Share Name Share Symbol Market Type Share ISIN Share Description
Schroder Real Estate Investment Trust Limited NEX:SREI.GB NEX Ordinary Share GB00B01HM147
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 55.50p 50.00p 61.00p 55.50p 55.50p 55.50p 0 07:31:43
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
- - - -

Schroder Real Estate Full year results for the year ended 31 March 2019

21/05/2019 7:00am

UK Regulatory (RNS & others)


 
TIDMSREI 
 
For release 21 May 2019 
 
                 Schroder Real Estate Investment Trust Limited 
 
                      ("SREIT"/ the "Company" / "Group") 
 
              FULL YEAR RESULTS FOR THE YEARED 31 MARCH 2019 
 
INCREASED WEIGHTING TO HIGHER GROWTH SECTORS AND WINNING CITIES UNDERPINS NAV, 
                         EARNINGS AND DIVID GROWTH 
 
Schroder Real Estate Investment Trust, the actively managed UK focussed REIT, 
today announces its audited full year results for the 12 months ended 31 March 
2019. 
 
Financial highlights for the 12 months ended 31 March 2019 
 
·      5% dividend increase delivered during the financial year 
 
·      Net Asset Value ('NAV') of GBP356.4 million or 68.7 pps, representing an 
increase of 0.7% 
 
·      NAV Total Return of 4.5% (31 March 2018: 10.5%), reflecting the impact 
of one-off refinancing and acquisition costs 
 
·      Adjusted EPRA earnings of GBP15.2 million (31 March 2018: GBP14.1 million) 
which results in dividend cover of 114% (31 March 2018: 109%) 
 
·      Profit for the year of GBP15.9 million (31 March 2018: GBP33.8 million) 
 
·      Extended the term of the loan facility with Canada Life at a lower rate 
and increased the capacity of the Royal Bank of Scotland revolving credit 
facility to maximise operational flexibility 
 
·      Loan to Value ('LTV'), net of all cash, reduced to 22.1% (30 September 
2018: 29.2%) 
 
Operational highlights 
 
·      Sustained outperformance of the real estate portfolio with a total 
return of 7.2% versus the IPD/MSCI Benchmark Index of 5.2% resulting in 
annualised outperformance of 2.0% over the past 12 months, 2.5% per annum over 
the past three years and 1.4% per annum since IPO in July 2004 
 
·      Portfolio supported by strong fundamentals with 93% of the portfolio 
located in Winning Cities 
 
·      68% of the portfolio weighted to the office and industrial sectors (31 
March 2018: 63.5%), with no City of London or Shopping Centres 
 
·      Three acquisitions during the year of regional offices in Edinburgh and 
Nottingham, and an adjoining industrial ownership in Milton Keynes totalling GBP 
21.85 million, equating to a yield based on contracted rental income of 7% 
 
·      Improved rental profile with reversionary income yield of 7.1% compared 
with the MSCI/IPD Benchmark Index of 5.4% 
 
·      GBP50 million of disposals contracted during the year and post year end at 
a blended initial income yield of 2.9%, crystallising profits from asset 
management 
 
·      Pipeline of asset management opportunities to capture future rental 
growth and improve the defensive characteristics across the portfolio 
 
·   Undrawn loan facilities and cash provides important operational flexibility 
 
Commenting, Lorraine Baldry, Chairman of the Board, said: 
 
"A combination of cash and undrawn revolving credit facilities provides an 
opportunity to reinvest following a market correction at higher yields.  This 
places the Company in a strong situation and successful execution of this 
strategy combined with delivering asset management initiatives should provide 
support for future income, valuation and dividend growth." 
 
Duncan Owen, Global Head of Schroder Real Estate, added: 
 
"Successful execution of our strategy over the year has supported a dividend 
increase in contrast to the real estate market slowdown. It has also further 
enhanced our flexibility and balance sheet strength against the backdrop of a 
more uncertain market environment. 
 
Recent disposals have realised profits at the same time as the market is 
experiencing wider price falls. Reinvestment will target higher income returns 
than the sales and this will increase net operating income. In the meantime, 
the Company is positioned to explore alternative refinancing strategies which 
may further increase net operating income. For this reason we believe the 
Company is well placed to deliver on its long term objectives and to pursue a 
progressive dividend policy." 
 
For further information: 
 
Schroder Real Estate Investment Management    020 7658 6000 
Duncan Owen / Nick Montgomery / Frank 
Sanderson 
 
Northern Trust                                01481 745212 
James Machon / Sean Walsh 
 
FTI Consulting                                020 3727 1000 
Dido Laurimore / Richard Gotla / Meth 
Tanyanyiwa 
 
A presentation for analysts and investors will be held at 8.45 am 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@fticonsulting.com 
 
Alternatively, the dial-in details are as    +44 (0)330 336 9105 
follows: 
 
Participant passcode:                        9872520 
 
 
 
 
Schroder Real Estate Investment Trust Limited 
 
Annual Report and Consolidated Financial Statements 
for the year ended 31 March 2019 
 
Contents 
 
Overview.. 3 
 
Company Summary. 3 
 
Key Points 4 
 
Portfolio Overview - At a glance. 5 
 
Investment Philosophy. 7 
 
Our Strategic Objectives 8 
 
Performance Summary. 9 
 
Strategic Report 11 
 
Chairman's Statement 11 
 
Investment Manager's review.. 13 
 
Sustainability Report 22 
 
Business Model 27 
 
Risk and Uncertainties 30 
 
Governance Report 33 
 
Board of Directors 33 
 
Report of the Directors 35 
 
Corporate Governance. 42 
 
Remuneration Report 45 
 
Report of the Audit Committee. 47 
 
Independent Auditor's report 50 
 
Financial Statements 54 
 
Consolidated Statement of Comprehensive Income. 54 
 
Consolidated Statement of Financial Position. 55 
 
Consolidated Statement of Changes in Equity. 56 
 
Consolidated Statement of Cash Flows 57 
 
Notes to the Financial Statements 58 
 
Other information. 78 
 
EPRA Performance Measures (unaudited) 78 
 
EPRA Sustainability Reporting Performance Measures (unaudited) 82 
 
Report of the Depositary to the Shareholders 93 
 
Glossary  94 
 
Notice of Annual General Meeting. 95 
 
Corporate Information. 98 
 
Overview 
 
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 property. 
 
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 
together with the potential for income and capital growth from owning and 
actively managing a diversified portfolio of 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 retail, 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. 
 
Relatively low level gearing is used to enhance income and total returns for 
shareholders with the level dependent on the real estate cycle and the outlook 
for future returns. 
 
Investment strategy 
 
The current investment strategy is to grow income and enhance shareholder 
returns through selective acquisitions, proactive asset management and selling 
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 due to good stock selection and asset management. 
 
Key Points 
 
·     5% dividend increase delivered during the financial year, with dividend 
cover of 114%1 
 
·     Sustained real estate outperformance of 2.0% versus the IPD/MSCI 
Benchmark Index over the past 12 months, 2.5% p.a. over the past 3 years and 
1.4% p.a. since IPO in July 20042 
 
·     Net asset value ('NAV') total return of 4.5% for the year to March 2019 
 
·     93% of the portfolio located in Winning Cities3 
 
·     68% of the portfolio weighted to the office and industrial sectors, with 
no City of London or Shopping Centres 
 
·     Loan to Value ('LTV'), net of all cash, reduced to 22.1% 
 
Supporting Information: 
 
·      Portfolio by value located in higher growth regions 93% (2018: 93%)3 
 
·      Net asset value ('NAV') total return 4.5% (2018: 10.5%) 
 
·      Underlying Property portfolio total return of 7.2% (2018: 11.8%) 
 
·      Dividend cover 114%  (2018: 109%)1 
 
·      Portfolio total return2 
 
o  1 year : 7.2% SREIT vs 5.2% MSCI/IPD Benchmark 
 
o  3 years: 9.1% per annum SREIT vs 6.5% per annum MSCI/IPD Benchmark 
 
·      Portfolio income return2 
 
o  1 year: 5.2% SREIT vs 4.6% MSCI/IPD Benchmark 
 
o  3 years: 6.0% per annum SREIT vs 4.8% per annum MSCI/IPD Benchmark 
 
·      Value of property assets and joint ventures GBP460.6 million (2018: GBP477.5 
million) 
 
·      Net asset value of GBP356.4 million (2018: GBP353.6 million) 
 
·      Underlying earnings of GBP15.2 million (2018: GBP14.1 million) 4 
 
·      Loan to value, net of all cash of 22.1% (2018: 25.3%) 
 
1. Dividend cover excluding one-off refinancing costs in 2019, and one-off 
abortive transaction costs in 2019. 
 
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. Winning Cities defined as higher growth locations; Source: Oxford Economics/ 
Schroders. 
 
4. Adjusted EPRA earnings. 
 
Portfolio Overview - At a glance 
 
The investment policy of the Company is to own a diversified portfolio of UK 
real estate with good fundamental characteristics. The Group invests 
principally in the office, retail and industrial commercial real estate sectors 
and will also consider other sectors including mixed use, residential, hotels, 
healthcare and leisure. 
 
Sector weightings 
 
Offices - The Company is overweight in offices compared with the MSCI/IPD 
Benchmark. The focus is on buildings with good fundamentals in those Winning 
Cities and regions that are attractive to a diverse occupier base. The Company 
has no exposure to the City of London, which is expected to be most affected by 
a UK departure from the European Union. 
 
Industrial - The Company owns a range of industrial assets, the most 
significant being multi-let estates including Milton Keynes and Leeds, which 
are positively impacted by structural trends and where there are significant 
asset management opportunities to capture rental growth. 
 
Retail - The retail assets in the portfolio are predominantly well-managed 
retail warehouses and convenience retail, let at sustainable rents and which 
benefit from trends including 'click and collect'. The Company does not own any 
shopping centres. 
 
Other - Other sectors include mixed use, residential hotels, healthcare and 
leisure properties. At present, hotels at City Tower, Manchester and Headingley 
Central, Leeds and a leisure scheme in Luton represent the other weighting in 
the portfolio. 
 
Sector weightings 
 
Sector weightings by value                                    2019                2018 
                                                               (%)                 (%) 
 
Offices                                                       36.1                36.6 
 
Industrial                                                    31.8                26.9 
 
Retail                                                        25.3                30.1 
 
Other                                                          6.8                 6.4 
 
Top ten properties 
 
The top ten properties set out below comprise 59% of the portfolio value: 
 
Top ten properties                                   Value (GBPm)    (% of portfolio) 
 
1   Manchester, City Tower (25% share)                     42.7                 9.3 
 
2   Milton Keynes, Stacey Bushes Industrial                37.5                 8.1 
    Estate 
 
3   London, Store Street, Bloomsbury (50%                  36.5                 7.9 
    share) 
 
4   Leeds, Millshaw Industrial Estate                      31.6                 6.9 
 
5   Bedford, St John's Retail Park                         30.0                 6.5 
 
6   Leeds, Headingley Central                              29.0                 6.3 
 
7   Uxbridge, 106 Oxford Road                              18.4                 4.0 
 
8   Norwich, Union Park Industrial Estate                  17.9                 3.9 
 
9   London, Allied Way Industrial Estate                   17.2                 3.7 
 
10  Salisbury, Churchill Way West                          13.0                 2.8 
 
    Total as at 31 March 2019                             273.5                59.4 
 
44 properties - valued at GBP460.6 million 
 
This includes the share of joint venture properties at City Tower in Manchester 
and Store Street in 
Bloomsbury, London. 
 
93% of the portfolio by value located in higher growth locations 
 
                                                 SREIT1                 % of UK GDP 
 
Fastest growing centres                             69%                         56% 
 
Second quartile                                     24%                         22% 
 
Third quartile                                       5%                         14% 
 
Slowest growing centres                              2%                          8% 
 
1Source: Oxford Economics, Schroders March 2019. 
 
Investment Philosophy 
 
A disciplined approach to investment 
 
Schroder Real Estate Investment Trust aims to provide shareholders with an 
attractive level of income, with the potential for income and capital growth, 
from owning a diversified portfolio focused on higher growth assets benefiting 
from structural change.  The portfolio is managed in accordance with an 
investment philosophy centred on consistent principles which are to invest in 
strong asset fundamentals and to actively manage assets in order to enhance 
value. 
 
Mega themes 
 
Long term performance of real estate assets will be driven by structural 
changes or 'mega themes' arising from demographic, technological, environmental 
and other factors that are outside of the normal real estate market cycle. 
 
High quality research 
 
Research is focussed on cyclical and structural trends in order to determine 
market strategy and exploit mis-pricing. In addition, to better understand real 
estate fundamentals, our research focuses on occupational demand at a town and 
city level and other factors such as construction starts, infrastructure 
investment and pricing relative to other assets. 
 
Business plan led approach 
 
Every asset is managed as a business with a detailed plan that is the key focal 
point for identifying and implementing active management strategies that will 
maximise returns. 
 
Responsible and Positive Impact Investment 
 
Sustainability and Environmental Social Governance ('ESG') and Impact 
Investment considerations are integral to good investment management and should 
generate better long term returns, contribute to our tenants' business 
performance and create tangible benefits to the communities where we are 
invested.  The Company's work in this area was recognised by an EPRA Gold award 
for Best Practice Reporting in the 2018 year end accounts. 
 
Winning Cities and Regions 
 
Occupier demand is increasingly concentrated in 'Winning Cities and Regions', 
those that offer a competitive advantage in terms of higher levels of GDP, 
employment and population growth; differentiated local economies with higher 
value industries; well developed infrastructure; and places where people want 
to live and work.  Winning Cities and Regions will change over time and 
investments will be made in other locations where we see higher rates of future 
growth that could lead to mispricing opportunities. 
 
Our Strategic Objectives 
 
Exposure to Winning Cities and Regions experiencing higher levels of GDP, 
employment and population growth 
 
93% of the Company's assets are located in higher growth regions and the 
strategy will continue to focus on Winning Cities and Regions which offer a 
competitive advantage in terms of higher levels of GDP, employment and 
population growth; differentiated local economies with higher value industries; 
well developed infrastructure; and places where people want to live and work. 
 
Increasing net income through transactions and asset management 
 
Disciplined acquisition strategy focused on investing primarily in industrial 
and regional office assets in Winning Cities and Regions, combined with 
relentless execution of asset management initiatives to drive net income growth 
and dividend cover and improve the portfolio's defensive qualities. The 
intention is to pursue a progressive dividend policy. 
 
Increasing exposure to assets and sectors with strong fundamentals 
 
Focus on fundamentals is essential at this stage in the cycle. Post completion 
of asset business plans, the Company will seek to dispose of assets where 
strong returns have been crystallised and that are expected to underperform to 
reinvest in assets with stronger fundamentals. 
 
Managing portfolio risk in order to enhance the portfolio's defensive qualities 
 
The Company has a diversified tenancy base of over 300 occupiers and average 
weighted lease term of 6.1 years. Priority is given to continue efforts to 
reduce the vacancy, improve covenants and increase the average lease length 
through new lettings and lease regears, alongside prudent management of our 
balance sheet with a target leverage ratio of 25% to 35%. 
 
Delivery of our strategy is intended to increase net income in the near term. 
 
The key strategic steps are: 
 
-     Increasing exposure to higher growth Winning Cities and Regions; 
 
-     Owning assets with strong fundamentals in terms of location and 
specification; 
 
-     Delivering sustainable net income growth through active asset management 
and selection; 
 
-     Disposals of lower yielding assets to realise profits; and 
 
-     A disciplined approach to leverage, actively managing both cost and 
increasing flexibility with an enlarged revolving credit facility 
 
Performance Summary 
 
Property performance 
 
                                                       31 March 2019  31 March 2018 
 
Value of Property Assets and Joint Ventures (GBP'000)         460,613*        477,495 
 
Annualised rental income (GBP'000)                              26,983         27,100 
 
Estimated open market rental value (GBP'000)                    32,907         33,623 
 
Underlying portfolio total return                               7.2%          11.8% 
 
MSCI/IPD Benchmark total return**                               5.2%          10.7% 
 
Underlying portfolio income return                              5.5%           6.2% 
 
MSCI/IPD Benchmark income return                                4.6%           4.8% 
 
* Includes transactions which unconditionally exchanged, but did not complete 
prior to year end. 
 
** Source: MSCI Quarterly Version of Balanced Monthly Index Funds including 
joint venture investments on a like-for-like basis as at 31 March 2019. 
 
Financial summary 
 
                                                      31 March 2019  31 March 2018 
 
Net Asset Value ("NAV")                                     GBP356.4m        GBP353.6m 
 
NAV per Ordinary Share (pence)                                 68.7           68.2 
 
EPRA1 NAV                                                   GBP356.4m        GBP353.6m 
 
Profit for the year                                          GBP15.9m         GBP33.8m 
 
Adjusted EPRA1 earnings                                      GBP15.2m         GBP14.1m 
 
Dividend cover                                                 114%           109% 
 
1EPRA calculations are included in the EPRA Performance measures section on 
page 78. 
 
Capital values 
 
                                                      31 March 2019  31 March 2018 
 
Share price (pence)                                            55.4           58.8 
 
Share price discount to NAV                                 (19.4%)        (13.8%) 
 
NAV total return1                                              4.5%          10.5% 
 
FTSE All Share Index                                       3,978.28       3,894.17 
 
FTSE EPRA/NAREIT UK Real Estate Index                      1,710.33       1,770.93 
 
1Net Asset Value total return calculated by Schroder Real Estate Investment 
Management Limited. 
 
Earnings and dividends 
 
                                                      31 March 2019  31 March 2018 
 
Earnings (pps)                                                  3.1            6.5 
 
Adjusted EPRA earnings (pps)                                    2.9            2.7 
 
Dividends paid (pps)                                           2.53           2.48 
 
Annualised dividend yield on 31 March share price              4.6%           4.2% 
 
Bank borrowings 
 
                                                      31 March 2019  31 March 2018 
 
On-balance sheet borrowings2                                GBP158.6m        GBP150.1m 
 
Loan to value ratio (LTV), net of all cash3                   22.1%          25.3% 
 
2On balance sheet borrowings reflects the loan facility with Canada Life and 
RBS, without deduction of finance costs. 
 
3Cash excludes rent deposits and floats held with managing agents. 
 
Ongoing charges 
 
                                                      31 March 2019  31 March 2018 
 
Ongoing charges (including fund and property                   2.2%           2.2% 
expenses4) 
 
Ongoing charges (including fund only expenses4,5)              1.1%           1.2% 
 
4Ongoing charges calculated in accordance with AIC recommended methodology, as 
a percentage of average NAV during the year. 
 
5Fund only expenses excludes all property operating expenses, valuers' and 
professional fees in relation to properties. 
 
Strategic Report 
 
Chairman's Statement 
 
Overview 
 
Good progress has been made over the financial year delivering on the key 
strategic objectives of growing the dividend and mitigating against the risk 
associated with greater market uncertainty.  This resulted in the net asset 
value ('NAV') increasing by 0.7% to GBP356.4 million over the 12 months to 31 
March 2019.  Allowing for the 5% dividend increase during the year, the NAV 
total return was 4.5%, with dividends covered by recurring earnings. 
 
Asset management activity and an above average income return continues to drive 
the performance of the underlying portfolio, which delivered a total return of 
7.2% compared with the MSCI Benchmark of 5.2%.  The portfolio has now 
consistently outperformed the Benchmark by an average of 1.4% per annum since 
the IPO of the Company in 2004. 
 
Weak sentiment towards UK real estate as well as broader political and economic 
uncertainty have depressed interest in the sector.  Average UK real estate 
values are expected to fall but there will be polarisation between sectors and 
property types driven by structural changes such as reduced demand for physical 
retail. We note the prevailing discount of the share price to Net Asset Value. 
The Company will continue to take strategic steps to strengthen its position. 
 
Strategy 
 
The Company has a clear and disciplined investment strategy focused on growing 
net income, reducing risk and increasing exposure to Winning Cities and Regions 
that are expected to generate higher levels of economic growth.  The 5% 
dividend increase during the year was enabled by this strategy being executed, 
including two debt financings, three acquisitions totalling GBP22 million and a 
high volume of income enhancing asset management activity.  93% of the 
portfolio is located in these higher growth areas. 
 
The Company benefits from having a good quality, diversified portfolio with an 
above average weighting to regional offices and regional industrial estates, 
sectors that are expected to deliver higher returns.  Conversely, the Company 
has a below average weighting to retail.  At a time of greater economic 
uncertainty the Company should also benefit from its diverse income profile 
with over 300 tenants across 44 assets. 
 
The Company has also sold lower yielding assets totalling GBP50 million in order 
to realise profits post active management, the results providing further 
evidence of our ability to deliver on our strategy whilst also reducing the 
Company's leverage.  These disposals will lead to a temporary reduction in net 
income, but create the potential to redeploy proceeds at a more attractive 
point in the cycle and therefore enhance returns. Future acquisitions will be 
consistent with the strategy to invest in assets with strong fundamentals in 
Winning Cities benefiting from long term structural changes.  The Company will 
also continue to review its cost of debt. 
 
Environmental, Social and Governance ('ESG') issues have become an increasingly 
important focus.  A wide range of initiatives have contributed to the Company 
securing a Global Real Estate Sustainability Benchmark ("GRESB") Green Star in 
recognition of the portfolio's suitability performance.  The Manager is also 
increasingly focused on ensuring that the Company's activities deliver a 
positive social impact. 
 
Debt 
 
The refinancing activity completed during the year included extending a portion 
of the Canada Life debt and increasing the revolving credit facility ('RCF') 
with Royal Bank of Scotland ('RBS').  These transactions achieved several 
objectives during the period.  They increased capacity to complete two higher 
yielding acquisitions, extended the average loan maturity to eight years and 
reduced the Company's average interest cost to 3.9% when fully drawn, hedged 
against any movement in interest rates.  An extension in the RCF capacity from 
GBP20.5 million to GBP52.5 million, also provides flexibility to fund capital 
expenditure and act opportunistically.  The NAV was negatively impacted by 
refinancing and acquisition costs totalling GBP4.5 million. 
 
Adjusting for disposals completed since the year end, the loan to value ratio, 
net of cash, was 22%.  Our long-term target leverage range of 25% to 35% 
remains unchanged. 
 
Regulation 
 
The Board and Manager have been monitoring the FCA's response to concerns 
raised regarding PRIIPs legislation and the use of Key Information Documents, 
or KIDs.  The Manager made representations to the FCA observing that the 
performance scenarios and risk indicators in the KID are potentially misleading 
and noted the discrepancies in how costs are calculated and presented in KIDs, 
particularly in relation to transaction costs and finance charges. 
 
Whilst shareholders may ignore unrealistic performance scenarios, wealth 
managers and multi-managers are required to use the "all-in" costs calculated 
in the KID when calculating their own expenses.  This potentially puts 
investment companies at a disadvantage to open-ended funds and internalised 
REITs which are exempt from PRIIPs legislation until 1 January 2022 and do not 
set out full costs in a like-for-like format. 
 
More specifically for our Company, whilst the ongoing charges calculation 
adopting the AIC methodology stood at 2.2% over the financial year, the KID 
cost which includes finance charges is 4.3%.  We understand some real estate 
investment companies are failing to calculate KID costs correctly and we will 
continue to lobby the FCA and other industry groups such as the AIC to ensure 
that disclosure on fees and charges is applied consistently across the market. 
 
Outlook 
 
Following almost a decade of positive growth, UK real estate is now likely to 
experience a period of lower than average returns.  Outside of the retail 
sector, however, we would expect the extent of any valuation declines to be 
mitigated by limited new development, lower debt levels than past cycles and 
supportive monetary policy. 
 
The Company's strategy has addressed late cycle risk by improving the 
portfolio's defensive qualities through sector, tenant and geographical 
diversification and selling assets to realise significant profits and reduce 
leverage.  In a lower return environment, the above average yield generated by 
the underlying portfolio combined with a pipeline of income enhancing asset 
management initiatives should support performance. 
 
A combination of cash and undrawn revolving credit facilities provides an 
opportunity to reinvest following a market correction at higher yields.  This 
places the Company in a strong situation and successful execution of this 
strategy combined with delivering asset management initiatives should provide 
support for future income, valuation and dividend growth. 
 
Lorraine Baldry 
Chairman 
Schroder Real Estate Investment Trust Limited 
20 May 2019 
 
Investment Manager's review 
 
Investment Manager's report 
 
The Company's Net Asset Value ('NAV') as at 31 March 2019 was GBP356.4 million or 
68.7 pence per share ('pps') compared with GBP353.6 million or 68.2 pps as at 31 
March 2018. This reflected an increase of 0.5 pps or 0.7%, with the underlying 
movement in NAV per share set out in the table below: 
 
                                                    Pence per share ('pps') 
 
NAV as at 31 March 2018                                                68.2 
 
Unrealised change in valuation of direct real estate portfolio          1.3 
and Joint Ventures 
 
Capital expenditure                                                   (0.5) 
 
Acquisition costs on purchases                                        (0.3) 
 
Realised gains on disposal                                              0.4 
 
Net revenue                                                             2.9 
 
Refinancing costs                                                     (0.6) 
 
Dividends paid                                                        (2.5) 
 
Others                                                                (0.2) 
 
NAV as at 31 March 2019                                                68.7 
 
The underlying portfolio, including joint ventures increased in value by 2.3% 
excluding capital expenditure. Adjusting for capital expenditure and 
transactions, it increased in value by 1.3% over the 12 months to March 2019. 
This compared with the MSCI Benchmark of -0.3% on a like-for-like basis. 
 
Net revenue for the year totalled 2.9 pps which reflected dividend cover of 
114%, and dividend cover of 100% from recurring revenues. The NAV total return 
for the year to March 2019 was 4.5%. This was impacted by one-off refinancing 
costs and acquisition costs related to the offices in Edinburgh and Nottingham 
and the adjoining industrial ownership in Milton Keynes which were acquired for 
GBP21.85 million, equating to a yield based on contracted income of 7%. 
 
