 per annum. This reflected a 6% premium above the independent valuation assumptions at 31 March 2017. This contributed to a 7.8% increase in the capital value over the quarter to GBP24.8 million.

Leeds, Millshaw Industrial Estate

During the quarter two lease renewals and a rent review completed at a total rent of GBP240,000 per annum. This reflected an 8% premium above the independent valuation assumptions at 31 March 2017. This contributed to a 3% increase in the capital value over the quarter to GBP27.2 million.

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 8.7 years and an average interest cost of 4.4%. The loans are fully compliant with their covenants.

In addition to the properties secured against the Canada Life and RBS loan facilities, the Company has unsecured properties with a value of GBP77.4 million and cash of approximately GBP31.4 million. This results in a loan to value ratio, net of cash, of approximately 26%.

-ENDS-

For further information:

 
 Schroder Real Estate Investment 
  Management Limited: 
  Duncan Owen / Nick Montgomery             020 7658 6000 
-----------------------------------------  -------------- 
 Northern Trust: 
  Sam Walden / Fraser Hiddelston            01481 745529 
-----------------------------------------  -------------- 
 FTI Consulting: 
  Dido Laurimore / Ellie Sweeney/Richard 
  Gotla                                     020 3727 1000 
-----------------------------------------  -------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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July 19, 2017 02:00 ET (06:00 GMT)