Strategy 
 
The strategy over the year has remained focused on the following key 
objectives: 
 
-     Increasing exposure to higher growth Winning Cities and Regions; 
 
-     Owning assets with strong fundamentals in terms of location and 
specification; 
 
-     Delivering sustainable net income growth through active asset management 
and selection; 
 
-     Disposals of lower yielding assets to realise profits; and 
 
-     A disciplined approach to leverage, actively managing both cost and 
increasing flexibility with an enlarged revolving credit facility. 
 
Good progress has been made executing the strategy and a high level of activity 
over the year has delivered the following: 
 
-     Outperformance of the underlying portfolio with a total return of 7.2% 
compared with the MSCI Benchmark of 5.2%. The underlying portfolio has now 
outperformed over one, three, five, ten years and since the Company's IPO; 
 
-     93% of the portfolio located in higher growth cities and towns[1]; 
 
-     Overweight exposure to high quality regional offices and multi-let 
industrial estates with no City of London offices or shopping centre assets; 
 
-     Portfolio level income return of 5.5% and reversionary income yield of 
7.1%[2] compared with 4.8% and 5.4% for the MSCI/IPD Benchmark respectively. 
The higher reversion should lead to stronger relative returns against the 
backdrop of slowing capital growth; 
 
-     An increase in the dividend of 5% with a full year cover of 100% on 
recurring earnings following the increase; 
 
-     GBP50 million of disposals during the year, at a blended income yield of 
2.9%, crystallising gains significantly above valuation following asset 
management; 
 
-     Extended the term of the loan facility with Canada Life at a lower rate 
and increased the capacity of the revolving credit facility. 
 
-     Consolidated net loan to value of 22% with cash and undrawn debt 
totalling GBP80 million providing valuable operational flexibility. 
 
Looking forward, the key strategic objectives above remain but they will 
continue to evolve with an emphasis on the following areas, given growing 
market uncertainty: 
 
-     Further realisations to crystallise gains following completion of asset 
management initiatives; 
 
-     Delivery of asset management activity with a strong pipeline of capital 
enhancements in the existing portfolio that increase income and the portfolio's 
defensive qualities; 
 
-     Opportunistic reinvestment at higher income yields assuming a market 
correction in late 2019 and into 2020; and 
 
-     A continued focus on lower costs which will include a review of debt cost 
given an ongoing low interest rate environment. 
 
Market overview 
 
The UK real estate market cycle has remained positive for an unusually long 
period since 2009. It is now, however, experiencing falling values in some 
sectors especially in City of London office and retail sectors. There is 
significant polarisation between the relative performance of different sectors 
due to factors including political risk and long-term structural shifts such as 
urbanisation and consumer behaviour impacting occupational demand. 
 
Brexit is a contributor to market uncertainty and this will persist until there 
is clarity on the terms of any deal between the UK and EU. This uncertainty is 
restricting investment with the greatest impact in Central London markets most 
dependent on financial services' demand. Brexit uncertainty has also dampened 
demand from international investors, despite Sterling weakness and yields 
comparing favourably with other European cities such as Berlin and Paris. 
 
More positively, weaker banking and finance markets contrast with growth 
sectors such as technology, fintech and medical research that are attracted to 
London by its talent pool. The Company's asset in Bloomsbury, located between 
the infrastructural improvements of the Crossrail station at Tottenham Court 
Road and the tech-led development at Kings Cross, is well positioned to 
capitalise on demand from these active growth sectors. 
 
The UK's regional office markets have remained more resilient due to a greater 
proportion on domestic demand. This is reflected in higher total returns for 
the year of 6.8%, compared with Central London offices which returned 5%. 
Within these markets we favour well located multi-let offices in Winning Cities 
such as Bristol, Cambridge, Leeds, Manchester and Reading. These locations have 
low levels of new building and have lost space to redevelopment for alternative 
uses.  For example, in 2018 Central Manchester office take-up was 1.7 million 
sq ft compared with a long term average of 1.1 million sq ft per annum. 
Occupational demand remains at high levels and is illustrated by recent 
lettings at City Tower in Manchester to professional services, technology and 
public sector tenants. 
 
The multi-let industrial market continues to enjoy strong levels of 
occupational demand from a diverse range of occupiers including internet 
related services such as 'last mile' delivery, light industrial business and 
SMEs. The resultant rental growth and falling yields due to strong investor 
demand contributed to a total return for the year of 15.7% in this sub-sector, 
exceeding total returns from single let distribution warehouses at 13.5% due to 
the ability to increase rents through asset management. The Company's estates 
in Leeds, Norwich and Milton Keynes all benefited from these trends. For 
example, Milton Keynes delivered a total return of 30.2% for the year, driven 
by rental value growth. 
 
In contrast, structural changes benefiting the industrial and logistics markets 
are disrupting retailer business models and leading to significant distress. 
During the year approximately 2,500 units were affected by retailer 
administrations or CVAs which has led to falling rents and a negative average 
total return for the year of -3.2%. Although some retail assets are 
functionally obsolete and values will fall across the sector, parts will 
stabilise and recover. We favour convenient retail locations let at affordable 
rents, with good transport infrastructure and serving robust local economies or 
Winning Cities in densely populated areas. Examples of this include the 
Company's investment in Headingley Central in Leeds and St. John's Retail Park 
in Bedford, where units have illustrated good levels of demand from occupiers 
despite the headwinds in this sector. 
 
We expect some niche sectors to offer attractive risk-adjusted returns where 
demand is less tied to the economy and more to demographic trends and 
structural changes. These sectors satisfy increasing demand for real estate 
types and strategies delivering a positive social impact as well as attractive 
risk-adjusted total returns. The Company has a relatively low weighting to 
alternatives and this may increase in the future. 
 
Real estate portfolio 
 
As at 31 March 2019 the portfolio comprised 44 properties valued at GBP460.6 
million. This includes the share of joint venture properties at City Tower in 
Manchester and Store Street in Bloomsbury, London. 
 
Following the disposal of Victory House in Brighton the portfolio produces a 
rental income of GBP26.9 million per annum, reflecting a net initial income yield 
of 5.5% which compares with the MSCI Benchmark (the 'Benchmark') at 4.8%. The 
portfolio also benefits from fixed contractual annual rental uplifts of GBP2.1 
million in the next 24 months. The independent valuers' estimate that the 
current rental value of the portfolio is GBP32.9 million per annum, reflecting a 
reversionary income yield of 7.1%, which compares favourably with the Benchmark 
at 5.4%. 
 
During the year four properties were sold to crystallise gains and also to 
further reduce retail exposure.  These included Victory House in Brighton 
(office), a Wickes Retail Warehouse in Basingstoke (retail), Commercial Road in 
Portsmouth (retail) and Middle Street in Yeovil (retail). The disposals 
generated total gross proceeds of GBP50 million, which reflected a low average 
net initial yield of 2.9%. The data tables below summarises the portfolio 
information as at 31 March 2019. 
 
                                       Weighting (% of portfolio) 
 
Sector weightings by value                         SREIT          Benchmark 
 
City                                                 0.0                3.2 
 
Mid-town and West End                                7.9                6.4 
 
Rest South East                                      6.8               12.4 
 
Office Rest of UK                                   21.3                6.8 
 
Offices sub-total                                   36.0               28.8 
 
South Eastern                                       12.5               18.5 
 
Industrial Rest of UK                               19.2               10.2 
 
Industrial sub-total                                31.7               28.7 
 
South East                                           1.1                5.8 
 
Rest of UK                                          11.8                5.3 
 
Shopping centres                                     0.0                4.6 
 
Retail warehouse                                    12.5               15.7 
 
Retail sub-total                                    25.4               31.4 
 
Others                                               6.8               11.3 
 
Other sub-total                                      6.8               11.3 
 
 
 
                                         Weighting (% of portfolio) 
 
Regional weightings by value                         SREIT        Benchmark 
 
Central London[3]                                      7.9             12.6 
 
South East excluding Central                          22.2             40.4 
London 
 
Rest of South                                          7.3             16.3 
 
Midlands and Wales                                    29.7             13.7 
 
North and Scotland                                    32.9             17.1 
 
The top ten properties comprise 59% of the portfolio value: 
 
Top ten properties                                   Value (GBPm)        (% of 
                                                                  portfolio) 
 
1   Manchester, City Tower (25% share)                     42.7          9.3 
 
2   Milton Keynes, Stacey Bushes Industrial                37.5          8.1 
    Estate 
 
3   London, Store Street, Bloomsbury (50%                  36.5          7.9 
    share) 
 
4   Leeds, Millshaw Industrial Estate                      31.6          6.9 
 
5   Bedford, St. John's Retail Park                        30.0          6.5 
 
6   Leeds, Arndale Centre                                  29.0          6.3 
 
7   Uxbridge, 106 Oxford Road                              18.4          4.0 
 
8   Norwich, Union Park Industrial Estate                  17.9          3.9 
 
9   Acton, Allied Way Industrial Estate                    17.2          3.7 
 
10  Salisbury, Churchill Way West                          13.0          2.8 
 
    Total as at 31 March 2019                             273.5         59.4 
 
The top ten tenants represent 27% of the portfolio as a percentage of annual 
rent: 
 
Top ten tenants                                 Rent p.a. (GBP000)       (% of 
                                                                  portfolio) 
 
1    University of Law Limited                             1,583         5.7 
 
2    Buckinghamshire New University                        1,152         4.2 
 
3    Recticel Limited                                        731         2.6 
 
4    Sportsdirect.com Retail Limited                         722         2.6 
 
5    The Secretary of State                                  715         2.5 
 
6    Booker Limited                                          700         2.5 
 
7    Matalan Retail Limited                                  676         2.4 
 
8    TJX UK Limited T/A Homesense                            505         1.8 
 
9    Cine UK Limited                                         501         1.8 
 
10   Jupiter Hotels Limited T/A Mercure                      461         1.7 
 
     Total as at 31 March 2019                             7,746        27.9 
 
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 31 March 2019 with the portfolio ranked on the 9th 
percentile of the Benchmark since IPO in 2004: 
 
           SREIT total return p.a.    MSCI/IPD Benchmark        Relative p.a. (%) 
                     (%)             total return p.a. (%) 
 
Period        One  Three  Since IPO    One  Three Since IPO    One    Three Since IPO4 
             year  years        [4]   year  years         4   year    years 
 
Retail       -4.3    2.5        5.2   -3.2    1.6       4.1   -1.1      0.9        1.1 
 
Office        8.7    8.9        8.4    6.2    5.3       6.9    2.4      3.4        1.4 
 
Industrial   18.3   18.1        9.6   13.9   14.3       8.6    3.9      3.3        0.9 
 
Other         2.3    3.9        3.4    7.5    9.2       7.5   -4.8     -4.8       -3.8 
 
All           7.2    9.1        7.7    5.2    6.5       6.2    2.0      2.5        1.4 
sectors 
 
Transactions and asset management 
 
Milton Keynes, Stacey Bushes Industrial Estate 
 
Asset strategy 
 
The strategy over the year was to consolidate the higher rental tone and grow 
net income, acquire an adjoining ownership and secure planning consent for a 
vacant development site. 
 
Asset overview and performance 
 
317,000 sq ft multi-let industrial estate comprising 42 units in a good 
location west of Milton Keynes. As at 31 March 2019 the asset was valued at GBP 
37.5 million, reflecting a net initial income yield of 5.1% and a reversionary 
yield of 5.4%. During the year to 31 March 2019 the property delivered a 30.2% 
total return. 
 
Key activity 
 
-     Estate now fully let with recent lettings at GBP9 per sq ft leading to 
rental growth of 9% over the year. 
 
-     Acquisition of a vacant adjoining ownership for GBP776,000.  This was 
subsequently let at GBP80,000 per annum to generate a 10% return on cost. 
 
-     Planning in place for a new development of 14,800 sq ft across six units. 
The works have been tendered and are due to start on site shortly at quoting 
rents of GBP10 per sq ft. 
 
Leeds, Millshaw Industrial Estate 
 
Asset strategy 
 
The strategy over the year was to refurbish units to drive rental income higher 
and progress planning for higher value alternative uses given the prominent 
site frontage to the Leeds ring road. 
 
Asset overview and performance 
 
463,400 sq ft multi-let industrial estate comprising 27 units strategically 
located south of Leeds city centre close to the M62 and M621 motorways. As at 
31 March 2019 the asset was valued at GBP31.6 million reflecting a net initial 
income yield of 4.4% and a reversionary yield of 6.6%. During the year to 31 
March 2019 the property delivered an 8.4% total return. 
 
Key activity 
 
-     Agreement for lease exchanged with JD Sport Gyms, with planning received 
for change of use. Works on site with an expected completion date in early 
July. 
 
-     Refurbished various units and achieved a new record rent of GBP7.25 per sq 
ft. 
 
-     Opportunity to grow rents further due to limited supply of units in 
Leeds, particularly units above 20,000 sq ft. 
 
Brighton, Victory House 
 
Asset strategy 
 
The strategy over the year was to extend the occupational leases and capitalise 
on strong rental growth for prime Brighton offices. Once completed this 
provided the opportunity to sell the asset at a significant profit which 
exceeded future returns if it has been held in the portfolio. 
 
Asset overview and performance 
 
Victory House is a 84,523 sq ft office building located in an established 
location next to Brighton railway station. In June 2018 the lease to the 
largest tenant, BUPA Insurance, was extended to ten years at a new rent of GBP 
1.09 million, reflecting an uplift of 14%. BUPA received a 15 month rental 
incentive and the new lease included a minimum fixed uplift at year five 
equating to 2% per annum. The asset management added significant value and the 
potential to extract the premium price through a disposal. 
 
Key activity 
 
-     In March contracts were exchanged to sell the asset for GBP36.1 million 
which reflected a net initial yield, on expiry of the rent free period in 
September 2019, of 4.9%. The disposal completed on 30 April. 
 
-     The asset was a prime and low risk asset which generated an ungeared 
total return of 10.3% per annum since acquisition in 2005, compared with the 
MSCI Benchmark for the same period of 5.9% per annum. 
 
Bedford, St. John's Retail Park 
 
Asset strategy 
 
The strategy over the year was to improve retailer mix and to negotiate new 
longer leases in order to preserve the rental income and manage void risk. 
 
Asset overview and performance 
 
St. John's Retail Park comprises a 130,000 sq ft retail warehouse park 1.5 
miles from the town centre. As at 31 March 2019 the asset was valued at GBP30.0 
million reflecting a net initial income yield of 4.0% and a reversionary yield 
of 6.3%. During the year to 31 March 2019, the property delivered an -10.9% 
total return. This was a result of weak sentiment towards the sector and 
Homebase leaving the park. 
 
Key activity 
 
-     Homebase vacated a 36,214 sq ft unit as part of their CVA in December 
2018. Homebase were paying GBP353,000 per annum. 
 
-     Homebase's failure was anticipated and in late 2018 a conditional 
agreement for lease was exchanged with Lidl for a supermarket totalling 21,630 
sq ft. Lidl has agreed a 15 year lease at GBP335,000 per annum. Planning has been 
secured and works to refurbish and extend the former Homebase will commence 
shortly at a cost of approximately GBP3.7 million. 
 
-     A conditional agreement for lease has also been exchanged with Home 
Bargains for a new 14,500 sq ft store on a 15 year lease at GBP190,000.  This is 
subject to a separate planning application that is ongoing. 
 
-     When completed, this will remove the largest void in the portfolio 
equating to 2.1% of portfolio ERV. Furthermore, Lidl should attract additional 
tenant demand to the park. 
 
Responsible and Positive Impact Investment 
 
Corporate social responsibility is key to long-term future business success. A 
successful sustainable investment programme should deliver enhanced returns to 
investors, improved business performance to tenants and deliver tangible 
positive impacts to local communities, the environment and wider society. In 
2018, the Company's work has been recognised in the annual Global Real Estate 
Sustainability Benchmark ("GRESB") survey achieving a Green Star, and in the 
EPRA Best Practise Reporting achieving a Gold Award for the year end accounts. 
 
Schroder Real Estate is evolving its investment philosophy to incorporate 
"positive impact" investing at the heart of its management activities with 
improvements to its portfolios and reduction of fuel consumption. This is 
proactively taking action to improve social and environmental outcomes. We are 
still learning how to best improve the sustainability of many of the Company's 
assets but have already mapped the key impacts to the UN Sustainable 
Development Goals and are using these to design and implement a sustainability 
programmes across the Company's activities and asset base.  We will report on 
its progress with this impact programme in next year's Annual Report. This has 
been a step change and we expect real benefits in the future, positively 
impacting the type of work and jobs across the portfolio, improvements to the 
surrounding built environment and a reduction in our carbon footprint. More 
detail on this matter can be found in our Sustainability section on page 22 of 
this report. 
 
Finance 
 
The balance sheet has been actively managed during the year to capitalise on 
low interest rates and therefore increase net income. At the same time, loan 
terms have been renegotiated to extend the overall duration of debt facilities 
and increase operational flexibility. There may be further emphasis in this 
area during the next financial year. 
 
The refinancing of the GBP25.9 million portion of the Canada Life term loan, 
previously due to expire in April 2023, was extended at current market rates to 
be coterminous with the balance of the existing loan. This reduced the total 
interest cost by GBP435,000 per annum and resulted in a blended interest rate on 
the facility of 4.43%. The refinancing incurred a negotiated break cost of GBP 
2.63 million. 
 
In addition, the total capacity of the Royal Bank of Scotland ('RBS') revolving 
credit facility ('RCF') increased from GBP20.5 million to GBP52.5 million and the 
loan term to July 2023. The RCF is an efficient and flexible funding source due 
to a margin of 1.6% and the ability to be repaid and redrawn as often as 
required. 
 
This activity reduced the overall cost of debt from 4.4% to 3.9%, assuming the 
RCF is fully drawn, and increased the average weighted debt term. The net loan 
to value at the year end was 22%. The tables below show the position at the 
year end. 
 
Lender   Loan Maturity  Interest Loan to      LTV Interest      ICR    Forward     Forward 
         (GBPm)           rate (%)   Value    ratio    cover    ratio    looking looking ICR 
                                 ('LTV') covenant    ratio covenant  ICR ratio       ratio 
                                   ratio     (%)5   (%)[6]     (%)6     (%)[7]    covenant 
                                 [5] (%)                                              (%)7 
 
Canada  129.6 15/04/     4.43[8]  36.7         65      380      185        314         185 
Life          2028 
 
RBS      29.0 03/07/    2.42[10]  27.4     65[11]      512      185        808         250 
          [9] 2023 
 
 
Outlook 
 
The economy and real estate markets have entered a phase of slowing growth and 
consolidation. Successful execution of our strategy over the year has supported 
a dividend increase in contrast to the real estate market slowdown. It has also 
further enhanced our flexibility and balance sheet strength against the 
backdrop of a more uncertain market environment. 
 
Recent disposals have realised profits at the same time as the market is 
experiencing wider price falls. Whilst these sales will lead to a period of 
reduced rental income, the increased cash levels and undrawn debt facility 
provides the capacity and operational flexibility to fully fund dividends. 
This also places the Company in a strong and sustainable position to take 
advantage to reinvest opportunistically following a market correction. 
 
Reinvestment will target higher income returns than the sales and this will 
increase net operating income. In the meantime, the Company is positioned to 
explore alternative refinancing strategies which may further increase net 
operating income. For this reason we believe the Company is well placed to 
deliver on its long-term objectives and to pursue a progressive dividend 
policy. 
 
Duncan Owen 
Schroder Real Estate Investment Management Limited 
20 May 2019 
 
Sustainability Report 
 
The Board and the Investment Manager believe that corporate social 
responsibility is key to long term future business success and that a 
successful, sustainable investment programme should deliver enhanced returns to 
investors, improved business performance to tenants and tangible positive 
impacts to local communities, the environment and wider society. 
 
The importance of environmental and social changes are investment factors that 
the Board and Investment Manager must understand to protect Company assets from 
depreciation and optimise the portfolio's value potential. 
 
Offering occupiers resource-efficient and flexible space is critical to ensure 
our investments are fit for purpose and sustain their value over the long 
term.  As a landlord, we have the opportunity to help reduce running costs for 
our occupiers, increase employee productivity and wellbeing, and contribute to 
the prosperity of a location through building design and public realm. 
Ignoring these issues when considering asset management and investments would 
risk the erosion of income and value as well as missing opportunities to 
enhance investment returns. 
 
Through its construction, use and demolition, the built environment accounts 
for more than one-third of global energy use and is the single largest source 
of greenhouse gas emissions in many countries. 
 
The industry's potential to cost-efficiently reduce emissions and the 
consumption of depleting resources, combined with the political imperative to 
tackle issues such as climate change, means the property sector will remain a 
prime target for policy action.  This presents new challenges and opportunities 
for the real estate industry with profound implications for both owners and 
occupiers. 
 
The Investment Manager is evolving its investment philosophy to incorporate 
"positive impact" investing, this aims to proactively take action to improve 
social and environment outcomes.  The Investment Manager has mapped key impacts 
to the UN Sustainable Development Goals and uses these to focus sustainability 
programmes for funds and assets. The Investment Manager will report on its 
progress with this impact programme in next year's Annual Report. 
 
A good investment strategy must incorporate environmental, social and 
governance factors alongside traditional economic considerations.  The Board 
and the Investment Manager believe a complete approach should be rewarded by 
improved investment decisions and performance. 
 
Further information on Schroder Real Estate's Sustainable Investment approach 
and its 2019 Sustainability Policy can be found at https://www.schroders.com/en 
/uk/realestate/products--services/sustainability/. 
 
Environmental Management System 
 
Schroder Real Estate, led by its Head of Sustainability and Impact Investment, 
and supported by sustainability and energy management consultancy Evora Global, 
operates an Environmental Management System ("EMS"). The EMS is aligned with 
the internationally recognised standard ISO 14001. The EMS provides the 
framework for how sustainability principles (environmental and social) are 
managed throughout all stages of its investment process including acquisition 
due diligence, asset management, property management provided by third parties, 
refurbishments and developments. Schroder Real Estate reviews its 
Sustainability Policy annually which is approved by the Investment Committee. 
Key aspects of the Policy, performance against 2018's objectives and targets, 
as well as objectives and targets for the year ahead, are set out below. 
 
Property Manager Sustainability Requirements 
 
Property managers play an integral role in supporting the sustainability 
program. Schroder Real Estate has established a set of Sustainability 
Requirements for Property Managers to adhere to in the course of delivering 
their property management services.  This includes a set of key performance 
indicators to help improve the property managers sustainability related 
services to the Company and which are assessed on a six-monthly and annual 
basis. Schroder Real Estate is pleased to report that MJ Mapp, its principal 
property manager, performed well against the targets set for both the 
six-monthly and annual indicators. 
 
Objectives and Targets 
 
Energy and Greenhouse Gas Emissions 
 
Active management of energy consumption and greenhouse gas emissions is a key 
component of responsible asset and building management. Improving energy 
efficiency and reducing energy consumption will benefit tenants' occupational 
costs and may support tenant retention and attraction, in addition to 
mitigating environmental impacts and helping to futureproof the portfolio 
against future legislation. Therefore, where the landlord retains operational 
control responsibilities, Schroder Real Estate monitors the Company's energy 
usage and efficiency on a quarterly basis. 
 
In the first quarter of 2016, Schroder Real Estate introduced an energy 
reduction target of 6% across all UK managed assets over a two-year period to 
March 2018 from a baseline of 2015/16. The programme period concluded in March 
2018 achieving an 8.1% reduction, which equates to a 3.8 million kWh saving, 
930 tonnes CO2-equivalent avoided and a cost saving of over GBP300,000. The 
target related to the like for like portfolio only (i.e. excluding assets 
purchased, sold or under refurbishment during the two years reported) and 
energy consumption data was adjusted for the impacts of weather and occupancy 
using recognised techniques. SREIT assets made up c.7% of Schroder Real 
Estate's UK portfolio energy consumption for this programme and contributed 
c.0.5% of the savings achieved. 
 
Schroder Real Estate continues to focus on energy and greenhouse gas emissions 
performance and the target has been extended to achieve a 18% reduction in 
landlord-controlled energy consumption by 2020/21 (2015/16 baseline). This is 
accompanied by a target of 32% reduction in landlord-controlled greenhouse gas 
emissions by 2020/21 (2015/16 baseline); this target is inclusive of 
decarbonisation of the UK electricity grid over recent years. 
 
In support of achieving these targets and improving the efficiency of the 
portfolio, Schroder Real Estate has continued to work with sustainability 
consultants Evora Global and property manager MJ Mapp to identify and deliver 
energy and greenhouse gas emissions reductions on a cost-effective basis. The 
programme has involved reviewing all managed assets within the Company and 
identifying and implementing improvement initiatives, where viable. 
 
Schroder Real Estate can report for the 2018 calendar year, for the managed 
assets held within the Company, an energy reduction for landlord procured 
energy of 1% on a like-for-like basis.  Energy improvement initiatives as well 
as a milder winter contributed to this result. For detailed energy performance 
data covering the reporting period and the prior year, please see the EPRA 
Sustainability Reporting Performance Measures. 
 
Energy Performance Certificates ("EPCs") for the portfolio are regularly 
reviewed for alignment with the 2015 Minimum Energy Efficiency Standards 
(England and Wales) legislation. Schroder Real Estate is actively managing the 
potential risk of this legislation to the portfolio. This legislation brought 
in a minimum EPC standard of "E" for new leases and renewals for non-domestic 
buildings from 1 April 2018; this minimum standard applies to all leases from 1 
April 2023.  The EPC profile for the portfolio is set out within the EPRA 
Sustainability Reporting Performance Measures. 
 
Water 
 
Fresh water is a finite resource of increasing importance for the environment 
and society and reductions in consumption can deliver operational cost 
efficiencies. Schroder Real Estate monitors water consumption where the 
landlord has supply responsibilities and encourages active management of 
asset-level consumption. Where the Company had such responsibilities, a 7% 
reduction in like for like water consumption is reported for the calendar year 
2018 compared to calendar year 2017. This reduction is due to a number of 
factors across the sectors as explained in the EPRA Sustainability Reporting 
Performance Measures. 
 
Waste 
 
Effective waste management decreases pollution and resource consumption, as 
well as improving operational efficiency and associated costs. To this end, 
waste should be minimised and disposal should be as sustainable as possible. 
Schroder Real Estate therefore has set an objective to send zero waste direct 
to landfill and to achieve optimal recycling. During 2018 Schroder Real Estate 
sent zero waste direct to landfill. 
 
Refurbishments and Green Building Certifications 
 
Schroder Real Estate seeks to deliver developments and refurbishments to 
sustainable standards and deliver good performance against building 
certifications, including EPCs and BREEAM (the Building Research Establishment 
Environmental Assessment Methodology: an environmental assessment method and 
rating system for buildings).  Standards required are set for each project in 
context for the asset and Schroder Real Estate's guiding principles for 
projects of minimum D rated EPCs and BREEAM Very Good. 
 
Health Wellbeing and Productivity 
 
The real estate industry is beginning to gain a new perspective on the 
importance of the built environment on human health, wellbeing and 
productivity.  A number of schemes have emerged which seek to identify the 
impacts of spaces and places on people and provide new ways of certifying 
buildings. Case studies demonstrate the benefit of reflecting wellbeing in good 
design.  Schroder Real Estate is working to embed this aspect into its 
investment process, especially in relation to refurbishments and developments. 
 
Stakeholder Engagement and Community 
 
Schroder Real Estate seeks active engagement with tenants to ensure a good 
occupational experience to help retain and attract tenants. As the day-to-day 
relationship is with the property manager, the Property Manager Sustainability 
Requirements include a key performance indicator on tenant engagement. 
 
Schroder Real Estate believes in the importance of understanding a building's 
relationship with the community and its contribution to the well-being of 
society. Positively impacting on local communities helps create successful 
places that foster community relationships, contribute to local prosperity, 
attract building users and ultimately, lead to better, more resilient 
investments.  Schroder Real Estate looks to understand and develop the 
community relationship to ensure investments provide sustainable social 
solutions for the long term. 
 
Compliance with Legislation 
 
Carbon Reduction Commitment 
 
The Company's portfolio did not require registration for Phase II of the CRC 
Scheme and the purchase of allowances. It was announced in the March 2016 
Budget that the CRC Scheme will not continue beyond Phase II. 
 
Energy Savings Opportunity Scheme 
 
The Company did not qualify for participation in the 2015 Phase 1 of the Energy 
Savings Opportunity Scheme. 
 
Mandatory Greenhouse Gas Emissions Reporting 
 
The Company is not incorporated in the UK and therefore does not fall within 
the requirements for mandatory reporting of greenhouse gas emissions for UK 
quoted companies, which came into effect from 1 October 2013. However, 
greenhouse gas emissions are reviewed annually, and the Company includes a 
report on a voluntary basis (as recommended by DEFRA guidance) within this 
financial year report.  The Company's report on greenhouse gas emissions can be 
found in the EPRA Sustainability Reporting Performance Measures report. 
 
The Board and its advisors will continue to monitor requirements and guidance 
in relation to managing and reporting environmental matters and developments in 
legislation. 
 
Industry Initiatives 
 
EPRA Sustainability Reporting Performance Measures 
 
The Company Report includes environmental performance indicator data for the 
portfolio. The disclosures are aligned with EPRA Best Practices Recommendations 
on Sustainability Reporting 2017 and are included in the Company EPRA 
Performance Measures report. 
 
Global Real Estate Sustainability Benchmark 
 
The Company participated in the annual Global Real Estate Sustainability 
Benchmark ("GRESB") survey in 2018 achieving a Green Star.  GRESB is the 
dominant global standard for assessing Environmental, Social and Governance 
performance for real estate funds and companies. 
 
Schroder Real Estate intends to participate in the survey for the Company in 
2019 again with the objective of achieving a Green Star rating; this rating is 
achieved where scores for the two dimensions of Management and Policy and 
Implementation and Measurement are at least 50 out of 100 points. 
 
Industry Participation 
 
Schroder Real Estate is a member of a number of industry bodies including the 
European Public Real Estate Association (EPRA), INREV (European Association for 
Investors in Non-Listed Real Estate Vehicles), British Council for Offices and 
the British Property Federation.  It was a founding member of the UK Green 
Building Council in 2007 and in 2017 became a member of the Better Buildings 
Partnership and a Fund Manager Member of GRESB. 
 
Employee Policies and Corporate Responsibility 
 
Employees 
 
The Company is an externally managed real estate investment trust and has no 
direct employees.  Schroder Real Estate is part of Schroders PLC which has 
responsibility for the employees that support the Company.  Schroders believes 
diversity of thought and an inclusive workplace are key to creating a positive 
environment for their people. Schroder Real Estate's real estate team has a 
sustainability objective within its annual objectives. 
 
Further information on Schroders' principles in relation to people including 
diversity, gender pay gap, values, employee satisfaction survey, wellbeing and 
retention can be found from page 69 of Schroders Annual Report and Accounts 
2018. 
 
https://www.schroders.com/en/sysglobalassets/digital/global/annual-report/ 
documents/annual-report-full.pdf. 
 
Corporate Responsibility 
 
Schroders' commitment to corporate responsibility is to ensure that its 
commitment to act responsibly, support clients, deliver value to shareholders 
and make a wider contribution to society is embedded across its business in all 
that it does. 
 
Full information on Schroders Corporate Responsibility approach including its 
economic contribution, environmental impacts and community involvement, can be 
found at 
 
http://www.schroders.com/en/about-us/corporate-responsibility/. 
 
Slavery and Human Trafficking Statement 
 
The Company is not required to produce a statement on slavery and human 
trafficking pursuant to the Modern Slavery Act 2015 as it does not satisfy all 
the relevant triggers under that Act that required such a statement. 
 
Schroder Real Estate, the Investment Manager to the Company, is part of 
Schroders PLC and whose statement on Slavery and Human Trafficking has been 
published in accordance with the Modern Slavery Act 2015 (the 'Act'). It sets 
out the steps that Schroders PLC and other relevant group companies 
('Schroders' or the 'Group') have taken during 2018 and will be taking in 2019 
to prevent slavery and human trafficking from taking place in its supply chains 
or any part of its business. Schroder Real Estate is part of the Schroders 
Group. 
 
Schroders' statement can be found at http://www.schroders.com/en/about-us/ 
corporate-responsibility/slavery-and-human-trafficking-statement/ 
 
Business Model 
 
Company's business 
 
The Company is a real estate investment company with a premium listing on the 
Official List of the UK Listing Authority and is traded on the London Stock 
Exchange's main market for listed securities.  On 1 May 2015, the Company 
converted to a Real Estate Investment Trust ('REIT') which means that it is 
able to benefit from exemptions from UK tax on profits and gains in respect of 
certain qualifying property rental business activities.  The Company continues 
to be an authorised closed-ended investment scheme registered in Guernsey. 
 
The Board 
 
The Board of Directors is responsible for the overall stewardship of the 
Company, including investment and dividend policies, corporate strategy, 
gearing, corporate governance and risk management. 
 
The Company has no executive Directors or employees. 
 
Investment objective 
 
The investment objective of the Company is to provide shareholders with an 
attractive level of income together with the potential for income and capital 
growth from owning and actively managing a diversified portfolio of real 
estate. 
 
The portfolio is principally invested in the three main UK commercial real 
estate sectors of office, industrial and retail, and may also invest in other 
sectors including, but not limited to, residential, leisure, healthcare and 
student accommodation. Over the real estate market cycle the portfolio aims to 
generate an above average income return with a diverse spread of lease 
expiries. 
 
Relatively low levels of debt are used to enhance returns for shareholders with 
the level of debt dependent on the real estate cycle and the outlook for future 
returns. 
 
Investment strategy 
 
The current investment strategy is to grow income and enhance shareholder 
returns through selective acquisitions, pro-active asset management and selling 
lower yielding properties on completion of the asset business plan.  The 
issuance of new shares will also be considered if this 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. 
 
The Board has delegated investment management and accounting services to the 
Investment Manager with the aim of helping the Company to achieve its 
investment objective and strategy. Details of the Investment Manager's 
investment approach, along with other factors that have affected performance 
during the year, are set out in the Investment Manager's Report. 
 
Diversification and asset allocation 
 
The Board believes that in order to maximise the stability of the Group's 
income, the optimal strategy for the Group is to invest in a portfolio of 
assets diversified by location, sector, asset size and tenant exposure with low 
vacancy rates and creditworthy tenants.  The value of any individual asset at 
the date of its acquisition may not exceed 15% of gross assets and the 
proportion of rental income deriving from a single tenant may not exceed 10%. 
From time to time the Board may also impose limits on sector, location and 
tenant types together with other activity such as development. 
 
The Company's portfolio will be invested and managed in accordance with the 
Listing Rules of the Financial Conduct Authority ('Listing Rules' and 'FCA' 
respectively) taking into account the Company's investment objectives, policies 
and restrictions. 
 
Borrowings 
 
The Board has established a gearing guideline for the Investment Manager, which 
seeks to limit on-balance-sheet debt, net of cash, to 35% of on-balance-sheet 
assets while recognising that this may be exceeded in the short term from time 
to time. It should be noted that the Company's Articles limit borrowings to 65% 
of the Group's gross assets, calculated as at the time of borrowing.  The Board 
keeps this guideline under review and the Directors may require the Investment 
Manager to manage the Group's assets with the objective of bringing borrowings 
within the appropriate limit while taking due account of the interests of 
shareholders. Accordingly, corrective measures may not have to be taken 
immediately if this would be detrimental to shareholder interests. 
 
Interest rate exposure 
 
It is the Board's policy to minimise interest rate risk, either by ensuring 
that borrowings are on a fixed rate basis, or through the use of interest rate 
swaps/derivatives used solely for hedging purposes. 
 
Investment restrictions 
 
As the Company is a closed-ended investment fund for the purposes of the 
Listing Rules, the Group will adhere to the Listing Rules applicable to 
closed-ended investment funds.  The Company and, where relevant, its 
subsidiaries will observe the following restrictions applicable to closed-ended 
investment funds in compliance with the current Listing Rules: 
 
-     Neither the Company nor any subsidiary will conduct a trading activity 
which is significant in the context of the Group as a whole and the Group will 
not invest in other listed investment companies; and 
 
-     Where amendments are made to the Listing Rules, the restrictions applying 
to the Company will be amended so as to reflect the new Listing Rules 
 
In addition, the Company will ensure compliance with the UK REIT regime 
requirements. 
 
Performance 
 
The Board uses principal financial Key Performance Indicators ('KPIs') to 
monitor and assess the performance of the Company being the net asset value 
('NAV') total return, the performance of the Company's underlying property 
portfolio relative to its MSCI/IPD Benchmark Index and the share price: 
 
1.    NAV total return 
 
For the year to 31 March 2019 the Company delivered a NAV total return of 4.5% 
(10.5% for the year to 31 March 2018). 
 
2.    Underlying property portfolio performance relative to peer group 
Benchmark 
 
The performance of the Company's property portfolio is measured against a 
specific Benchmark defined as the MSCI (formerly Investment Property Databank) 
Quarterly Version of Balanced Monthly Index Funds (the 'Benchmark'). As at 31 
March 2019 the Benchmark Index comprised 42 member funds. 
 
Property portfolio performance 
 
Total return for 12 months to 31 March   Total return for 12 months to 31 March 
2019                                     2018 
 
     SREIT (%)       MSCI/IPD Benchmark       SREIT (%)        MSCI/IPD Benchmark 
                            (%)                                       (%) 
 
        7.2                 5.2                  11.8                 10.7 
 
The analysis above prepared by MSCI and takes account of all direct property 
related transaction costs. 
 
3.    Share price performance 
 
The Board monitors the level of the share price compared to the NAV. As at 31 
March 2019, the share price was at a 19.4% discount to NAV of 68.7 pps. Where 
appropriate on investment grounds, the Company may from time to time repurchase 
its own shares, but the Board recognises that movements in the share price 
premium or discount are driven by numerous factors, including investment 
performance, gearing and market sentiment. Accordingly we focus our efforts 
principally on addressing sources of risk and return as the most effective way 
of producing long term value for shareholders. 
 
Risk and Uncertainties 
 
The Board is responsible for the Company's system of risk management and 
internal control and for reviewing its effectiveness. The Board has carried out 
a robust assessment of the principal risks facing the Company including those 
that would threaten its business model, future performance, solvency or 
liquidity. A framework of internal controls has been designed and established 
to monitor and manage those risks. This internal control framework provides a 
system to enable the Directors to mitigate these risks as far as possible, 
which assists in determining the nature and extent of the significant risks the 
Board is willing to take in achieving its strategic objectives. 
 
Although the Board believes that it has a robust framework of internal controls 
in place this can provide only reasonable, and not absolute, assurance against 
material financial misstatement or loss and is designed to manage, not 
eliminate, risk. 
 
A summary of the principal risks and uncertainties faced by the Company, which 
have remained unchanged throughout the year ended 31 March 2019, and actions 
taken by the Board to manage and mitigate these risks and uncertainties, are 
set out below. 
 
              Key risks                            Mitigation of risk 
 
Investment policy and strategy 
 
An inappropriate investment strategy, The Board seeks to mitigate these risks by: 
or failure to implement the strategy, -  Diversification of its property portfolio 
could lead to underperformance and    through its investment restrictions and 
the share price being at a larger     guidelines which are monitored and reported 
discount, or smaller premium, to NAV  on by the Investment Manager. 
than the property market generally.   -  Determining borrowing policy and the 
This under performance could be       Investment Manager operates within borrowing 
caused by incorrect sector and        restrictions and guidelines. 
geographic weightings or a loss of    -  Receiving from the Investment Manager 
income through tenant failure, both   timely and accurate management information 
of which could lead to a fall in the  including performance data, attribution 
value of the underlying portfolio.    analysis, property level business plans and 
This fall in values would be          financial projections. 
amplified by the Company's external   -  Monitoring the implementation and results 
borrowings.                           of the investment process with the 
                                      Investment Manager with a separate meeting 
                                      devoted to strategy each year. 
 
Investment management 
 
The Investment Manager's investment   Review of the Investment Manager's 
strategy, if inappropriate, may       compliance with the agreed investment 
result in the Company underperforming restrictions, investment performance and 
the market and/or peer group          risk against investment objectives and 
companies, leading to the Company and strategy; relative performance; the 
its objectives becoming unattractive  portfolio's risk profile; and appropriate 
to investors.                         strategies employed to mitigate any negative 
                                      impact of substantial changes in markets, 
                                      including any potential disruption to 
                                      capital markets. 
 
Economic and property market risk 
 
The performance of the Company could  The Board considers economic conditions and 
be affected by economic and property  the uncertainty around political events when 
market risk.  In the wider economy    making investment decisions. The Board 
this could include inflation or       mitigates property market risk through the 
deflation, economic recessions,       review of the Group's strategy on a regular 
movements in interest rates, Brexit   basis and discussions are held to ensure the 
impact or other external shocks. The  strategy is still appropriate or if needs 
performance of the underlying         updating. 
property portfolio could also be 
affected by structural or cyclical 
factors impacting particular sectors 
or regions of the property market. 
 
Gearing and leverage 
 
The Company utilises credit           Gearing is monitored and strict restrictions 
facilities. These arrangements        on borrowings imposed. 
increase the funds available for 
investment through borrowing. While 
this has the potential to enhance 
investment returns in rising markets, 
in falling markets the impact could 
be detrimental to performance. 
 
Accounting, legal and regulatory 
 
The risk that the NAV and financial   The Investment Manager has robust processes 
statements could be inaccurate.       in place to ensure that accurate accounting 
                                      records are maintained and that evidence to 
                                      support the financial statements is 
                                      available to the Board and the auditors. The 
                                      Investment Manager operates established 
                                      property accounting systems and has 
                                      procedures in place to ensure that the 
                                      quarterly NAV and Gross Asset Value are 
                                      calculated accurately. The Board has 
                                      appointed the Investment Manager as 
                                      Alternative Investment Fund Manager (AIFM) 
                                      in accordance with the Alternative 
                                      Investment Fund Managers Directive (AIFMD). 
                                      The quarterly and annual NAV has numerous 
                                      levels of reviews including by the Board. 
                                      Additional support is produced by the fund 
                                      accountants to ensure financial data is 
                                      complete and accurate. 
                                      An internal controls review is performed by 
                                      EY in accordance with ISAE 3402 annually to 
                                      provide assurance on Schroders' service 
                                      organisations' control procedures and an 
                                      external audit is completed to provide an 
                                      opinion on the financial statements which 
                                      have been reviewed by the board of 
                                      directors. 
                                      The Administrator monitors legal 
                                      requirements to ensure that adequate 
                                      procedures and reminders are in place to 
                                      meet the Company's legal requirements and 
                                      obligations. The Investment Manager 
                                      undertakes full legal due diligence with 
                                      advisors when transacting and managing the 
                                      Company's assets. All contracts entered into 
                                      by the Company are reviewed by the Company's 
                                      legal and other advisors. 
                                      Processes are in place to ensure that the 
                                      Company complies with the conditions 
                                      applicable to property investment companies 
                                      set out in the Listing Rules. The 
                                      Administrator attends all Board meetings to 
                                      be aware of all announcements that need to 
                                      be made and the Company's advisors are aware 
                                      of their obligations to advise the 
                                      Administrator and, where relevant, the Board 
                                      of any notifiable events. Finally, the Board 
                                      is satisfied that the Investment Manager and 
                                      Administrator have adequate procedures in 
                                      place to ensure continued compliance with 
                                      the regulatory requirements of the FCA and 
                                      the Guernsey Financial Services Commission. 
 
 
 
Valuation risk 
 
Property valuations are inherently    External valuers provide independent 
subjective and uncertain.             valuation of 
                                      all assets. 
                                      Members of the Audit Committee meet with the 
                                      external valuers to discuss the basis of 
                                      their valuations and their quality control 
                                      processes. 
 
Tax risk 
 
The Group is exposed to changes in    We regularly monitor proposed and actual 
the tax regime affecting the cost of  changes in tax legislation with the help of 
corporate tax, VAT, Stamp Duty and    Deloitte and through direct liaison with 
Stamp Duty Land Tax.                  HMRC, to understand and, if possible, 
                                      mitigate or benefit from their impact. This 
The UK's future exit from the EU      includes considering the impact of new UK 
creates uncertainty over the future   legislation in relation to the taxation of 
UK tax and regulatory environment.    non-resident companies investing in UK real 
                                      estate that is effective from 5 April 2019. 
The Group is exposed to potential tax 
penalties or loss of its REIT status  HMRC has designated the Group as having a 
by failing to comply with the REIT    low-risk tax status, and we hold regular 
legislation.                          meetings with them. We carry out detailed 
                                      planning ahead of any future regulatory and 
                                      tax changes using Deloitte as our tax 
                                      advisors. 
 
                                      The Group has internal monitoring procedures 
                                      in place to ensure that the appropriate REIT 
                                      rules and legislation are complied with. To 
                                      date, all REIT regulations have been 
                                      complied with, including projected tests. 
 
Service provider 
 
The Company has no employees and has  Service providers appointed subject to 
delegated certain functions to a      regular reviews and with clearly documented 
number of service providers. Failure  contractual arrangements detailing service 
of controls and poor performance of   expectations. 
any service provider could lead to    Regular reporting by key service providers 
disruption, reputational damage or    and monitoring of the quality of services 
loss.                                 provided. 
                                      Review of internal controls reports from key 
                                      service providers, including confirmation of 
                                      business continuity and cyber security 
                                      arrangements. 
 
Governance Report 
 
Board of Directors 
 
Lorraine Baldry (Chairman) 
Status: Independent Non Executive Director 
Date of appointment: 13 January 2014 
 
Aged 69, is Chair of Sellafield Ltd and Inventa Partners Ltd. Until recently 
Lorraine was Chair of London & Continental Railways, a Governor at The 
University of the Arts London and a Director of Thames Water Utilities 
Limited.  She was Chief Executive of Chesterton International plc and prior to 
that held various senior positions at Prudential Corporation, Morgan Stanley 
and Regus. She is also an Honorary Member of the Royal Institution of Chartered 
Surveyors and a Past President of the British Property Federation. 
 
Current remuneration: GBP50,000 per annum 
 
Material interests in any contract which is significant to the Company's 
business: None 
 
Graham Basham 
Status: Independent Non Executive Director 
Date of appointment: 11 September 2015 
 
Aged 61, is a director of a number of Investment and Fiduciary regulated 
companies in Guernsey.  He also sits on the boards of the SREIT subsidiaries, a 
position he has held for the last nine years.  He has 40 years' experience in 
fiduciary and fund work, most of these spent in several offshore locations.  He 
is Group partner and Head of Guernsey for the Active Group Ltd, holds a Trustee 
Diploma as an Associate of Chartered Institute of Banks and is a member of the 
Society of Trust & Estate Practitioners and Institute of Directors. 
 
Current remuneration: GBP30,000 per annum 
 
Material interests in any contract which is significant to the Company's 
business: Director of Computershare Services (Guernsey) Ltd who act as 
Registrar to the Fund 
 
Stephen Bligh (Chairman of the Audit Committee) 
Status: Independent Non Executive Director 
Date of appointment: 28 April 2015 
 
Aged 62, Stephen was previously with KPMG for 34 years, specialising in the 
audit of FTSE 350 companies in property and construction. He is a fellow of the 
Institute of Chartered Accountants in England & Wales and was previously a 
non-executive Board Member of the Department of Business, Innovation & Skills. 
 
Current remuneration: GBP35,000 per annum 
 
Material interests in any contract which is significant to the Company's 
business: None 
 
Alastair Hughes (Senior Independent Director) 
Status: Independent Non Executive Director 
Date of appointment: 26 April 2017 
 
Aged 53, Alastair Hughes has over 25 years of experience in real estate 
markets, is a non-executive director of British Land PLC and Tritax Big Box. 
He was previously the Managing Director of Jones Lang LaSalle (JLL) in the UK 
before becoming the CEO for Europe, Middle East and Africa and then most 
recently becoming the CEO for Asia Pacific.  Alastair is a Chartered Surveyor 
and sat on the Global Executive Board of JLL. 
 
Current remuneration: GBP35,000 per annum 
 
Material interests in any contract which is significant to the Company's 
business: None 
 
No Director has any entitlement to pensions and the company has not awarded any 
share options or long-term performance incentives to any of them. No element of 
Directors' remuneration is performance-related. There were no payments to 
Directors for loss of office. 
 
No Director has a service contract with the Company; however, each of the 
Directors has a letter of appointment with the Company. The Directors' letter 
of appointment, which set out the terms of their appointment, are available for 
inspection at the Company's registered office address during normal business 
hours and will be available for inspection at the AGM. 
 
Report of the Directors 
 
The Directors of the Company and its subsidiaries (together, the 'Group') 
present their report and the audited financial statements of the Group for the 
year ended 31 March 2019. The Company is incorporated in Guernsey, Channel 
Islands under The Companies (Guernsey) Law, 2008 ('Companies Law'). 
 
Results and dividends 
 
The results for the year under review are set out in the attached financial 
statements. 
 
During the year the Company has declared and paid the following interim 
dividends to its ordinary shareholders in accordance with the solvency test 
(contained in the Companies Law): 
 
Dividend For quarter      Date Paid                 Rate 
 
31 March 2018             31 May 2018               0.62 pence per share 
 
30 June 2018              31 August 2018            0.62 pence per share 
 
30 September 2018         5 December 2018           0.6355 pence per share 
 
31 December 2018          15 March 2019             0.65 pence per share 
 
Subject to the solvency test provided for in the Companies Law being satisfied, 
all dividends are declared and paid as interim dividends. The Directors do not 
therefore recommend a final dividend. A dividend for the quarter ended 31 March 
2019 of 0.65 pence per share ('pps') was declared on 10 May 2019 and will be 
paid on 
7 June 2019. 
 
The split of dividend paid between Property Income Distribution (PID) and 
Ordinary dividend for the year ending 31 March 2019 is 1.4 pps and 1.1255 pps 
respectively. 
 
Share capital 
 
As at 31 March 2019 and the date of this Report, the Company has 565,664,749 
(2018: 565,664,749) Ordinary Shares in issue of which 47,151,340 Ordinary 
Shares (representing 8.3% of the Company's total issued share capital) are held 
in treasury (2018: 47,151,340).  The total number of voting rights of the 
Company is 518,513,409 (2018: 518,513,409) and this figure may be used by 
shareholders as the denominator for the calculations by which they will 
determine if they are required to notify their interest in, or a change in 
their interest in the Company, under the Disclosure Guidance and Transparency 
Rules. 
 
Key services providers 
 
The Board has adopted an outsourced business model and has appointed the 
following key service providers: 
 
Investment Manager 
 
The Board reviews the Investment Manager's performance at its quarterly Board 
meetings.  In addition, the Board made its annual visit to the Investment 
Manager in May 2019 to review portfolio strategy and the Investment Manager's 
capabilities in more depth. Subsequently, the Directors formally discussed the 
performance of the Investment Manager at a private session. 
 
On the basis of this review, and the extensive selection process undertaken 
prior to appointing the Investment Manager, the Board remains satisfied that 
the Investment Manager has the appropriate capabilities required to support the 
Company, and believes that the continuing appointment of the Investment Manager 
under the terms of the current investment management agreement, further details 
are set out below, is in the interest of shareholders. 
 
The Investment Manager receives a fee of 1.1% per annum of the Company's NAV 
for providing investment management and accounting services.  The fee is 
payable monthly in arrears.  There is no performance fee. The investment 
management agreement can be terminated by either party on not less than nine 
months' written notice or on immediate notice in the event of certain breaches 
of its terms or the insolvency of 
either party. 
 
The Company has appointed the Investment Manager as the AIFM under the AIFMD. 
There is no additional fee paid to the Investment Manager for this service. 
 
Administration 
 
The Board appointed Northern Trust International Fund Administration Services 
(Guernsey) Limited as the administrator to the Company (the 'Administrator'). 
The Administrator is entitled to an annual fee equal 
to GBP120,000. 
 
Northern Trust (Guernsey) Limited has been appointed by the Board to provide 
depositary services, as required under the AIFMD at an annual fee of GBP40,000. 
 
Going concern and viability 
 
Going concern 
 
The Directors have examined significant areas of possible financial risk and 
have reviewed cash flow forecasts and compliance with the debt covenants, in 
particular the loan to value covenant and interest cover ratio.  They 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 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 financial statements. 
 
Brexit 
 
The Company's properties were independently valued as at 31 March 2019 and 
Brexit is only one of a number of market factors which the independent valuers 
will have taken into consideration in determining their valuations.  The 
valuations are not qualified with regard to Brexit.  The Company has over 300 
tenants with varying degrees of exposure to Brexit. The Board has considered 
reasonable sensitivities, including potential falls in property valuations 
arising from, inter alia, Brexit, in concluding that it will remain a going 
concern for a period of not less than twelve months from the date of the 
approval of the financial statements. 
 
Viability statement 
 
The 2016 UK Corporate Governance Code requires the Board to make a Viability 
Statement which considers 
the Company's current position and principal risks and uncertainties together 
with an assessment of 
future prospects. 
 
The Board conducted this review over a five year time horizon which is selected 
to match the period over which the Board monitors and reviews its financial 
performance and forecasting. The Investment Manager prepares five year total 
return forecasts for the UK commercial real estate market. The Investment 
Manager uses these forecasts as part of analysing acquisition opportunities as 
well as for its annual asset level business planning process.  At the annual 
Manager Visit the Board receives an overview of the asset level business plans 
which the Investment Manager uses to assess the performance of the underlying 
portfolio and therefore make investment decisions such as disposals and 
investing capital expenditure. The Company's principal borrowings are for a 
weighted duration of eight years and the average unexpired lease term, assuming 
all tenants vacate at the earliest opportunity, is eight years. 
 
The Board's assessment of viability considers the principal risks and 
uncertainties faced by the Company, as detailed on pages 30 to 32 of the 
Strategic Report, which could negatively impact its ability to deliver the 
investment objective, strategy, liquidity and solvency of the Company.  This 
includes considering a cash flow model prepared by the Manager that analyses 
the sustainability of the Company's cash flows, dividend cover, compliance with 
bank covenants, REIT compliance and general liquidity requirements for a five 
year period.  These metrics are subject to a sensitivity analysis which 
involves flexing a number of the main assumptions including macro economic 
scenarios, delivery of specific asset management initiatives, rental growth and 
void/reletting assumptions.  The Board also reviews assumptions regarding 
capital recycling and the Company's ability to refinance or extend financing 
facilities. 
 
Based on the assessment, the Board has a reasonable expectation that the 
Company will be able to continue in operation and meet its liabilities as they 
fall due over the five year period of its assessment. 
 
Anti-bribery policy 
 
The Company continues to be committed to carrying out its business fairly, 
honestly and openly. To this end, it has undertaken a risk assessment of its 
internal procedures and the policies of the Company's main service providers 
which aim to prevent bribery being committed by Directors and persons 
associated with the Company on the Company's behalf and to ensure compliance 
with the Bribery Act. 
 
Directors 
 
The Directors of the Company together with their beneficial interest in the 
Company's ordinary share capital as at the date of this report are given below: 
 
Director                    Number of ordinary shares         Percentage (%) 
 
Lorraine Baldry                         -                           - 
 
Graham Basham                           -                           - 
 
Stephen Bligh                        64,000                   Less than 0.1 
 
Alastair Hughes                      100,000                  Less than 0.1 
 
Substantial shareholdings 
 
As at 31 March 2019 the Directors were aware that the following shareholders 
each owned 3% or more of the issued Ordinary Shares of the Company. 
 
                                         Number of ordinary shares     Percentage (%) 
 
Investec Wealth & Investment (UK)                       86,735,642               16.7 
 
Schroders Investment Management                         86,591,878               16.7 
Limited 
 
Premier Fund Managers Ltd (UK)                          40,977,139                7.9 
 
Alliance Trust Savings Limited                          31,800,387                6.1 
 
BlackRock Inc                                           24,164,759                4.7 
 
Brooks Macdonald Asset Management                       21,161,675                4.1 
 
The Vanguard Group Inc                                  20,297,217                3.9 
 
Independent auditors 
 
KPMG Channel Islands Limited ('KPMG') have expressed their willingness to 
continue as auditors to the Company (the 'Auditors') and resolutions proposing 
their reappointment and authorising the Directors to determine their 
remuneration for the coming year will be put to shareholders at the annual 
general meeting ('AGM') of the Company. 
 
The Audit Committee's evaluation of the Auditors is described in the Report of 
the Audit Committee on page 47. 
 
Disclosure of information to auditors 
 
The Directors who held office at the date of approval of this Directors' Report 
confirm that, so far as they are each aware, there is no relevant audit 
information of which the Company's Auditors are unaware and each Director has 
taken all the steps that he/she ought to have taken as a Director to make 
himself/herself aware of any relevant audit information and to establish that 
the Company's Auditors are aware of that information. 
 
Status for taxation 
 
The Director of Income Tax in Guernsey has granted the Company exemption from 
Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 
1989 and the income of the Company may be distributed or accumulated without 
deduction of Guernsey Income Tax. Exemption under the above mentioned Ordinance 
entails the payment by the Company of an annual fee of GBP1,200. 
 
The Group's tax charge remains low because it has tax exempt status in the UK 
as a UK Real Estate Investment Trust (REIT). The Group has been a UK REIT since 
2015 and the Group's property income and gains are exempt from UK corporate 
taxes provided a number of conditions in relation to the Group's activities are 
met including, but not limited to, distributing at least 90% of the Group's UK 
tax exempt profit as property income distributions (PIDs). The residual 
business in the UK is subject to UK tax as normal. 
 
Shareholders who are in any doubt concerning the taxation implications of a 
REIT should consult their own tax advisors. 
 
Key information document 
 
A Key Information Document ("KID") for the Company was published in January 
2018, in accordance with the Packaged Retail and Insurance-Based Investment 
Products Regulations ("PRIIPS"). The calculation of figures and performance 
scenarios contained in the KID are prescribed by PRIIPS and have neither been 
set nor endorsed by the Board. In fact, the Board is of the opinion that PRIIPS 
is inconsistently applied by market participants and hence creates confusion 
amongst investors. 
 
AIFMD remuneration disclosures for Schroder Real Estate Investment Management 
Limited ('SREIM') for the year to 31 December 2018. 
 
Quantitative remuneration disclosures to be made in this Annual Report in 
accordance with FCA Handbook rule FUND3.3.5 are published on the following 
website http://www.schroders.com/en/investor-relations/ 
shareholders-and-governance/disclosures/remuneration-disclosures/ 
 
Statement of Directors' Responsibilities 
 
The Directors are responsible for preparing the Directors' Report and the 
financial statements in accordance with applicable law and regulations. 
 
Company law requires the Directors to prepare financial statements for each 
financial year.  Under that law they have elected to prepare the financial 
statements in accordance with International Financial Reporting Standards and 
applicable law. 
 
The financial statements are required by law to give a true and fair view of 
the state of affairs of the Company and of the profit or loss of the Company 
for that period. 
 
In preparing these financial statements, the Directors are required to: 
 
-     Select suitable accounting policies and then apply them consistently; 
 
-     Make judgements and estimates that are reasonable and prudent; 
 
-     State whether applicable accounting standards have been followed, subject 
to any material departures disclosed and explained in the financial statements; 
 
-     Assess the Company's ability to continue as a going concern, disclosing 
as applicable matters relating to going concern; and 
 
-     Use the going concern basis of preparation unless they intend to either 
liquidate the Company or cease operations or have no realistic alternative to 
do so. 
 
The Directors are responsible for keeping proper accounting records which 
disclose with reasonable accuracy at any time the financial position of the 
Company and enable them to ensure that the financial statements comply with the 
Companies Law.  They have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the Company and to prevent 
and detect fraud and other irregularities. 
 
Responsibility Statement of the Directors in respect of the Annual Report 
 
We confirm to the best of our knowledge: 
 
-     The financial statements, prepared in accordance with International 
Financial Reporting Standards, give a true and fair view of the assets, 
liabilities, financial position and profit of the Group and the undertakings 
included in the consolidation taken as a whole and comply with the Companies 
Law; 
 
-     The Strategic Report on pages 11 to 32 and Governance Report on pages 33 
to 38 include a fair review of the development and performance of the business 
and the position of the Group and the undertakings included in the 
consolidation taken as a whole, together with a description of the principal 
risks and uncertainties it faces: and 
 
-     The Annual Report and Consolidated Financial Statements, taken as a 
whole, is fair, balanced and understandable and provides the information 
necessary for shareholders to assess the Company's position and performance, 
business model and strategy 
 
Responsibility for electronic publication 
 
The Directors 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. 
 
Resolutions at 2019 Annual General Meeting 
 
THIS SECTION IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. 
 
If you are in any doubt about the contents of this section of the document or 
the action you should take, you are recommended to seek immediately your own 
personal financial advice from an appropriately qualified independent advisor 
authorised pursuant to the Financial Services and Markets Act 2000. 
 
If you have sold or otherwise transferred all your shares in the Company, 
please send this document (including the Notice of AGM) and the accompanying 
documents at once to the purchaser, transferee, or to the stockbroker, bank or 
other person through whom the sale or transfer was effected for onward 
transmission to the purchaser or transferee. However, such documents should not 
be distributed, forwarded or transmitted in or into the United States, Canada, 
Australia or Japan or into any other jurisdiction if to do so would constitute 
a violation of applicable laws and regulations in such other jurisdiction. 
 
The Notice of the Annual General Meeting of Shareholders is set out on pages 95 
to 97. The following paragraphs explain the resolutions to be put to the AGM. 
 
Ordinary resolutions 1-8 
 
Ordinary Resolutions 1-8 are being proposed to approve the ordinary business of 
the Company to: (i) consider and approve the consolidated Annual Report and the 
remuneration report of the Company for the year ended 31 March 2019; (ii) 
re-elect the Directors; and (iii) re-appoint the Auditors and to authorise the 
Directors to determine the Auditor's remuneration. 
 
Ordinary Resolution 9 Approval of the company's dividend policy 
 
The Company's dividend policy is to pay a sustainable level of quarterly 
dividends to shareholders (in arrears). It is intended that successful 
execution of the Company's strategy will enable a progressive dividend policy. 
 
The Company's objective and strategy, outlined in the Chairman's Statement and 
Investment Manager's Report, is to deliver sustainable net income growth in due 
course through active management of the underlying portfolio. Any future 
decision to increase the dividend will be determined by factors including 
whether it is sustainable over the long term, current and anticipated future 
market conditions, rental values and the potential impact of any future debt 
refinancing. 
 
As the Company is a REIT, the Board must also ensure that dividends are paid in 
accordance with the requirements of the UK REIT regime (pursuant to part 12 of 
the UK Corporation Tax Act 2010) in order to maintain the Company's REIT 
status. Shareholders should note that the dividend policy is not a profit 
forecast and dividends will only be paid to the extent permitted in accordance 
with the Companies Law and the UK 
REIT regime. 
 
The Board acknowledges that the dividend policy is fundamental to shareholders' 
income requirements as well as the Company's investment and financial planning. 
Therefore, in accordance with the principles of good corporate governance and 
best practice relating to the payment of interim dividends without the approval 
of a final dividend by a company's shareholders, a resolution to approve the 
Company's dividend policy will be proposed annually for approval. 
 
Special Resolution 1 Authority to repurchase shares 
 
The Company did not buy back any ordinary shares during the year ended 31 March 
2019. The Directors currently have authority to repurchase up to 14.99% of the 
Company's ordinary shares and will seek annual renewal of this authority from 
shareholders at the AGM. The Board monitors the level of the ordinary share 
price compared to the NAV per ordinary share. Where appropriate on investment 
grounds, the Company may from time to time repurchase its ordinary shares, but 
the Board recognises that movements in the ordinary share price, premium or 
discount, are driven by numerous factors, including investment performance, 
gearing and market sentiment. Accordingly, it focuses its efforts principally 
on addressing sources of risk and return as the most effective way of producing 
long term value for Shareholders. Any repurchase of ordinary shares will be 
made subject to Guernsey law and within any guidelines established from time to 
time by the Board. The making and timing of any repurchases will be at the 
absolute discretion of the Board, although the Board will have regard to the 
effects of any such repurchase on long-term shareholders in exercising its 
discretion. 
 
Purchases of ordinary shares will only be made through the market for cash at 
prices below the prevailing NAV of the ordinary shares (as last calculated) 
where the Directors believe such purchases will enhance shareholder value. Such 
purchases will also only be made in accordance with the Listing Rules and the 
Disclosure Guidance and Transparency Rules which provide that the maximum price 
to be paid for each ordinary share must not be more than the higher of: (i) 5 
per cent above the average mid-market value of the ordinary shares for the five 
business days before the purchase is made; and (ii) that stipulated by the 
regulatory technical standards adopted by the European Union pursuant to the 
Market Abuse Regulation from time to time. Any ordinary shares purchased under 
this authority may be cancelled or held in treasury. 
 
This authority will expire at the conclusion of the annual general meeting of 
the Company to be held in 2020 unless varied, revoked or renewed prior to such 
date by ordinary resolution of the Company. 
 
Special Resolution 2 Authority to disapply pre-emption rights 
 
The Directors require specific authority from shareholders before allotting new 
ordinary shares for cash (or selling shares out of treasury for cash) without 
first offering them to existing shareholders in proportion to their holdings. 
Special Resolution 2 empowers the Directors to allot new ordinary shares for 
cash or to sell ordinary shares held by the Company in treasury for cash, 
otherwise than to existing shareholders on a pro-rata basis, up to such number 
of ordinary shares as is equal to 10% of the ordinary shares in issue 
(including treasury shares) on the date the resolution is passed. No ordinary 
shares will be issued without pre-emption rights for cash (or sold out of 
treasury for cash) at a price less than the prevailing net asset value per 
ordinary share at the time of issue or sale from treasury. 
 
The Directors do not intend to allot or sell ordinary shares other than to take 
advantage of opportunities in the market as they arise and will only do so if 
they believe it to be advantageous to the Company's existing shareholders and 
when it would not result in any dilution of the net asset value per ordinary 
share (owing to the fact that no ordinary shares will be issued or sold out of 
treasury for a price less than the prevailing net asset value per ordinary 
share). 
 
This authority will expire on the earlier of the conclusion of the annual 
general meeting of the Company to be held in 2020 or on the expiry of 15 months 
from the passing of this Special Resolution 2. 
 
The Board considers that the resolutions to be proposed at the AGM are in the 
best interests of the Company's shareholders as a whole. The Board therefore 
recommends unanimously to shareholders that they vote in favour of each of the 
resolutions, as they intend to do in respect of their own beneficial holdings. 
 
Lorraine Baldry, Chairman 
20 May 2019 
 
Stephen Bligh, Director 
20 May 2019 
 
Corporate Governance 
 
The Directors are committed to maintaining high standards of corporate 
governance. Insofar as the Directors believe it to be appropriate and relevant 
to the Company, it is their intention that the Company should comply with best 
practice standards for the business carried on by the Company. 
 
The Guernsey Financial Services Commission (the 'GFSC')  states in the Finance 
Sector Code of Corporate Governance (the 'Code') that companies which report 
against the UK Corporate Governance Code or the Association of Investment 
Companies Code of Corporate Governance (the 'AIC Code') are deemed to meet the 
Code, and need take no further action. 
 
The Board has considered the principles and recommendations of the AIC Code. 
The AIC Code, addresses all the principles set out in the UK Corporate 
Governance Code, as well as setting out additional principles and 
recommendations on issues that are of specific relevance. 
 
The Board considers that reporting against the principles and recommendations 
of the AIC Code, which has been endorsed by the Financial Reporting Council 
('FRC'), will provide better information to shareholders. 
 
It is the Board's intention to continue to comply with the AIC Code. 
 
In July 2018, the FRC published a new version of the UK Corporate Governance 
Code (the "2018 UK Code"), prompting the AIC to publish a new version of the 
AIC code in 2019 (the "2019 AIC Code").  Both the 2018 UK Code and the 2019 AIC 
Code apply to accounting periods beginning on or after 1 January 2019, at which 
point they will supersede the previous versions of these documents. 
 
A copy of the AIC Code can be found at www.theaic.co.uk. 
 
Statement of compliance 
 
The Company has complied with the recommendations of the AIC Code and the 
relevant provisions of the UK Corporate Governance Code, except as set out 
below. 
 
The UK Corporate Governance Code includes provisions relating to: 
 
-     The role of the chief executive; 
 
-     Executive directors' remuneration; and 
 
-     Internal audit function. 
 
For the reasons set out above the Board considers that these provisions are not 
relevant to the Company, being an externally managed investment company. The 
provision in relation to the internal audit function is referred to in the 
Audit Committee report. The Company has therefore not reported further in 
respect of 
these provisions. 
 
Role of the Board 
 
The Board has determined that its role is to consider and determine the 
following principal matters which it considers are of strategic importance to 
the Company: 
 
-     The overall objectives of the Company, as described under the paragraph 
above headed 'Investment Policy and Strategy' and the strategy for fulfilling 
those objectives within an appropriate risk framework in light of market 
conditions prevailing from time to time. 
 
-     The capital structure of the Company, including consideration of an 
appropriate policy for the use of borrowings both for the Company and in any 
joint ventures in which the Company may invest from time to time. 
 
-     The appointment of the Investment Manager, Administrator and other 
appropriately skilled service providers and to monitor their effectiveness 
through regular reports and meetings; and 
 
-     The key elements of the Company's performance including NAV growth and 
the payment of dividends. 
 
Board decisions 
 
The Board makes decisions on, among other things, the principal matters set out 
under the paragraph above headed 'Role of the Board'. Issues associated with 
implementing the Company's strategy are generally considered by the Board to be 
non-strategic in nature and are delegated either to the Investment Manager or 
the Administrator, unless the Board considers there will be implementation 
matters significant enough to be of strategic importance to the Company and 
should be reserved to the Board. Generally these are defined as: 
 
-     Large property decisions affecting 10% or more of the Company's assets; 
 
-     Large property decisions affecting 5% or more of the Company's rental 
income; and 
 
-     Decisions affecting the Company's financial borrowings. 
 
Board performance evaluation 
 
As in prior years, the Board has undertaken a review of its performance. The 
review concluded that the Board was operating effectively and that the 
Directors had the breadth of skills required to fulfil their roles. 
 
Non-Executive Directors, rotation of Directors and Directors' tenure 
 
The UK Corporate Governance Code recommends that Directors should be appointed 
for a specified period. The Board has resolved in this instance that Directors' 
appointments need not comply with this requirement as all Directors are 
non-executive and their respective appointments can be terminated at any time 
without penalty. The Board has approved a policy that all Directors will stand 
for re-election annually. 
 
The Board considers that independence is not compromised by length of tenure 
and that it has the appropriate balance of skills, experience and length of 
service. 
 
The Board has determined that all the Directors are independent of the 
Investment Manager. Alastair Hughes is the Senior Independent Director. 
 
The appointment and replacement of Directors is governed by the Company's 
Articles, the Companies Law, related legislations and the Listing Rules. The 
Articles may only be amended by a special resolution of 
the shareholders. 
 
Board composition, changes and diversity 
 
The Board currently consists of four non-executive Directors. The Chairman is 
Lorraine Baldry. The biography of each of these Directors is set out on page 33 
of the report. The Board considers each of the Directors to be independent. 
 
The independence of each Director is considered on a continuing basis. The 
Board is satisfied that it is of sufficient size with an appropriate balance of 
skills and experience, independence and knowledge of both the Company and the 
wider investment company sector, to enable it to discharge its respective 
duties and responsibilities effectively and that no individual or group of 
individuals is, or has been, in a position to dominate decision making. 
Accordingly the Board approves the nomination for re-election of each of the 
Directors at the forthcoming annual general meeting. 
 
When a vacancy arises the board selects the best candidate taking into account 
the skills and experience required, while taking into consideration board 
diversity as part of a good corporate governance culture. 
 
Board committees 
 
The Board has delegated certain of its responsibilities to its Audit and 
Nomination Committees. Each of these committees has formal terms of reference 
established by the Board, which are available on the 
Company's website. 
 
Audit committee 
 
Details of the Audit Committee are set out in the Report of the Audit 
Committee. 
 
Nomination committee 
 
The role of the Nomination Committee, chaired by Lorraine Baldry, is to 
consider and make recommendations to the Board on its composition and makes 
recommendations to the Board with regards any adjustment that may be 
appropriate, including in connection with the renewable and re-election of the 
Board, so as to maintain an appropriate balance of skills, experience and 
diversity, including gender, and to ensure progressive refreshing of the Board. 
On individual appointments, the Nomination Committee leads the process and 
makes recommendations to the Board. 
 
Before the appointment of a new director, the Nomination Committee prepares a 
description of the role and capabilities required for a particular appointment. 
While the Nomination Committee is dedicated to selecting the best person for 
the role, it aims to promote diversification and the Board recognises the 
importance of diversity. The Board agrees that its members should possess a 
range of experience, knowledge, professional skills and personal qualities as 
well as the independence necessary to provide effective oversight of the 
affairs of the Company. 
 
Remuneration committee 
 
As all the Directors are non-executives, the Board has resolved that it is not 
necessary to have a Remuneration Committee. 
 
Board meetings and attendance 
 
The Board meets at least four times each year.  Additional meetings are also 
arranged as required and regular contact between Directors, the Investment 
Manager and the Administrator is maintained throughout the year. 
Representatives of the Investment Manager and Company Secretary attend each 
Board meeting and other advisors also attend when requested to do so by the 
Board. At least once a year the Board carries out a site visit to properties 
owned by the Company. 
 
Attendance records for the four quarterly Board meetings and two six-monthly 
Audit Committee meetings during the year under review are set out in the table 
below. 
 
                                                  Board          Audit committee 
 
Lorraine Baldry (Chairman)                         4/4                 2/2 
 
Alastair Hughes                                    4/4                 1/2 
 
Graham Basham                                      4/4                 1/2 
 
Stephen Bligh                                      4/4                 2/2 
 
No. of meetings during the year                     4                   2 
 
In addition to its regular quarterly meetings, the Board met on six other 
occasions during the year, attended by all or the majority of Directors. 
 
Information flows 
 
All Directors receive, in a timely manner, relevant management, regulatory and 
financial information and are provided, on a regular basis, with key 
information on the Company's policies, regulatory requirements and internal 
controls. The Board receives and considers reports regularly from the 
Investment Manager and other key advisors and ad hoc reports and information 
are supplied to the Board as required. 
 
Data protection and security 
 
The Board has reviewed its systems and controls in light of the implementation 
of the General Data Protection Regulation (EU Regulation 2016/679) (the "GDPR") 
to ensure that the Company is compliant with the requirements of the GDPR. As 
part of this process the Board has taken steps to update its contracts and 
policies accordingly and is comfortable that it meets its obligations as a 
controller of personal data.  The Board also requires its Investment Manager 
and Administrator to have robust information security and data protection 
environment in place. This is reviewed with the Investment Manager at the 
annual Manager visit day. All Board communication of a confidential nature is 
managed via a secure Board application. The Company's privacy notice is 
available on its webpage. 
 
Directors' and Officers' Liability Insurance 
 
During the year, the Company has maintained insurance cover for its Directors 
under a liability insurance policy. 
 
Relations with shareholders 
 
The Board believes that the maintenance of good relations with both 
institutional and retail shareholders is important for the long-term prospects 
of the Company. The Board receives feedback on the views of shareholders from 
its corporate broker, the Investment Manager and from the Chairman. Through 
this process the Board seeks to monitor the views of shareholders and to ensure 
an effective communication programme. 
 
The Board believes that the Annual General Meeting provides an appropriate 
forum for investors to communicate with the Board, and encourages 
participation. The Notice of Annual General Meeting on page 95 sets out the 
business of the Annual General Meeting to be held on 18 September 2019. 
 
Remuneration Report 
 
The Company's Articles currently limit the aggregate fees payable to the Board 
of Directors to a total of GBP250,000 per annum. Subject to this overall limit, 
it is the Board's policy to determine the level of Directors' fees having 
regard to the fees payable to non-executive directors in the industry 
generally, the role that individual Directors fulfil in respect of Board and 
Committee responsibilities, and time committed to the Company's affairs. 
 
Directors receive a base fee of GBP30,000 per annum, and the Chairman receives GBP 
50,000 per annum. The Chairman of the Audit Committee and the Senior 
Independent Director receive an additional fee of GBP5,000 respectively. The fees 
were reviewed by an external consultant during 2015, which led to the 
recommendation adopted and current level of fees taking effect from 1 October 
2015. 
 
No Director past or present has any entitlement to pensions, and the Company 
has not awarded any share options or long-term performance incentives to any of 
them. No element of Directors' remuneration is performance-related. There were 
no payments to former directors for loss of office. 
 
The Board believes that the principles of Section D of the UK Corporate 
Governance Code relating to remuneration do not apply to the Company, except as 
outlined above, as the Company has no executive Directors. 
 
No Director has a service contract with the Company, however, each of the 
Directors has a letter of appointment with the Company. The Directors' letters 
of appointment, which set out the terms of their appointment, are available for 
inspection at the Company's registered office address during normal business 
hours and will be available for inspection at the AGM. 
 
All Directors are appointed for an initial term covering the period from the 
date of their appointment until the first AGM thereafter, at which they are 
required to stand for re-election in accordance with the Articles.  When 
recommending whether an individual Director should seek re-election, the Board 
will take into account the provisions of the UK Corporate Governance Code, 
including the merits of refreshing the Board and its Committees. 
 
The Board has approved a policy that all Directors will stand for re-election 
annually. 
 
Performance 
 
The performance of the Company is described on page 27 in the Business Model 
Report. 
 
The following amounts were paid by the Company for services as non-executive 
Directors: 
 
Director                                       31 March 2019         31 March 2018 
 
Lorraine Baldry (Chairman)                            50,000                50,000 
 
Keith Goulborn*                                            -                35,000 
 
John Frederiksen*                                          -                 2,500 
 
Stephen Bligh#                                        35,000                35,000 
 
Graham Basham##                                       30,000                30,000 
 
Alastair Hughes                                       35,000                27,910 
 
 Total                                               150,000               180,410 
 
*     John Frederiksen retired on 25 April 2017. Keith Goulborn retired on 31 
March 2018. 
 
    Senior Independent Director 
 
#    Chairman of the Audit Committee. 
 
##  Graham Basham was a director on a majority of the subsidiary companies, for 
which an additional GBP21,000 was paid to his employer, Active Group, during the 
year for his service. Mr Basham owns 15% of Active Group. 
 
Information to be disclosed in accordance with Listing Rule 9.8.4R 
 
Listing Rule 9.8.4C requires the Company to include certain information in a 
single identifiable section of this annual report or a cross reference table 
indicating where the information required under Listing Rule 9.8.4 R is set 
out. 
 
The Directors confirm that there are no disclosures to be made in this regard. 
 
Lorraine Baldry, Chairman 
20 May 2019 
 
Stephen Bligh, Director 
20 May 2019 
 
Report of the Audit Committee 
 
Composition 
 
The Audit Committee is chaired by Stephen Bligh with Lorraine Baldry, Graham 
Basham and Alastair Hughes as members.  During the year, Lorraine Baldry 
stepped down from the Audit Committee based on guidance from the Financial 
Reporting Council's ('FRC') UK Corporate Governance Code.  The Board considers 
that Stephen Bligh's professional experience makes him suitably qualified to 
chair the Audit Committee. 
 
Responsibilities 
 
The Audit Committee ensures that the Company maintains the highest standards of 
integrity in financial reporting and internal control. This includes 
responsibility for reviewing the half-year and annual financial statements 
before their submission to the Board. In addition, the Audit Committee is 
specifically charged under its terms of reference to advise the Board, inter 
alia, on the terms and scope of the appointment of the Auditors, including 
their remuneration, independence, objectivity and reviewing with the Auditors 
the results and effectiveness of the audit and the interim review. 
 
Work of the Audit Committee 
 
The Audit Committee meets no less than twice a year and, if required, meetings 
are also attended by the Investment Manager, the Administrator and the Auditor. 
During the year under review, the Audit Committee met on two occasions to 
consider: 
 
-     The contents of the interim and annual financial statements and to 
consider whether, taken as a whole, they were fair, balanced and understandable 
and provided the information necessary for shareholders to assess the Company's 
performance, business model and strategy; 
 
-     The effectiveness of the Company's system of internal control; 
 
-     The external Auditor's terms of appointment, audit plan, half year review 
findings and year-end report; 
 
-     The management representation letter to the Auditors; 
 
-     The effectiveness of the audit process; 
 
-     The independence, effectiveness and objectivity of the external Auditor; 
 
-     The risk assessment of the Company; and 
 
-     Compliance with the UK REIT regime. 
 
Significant matters considered by the Audit Committee in relation to the 
financial statements 
 
Matter                          Action 
 
Property valuation 
Property valuation is central   The Audit Committee reviewed the outcomes of the 
to the business and is a        valuation process throughout the year and 
significant area of judgement   discussed the detail of each quarterly valuation 
which is inherently subjective, with the Investment Manager at the Board meetings. 
although the valuations are     Members of the Audit Committee met with Knight 
performed by independent firms  Frank LLP and BNP Paribas Real Estate UK outside 
of valuers: Knight Frank LLP    the formal meeting to discuss the process, 
and BNP Paribas Real Estate UK  assumptions, independence and communication with 
for the joint ventures.         the Investment Manager and their valuations. 
                                Furthermore, as this is the main area of audit 
Errors in valuation could have  focus, the Auditors contact the valuers directly 
a material impact on the        and independently of the Investment Manager. The 
Company's net asset value.      Audit Committee receives detailed verbal and 
                                written reports from KPMG on this matter as part 
                                of their interim and year end reporting to the 
                                Audit Committee. 
                                On the basis of the above, the Audit Committee 
                                concluded that the valuations were suitable for 
                                inclusion in the financial statements. 
 
Internal control 
 
The UK Corporate Governance Code requires the Board to conduct, at least 
annually, a review of the adequacy of the Company's systems of internal 
control, and to report to shareholders that it has done so. The Audit 
Committee, on behalf of the Board, also regularly reviews a detailed 'Risk Map' 
identifying significant strategic, investment-related, operational and service 
provider related risks and ensures that risk management and all aspects of 
internal control are reviewed at least annually. 
 
The Company's system of internal controls is substantially reliant on the 
Investment Manager's and the Administrator's own internal controls and internal 
audit processes due to the relationships in place. 
 
Although the Board believes that it has a robust framework of internal controls 
in place, this can provide only reasonable and not absolute assurance against 
material financial misstatement or loss and is designed to manage, not 
eliminate, risk. No significant issues were identified from the internal 
controls review. 
 
Internal audit 
 
The Audit Committee considered the need for an internal audit function and 
concluded that this function is provided by Schroder's Group Internal Audit 
reviews, which cover the functions provided by the Investment Manager, Schroder 
Real Estate Investment Management Limited. 
 
In addition, the Investment Manager prepares an ISAE 3402/AAF 01/06 Internal 
Controls Report which includes the Company within the scope of the review. This 
report is reviewed by Ernst & Young LLP (EY) which issued an unqualified 
opinion for the year ended December 2018. The Audit Committee has considered 
both the Investment Manager's internal controls report and the review by EY. 
 
External Auditor remuneration, independence and effectiveness 
 
Annually, the Audit Committee considers the remuneration and independence of 
the external auditor. The Committee recommends the remuneration of the external 
auditor to the Board and keeps under review the ratio of audit to non-audit 
fees to ensure that the independence and objectivity of the external auditor 
are safeguarded. 
 
Effectiveness of the independent audit process 
 
The Audit Committee evaluated the effectiveness of the independent audit firm 
and process prior to making a recommendation on its re-appointment at the 
forthcoming Annual General Meeting. As part of the evaluation, the Committee 
considered feedback from the Investment Manager on the audit process and the 
half year and year end report from the Auditor, which details the auditor's 
compliance with regulatory requirements, on safeguards that have been 
established and their own internal quality control procedures. The Audit 
Committee had discussions with the audit partner, on audit planning, accounting 
policies and audit findings, and met the audit partner both with and without 
representatives of the Investment Manager present. The Chairman of the Audit 
Committee also had informal discussions with the audit partner during the 
course of the year. The Committee is satisfied with the effectiveness of the 
audit. 
 
Review of auditor appointment 
 
KPMG has been the Group's Auditor since inception in 2004.  In order to 
benchmark KPMG's service quality, effectiveness and value for money, together 
with adopting the UK Corporate Governance code on audit tendering and rotation, 
the Audit Committee conducted a formal tender process during May/June 2014. 
Three firms, including KPMG, were asked to participate in this process. 
Following this, a recommendation was made to the Audit Committee to retain KPMG 
as the Group's auditor. 
 
The Audit Committee's current intention is for the next audit tender to take 
place within three years, at the end of the current audit partner's tenure, 
when the audit firm will be changed. 
 
Non-audit services 
 
In order to help safeguard the independence and objectivity of the auditor, the 
Audit Committee maintains a policy on the engagement of the external auditor to 
provide non-audit services. The Audit Committee's policy for the use of the 
external auditor for non-audit services recognises that there are certain 
circumstances where, due to KPMG's expertise and knowledge of the Company, it 
will often be in the best position to perform non audit services. Under the 
policy, the use of the external auditor for non-audit services is subject to 
pre-clearance by the Audit Committee. Clearance will not be granted if it is 
believed it would impair the external auditor's independence or where provision 
of such services by the Company's auditor is prohibited. Prior to undertaking 
any non-audit service, KPMG also completes its own independence confirmation 
processes which are approved by the audit partner. 
 
During the year, the non-audit services fees paid to KPMG were GBP13,250. (2018: 
GBP13,000) in relation to the interim review. 
 
Stephen Bligh, Director 
20 May 2019 
 
Independent Auditor's report 
 
Our opinion is unmodified 
 
We have audited the consolidated financial statements (the "Financial 
Statements") of Schroder Real Estate Investment Trust Limited (the "Company") 
and its subsidiaries (together, the "Group"), which comprise the consolidated 
statement of financial position as at 31 March 2019, the consolidated 
statements of comprehensive income, changes in equity and cash flows for the 
year then ended, and notes, comprising significant accounting policies and 
other explanatory information. 
 
In our opinion, the accompanying Financial Statements: 
 
-  give a true and fair view of the financial position of the Group as at 31 
March 2019, and of the Group's financial performance and cash flows for the 
year then ended; 
 
-  are prepared in accordance with International Financial Reporting Standards 
(IFRS); and 
 
-  comply with the Companies (Guernsey) Law, 2008. 
 
Basis for opinion 
 
We conducted our audit in accordance with International Standards on Auditing 
(UK) (ISAs (UK)) and applicable law. Our responsibilities are described below. 
We have fulfilled our ethical responsibilities under, and are independent of 
the Company and Group in accordance with, UK ethical requirements including FRC 
Ethical Standards as applied to listed entities.  We believe that the audit 
evidence we have obtained is a sufficient and appropriate basis for our 
opinion. 
 
Key audit matters: our assessment of the risks of material misstatement 
 
Key audit matters are those matters that, in our professional judgment, were of 
most significance in the audit of the Financial Statements and include the most 
significant assessed risks of material misstatement (whether or not due to 
fraud) identified by us, including those which had the greatest effect on: the 
overall audit strategy; the allocation of resources in the audit; and directing 
the efforts of the engagement team.  These matters were addressed in the 
context of our audit of the Financial Statements as a whole, and in forming our 
opinion thereon, and we do not provide a separate opinion on these matters.  In 
arriving at our audit opinion above, the key audit matter was as follows 
(unchanged from 2018): 
 
                      The risk                       Our response 
 
Valuation of          Basis:                         Our audit procedures included: 
investment property   Directly held investment       Internal Controls: 
held directly and     property accounted for 71.1%   We assessed the design and 
indirectly through    of the Group's total assets at implementation of the review 
investment in joint   31 March 2019 (2018: 76.2%)    control over the valuations 
ventures              and the investment in joint    prepared by the External 
                      ventures accounted for a       Valuers. 
Investment property GBP further 15.4% of Group's total 
371.1 million;        assets (2018: 15.2%).  The     Evaluating experts engaged by 
(2018: GBP389.0         fair value of the directly and management: 
million)              indirectly held investment     We assessed the competence, 
Investment in joint   property at 31 March 2019 was  capabilities and objectivity of 
ventures GBP80.2        assessed by the Board of       the External Valuers. We also 
million; (2018: 77.7  Directors based on independent assessed their independence by 
million)              valuations prepared by the     considering the scope of their 
                      Company's and the joint        work and the terms of their 
Refer to page 47 of   ventures' external property    engagement. 
the Report of the     valuers (together, the 
Audit Committee,      "External Valuers").           Evaluating assumptions and 
significant                                          inputs used in the valuation: 
accounting policies   Risk:                          With the assistance of our own 
note and disclosure   As highlighted in the Report   real estate specialist we 
notes 11,12 and 19    of the Audit Committee, the    critically assessed the 
                      valuation of investment        valuations prepared by the 
                      property is a significant area External Valuers by evaluating 
                      of judgment and requires       the appropriateness of the 
                      subjective assumptions to be   valuation methodologies and 
                      made.                          assumptions used, including 
                      Determination of the fair      undertaking discussions on key 
                      value of directly and          findings with the External 
                      indirectly held investment     Valuers and challenging the 
                      property is considered a       assumptions used based on market 
                      significant audit risk due to  information. 
                      the magnitude of the balances  We compared a sample of key 
                      and that such valuations       inputs to the valuations such as 
                      require the use of significant yields, occupancy and tenancy 
                      judgments and subjective       contracts for consistency with 
                      assumptions.                   other audit findings and 
                                                     observable market evidence. 
 
                                                     Assessing disclosures: 
                                                     We assessed the directly held 
                                                     investment property and 
                                                     investment in joint ventures 
                                                     fair value disclosures in the 
                                                     financial statements for 
                                                     compliance with IFRS 
                                                     requirements. 
 
Our application of materiality and an overview of the scope of our audit 
 
Materiality for the Financial Statements as a whole was set at GBP3.7 million, 
determined with reference to a benchmark of Group total assets of GBP522.0 
million, of which it represents 0.7% (2018: 0.7%). 
 
We reported to the Audit Committee any corrected or uncorrected identified 
misstatements exceeding GBP185,000, in addition to other identified misstatements 
that warranted reporting on qualitative grounds. 
 
Our audit of the Group was undertaken to the materiality level specified above, 
which has informed our identification of significant risks of material 
misstatement and the associated audit procedures performed in those areas as 
detailed above. 
 
The Group team performed the audit of the Group as if it was a single 
aggregated set of financial information. The audit was performed using the 
materiality level set out above and covered 100% of total Group revenue, total 
Group profit before taxation, and total Group assets and liabilities. 
 
We have nothing to report on going concern 
 
We are required to report to you if we have anything material to add or draw 
attention to in relation to the directors' statement in note 1 to the Financial 
Statements on the use of the going concern basis of accounting with no material 
uncertainties that may cast significant doubt over the Group's use of that 
basis for a period of at least twelve months from the date of approval of the 
Financial Statements.  We have nothing to report in this respect. 
 
We have nothing to report on the other information in the Annual Report 
 
The directors are responsible for the other information presented in the Annual 
Report together with the Financial Statements. Our opinion on the Financial 
Statements does not cover the other information and we do not express an audit 
opinion or any form of assurance conclusion thereon. 
 
Our responsibility is to read the other information and, in doing so, consider 
whether, based on our Financial Statements audit work, the information therein 
is materially misstated or inconsistent with the Financial Statements or our 
audit knowledge. Based solely on that work we have not identified material 
misstatements in the other information. 
 
Disclosures of principal risks and longer-term viability 
 
Based on the knowledge we acquired during our financial statements audit, we 
have nothing material to add or draw attention to in relation to: 
 
·     the directors' confirmation within the Viability Statement on pages 36 
and 37 that they have carried out a robust assessment of the principal risks 
facing the Group, including those that would threaten its business model, 
future performance, solvency or liquidity; 
 
·     the Principal Risks and Uncertainties disclosures describing these risks 
and explaining how they are being managed or mitigated; 
 
·     the directors' explanation in the Viability Statement on pages 36 and 37 
as to how they have assessed the prospects of the Group, over what period they 
have done so and why they consider that period to be appropriate, and their 
statement as to whether they have a reasonable expectation that the Group will 
be able to continue in operation and meet its liabilities as they fall due over 
the period of their assessment, including any related disclosures drawing 
attention to any necessary qualifications or assumptions. 
 
Corporate governance disclosures 
 
We are required to report to you if: 
 
·     we have identified material inconsistencies between the knowledge we 
acquired during our financial statements audit and the directors' statement 
that they consider that the Annual Report and Financial Statements taken as a 
whole is fair, balanced and understandable and provides the information 
necessary for shareholders to assess the Group's position and performance, 
business model and strategy; or 
 
·     the section of the Annual Report describing the work of the Audit 
Committee does not appropriately address matters communicated by us to the 
Audit Committee. 
 
We are required to report to you if the Corporate Governance Statement does not 
properly disclose a departure from the eleven provisions of the 2016 UK 
Corporate Governance Code specified by the Listing Rules for our review. 
 
We have nothing to report to you in these respects. 
 
We have nothing to report on other matters on which we are required to report 
by exception 
 
We have nothing to report in respect of the following matters where the 
Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion: 
 
·     the Company has not kept proper accounting records; or 
 
·     the Financial Statements are not in agreement with the accounting 
records; or 
 
·     we have not received all the information and explanations, which to the 
best of our knowledge and belief are necessary for the purpose of our audit. 
 
Respective responsibilities 
 
Directors' responsibilities 
 
As explained more fully in their statement set out on page 39, the Directors 
are responsible for: the preparation of the Financial Statements including 
being satisfied that they give a true and fair view; such internal control as 
they determine is necessary to enable the preparation of financial statements 
that are free from material misstatement, whether due to fraud or error; 
assessing the Group's ability to continue as a going concern, disclosing, as 
applicable, matters related to going concern; and using the going concern basis 
of accounting unless they either intend to liquidate the Group or to cease 
operations, or have no realistic alternative but to do so. 
 
Auditor's responsibilities 
 
Our objectives are to obtain reasonable assurance about whether the Financial 
Statements as a whole are free from material misstatement, whether due to fraud 
or error, and to issue our opinion in an auditor's report.  Reasonable 
assurance is a high level of assurance, but does not guarantee that an audit 
conducted in accordance with ISAs (UK) will always detect a material 
misstatement when it exists.  Misstatements can arise from fraud or error and 
are considered material if, individually or in aggregate, they could reasonably 
be expected to influence the economic decisions of users taken on the basis of 
the Financial Statements. 
 
A fuller description of our responsibilities is provided on the FRC's website 
at www.frc.org.uk/auditorsresponsibilities. 
 
The purpose of this report and restrictions on its use by persons other than 
the Company's members as a body 
 
This report is made solely to the Company's members, as a body, in accordance 
with section 262 of the Companies (Guernsey) Law, 2008.  Our audit work has 
been undertaken so that we might state to the Company's members those matters 
we are required to state to them in an auditor's report and for no other 
purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company's members, as a 
body, for our audit work, for this report, or for the opinions we have formed. 
 
Lee Clark 
For and on behalf of KPMG Channel Islands Limited 
 
Chartered Accountants and Recognised Auditors 
Glategny Court 
Glategny Esplanade 
St Peter Port 
Guernsey 
GY1 1WR 
 
 
20 May 2019 
 
Financial Statements 
 
Consolidated Statement of Comprehensive Income 
 
                                                             31/03/2019   31/03/2018 
 
                                                    Notes          GBP000         GBP000 
 
Rental income                                                    25,278       24,041 
 
Other income                                          4           1,339        1,545 
 
Property operating expenses                           5         (2,375)      (1,734) 
 
Net rental and related income, excluding joint                   24,242       23,852 
ventures 
 
Share of net rental income in joint ventures                      3,311        2,754 
Net rental and related income, including joint                   27,553       26,606 
ventures 
 
Profit on disposal of investment property            11           2,156          594 
 
Net unrealised valuation gain on investment          11           1,556       20,195 
property 
 
Expenses 
 
Investment management fee                             3         (3,363)      (3,531) 
 
Valuers' and other professional fees                            (1,633)      (1,549) 
 
Administrators' fee                                   3           (120)        (120) 
 
Auditor's remuneration                                6           (128)        (128) 
 
Directors' fees                                       7           (150)        (180) 
 
Abortive transaction costs                            7               -      (1,507) 
 
Other expenses                                        7           (202)        (223) 
 
Total expenses                                                  (5,596)      (7,238) 
 
Net operating profit before net finance costs                    22,358       37,403 
 
Refinancing costs                                     7         (3,128)            - 
 
Finance costs                                                   (6,807)      (6,819) 
 
Net finance costs                                               (9,935)      (6,819) 
 
Share of net rental income in joint ventures         12           3,311        2,754 
 
Share of valuation gain in joint ventures            12             167          498 
 
Profit before taxation                                           15,901       33,836 
 
Taxation                                              8               -            - 
 
Profit and total comprehensive income for the                    15,901       33,836 
year attributable to the equity holders of the 
parent 
 
Basic and diluted earnings per share                  9            3.1p         6.5p 
 
 
All items in the above statement are derived from continuing operations. The 
accompanying notes 1 to 24 form an integral part of the financial statements. 
 
Consolidated Statement of Financial Position 
 
                                                              31/03/2019  31/03/2018 
 
                                                   Notes            GBP000        GBP000 
 
Investment property                                 11           371,097     388,976 
 
Investment in joint ventures                        12            80,165      77,748 
 
Non-current assets                                               451,262     466,724 
 
Trade and other receivables                         13            49,689      14,415 
 
Cash and cash equivalents                           14            21,042      29,218 
 
Current assets                                                    70,731      43,633 
 
Total assets                                                     521,993     510,357 
 
Issued capital and reserves                         15           382,828     380,022 
 
Treasury shares                                     15          (26,452)    (26,452) 
 
Equity                                                           356,376     353,570 
 
Interest-bearing loans and borrowings               16           156,230     148,505 
 
Non-current liabilities                                          156,230     148,505 
 
Trade and other payables                            17             9,387       8,282 
 
Current liabilities                                                9,387       8,282 
 
Total liabilities                                                165,617     156,787 
 
Total equity and liabilities                                     521,993     510,357 
 
                                                                   68.7p       68.2p 
Net Asset Value per Ordinary Share                  18 
 
 
The financial statements on pages 54 to 77 were approved at a meeting of the 
Board of Directors held on 20 May 2019 and signed on its behalf by: 
 
Lorraine Baldry, Chairman 
 
 
Stephen Bligh, Director 
 
 
The accompanying notes 1 to 24 form an integral part of the financial 
statements. 
 
Consolidated Statement of Changes in Equity 
 
                            Notes        Share     Treasury      Revenue        Total 
                                       premium        share      reserve 
                                                    reserve 
 
                                          GBP000         GBP000         GBP000         GBP000 
 
Balance as at 31 March 2017            219,090     (26,452)      139,952      332,590 
 
Profit for the year                          -            -       33,836       33,836 
 
Dividends paid               10              -            -     (12,856)     (12,856) 
 
Balance as at 31 March 2018            219,090     (26,452)      160,932      353,570 
 
Profit for the year                          -            -       15,901       15,901 
 
Dividends paid               10              -            -     (13,095)     (13,095) 
 
Balance as at 31 March 2019            219,090     (26,452)      163,738      356,376 
 
 
The accompanying notes 1 to 24 form an integral part of the financial 
statements. 
 
Consolidated Statement of Cash Flows 
 
                                                          31/03/2019    31/03/2018 
 
                                                                GBP000          GBP000 
 
Operating activities 
 
Profit for the year                                           15,901        33,836 
 
Adjustments for: 
 
Profit on disposal of investment property                    (2,156)         (594) 
 
Net valuation gain on investment property                    (1,556)      (20,195) 
 
Share of profit of joint ventures                            (3,478)       (3,252) 
 
Net finance cost                                               9,935         6,819 
 
Operating cash generated before changes in working            18,646        16,641 
capital 
 
(Increase)/decrease in trade and other                         (179)        12,087 
receivables 
 
Increase/(decrease) in trade and other payables                1,105         (613) 
 
Cash generated from operations                                19,572        28,088 
 
Finance costs paid                                           (6,541)       (6,585) 
 
Tax paid                                                           -             - 
 
Cash flows from operating activities                          13,031        21,503 
 
Investing activities 
 
Proceeds from sale of investment property                     12,447         6,544 
 
Acquisition of investment property                          (23,191)             - 
 
Additions to investment property                             (2,761)       (8,504) 
 
Addition to joint ventures                                   (2,250)         (350) 
 
Net income distributed from joint ventures                     3,311         2,754 
 
Cash flows from investing activities                        (12,444)           444 
 
Financing activities 
 
Additions to debt                                              8,500             - 
Refinancing fees paid                                        (4,168)             - 
Dividends paid                                              (13,095)      (12,856) 
 
Cash flows used in financing activities                      (8,763)      (12,856) 
 
Net (decrease)/increase in cash and cash                     (8,176)         9,091 
equivalents for the year 
 
Opening cash and cash equivalents                             29,218        20,127 
 
Closing cash and cash equivalents                             21,042        29,218 
 
 
The accompanying notes 1 to 24 form an integral part of the financial 
statements. 
 
Notes to the Financial Statements 
 
1.   Significant accounting policies 
 
Schroder Real Estate Investment Trust Limited ("the Company") is a closed-ended 
investment company registered in Guernsey. The consolidated financial 
statements of the Company for the year ended 31 March 2019 comprise the Company 
and its subsidiaries (together referred to as the "Group"). 
 
Statement of compliance 
 
The financial statements have been prepared in accordance with International 
Financial Reporting Standards ("IFRS") issued by the International Accounting 
Standards Board (the "IASB"), and interpretations issued by the International 
Financial Reporting Interpretations Committee. 
 
The financial statements give a true and fair view and are in compliance with 
The Companies (Guernsey) Law, 2008, applicable legal and regulatory 
requirements and the Listing Rules of the UK Listing Authority. 
 
Basis of preparation 
 
The financial statements are presented in sterling, which is the Company's 
functional currency, rounded to the nearest thousand. They are prepared on the 
historical cost basis except that investment property and derivative financial 
instruments are stated at their fair value. 
 
The accounting policies have been consistently applied to the results, assets, 
liabilities and cash flows of the entities included in the consolidated 
financial statements and are consistent with those of the previous year. 
 
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.  In July 2018, the Group completed a refinancing 
activity which included extending a portion of the Canada Life debt and 
increasing the revolving credit facility ('RCF') with Royal Bank of Scotland 
('RBS'). 100% of the Canada Life loan now matures on 15 April 2028 and The 
Royal Bank of Scotland loan matures in July 2023.   Additionally in January 
2019 the RCF was further increased providing additional undrawn capacity of GBP20 
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. 
The additional loan amount matures in July 2023 and is co-terminus with the 
existing facilities. 
 
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 
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 consolidated financial statements. 
 
Use of estimates and judgements 
 
The preparation of financial statements in conformity with IFRS 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. These estimates and associated assumptions are based on 
historical experience and various other factors that are believed to be 
reasonable under the circumstances, the results of which form the basis of 
making judgements about the carrying values of assets and liabilities that are 
not readily apparent from other sources. 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. 
 
The most significant estimates made in preparing these financial statements 
relate to the carrying value of investment properties, including those within 
joint ventures, which are stated at fair value. The Group uses external 
professional valuers to determine the relevant amounts. Judgements made by 
management in the application of IFRS that have a significant effect on the 
financial statements and estimates with a significant risk of material 
adjustment in the next year are disclosed in note 19. 
 
Basis of consolidation 
 
Subsidiaries 
 
The consolidated financial statements comprise the financial statements of the 
Company and all of its subsidiaries drawn up to 31 March each year. 
Subsidiaries are those entities, including special purpose entities, controlled 
by the Company. Control exists when the Company has the power, directly or 
indirectly, to govern the financial and operating policies of an entity so as 
to obtain benefits from its activities. In assessing control, potential voting 
rights that presently are exercisable are taken into account. The financial 
statements of subsidiaries are included in the consolidated financial 
statements from the date that control commences until the date that control 
ceases. Where properties are acquired by the Group through corporate 
acquisitions but the acquisition does not meet the definition of a business 
combination, the acquisition has been treated as an asset acquisition. 
 
Joint ventures 
 
Joint ventures are those entities over whose activities the Group has joint 
control, established by contractual agreement. The consolidated financial 
statements include the Group's share of profit or loss of jointly controlled 
entities on an equity accounted basis. When the Group's share of losses exceeds 
its interest in an entity, the Group's carrying amount is reduced to nil and 
recognition of further losses is discontinued except to the extent that the 
Group has incurred legal or constructive obligations or is making payments on 
behalf of an entity. 
 
Transactions eliminated on consolidation 
 
Intra-group balances and any gains and losses arising from intra-group 
transactions are eliminated in preparing the consolidated financial statements. 
Gains arising from transactions with joint ventures are eliminated to the 
extent of the Group's interest in the entity. Losses are eliminated in the same 
way as gains but only to the extent that there is no evidence of 
impairment. 
 
Investment property 
 
Investment property is land and buildings held to earn rental income together 
with the potential for capital growth. 
 
Acquisitions and disposals are recognised on the unconditional exchange of 
contracts.  Acquisitions are initially recognised at cost, being the fair value 
of the consideration given, including transaction costs associated with the 
investment property. 
 
After initial recognition, investment properties are measured at fair value, 
with unrealised gains and losses recognised in profit and loss. Realised gains 
and losses on the disposal of properties are recognised in profit and loss in 
relation to carrying value. Fair value is based on the market valuations of the 
properties as provided by a firm of independent chartered surveyors at the 
reporting date. Market valuations are carried out on a quarterly basis. 
 
As disclosed in note 20, the Group leases out all owned properties on operating 
leases. A property held under an operating lease is classified and accounted 
for as an investment property where the Group holds it to earn rentals, capital 
appreciation, or both. Any such property leased under an operating lease is 
classified as an investment property and carried at fair value. 
 
Financial instruments 
 
Non-derivative financial instruments 
 
Financial assets 
 
Non-derivative financial instruments comprise trade and other receivables and 
cash and cash equivalents. These are recognised initially at fair value plus 
any directly attributable transaction costs. Subsequent to initial recognition 
they are measured at amortised cost using the effective interest rate method 
less any impairment losses. 
 
Cash and cash equivalents 
 
Cash at bank and short-term deposits that are held to maturity are carried at 
cost. Cash and cash equivalents are defined as cash in hand, demand deposits 
and short-term, highly liquid investments readily convertible to known amounts 
of cash and subject to insignificant risk of changes in value. For the purposes 
of the Consolidated Statement of Cash Flows, cash and cash equivalents consist 
of cash in hand and short-term deposits at banks with a term of no more than 
three months. 
 
Financial liabilities 
 
Non-derivative financial instruments comprise loans and borrowings and trade 
and other payables. 
 
Loans and borrowings 
 
Borrowings are recognised initially at fair value of the consideration 
received, less attributable transaction costs. Subsequent to initial 
recognition, interest bearing borrowings are stated at amortised cost with any 
difference between cost and redemption value being recognised in the profit and 
loss over the period of the borrowings on an effective interest basis. 
 
Trade and other payables 
 
Trade and other payables are stated at amortised cost. 
 
Share capital 
 
Ordinary shares including treasury shares are classified as equity. 
 
Dividends 
 
Dividends are recognised in the period in which they are paid. 
 
Impairment 
 
Financial assets 
 
A financial asset, other than those at fair value through profit and loss, is 
assessed at each reporting date to determine whether there is any objective 
evidence that it is impaired. A financial asset is considered to be impaired if 
objective evidence indicates that one or more events have had a negative effect 
on the estimated future cash flows of that asset. 
 
The Group's significant financial assets that are subject to IFRS 9's new 
expected credit loss model are trade receivables from the leasing of investment 
properties.  The credit risk associated with unpaid rent is deemed to be low. 
The Group was required to revise its impairment methodology under IFRS 9. This 
did not result in a material change in the loss allowance recognised under IFRS 
9 compared to the previous impairment provision held under IAS 39. Note 19 
provides further details on the measurement of the loss allowance and amount 
recognised at 31 March 2019. 
 
Non-financial assets 
 
The carrying amounts of the Group's non-financial assets, other than investment 
property but including joint ventures, are reviewed at each reporting date to 
determine whether there is any indication of impairment. If any such indication 
exists, then the asset's recoverable amount is estimated. 
 
The recoverable amount of an asset or cash-generating unit is the greater of 
its value in use and its fair value less costs to sell. In assessing value in 
use, the estimated future cash flows are discounted to their present value 
using a pre-tax discount rate that reflects current market assessments of the 
time value of money and the risks specific to that asset. 
 
For the purpose of impairment testing, assets are grouped together into the 
smallest group of assets that generates cash inflows from continuing use that 
are largely independent of the cash inflows of other assets or groups of assets 
(the "cash-generating unit"). 
 
An impairment loss is recognised if the carrying amount of an asset or its 
cash-generating unit exceeds its estimated recoverable amount. Impairment 
losses are recognised in the profit and loss. 
 
Provisions 
 
A provision is recognised in the Consolidated Statement of Financial Position 
when the Group has a legal or constructive obligation as a result of a past 
event and it is probable that an outflow of economic benefits will be required 
to settle the obligation. 
 
Rental income 
 
Rental income from investment properties is recognised on a straight-line basis 
over the term of ongoing leases and is shown gross of any UK income tax. Lease 
incentives are spread evenly over the lease term. 
 
Surrender premiums and dilapidations are recognised in line with individual 
lease agreements when cash inflows are certain. 
 
Finance costs 
 
Finance costs comprise interest expense on borrowings that are recognised in 
profit and loss. Attributable transaction costs incurred in establishing the 
Group's credit facilities are deducted from the fair value of borrowings on 
initial recognition and are amortised over the lifetime of the facilities 
through profit and loss. Finance costs are accounted for on an effective 
interest basis. 
 
Expenses 
 
All expenses are accounted for on an accruals basis. The costs recharged to 
occupiers of the properties are presented net of the service charge income as 
management consider that the property agent acts as principal in this respect. 
 
Taxation 
 
SREIT elected to be treated as a UK REIT with effect from 1 May 2015. The UK 
REIT rules exempt the profits of the Group's UK property rental business from 
UK corporation and income tax. Gains on UK properties are also exempt from tax, 
provided they are not held for trading. The Group is otherwise subject to UK 
corporation tax. 
 
As a REIT, the Company is required to pay Property Income Distributions equal 
to at least 90% of the Group's exempted net income. To remain a UK REIT there 
are a number of conditions to be met in respect of the principal company of the 
Group, the Group's qualifying activity and its balance of business. The Group 
continues to meet these conditions. 
 
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. SREIM acts as advisor to the Board, who then make management 
decisions following their recommendations. As such the Board of Directors are 
considered to be the chief operating decision maker. A set of consolidated IFRS 
information is provided on a quarterly basis. 
 
2.   New standards and interpretations 
 
Standards, interpretations and amendments to published standards that are 
effective for the first time 
 
The following standards, amendments and interpretations endorsed by the EU were 
effective for the first time for the Group's 31 March 2019 year end and had no 
material impact on the financial statements; 
 
·      IFRS 2 (amended) - Share Based Payments; 
 
·      IFRS 4 (amended) - Insurance Contracts; 
 
·      IAS 40 (amended) - Investment Property; 
 
·      IFRIC 22 - Foreign Currency Transactions and Advance Consideration; 
Annual Improvements to IFRSs (2014 - 2016 cycle). 
 
·      IFRS 9 Financial Instruments (effective from 1 January 2018).  This 
standard applies to classification and measurement of financial assets and 
financial liabilities, impairment provisioning and hedge accounting. The 
Group's assessment of IFRS 9 determined that the main area of potential impact 
was impairment provisioning on trade receivables, given the requirement to use 
a forward-looking expected credit loss model. The Directors have completed its 
assessment of IFRS 9 and conclude that its adoption has no material impact on 
the financial statements. 
 
·      IFRS 15, 'Revenue from contracts with customers' is a converged standard 
from the IASB on revenue recognition.  The standard will improve the financial 
reporting of revenue and improve comparability of the top line in financial 
statements globally.  It is more prescriptive in terms of what should be 
included within revenue than IAS 18 'Revenue'. The standard is applicable to 
service charge income, facilities management income, investment property 
disposals and trading property disposals, but excludes rent receivable, which 
is within the scope of IFRS 16. The Directors have completed its assessment of 
IFRS 15 and conclude that its adoption has no material impact on the financial 
statements. 
 
Standards, interpretations and amendments to published standards that have been 
issued but are not yet effective 
 
The following standards, amendments and interpretations were in issue at the 
date of approval of these financial statements but were not yet effective for 
the current accounting year and have not been adopted early. Based on the 
Group's current circumstances, the Directors do not anticipate that their 
adoption in future periods will have a material impact on the financial 
statements of the Group. 
 
IFRS 16 Leases (effective 1 January 2019) specifies how an IFRS reporter will 
recognise, measure, present and disclose leases. The standard provides a single 
lessee accounting model, requiring lessees to recognise assets and liabilities 
for all leases unless the lease term is 12 months or less or the underlying 
asset has a low value. Lessors continue to classify leases as operating or 
finance, with IFRS 16's approach to lessor accounting substantially unchanged 
from its predecessor, IAS 17.  As the Group does not hold any material 
operating leases as lessee, the impact of the standard is not expected to be 
material to the financial statements. 
 
3.   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 nine 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 and loss 
during the year was GBP3,363,000 (2018: GBP3,531,000). At the year end GBP287,000 
(2018: GBP556,000) was outstanding. 
 
Northern Trust International Fund Administration Services (Guernsey) Limited is 
the Administrator to the Company. The Administrator is entitled to an annual 
fee equal to GBP120,000 (2018: GBP120,000) of which GBP30,000 (2018: GBP30,000) was 
outstanding at the year end. In addition to this GBP40,000 (2018: GBP40,000) was 
paid for depository fees of which GBP3,334 (2018: GBP3,334) was outstanding at year 
end. 
 
4.   Other income 
 
                                                              31/03/2019   31/03/2018 
 
                                                                    GBP000         GBP000 
 
Dilapidations                                                        915          265 
 
Surrender premium                                                    414          610 
 
Miscellaneous income                                                  10          670 
 
                                                                   1,339        1,545 
 
5.   Property operating expenses 
 
                                                                  31/03/2019  31/03/2018 
 
                                                                        GBP000        GBP000 
 
Agents' fees                                                              56          78 
 
Repairs and maintenance                                                  149          43 
 
Advertising                                                               33          55 
 
Rates - vacant*                                                                      376 
                                                                         821 
 
Security                                                                  19          14 
 
Service charge, insurance and utilities on                               986         503 
vacant units 
 
Ground rent                                                              124         141 
 
Bad debts                                                                156         489 
 
Other                                                                                 35 
                                                                          31 
 
                                                                       2,375       1,734 
 
*Previous period includes a rates refund totalling GBP587,000. 
 
6.   Auditor's remuneration 
 
The total expected audit fees for the year are GBP117,170 (2018: GBP115,000) and GBP 
13,250 (2018: GBP13,000) for the half year review of the financial statements. 
There were no additional fees paid to the auditors during the year. 
 
7.   Other expenses 
 
                                                              31/03/2019  31/03/2018 
 
                                                                    GBP000        GBP000 
 
Directors' and officers' insurance                                     9           9 
premium 
 
Regulatory costs                                                      21          21 
 
Professional fees                                                    135         109 
 
Other expenses                                                        37          84 
 
                                                                     202         223 
 
Directors' fees 
 
Directors are the only officers of the Company and there are no other key 
personnel. 
 
The Directors' annual remuneration for services to the Group was GBP150,000 
(2018: GBP180,000), as set out in the Remuneration Report on page 45. 
 
One off transaction costs 
 
One-off costs of GBP3,128,000 relating to refinancing were incurred in the 
current year. 
 
In 2018 One-off abortive transaction costs of GBP1,507,000 relating to the 
attempted acquisition of a major portfolio were incurred in the prior year. 
There were no similar costs in this period. 
 
8.   Taxation 
 
                                                             31/03/2019   31/03/2018 
 
                                                                   GBP000         GBP000 
 
Tax expense in year                                                   -            - 
 
Reconciliation of effective tax rate 
 
Profit before tax                                                15,901       33,836 
 
Effect of: 
 
Tax using UK corporation tax rate of 19%                          3,021        6,429 
 
Revaluation gain not taxable                                      (296)      (3,837) 
 
Share of profit of associates and joint                           (661)        (618) 
ventures not taxable 
 
Profit on disposal of investment property not                     (410)        (113) 
taxable 
 
UK REIT exemption                                               (1,654)      (1,861) 
 
Current tax expense in the year                                       -            - 
 
SREIT and its Guernsey registered subsidiaries have obtained exempt Company 
status in Guernsey under the terms of the Income Tax (Exempt Bodies) (Guernsey) 
Ordinance, 1989 so that they are exempt from Guernsey taxation on income 
arising outside Guernsey and on bank interest receivable in Guernsey. Each 
Company is, therefore, only liable for a fixed fee of GBP1,200 per annum. The 
Directors intend to conduct the Group's affairs such that they continue to 
remain eligible for exemption. 
 
SREIT is a real estate investment trust ('REIT') and benefits from the various 
tax advantages offered by the UK REIT regime. 
 
9.   Basic and diluted earnings per share 
 
Earnings per share 
 
The basic and diluted earnings per share for the Group is based on the net 
profit for the year of GBP15,901,000 (2018: GBP33,836,000) and the weighted average 
number of Ordinary Shares in issue during the year of 518,513,409 (2018: 
518,513,409). 
 
1. 
 
10.  Dividends paid 
 
In respect of                                           Ordinary     Rate  31/03/2019 
 
                                                          shares  (pence)        GBP000 
 
Quarter 31 March 2018 dividend paid 31 May 2018   518.51 million     0.62       3,215 
 
Quarter 30 June 2018 dividend paid 31 August 2018 518.51 million     0.62       3,215 
 
Quarter 30 September 2018 dividend paid 5         518.51 million     0.64       3,295 
December 2018 
 
Quarter 31 December 2018 dividend paid 15 March   518.51 million     0.65       3,370 
2019 
 
                                                                     2.53      13,095 
 
In respect of                                           Ordinary     Rate  31/03/2018 
 
                                                          shares  (pence)        GBP000 
 
Quarter 31 March 2017 dividend paid 31 May 2017   518.51 million     0.62       3,214 
 
Quarter 30 June 2017 dividend paid 31 August 2017 518.51 million     0.62       3,214 
 
Quarter 30 September 2017 dividend paid 6         518.51 million     0.62       3,214 
December 2017 
 
Quarter 31 December 2017 dividend paid 7 March    518.51 million     0.62       3,214 
2018 
 
                                                                     2.48      12,856 
 
 
A dividend for the quarter ended 31 March 2019 of 0.65 pence (GBP3.4 million) was 
declared on 10 May 2019 and will be paid on 7 June 2019. 
 
11.  Investment property 
 
                                                           Leasehold     Freehold        Total 
 
                                                                GBP000         GBP000         GBP000 
 
Fair value as at 31 March 2017                                37,403      328,824      366,227 
 
Additions                                                        721        7,783        8,504 
 
Gross proceeds on disposals                                     (35)      (6,509)      (6,544) 
 
Realised gain on disposals                                        35          559          594 
 
Net unrealised valuation (loss)/gain on                        (944)       21,139       20,195 
investment property 
 
Fair value as at 31 March 2018                                37,180      351,796      388,976 
 
Reclassification between freehold and                          5,600      (5,600)            - 
leasehold 
 
Additions                                                         88       25,864       25,952 
 
Gross proceeds on disposals                                              (47,543)     (47,543) 
                                                                   - 
 
Realised gain on disposals                                         -        2,156        2,156 
 
Net unrealised valuation (loss)/gain on                      (3,046)        4,602        1,556 
investment property 
 
Fair value as at 31 March 2019                                39,822      331,275      371,097 
 
The balance above includes; 
 
                                                 Leasehold     Freehold        Total 
 
                                                      GBP000         GBP000         GBP000 
 
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 
 
Two of the investment properties have been determined to meet the criteria of a 
held for sale asset at the period end at a value of GBP18,911,000 (31 March 2018: 
GBPnil).  Of these properties Allied Industrial Estate, Acton exchanged 
unconditional contracts 16 May 2019.  Details of this disposal can be seen in 
note 24. 
 
The fair value of investment properties as determined by the valuer totals GBP 
417,550,000 (2018: GBP399,725,000). Of this amount GBP36,100,000 is in relation to 
the unconditional exchange of contracts for Victory House in Brighton (2018: GBP 
nil). In addition to this, GBP10,352,000 (2018: GBP10,749,000) relating to lease 
incentives is included within trade and other receivables. 
 
The unrealised net valuation gain on investment property consists of unrealised 
gains of GBP2,057,000 (2018: GBP24,924,000) net of unrealised losses of GBP501,000 
(2018: GBP4,729,000). 
 
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 - Professional Standards global January 2017, issued by the Royal 
Institution of Chartered Surveyors (the "Red Book") including the International 
Valuation Standards. 
 
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. Consistent with prior year, 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 
31 March 2019 
 
31 March 2019                 Industrial       Retail       Office       Other         Total 
                                     (1)       (incl. 
                                               retail 
                                           warehouse) 
 
Fair value (GBP                    146,350      111,450      139,500      20,250       417,550 
000) 
 
Area ('000 sq                      1,737          553          634         177         3,101 
ft) 
 
Net passing     Range             GBP0 - GBP  GBP0 - GBP38.50  GBP0 - GBP25.72 GBP0 - GBP13.00 GBP0 - GBP38.50 GBP 
rent per sq ft  Weighted         10.84 GBP       GBP12.63       GBP11.50       GBP7.92          7.62 
per annum       average             4.58 
 
Gross ERV per   Range          GBP3.75 - GBP    GBP7.40 - GBP    GBP9.50 - GBP    GBP8.18 -GBP     GBP3.75 - GBP 
sq ft per annum Weighted           12.77 38.50 GBP14.73 27.50 GBP16.46       13.00   38.50 GBP9.64 
                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%        6.38%        6.75%      -7.83%         6.36% 
                average            5.95%                                 6.59% 
 
Notes: 
 
(1)    Yields based on rents receivable after deduction of head rents but gross 
of non-recoverables 
 
Quantitative information about fair value measurement using unobservable inputs 
(Level 3) as at 
31 March 2018 
 
  31 March 2018              Industrial      Retail      Office   Other (2)       Total 
                                    (1)      (incl. 
                                             retail 
                                         warehouse) 
 
Fair value (GBP                   128,450     138,825     111,700      20,750     399,725 
000) 
 
Area ('000 sq                     1,716         599         547         177       3,039 
ft) 
 
Net passing     Range       GBP0 - GBP10.83 GBP0 - GBP38.50 GBP0 - GBP25.81  GBP0 - GBP6.15 GBP0 - GBP38.50 
rent per sq ft  weighted          GBP4.13      GBP13.89      GBP13.56       GBP4.52       GBP7.77 
per annum       average 
 
Gross ERV per   Range         GBP3.75 - GBP   GBP7.40 - GBP   GBP9.50 - GBP   GBP8.23 - GBP   GBP3.75 - GBP 
sq ft per annum weighted          11.50     38.50 GBP     27.50 GBP       13.00 38.50 GBP9.38 
                average           GBP5.36       15.23       15.70       GBP9.11 
 
Net initial     Range        0% - 6.81%  0% - 8.25% 0% - 17.41%  0% - 5.80% 0% - 17.41% 
yield (1)       weighted          5.17%       5.61%       6.22%       3.62%       5.53% 
                average 
 
Equivalent      Range           4.84% -     4.75% -     5.60% -     4.75% -     4.75% - 
yield           weighted    8.91% 6.40% 8.68% 6.00%      10.41%       7.83%     10.41% 
                average                                   7.01%       6.61%       6.44% 
 
Notes: 
 
(1) Yields based on rents receivable after deduction of head rents but gross of 
non-recoverables. 
 
(1) 
 
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 measurement  Impact on fair value 
                   of significant increase in input  measurement of significant 
                                                     decrease in 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. 
 
The sensitivity of the valuation to changes in the most significant inputs per 
class of investment property are shown below: 
 
Estimated movement in fair value   Industrial  Retail    Office    Other     All 
of investment properties at 31     GBP'000       GBP'000     GBP'000     GBP'000     sectors 
March 2019                                                                   GBP'000 
 
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% 
 
 
 
Estimated movement in fair value    Industrial    Retail    Office     Other       All 
of investment properties at 31           GBP'000     GBP'000     GBP'000     GBP'000   sectors 
March 2018                                                                       GBP'000 
 
Increase in ERV by 5%                    6,559     6,057     4,837       731    18,184 
 
Decrease in ERV by 5%                  (5,460)   (5,405)   (4,792)     (737)  (16,394) 
 
Increase in  net initial yield by      (5,929)   (5,920)   (4,318)   (1,341)  (17,277) 
0.25% 
 
Decrease in  net initial yield by        6,532     6,473     4,680     1,540    18,911 
0.25% 
 
12.  Investment in joint ventures 
 
                                                                                GBP000 
 
Closing balance as at 31 March 2017                                           76,900 
 
Purchase of interest in City Tower Unit Trust                                    350 
 
Share of profit for the year                                                   3,252 
 
Distribution received                                                        (2,754) 
 
Closing balance as at 31 March 2018                                           77,748 
 
Purchase of interest in City Tower Unit Trust                                  2,250 
 
Share of profit for the year                                                   3,478 
 
Distribution received                                                        (3,311) 
 
Closing balance as at 31 March 2019                                           80,165 
 
Summarised joint venture financial information                31/03/2019  31/03/2018 
not adjusted for the Group's share                                  GBP000        GBP000 
 
Total assets                                                     250,170     240,090 
 
Total liabilities1                                                 3,118       2,129 
 
Revenues for year                                                  8,969       8,056 
 
Total comprehensive income                                        20,918      20,827 
 
Net asset value attributable to Group                             80,165      77,748 
 
Total comprehensive income attributable to the                     3,478       3,252 
Group 
 
1Liabilities that are non-recourse to the Group. 
 
13.  Trade and other receivables 
 
                                                              31/03/2019  31/03/2018 
                                                                    GBP000        GBP000 
 
Rent receivable                                                      866         974 
 
Other debtors and prepayments                                     12,604      13,441 
 
Receivable relating to disposals                                  36,219           - 
 
                                                                  49,689      14,415 
 
Other debtors and prepayments includes GBP10,352,000 (2018: GBP10,749,000) in 
respect of lease incentives. 
 
14.  Cash and cash equivalents 
 
As at 31 March 2019, the Group had GBP21.0 million (2018: GBP29.2 million) in cash. 
GBP1.2 million (2018: GBP1.0 million) is held in respect of rental deposits (see 
note 17). 
 
15.  Issued capital and reserves 
 
Share capital 
 
The share capital of the Company is represented by an unlimited number of 
Ordinary Shares of no par value. As at the date of this Report, the Company has 
565,664,749 ordinary shares in issue (2018: 565,664,749) of which 47,151,340 
ordinary shares are held in treasury (2018: 47,151,340). The total number of 
voting rights of the Company is 518,513,409 (2018: 518,513,409). 
 
Treasury capital 
 
47,151,340 (2018: 47,151,340) Ordinary Shares which represent 8.3% (2018: 8.3%) 
of the Company's total issued share capital are held in treasury. 
 
Revenue reserve 
 
This reserve represents an accumulated amount of the Group's prior earnings, 
net of dividends. 
 
16.  Interest-bearing loans and borrowings 
 
This note provides information about the contractual terms of the Group's 
interest-bearing loans and borrowings. For more information about the Group's 
exposure to interest rate risk, see note 19. 
 
                                                   31/03/2019                31/03/2018 
 
                                            GBP000         GBP000         GBP000         GBP000 
 
Non-current liabilities 
 
Loan facility                                         158,585                   150,085 
 
Less: Finance costs incurred             (2,621)                   (1,814) 
 
Add: Amortised finance costs                 266      (2,355)          234      (1,580) 
 
                                                      156,230                   148,505 
 
 
 
 
The Group entered into a GBP129.6 million loan facility with Canada Life on 16 
April 2013 that has 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 ('RCF') with Royal Bank of Scotland. The RCF limit was 
increased from GBP20.5 million to GBP32.5 million and the maturity date extended 
from July 2019 to 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 both the current and prior year 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%. 
 
On 9 August 2018 an additional amount of GBP10 million was drawn down on the 
available RCF to assist in the acquisition of new assets The Tun and The Arc. 
 
In January 2019 the RCF limit was increased from GBP32.5 million to GBP52.5 million 
providing additional undrawn capacity of GBP20 million. 
 
On the 4 March 2019 following the sale of Commercial Road an amount of GBP1.5 
million was repaid.  As at 31 March 2019 the total drawn amount on the RCF is GBP 
29 million. 
 
As at 31 March 2019 the Group has a loan balance of GBP158.6 million and GBP2.4 
million of unamortised arrangement fees. (31 March 2018: GBP150.1 million and GBP 
1.6 million of unamortised arrangement fees).  During the year additional costs 
relating to the refinancing were incurred.  Break costs of GBP2.6 million and 
other fees totalling GBP0.5 million have been written off to the income statement 
in the year.  Additionally costs totalling GBP1.1 million have been capitalised 
and are being charged to the income statement in line with the Group's 
amortisation policy. 
 
The Canada Life facility has a first charge security over all the property 
assets in the ring-fenced Security Pool (the 'Security Pool') which at 31 March 
2019 contained properties valued at GBP318.2 million (2018: GBP356.5 million). 
Various restraints apply during the term of the loan although the facility has 
been designed to provide significant operational flexibility.  The RBS facility 
has a first charge security over all the property assets held in SREIT No.2 
Limited, which at 31 March 2019 contained properties valued at GBP105.9million 
(2018: GBP43.3 million). 
 
The principal covenants for Canada Life and RBS are that the loan should not 
comprise more than 65% of the value of the assets in the Security Pool nor 
should estimated rental and other income arising from assets in the Security 
Pool, calculated on any interest payment date and one year projected from any 
interest payment date, comprise less than 185% of the interest payments. For 
the RBS facility, the forward looking interest cover covenant is 250%. 
 
As at the Interest Payment Date, the Canada Life interest cover calculated in 
accordance with the ICR covenant was 333% (2018: 352%) and the forward looking 
interest cover was 314% (2018: 329%), with the Loan to value ratio of 36.7% 
(22.1% net of all cash) (2018: 36.4%, 28.2% net of all cash). The RBS interest 
cover calculated in accordance with the ICR covenant was 495% (2018: 513%) with 
the loan to value ratio of 27.4% (2018: 47.4%). 
 
17.  Trade and other payables 
 
                                                              31/03/2019   31/03/2018 
                                                                    GBP000         GBP000 
 
Rent received in advance                                           4,532        4,782 
 
Rental deposits                                                    1,193          963 
 
Interest payable                                                   1,391        1,391 
 
Other trade payables and accruals                                  2,271        1,146 
 
                                                                   9,387        8,282 
 
18.  NAV per Ordinary Share 
 
The NAV per Ordinary Share is based on the net assets of GBP356,376,000 (2018: GBP 
353,570,000) and 518,513,409 (2018: 518,513,409) Ordinary Shares in issue at 
the reporting date. 
 
19.  Financial instruments, properties and associated risks 
 
Financial risk factors 
 
The Group holds cash and liquid resources as well as having debtors and 
creditors that arise directly from its operations. The Group uses interest rate 
contracts when required to limit exposure to interest rate risks, but does not 
have any other derivative instruments. 
 
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 has no exposure to foreign currency exchange risk. The Board regularly 
reviews and agrees policies for managing each of these risks and these are 
summarised below: 
 
Market price risk 
 
Rental income and the market value for properties are generally affected by 
overall conditions in the economy, such as changes in gross domestic product, 
employment trends, inflation and changes in interest rates. Changes in gross 
domestic product may also impact employment levels, which in turn may impact 
the demand for premises. Furthermore, movements in interest rates may also 
affect the cost of financing for real estate companies. Both rental income and 
property values may also be affected by other factors specific to the real 
estate market, such as competition from other property owners, the perceptions 
of prospective tenants of the attractiveness, convenience and safety of 
properties, the inability to collect rents because of bankruptcy or the 
insolvency of tenants, the periodic need to renovate, repair and release space 
and the costs thereof, the costs of maintenance and insurance, and increased 
operating costs. 
 
The Directors monitor the market value of investment properties by having 
independent valuations carried out quarterly by a firm of independent chartered 
surveyors. Note 11 sets out the sensitivity analysis on the market price risk. 
Concentration risk based on industry and geography, is set out in the tables on 
page 5. Included in market price risk is interest rate risk which is discussed 
further below. 
 
Credit risk 
 
Credit risk is the risk that an issuer or counterparty will be unable or 
unwilling to meet a commitment that it has entered into with the Group. In the 
event of default by an occupational tenant, the Group will suffer a rental 
income shortfall and incur additional costs, including legal expenses, in 
maintaining, insuring and re-letting the property. The Investment Manager 
reviews reports prepared by Dun & Bradstreet, or other sources to assess the 
credit quality of the Group's tenants and aims to ensure there is no excessive 
concentration of risk and that the impact of any default by a tenant is 
minimised. 
 
In respect of credit risk arising from other financial assets, which comprise 
cash and cash equivalents, exposure to credit risk arises from default of the 
counterparty with a maximum exposure equal to the carrying amounts of these 
instruments. In order to mitigate such risks, cash is maintained with major 
international financial institutions with high quality credit ratings. During 
the year and at the reporting date the Group maintained relationships with 
branches and subsidiaries of HSBC. HSBC Credit Rating is AA negative (provided 
by Standard and Poor). 
 
The maximum exposure to credit risk for rent receivables at the reporting date 
by type of sector was: 
 
                                                      31 March 2019   31 March 2018 
                                                    Carrying amount Carrying amount 
                                                               GBP000            GBP000 
 
Office                                                            3             148 
 
Industrial                                                      599             742 
 
Retail                                                          264              84 
 
                                                                866             974 
 
Rent receivables which are past their due date, but which were not impaired at 
the reporting date were: 
 
                                                      31 March 2019   31 March 2018 
                                                    Carrying amount Carrying amount 
                                                               GBP000            GBP000 
 
0-30 days                                                       775             640 
 
31-60 days                                                       21               3 
 
61-90 days                                                       34              85 
 
91 days plus                                                     36             246 
 
                                                               866*            974* 
 
*Net of bad debt provisions of GBP156k (2018: GBP489k). 
 
Liquidity risk 
 
Liquidity risk is the risk that the Group will encounter difficulties in 
meeting obligations associated with its financial obligations. 
 
The Group's investments comprise UK commercial property. Property and property 
related assets are inherently difficult to value due to the individual nature 
of each property. As a result, valuations are subject to substantial 
uncertainty. There is no assurance that the estimates resulting from the 
valuation process will reflect the actual sales price even where such sales 
occur shortly after the valuation date. Investments in property are relatively 
illiquid; however the Group has tried to mitigate this risk by investing in 
properties that it considers to be good quality. 
 
In certain circumstances, the terms of the Group's debt facilities entitle the 
lender to require early repayment and in such circumstances the Group's ability 
to maintain dividend levels and the net asset value could be adversely 
affected. The Investment Manager prepares cash flows on a rolling basis to 
ensure the Group can meet future liabilities as and when they fall due. 
 
The following table indicates the maturity analysis of the financial 
liabilities. 
 
As at 31 March 2019      Carrying    Expected    6 mths   6 mths -      2-5        More 
                           amount  cash flows   or less    2 years    years      than 5 
                             GBP000        GBP000      GBP000       GBP000     GBP000       years 
                                                                                   GBP000 
 
Financial liabilities 
 
Interest-bearing loans    157,621     220,463     3,117      9,350   47,505     160,491 
and borrowings and 
interest 
 
Trade and other             3,464       3,464    2,271           -      -       1,193 
payables 
 
Total financial           161,085     223,927     5,388      9,350   47,505     161,684 
liabilities 
 
As at 31 March 2018     Carrying     Expected   6 mths    6 mths -      2-5        More 
                          amount   cash flows  or less     2 years    years      than 5 
                            GBP000         GBP000     GBP000        GBP000     GBP000       years 
                                                                                   GBP000 
 
Financial liabilities 
 
Interest-bearing loans   149,896      212,213    3,217       9,651   38,854     160,491 
and borrowings and 
interest 
 
Trade and other            2,109        2,109   1,146            -      -         963 
payables 
 
Total financial          152,005      214,322    4,363       9,651   38,854     161,454 
liabilities 
 
 
Interest rate risk 
 
Exposure to market risk for changes in interest rates relates primarily to the 
Group's long-term debt obligations and to interest earned on cash balances.  As 
interest on the Group's long-term debt obligations is payable on a fixed-rate 
basis the Group is not exposed to interest rate risk, but is exposed to changes 
in fair value of long-term debt obligations driven by interest rate movements. 
As at 31 March 2019 the fair value of the Group's GBP129.6 million loan with 
Canada Life was GBP140.3 million (2018: GBP140.3 million). The RBS revolving credit 
facility is a low margin flexible source of funding with a margin of 1.6% above 
3 month LIBOR and it is considered by management that the carrying value is 
equal to fair value. 
 
A 1% increase or decrease in short-term interest rates would increase or 
decrease the annual income and equity by GBP104,000 based on the cash balance as 
at 31 March 2019. 
 
Fair values 
 
The fair values of financial assets and liabilities are not materially 
different from their carrying values, unless disclosed below, in the financial 
statements. 
 
The fair value hierarchy levels are as follows: 
 
-     Level 1 - quoted prices (unadjusted) in active markets for identical 
assets and liabilities 
 
-     Level 2 - inputs other than quoted prices included within level 1 that 
are observable for the asset or liability, either directly (i.e. as prices) or 
indirectly (i.e. derived from prices); and 
 
-     Level 3 - inputs for the assets or liability that are not based on 
observable market data 
(unobservable inputs). 
 
There have been no transfers between Levels 1, 2 and 3 during the year (2018: 
none). 
 
The following summarises the main methods and assumptions used in estimating 
the fair values of financial instruments and investment property. 
 
Investment property - level 3 
 
Fair value is based on valuations provided by an independent firm of chartered 
surveyors and registered appraisers. These values were determined after having 
taken into consideration recent market transactions for similar properties in 
similar locations to the investment properties held by the Group. The fair 
value hierarchy of investment property is level 3. See Note 11 for further 
details. 
 
Interest bearing loans and borrowings - level 2 
 
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 31 March 2019 the fair value of the Group's GBP129.6 million 
loan with Canada Life was GBP140.3 million (2018: GBP140.3 million). 
 
Trade and other receivables/payables - level 2 
 
All receivables and payables are deemed to be due within one year and as such 
the notional amount is considered to reflect the fair value. 
 
Capital management 
 
The Board's policy is to maintain a strong capital base to maintain investor, 
creditor and market confidence and to sustain future development of the 
business. The objective is to ensure that it will continue as a going concern 
and to maximise the return to its equity shareholders through an appropriate 
level of gearing. The Company's capital management process ensures it meets its 
financial covenants in its borrowing arrangements. Breaches in meeting the 
financial covenants could permit the lenders to immediately accelerate the 
repayment of loans and borrowings. The Company monitors as part of its 
quarterly board meetings that it will adhere to specific leverage, interest 
cover and rental cover ratios. There have been no breaches in the financial 
covenants of any loans and borrowings during the financial year 
 
 
The Company's debt and capital structure comprises the following: 
 
                                                              31/03/2019  31/03/2018 
                                                                    GBP000        GBP000 
 
Debt 
 
Fixed rate loan facility                                         129,585     129,585 
 
Floating rate loan facility*                                      29,000      20,500 
 
Equity 
 
Called-up share capital                                          192,638     192,638 
 
Reserves                                                         163,738     160,932 
 
                                                                 356,376     353,570 
 
Total debt and equity                                            514,961     503,655 
 
 
There were no changes in the Group's approach to capital management during the 
year. 
 
*Please note that this amount refers to the amount drawn.  The total facility 
limit as at 31 March 2019 was GBP52.5m. 
 
20.  Operating leases 
 
The Group leases out its investment property under operating leases. At 31 
March 2019 the future minimum lease receipts under non-cancellable leases are 
as follows: 
 
                                                             31/03/2019  31/03/2018 
                                                                   GBP000        GBP000 
 
Less than one year                                               25,138      24,573 
 
Between one and five years                                       76,120      80,004 
 
More than five years                                             75,679      73,026 
 
                                                                176,937     177,603 
 
 
The total above comprises the total contracted rent receivable as at 31 March 
2019. 
 
The Group has entered into leases on its property portfolio. The commercial 
property leases typically have lease terms between 5 and 15 years and include 
clauses to enable periodic upward revision of the rental charge according to 
prevailing market conditions. Some leases contain options to break before the 
end of the lease term. 
 
21.  List of Subsidiary and Joint Venture Undertakings 
 
The companies listed below are those which were part of the Group at 31 March 
2019 and 31 March 2018: 
 
Undertaking                    Category      Country of            Ultimate 
                                             incorporation         ownership 
 
SREIT No.2 Ltd                 Subsidiary    Guernsey              100% 
 
SREIT Holdings No.2 Ltd        Subsidiary    Guernsey              100% 
 
SREIT Holdings Ltd             Subsidiary    Guernsey              100% 
 
SREIT Property Ltd             Subsidiary    Guernsey              100% 
 
SREIT (Portergate) Ltd         Subsidiary    Guernsey              100% 
 
SREIT (Victory) Ltd            Subsidiary    Guernsey              100% 
 
SREIT (Uxbridge) Ltd           Subsidiary    Guernsey              100% 
 
SREIT (City Tower) Ltd         Subsidiary    Guernsey              100% 
 
SREIT (Store) Ltd              Subsidiary    Guernsey              100% 
 
SREIT Holdings No.3 Ltd        Subsidiary    Guernsey              100% 
 
SREIT No.3 Finance Ltd         Subsidiary    Guernsey              100% 
 
SREIT (Bedford) Ltd            Subsidiary    Guernsey              100% 
 
City Tower Unit Trust          Joint Venture Jersey                25% 
 
Store Unit Trust               Joint Venture Jersey                50% 
 
 
The company listed below was liquidated during the year ended 31 March 2019: 
 
Undertaking                  Category        Country of            Ultimate 
                                             incorporation         ownership 
 
St John's Centre (Bedford)   Subsidiary      UK                    100% 
Ltd 
 
22.  Related party transactions 
 
Material agreements are disclosed in note 3. Transactions with Directors and 
the Investment Manager are disclosed in note 7. Transactions with joint 
ventures are disclosed in note 12. 
 
23.  Capital commitments 
 
As at 31 March 2019 the Group had capital commitments of GBP9.4 million (2018: GBP 
1.2 million). 
 
24.  Post balance sheet events 
 
On 16 May 2019 unconditional contracts were exchanged to sell Allied Industrial 
Estate, Acton for GBP18.875 million.  The buyer has paid a non-refundable deposit 
of GBP1.89 million and completion is due in November 2019. 
 
Other information (unaudited) 
 
EPRA Performance Measures (unaudited) 
 
As recommended by EPRA (European Public Real Estate Association), EPRA 
performance measures are disclosed in the section below. 
 
EPRA performance measures: summary table 
 
                                                             31/03/2019      31/03/2018 
 
                                                                  Total           Total 
                                                                   GBP000            GBP000 
 
EPRA earnings                                                    12,022          12,549 
 
Adjusted EPRA earnings*                                          15,150          14,056 
 
EPRA earnings per share                                             2.3             2.4 
 
Adjusted EPRA earnings per share*                                   2.9             2.7 
 
EPRA NAV                                                356,376         353,568 
 
EPRA NAV per share                                                 68.7            68.2 
 
EPRA NNNAV                                                      343,322         332,590 
 
EPRA NNNAV per share                                               66.2            64.1 
 
EPRA Net Initial Yield                                             5.0%            5.0% 
 
EPRA topped-up Net Initial Yield                                   5.3%            5.5% 
 
EPRA Vacancy Rate                                                  8.5%            7.2% 
 
EPRA Cost Ratios - including direct                               27.6%           33.1% 
vacancy costs 
 
Adjusted EPRA Cost Ratios - including                             21.2%           27.5% 
direct vacancy costs* 
 
EPRA Cost Ratios - excluding direct                               27.6%           29.8% 
vacancy costs 
 
Adjusted EPRA Cost Ratios - excluding                             21.2%           24.2% 
direct vacancy costs* 
 
*Adjusted for one off company transactions in the prior year. 
 
a.    EPRA earnings and EPS 
 
Total comprehensive income excluding realised and unrealised gains/ losses on 
investment property, share of profit on joint venture investments and changes 
in fair value of financial instruments, divided by the weighted average number 
of shares. 
 
                                                            31/03/2019    31/03/2018 
 
                                                                  GBP000          GBP000 
 
IFRS profit after tax                                           15,901        33,836 
 
Adjustments to calculate EPRA Earnings: 
 
Profit on disposal of investment property                      (2,156)         (594) 
 
Net valuation gain on investment property                      (1,556)      (20,195) 
 
Share of valuation (loss)/gain in associates and                 (167)         (498) 
joint ventures 
 
EPRA earnings                                                   12,022        12,549 
 
Company adjustments1                                             3,128         1,507 
 
Adjusted EPRA earnings                                          15,150        14,056 
 
Weighted average number of Ordinary shares                 518,513,409   518,513,409 
 
IFRS earnings per share (pence)                                    3.1           6.5 
 
EPRA earnings per share (pence)                                    2.3           2.4 
 
Adjusted EPRA earnings per share (pence)                           2.9           2.7 
 
1 The Company adjustments relate to one-off costs 
 
b.    EPRA NAV per share 
 
The net asset value adjusted to exclude assets or liabilities not expected to 
crystallise in a long-term investment property model, divided by the number of 
shares in issue. 
 
                                                           31/03/2019    31/03/2018 
 
                                                                 GBP000          GBP000 
 
IFRS NAV per financial statements                             356,376       353,570 
 
EPRA NAV                                                      356,376       353,570 
 
Shares in issue at end of year                            518,513,409   518,513,409 
 
IFRS NAV per share (pence)                                       68.7          68.2 
 
EPRA NAV per share (pence)                                       68.7          68.2 
 
c.          EPRA NNNAV per share 
 
The EPRA NAV adjusted to include the fair value of debt, divided by the number 
of shares in issue. 
 
                                                              31/03/2019  31/03/2018 
 
                                                                    GBP000        GBP000 
 
EPRA NAV                                                         356,376     353,568 
 
Adjustments to calculate EPRA NNNAV: 
 
Fair value of debt                                              (13,054)    (12,279) 
 
EPRA NNNAV                                                       343,322     341,289 
 
EPRA NNNAV per share (pence)                                        66.2        65.8 
 
d.    EPRA Net Initial Yield 
 
Annualised rental income based on the cash rents passing at the balance sheet 
date, less non-recoverable property operating expenses, divided by the grossed 
up market value of the complete property portfolio. The EPRA "topped up" NIY is 
the EPRA NIY adjusted for unexpired lease incentives. 
 
                                                             31/03/2019   31/03/2018 
 
                                                                   GBP000         GBP000 
 
Investment property - wholly owned                              381,450      399,725 
 
Investment property - share of joint ventures                    79,163       77,770 
and funds 
 
Complete property portfolio                                     460,613      477,495 
 
Allowance for estimated purchasers' costs                        26,716       27,695 
 
Gross up completed property portfolio                           487,329      505,190 
valuation 
 
Annualised cash passing rental income                            26,983       27,054 
 
Property outgoings                                              (2,375)      (1,734) 
 
Annualised net rents                                             24,608       25,320 
 
Notional rent expiration of rent free periods                     1,029        2,566 
(1) 
 
Topped-up net annualised rent                                    25,637       27,886 
 
EPRA NIY                                                           5.0%         5.0% 
 
EPRA "topped-up" NIY                                               5.3%         5.5% 
 
(1) The period over which rent free periods expire is 2 years (2018: 2 years). 
 
e.         EPRA cost ratios 
 
Administrative and operating costs as a percentage of         31/03/2019  31/03/2018 
gross rental income calculated including and excluding 
direct vacancy costs. 
 
 
 
                                                                    GBP000        GBP000 
 
Administrative/property operating expense line per IFRS            7,970       8,972 
income statement 
 
Ground rent costs                                                  (124)       (141) 
 
EPRA Costs (including direct vacancy costs)                        7,846       8,831 
 
Direct vacancy costs                                             (1,769)       (879) 
 
EPRA Costs (excluding direct vacancy costs)                        6,077       7,952 
 
Company adjustments                                                    -     (1,507) 
 
Adjusted EPRA Costs (including company adjustment costs)           7,846       7,324 
 
Direct vacancy costs                                             (1,769)       (879) 
 
Adjusted EPRA Costs (excluding direct vacancy costs)               6,077       6,445 
 
Gross Rental Income less ground rent costs                        25,154      23,900 
 
Share of Joint Ventures income less ground rent costs              3,311       2,754 
 
Gross Rental Income                                               28,465      26,654 
 
EPRA Cost Ratio (including direct vacancy costs)                   27.6%       33.1% 
 
EPRA Cost Ratio (excluding direct vacancy costs)                   21.2%       29.8% 
 
EPRA Vacancy Rate                                                   8.5%        7.2% 
 
Adjusted EPRA Cost Ratio (including company adjustment             27.6%       27.5% 
costs) 
 
Adjusted EPRA Cost Ratio (excluding direct vacancy costs)          21.2%       24.2% 
 
Sustainability Performance Measures (Environmental) (unaudited) 
 
SREIT reports sustainability information in accordance with EPRA Best Practice 
Recommendations on Sustainability Reporting (sBPR) 2017, 3rd Edition for the 12 
months, 1st January 2018 - 31st December 2018, presented with comparison 
against 2017. As permitted by the EPRA Sustainability Reporting Guidelines, 
environmental data has been developed and presented in line with the Global 
Real Estate Sustainability Benchmark (GRESB). 
 
The reporting boundary has been scoped to where SREIT has operational control: 
managed properties where SREIT is responsible for payment of utility invoices 
and / or arrangement of waste disposal contracts. 'Operational control' has 
been selected as the reporting boundary (as opposed to 'financial control' or 
'equity share') as this reflects the portion of the portfolio where the Company 
can influence operational procedures and, ultimately, sustainability 
performance. The operational control approach is the most commonly applied 
within the industry. 
 
In 2017 there were 21 such managed assets within the portfolio. In 2018, this 
increased to 23 managed assets, reflecting the purchase of two new assets (The 
Arc in Nottingham and The Tun in Edinburgh). All managed assets are included 
within the below data for 2018. 
 
Where data coverage is less than 100%, a supporting explanation is provided 
within the data notes immediately below the relevant table. Energy and water 
consumption data is reported according to automatic meter reads, manual meter 
reads or invoice estimates. Where required, missing consumption data has been 
estimated by pro-rating data from other periods using recognised techniques. 
The proportion of data that is estimated is presented in the footnotes to the 
data tables. Historic consumption data has been restated where more complete 
and/or accurate records have become available. 
 
SREIT does not contain any managed assets that consume energy from district 
heating or cooling sources. Therefore, the EPRA sBPR DH&C-Abs and DH&C-LfL 
indicators are not applicable and not presented in this report. Furthermore, 
the Company does not have any direct employees; it is served by the employees 
of the Investment Manager (Schroder Real Estate Investment Management Limited). 
Accordingly, the EPRA Overarching Recommendation for companies to report on the 
environmental impact of their own offices is not relevant/material and not 
presented in this report. 
 
This report has been prepared by EVORA Global, retained sustainability and 
energy management consultants to Schroder Real Estate Investment Management. 
 
Total energy consumption (Elec-Abs; Fuels-Abs) 
 
The table below sets out total landlord obtained energy consumption from the 
Company's managed portfolio by sector. 
 
                                                Total electricity        Total fuel consumption 
                                                      consumption                         (kWh) 
                                                            (kWh) 
 
Sector                                          2017         2018           2017          2018 
 
Office                                     3,225,386    3,290,220      1,969,103     2,214,422 
 
  Coverage                                     10/10        11/11            9/9         12/12 
 
Retail                                       186,638      126,882          1,599         2,155 
 
  Coverage                                       2/2          2/2            1/1           1/1 
 
Mixed Use[12]                              2,573,373    2,609,116              -             - 
 
  Coverage                                       1/1          1/1              -             - 
 
Industrial, Distribution Warehouse           161,585      111,971            376         1,705 
 
  Coverage                                       5/5          5/5            2/2           2/2 
 
Retail, Warehouse                             22,415       22,888              -             - 
 
  Coverage                                       1/1          1/1              -             - 
 
Leisure                                      286,216      271,648        222,289       163,545 
 
  Coverage                                       1/1          1/1            1/1           1/1 
 
Total                                      6,455,613    6,432,725      2,193,367     2,381,827 
 
  Coverage                                     20/20        21/21          13/13         16/16 
 
Total electricity and fuel                 8,648,979    8,814,551              -             - 
 
  Coverage                                     20/20        22/22              -             - 
 
Renewable electricity                            97%          98%              -             - 
 
                                               20/20        21/21              -             - 
Coverage 
 
-       Consumption data relates to the managed portfolio only: 
 
-       Offices: Common areas, shared services and/or whole building 
 
-       Mixed-Use: Whole building 
 
-       Retail:  Common areas and tenant voids 
 
-       Retail Warehouse: Exterior areas only 
 
-       Industrial, Distribution Warehouse: Exterior areas and tenant voids 
 
-       Leisure: Common areas and external areas 
 
-       Energy procured directly by tenants is not reported. 
 
-       Estimation: 0.1% of Electricity and 1% of Gas data have been estimated 
through pro-rating. 
 
-       Where appropriate (for relevant assets), consumption data has been 
adjusted to reflect the Company's share of asset ownership. 
 
-       Coverage relates to the number of managed assets for which data is 
reported. 
 
-       Renewable electricity (%) is calculated according to the attributes of 
energy supply contracts as at 31st December 2018 and only reflects renewable 
electricity procured under a 100% 'green tariff' (i.e. where generation is from 
100% renewable sources). The renewables percentage of standard (non 'green 
tariff') energy supplies are not currently known and therefore has not been 
included within this number. As far as we know, no renewable fuel was consumed 
during the reporting period and therefore a percentage renewable fuel figure is 
not presented here. 
 
-       All energy was procured from a third-party supplier. No 
'self-generated' renewable energy was consumed during the reporting period and 
is therefore not presented here. 
 
Like for like energy consumption (Elec-LfL; Fuels-LfL; Energy-Int) 
 
The table below sets out the like for like landlord obtained energy consumption 
from the Company's managed portfolio by sector. 
 
                         Total electricity               Total fuels           Energy Intensity 
                               (kWh)                        (kWh)                  (kWh/m2) 
 
Sector                  2017      2018    Change      2017      2018  Change     2017        2018 
 
Office             3,225,386 3,180,842       -1% 1,969,103 2,008,722      2%      144         143 
 
  Coverage                     10/10                         9/9                    10/10 
 
Retail                17,521    14,683      -16%                                   13          11 
 
  Coverage                      1/1                                                  1/1 
 
Mixed Use[13]      2,573,373 2,609,116        1%                                  178         181 
 
  Coverage                      1/1                                                  1/1 
 
Industrial,            3,596       786  -78%[14]                                   0.2        0.1 
Distribution 
Warehouse 
 
  Coverage                      1/1                                                  1/1 
 
Retail, Warehouse     22,415    22,888        2%                                  1.8         1.9 
 
  Coverage                      1/1                                                  1/1 
 
Leisure              286,216   271,648       -5%   222,289   163,545    -26%      184         157 
 
  Coverage                      1/1                          1/1                     1/1 
 
Total              6,128,507 6,099,963     -0.5% 2,191,392 2,172,267     -1% 
 
  Coverage                     15/15                        10/10                   15/15 
 
Total electricity  8,319,899 8,272,229       -1% 
and fuel 
 
      Coverage                             15/15 
 
 
-       Like for like excludes assets that were purchased, sold or under 
refurbishment during the two years reported. 
 
-       Consumption data relates to the managed portfolio only: 
 
-       Offices: Common areas, shared services and/or whole building 
 
-       Mixed-Use: Whole building 
 
-       Retail: Common areas and tenant voids 
 
-       Retail, Warehouse: Exterior areas only 
 
-       Industrial, Distribution Warehouse: Exterior areas only 
 
-       Leisure: Common areas and external areas 
 
-       Energy procured directly by tenants is not reported. 
 
-       Estimation: 0.1% of Electricity and 1% of Gas data have been estimated 
through pro-rating. 
 
-       Where appropriate (for relevant assets), consumption data has been 
adjusted to reflect the Company's share of ownership. 
 
-       Coverage relates to the number of managed assets for which data is 
reported. 
 
-       Intensity: An energy intensity kWh/m2 is reported for assets within the 
like for like portfolio. The numerator is landlord-managed energy consumption 
and the denominator is net lettable floor area (m2). For Leisure / Retail, 
common parts energy consumption is divided by common parts area (m2). As common 
parts area is not typically measured and therefore known, where required we 
have taken the known net lettable area and applied an internal benchmark: 25% 
common part area for unenclosed centres and 35% for enclosed centres. 
 
Greenhouse gas emissions (GHG-Dir-Abs; GHG-Indir-Abs; GHG-Int) 
 
The table below sets out the Company's greenhouse gas emissions by sector. 
 
                       Absolute emissions    Like for like emissions      Intensity 
                             (tCO²e)                 (tCO²e)             (kg CO2e/m2) 
 
Sector                      2017       2018       2017  2018   Change      2017     2018 
 
Office 
 
Scope 1                      362        407        362   370       2%        41       35 
 
Scope 2                    1,134        931      1,134   900     -21% 
 
Coverage                   10/10      12/12                                        10/10 
 
Retail 
 
Scope 1                                                                       3        2 
 
Scope 2                       66         36          6     4     -33% 
 
Coverage                     2/2        2/2                                          1/1 
 
Mixed Use[15] 
 
Scope 1                        0          0                                  63       51 
 
Scope 2                      905        739        905   739     -18% 
 
Coverage                     1/1        1/1                                          1/1 
 
Industrial, 
Distribution 
Warehouse 
 
Scope 1                      0.1        0.3          0     0               0.09     0.02 
 
Scope 2                       57         32       1.26  0.22     -83% 
 
Coverage                     5/5        5/5        1/1 
 
Retail, Warehouse 
 
Scope 1                        0          0          0     0                0.6      0.5 
 
Scope 2                        8          6          8     6     -25% 
 
Coverage                     1/1        1/1                                          1/1 
 
Leisure 
 
Scope 1                       41         30         41    30     -27%        41       31 
 
Scope 2                      101         77        101    77     -24% 
 
Coverage                     1/1        1/1                                          1/1 
 
                                                                                   Total 
 
Scope 1                      403        438        403   400      -1% 
 
Scope 2                    2,270      1,821      2,155 1,727     -20% 
 
Scope 1 & 2                2,673      2,259      2,558 2,126     -17% 
 
Coverage                   20/20      22/22                                        15/15 
 
-       Like for like excludes assets that were purchased, sold or under 
refurbishment during the two years reported. 
 
-       The Company's greenhouse gas (GHG) inventory has been developed as 
follows: 
 
-       Fuels/electricity GHG emissions factors taken from UK government's 
Greenhouse Gas Reporting Factors for Company Reporting (2017 and 2018). 
 
-       GHG emissions from electricity (Scope 2) are reported according to the 
'location-based' approach. 
 
-       GHG emissions are presented as tonnes of carbon dioxide equivalent (tCO 
²e). GHG intensity is presented as kilograms of carbon dioxide equivalent 
(kgCO2e), where possible. 
 
-       Emissions data relates to the managed portfolio only; 
 
-       Offices: Common areas, shared services and/or whole building 
 
-       Mixed-Use: Whole building 
 
-       Retail: Common areas and tenant voids 
 
-       Retail, Warehouse: Exterior areas only 
 
-       Industrial, Distribution Warehouse: Exterior areas and tenant voids 
 
-       Leisure: Common areas and external areas 
 
-       Emissions associated with energy procured directly by tenants is not 
reported. 
 
-       Estimation: 0.1% of Electricity and 1% of Gas data have been estimated 
through pro-rating. 
 
-       Where appropriate (for relevant assets), emissions data has been 
adjusted to reflect the Company's share of asset ownership. 
 
-       Coverage relates to the number of managed assets for which data is 
reported. 
 
-       Intensity: An intensity kgCO2e/m2 is reported for assets within the 
like for like portfolio. The numerator is landlord-managed GHG emissions from 
energy consumption and the denominator is net lettable floor area (m2). For 
Leisure / Retail, common parts GHG emissions is divided by common parts area 
(m2). As common parts area is not typically measured and therefore known, where 
required we have taken the known net lettable area and applied an internal 
benchmark: 25% common part area for unenclosed centres and 35% for enclosed 
centres. 
 
Water (Water-Abs; Water-LfL; Water-Int) 
 
The table below sets out water consumption for assets managed by the Company. 
 
                     Absolute water           Like for like              Intensity 
                    consumption (m³)      water consumption (m³)          (m³/m²) 
 
Sector                  2017      2018      2017      2018    Change      2017     2018 
 
Office                 9,855     7,898     9,855     7,898  -20%[16]      0.33     0.26 
 
      Coverage           8/8       8/8                                              8/8 
 
Retail                 1,816     2,392     1,654     2,313   40%[17]       0.7      1.0 
 
      Coverage           2/2       2/2                                              1/1 
 
Mixed Use[18]          5,512     5,564     5,512     5,564        1%      0.38     0.39 
 
      Coverage           1/1       1/1                                              1/1 
 
Leisure                  277       242       277       242      -13%      0.08     0.07 
 
      Coverage           1/1       1/1                                              1/1 
 
Total                 17,460    16,096    17,298    16,017       -8% 
 
      Coverage         12/12     12/12                                            11/11 
 
 
-       Like for like excludes assets that were purchased, sold or under 
refurbishment during the two years reported. 
 
-       All consumption data relates to the managed portfolio only: 
 
-       Offices and Mixed use: Whole building 
 
-       Retail and Leisure: Common parts 
 
-       There is no landlord responsibly for water in Retail, Warehouses and 
Industrial, Distribution Warehouse 
 
-       Water procured directly by tenants is not reported. 
 
-       Estimation: 3% of water data has been estimated through pro-rating. 
 
-       Where appropriate (for relevant assets), consumption data has been 
adjusted to reflect the Company's share of ownership. 
 
-       Coverage relates to the number of managed assets for which data is 
reported. 
 
-       Intensity: An intensity m3/m2 is reported for assets within the like 
for like portfolio. The numerator is landlord-managed water consumption and the 
denominator is net lettable floor area (m2). For Leisure / Retail, common parts 
water consumption is divided by common parts area (m2). As common parts area is 
not typically measured and therefore known, where required we have taken the 
known net lettable area and applied an internal benchmark: 25% common part area 
for unenclosed centres and 35% for enclosed centres. 
 
-       All water was procured from a municipal supply. As far as we are aware, 
no surface, ground or rainwater was consumed during the reporting period and 
therefore is not presented here. 
 
Waste (Waste-Abs; Waste-LfL) 
 
The table below sets out waste managed by the Company by disposal route and 
sector. 
 
                               Absolute tonnes                 Like for like tonnes 
 
                             2017            2018            2017           2018         % 
                                                                                      change 
                        Tonnes    %    Tonnes     %     Tonnes    %    Tonnes    % 
 
Office         Recycled     85     39%     112      50%     85     39%     107    49%     26% 
 
           Incineration    131     60%     114      50%    131     61%     112    51%    -15% 
            with energy 
               recovery 
 
              Direct to       0     0%  0            0%      0      0%      0      0%      0% 
               landfill 
 
                  Total            217              227            217            219      1% 
 
               Coverage            9/9            10/10                                   9/9 
 
Retail         Recycled      68    62%      98     69% 
 
           Incineration      42    38%      44     31% 
            with energy 
               recovery 
 
              Direct to              0      0%       0              0% 
               landfill 
 
                  Total            111             142 
 
               Coverage            3/3             3/3 
 
Mixed Use      Recycled     115    71%      94     59%     115     71%     94     59%    -19% 
[19] 
           Incineration      48    29%      64     41%      48     29%     64     41%     35% 
            with energy 
               recovery 
 
              Direct to       0     0%       0       0       0      0%      0      0%      0% 
               landfill 
 
                  Total            162             158             162            158     -3% 
 
               Coverage            1/1             1/1                                    1/1 
 
Leisure        Recycled     127    44%     166     50%     127     44%    166     50%     30% 
 
           Incineration     164    56%     165     50%     164     56%    165     50%      1% 
            with energy 
               recovery 
 
              Direct to       0     0%       0      0%       0      0%      0      0%      0% 
               landfill 
 
                  Total            291             331             291    331             14% 
 
               Coverage            1/1             1/1             1/1 
 
Total          Recycled     396    51%     470     55%     327     49%    367     52%     12% 
 
           Incineration     385    49%     388     45%     343     51%    342     48%      0% 
            with energy 
               recovery 
 
              Direct to       0     0%       0      0%       0      0%      0      0%      0% 
               landfill 
 
                  Total     781            858             670            708              6% 
 
               Coverage   14/14          15/15                                          11/11 
 
 
-       Whilst zero waste is sent direct to landfill, a residual component of 
the 'recycled' and 'incineration with energy recovery' waste streams may end up 
in landfill. 
 
-       Like for like excludes assets that were purchased, sold or under 
refurbishment during the two years reported. 
 
-       Waste data relates to the managed portfolio only. 
 
-       Waste management procured directly by tenants is not reported. 
 
-       The Company has no waste management responsibilities for Retail, 
Warehouse and Industrial, Distribution Warehouse. 
 
-       Where appropriate (for relevant assets), waste data has been adjusted 
to reflect the Company's share of asset ownership. 
 
-       Coverage relates to the number of managed assets for which data is 
reported. 
 
-       Reported data relates to non-hazardous waste only. Hazardous waste is 
not reported as due to the low volumes produced it is not considered material. 
Furthermore, robust tonnage data on the small quantities that are produced is 
not available. 
 
Sustainability certification (Cert-Tot): Green building certificates 
 
Rating                                           Portfolio by floor area (%) 
 
Offices (BREEAM In Use)                                     1.3% 
 
Mixed Use[20] (BREEAM Fit Out/                              0.1% 
Refurbishment) 
 
All other sectors                                            0% 
 
Coverage                                                    100% 
 
-       Green building certificate records for the Fund are provided as at 31st 
March 2019 by portfolio floor area. 
 
-       Data provided includes managed and non-managed assets (i.e. the whole 
portfolio). 
 
-       Where appropriate (for relevant assets), floor area coverage data has 
been adjusted to reflect the Fund's share of ownership. 
 
Sustainability certification (Cert-Tot): Energy performance certificates 
 
Energy performance certificate             Portfolio by floor area (%) 
rating 
 
A                                                     0.03% 
 
B                                                      3.3% 
 
C                                                     29.1% 
 
D                                                     26.9% 
 
E                                                     13.5% 
 
F                                                      1.5% 
 
G                                                      2.2% 
 
Exempt                                                 1.6% 
 
No EPC                                                21.9% 
 
Coverage                                               100% 
 
-       Energy Performance Certificate (EPC) records for the Company are 
provided as at 31st December 2018 by portfolio floor area. 
 
-       Data provided includes managed and non-managed assets (i.e. the whole 
portfolio). 
 
-       Where appropriate (for relevant assets), floor area coverage data has 
been adjusted to reflect the Company's share of asset ownership, including 25% 
of the net lettable area of City Tower, Manchester (reflecting the Company's 
25% ownership share) and 50% of Store Street, London (reflecting the Company's 
50% ownership share) 
 
-       The information on EPCs is continuously reviewed and updated. 
 
-       EPCs are known for 78% of the portfolio by floor area. In general 
terms, since the introduction of the EPC Regulations in 2008, EPCs are required 
for the letting of units or buildings or the sale of buildings. In addition, 
the UK Minimum Energy Efficiency Standards regulations ('MEES') came into force 
for commercial buildings on 1st April 2018 and require a minimum EPC rating of 
E for new lettings; the rules apply to all leases from 1 April 2023. The EPCs 
for the portfolio will be managed to ensure compliance with the MEES 
regulations. The F&G EPCs relate to ten units in six assets. 
 
Sustainability Performance Measures (Social) 
 
EPRA's Sustainability Best Practices Recommendations Guidelines 2017 ("EPRA's 
Guidelines") include Social and Governance reporting measures to be disclosed 
for the entity i.e. the Company. The Company is an externally managed real 
estate investment trust and has no direct employees. A number of these Social 
Performance measures relate to entity employees and therefore these measures 
are not relevant for reporting at the entity level.  The Investment Manager to 
the Company, Schroder Real Estate Investment Management Limited, is part of 
Schroders PLC which has responsibility for the employees that support the 
Company. The Company aims to comply with EPRA's Guidelines and therefore has 
included Social and Governance Performance Measure disclosures in this report. 
However, these are presented as appropriate for the activities and 
responsibilities of the Schroder Real Estate Investment Trust Limited (the 
"Company"), Schroders PLC or the Investment Manager, Schroder Real Estate 
Investment Management Limited. 
 
The Schroders PLC Annual Report and Accounts for the 12 months to 31 March 2019 
supports the performance measures in relation to the Investment Manager as set 
out below. Schroders PLC's principles in relation to people including 
diversity, gender pay gap, values, employee satisfaction survey, wellbeing and 
retention can be found at: 
 
·      https://www.schroders.com/en/sysglobalassets/digital/global/ 
annual-report/documents/annual-report-full.pdf; and, 
 
·      https://www.schroders.com/en/people/diversity-and-inclusion/ 
gender-equality-at-schroders/ 
 
Employee gender diversity (iversity-Emp) 
 
As at 31 March 2019 the Company Board comprised four members: 1 (25% female); 3 
(75% male). 
 
For further information on Schroders PLC employee gender diversity, covering 
more employee categories, please refer to Schroders 2018 Annual Report and 
Accounts (page 32): 
 
https://www.schroders.com/en/sysglobalassets/digital/global/annual-report/ 
documents/annual-report-full.pdf. 
 
Gender pay ratio (Diversity-Pay) 
 
The remuneration of the Company Board is set out on page 45 of this Report and 
Accounts document. 
 
Schroders PLC female representation and gender pay report can be found in 
Schroders 2018 Annual Report and Accounts (page 78): 
 
https://www.schroders.com/en/sysglobalassets/digital/global/annual-report/ 
documents/annual-report-full.pdf; 
 
Information on Diversity and Inclusion at Schroders can be found at: https:// 
www.schroders.com/en/people/diversity-and-inclusion 
 
The following are reported for Schroders in relation to the Investment 
Management of the Company: 
 
Training and development (Emp-Training) 
 
Schroders requires employees to complete mandatory internal training. 
Schroders encourages all staff with professional qualifications to maintain the 
training requirements of their respective professional body. 
 
Employee performance appraisals (Emp-Dev) 
 
Schroders performance management process requires annual performance objective 
setting and annual performance reviews for all staff. The Investment Manager 
confirms that performance appraisals were completed for 100% of investment 
staff relevant to the Company in 2018. 
 
The following are reported for Schroders PLC: 
 
Employee turnover and retention (Emp-Turnover) 
 
For Schroders PLC turnover and retention rates please refer to Schroders Annual 
Report and Accounts (page 33): https://www.schroders.com/en/sysglobalassets/ 
digital/global/annual-report/documents/annual-report-full.pdf 
 
Employee health and safety (H&S-Emp) 
 
Schroders PLC does not include employee health and safety performance measures 
in its Annual Report and Accounts. 
 
The following are reported in relation to the assets held in the Company's 
portfolio over the reporting period to 31 December 2018: 
 
Asset health and safety assessments (H&S-Asset) 
 
Health and safety impacts were assessed or reviewed for compliance or 
improvement for 100% of managed assets held in the Company portfolio during the 
reporting period. 
 
Asset health and safety compliance (H&S-Comp) 
 
No incidents of non-compliance with regulations/and or voluntary codes were 
identified during the reporting period. 
 
Community engagement, impact assessments and development programmes (Comty-Eng) 
 
Local community engagement, impact assessments and/or development programmes 
were completed for 4% (2 of 46) assets during the reporting period. 
 
                                          Portfolio by number assets (%) 
 
Mixed Use                                                    2% 
 
Industrial, Distribution Warehouse                           2% 
 
Total                                                        4% 
 
Sustainability Performance Measures (Governance) 
 
Composition of the highest governance body (Gov-Board) 
 
The Board of the Company comprised 4 non-executive independent directors (0 
executive board members) for the 12 months to 31 March 2019. 
 
·      The average tenure of the four directors to 31 March is three years and 
eight months 
 
·      The number of directors with competencies relating to environmental and 
social topics is three and their experience can be seen in their biographies. 
 
Nominating and selecting the highest governance body (Gov-Select) 
 
The role of the Nomination Committee, chaired by Lorraine Baldry is to consider 
and make recommendations to the Board on its composition so as to maintain an 
appropriate balance of skills, experience and diversity, including gender, and 
to ensure progressive refreshing of the Board. On individual appointments, the 
Nomination Committee leads the process and makes recommendations to the Board. 
 
Before the appointment of a new director, the Nomination Committee prepares a 
description of the role and capabilities required for a particular appointment. 
While the Nomination Committee is dedicated to selecting the best person for 
the role, it aims to promote diversification and the Board recognises the 
importance of diversity. The Board agrees that its members should possess a 
range of experience, knowledge, professional skills and personal qualities as 
well as the independence necessary to provide effective oversight of the 
affairs of the Company. 
 
Process for managing conflicts of interest (Gov-Col) 
 
The Company's Conflicts of Interest Policy sets out the policy and procedures 
of the Board and the Company Secretary for the management of conflicts of 
interest. 
 
Report of the Depositary to the Shareholders 
 
Northern Trust (Guernsey) Limited has been appointed as Depositary to Schroder 
Real Estate Investment Trust Limited (the "Company") in accordance with the 
requirements of Article 36 and Articles 21(7), (8) and (9) of the Directive 
2011/61/EU of the European Parliament and of the Council of 8 June 2011 on 
Alternative Investment Fund Managers and amending Directives 2003/41/EC and 
2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (the "AIFM 
Directive"). 
 
We have enquired into the conduct of Schroder Real Estate Investment Management 
Limited (the "AIFM") for the year ended 31 March 2019, in our capacity as 
Depositary to the Company. 
 
This report including the review provided below has been prepared for and 
solely for the Shareholders in the Company. We do not, in giving this report, 
accept or assume responsibility for any other purpose or to any other person to 
whom this report is shown. 
 
Our obligations as Depositary are stipulated in the relevant provisions of the 
AIFM Directive and the relevant sections of Commission Delegated Regulation 
(EU) No 231/2013 (collectively the "AIFMD legislation"). 
 
Amongst these obligations is the requirement to enquire into the conduct of the 
AIFM and the Company and their delegates in each annual accounting period. 
 
Our report shall state whether, in our view, the Company has been managed in 
that period in accordance with the AIFMD legislation. It is the overall 
responsibility of the AIFM to comply with these provisions. If the AIFM or 
their delegates have not so complied, we as the Depositary will state why this 
is the case and outline the steps which we have taken to rectify the situation. 
 
The Depositary and its affiliates is or may be involved in other financial and 
professional activities which may on occasion cause a conflict of interest with 
its roles with respect to the Company. The Depositary will take reasonable care 
to ensure that the performance of its duties will not be impaired by any such 
involvement and that any conflicts which may arise will be resolved fairly and 
any transactions between the Depositary and its affiliates and the Company 
shall be carried out as if effected on normal commercial terms negotiated at 
arm's length and in the best interests of Shareholders. 
 
Basis of depositary review 
 
The Depositary conducts such reviews as it, in its reasonable discretion, 
considers necessary in order to comply with its obligations and to ensure that, 
in all material respects, the Company has been managed (i) in accordance with 
the limitations imposed on its investment and borrowing powers by the 
provisions of its constitutional documentation and the appropriate regulations 
and (ii) otherwise in accordance with the constitutional documentation and the 
appropriate regulations. Such reviews vary based on the type of Company, the 
assets in which a Company invests and the processes used, or experts required, 
in order to value such assets. 
 
Review 
 
In our view, the Company has been managed during the year, in all material 
respects: 
 
i.      In accordance with the limitations imposed on the investment and 
borrowing powers of the Company by the constitutional document; and by the 
AIFMD legislation; and 
 
ii.     Otherwise in accordance with the provisions of the constitutional 
document; and the AIFMD legislation. 
 
For and on behalf of 
Northern Trust (Guernsey) Limited 
 
Glossary 
 
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 whose names are set out on page 33 of this 
                        document and "Director" means any one of them. 
 
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 per share 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 NNNAV              is EPRA Triple Net Asset Value, being 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. 
 
Notice of Annual General Meeting 
 
Notice is hereby given that the Annual General Meeting of the Company will be 
held at 1 London Wall Place, EC2Y 5AU  on 18 September 2019 at 11a.m. 
 
Resolution on        Agenda 
Form of Proxy        1.    To elect a Chairman of the Meeting. 
 
                     To consider and, if thought fit, pass the following Ordinary 
                     Resolutions: 
 
Ordinary Resolution  2.      To receive, consider and approve the Consolidated 
1                    Annual Report and Financial Statements of the Company for the 
                     year ended 31 March 2019. 
 
Ordinary Resolution  3.      To approve the Remuneration Report for the year ended 
2                    31 March 2019. 
 
Ordinary Resolution  4.      To re-elect Ms Lorraine Baldry as a Director of the 
3                    Company. 
 
Ordinary Resolution  5.      To re-elect Mr Stephen Bligh as a Director of the 
4                    Company. 
 
Ordinary Resolution  6.      To re-elect Mr Alastair Hughes as a Director of the 
5                    Company. 
 
Ordinary Resolution  7.      To re-elect Mr Graham Basham as a Director of the 
6                    Company. 
 
Ordinary Resolution  8.      To re-appoint KPMG Channel Islands Limited as Auditor 
7                    of the Company until the conclusion of the next Annual General 
                     Meeting. 
 
Ordinary Resolution  9.      To authorise the Board of Directors to determine the 
8                    Auditor's remuneration. 
 
Ordinary Resolution  10.    To receive and approve the Company's Dividend Policy 
9                    which appears on page 40 of the Annual Report. 
 
                     To consider and, if thought fit, pass the following Special 
                     Resolutions: 
 
Special Resolution 1 11.    That the Company be authorised, in accordance with 
                     section 315 of The Companies (Guernsey) Law, 2008, as amended 
                     (the "Companies Law"), to make market acquisitions (within the 
                     meaning of section 316 of the Companies Law) of ordinary shares 
                     in the capital of the Company ("Ordinary Shares"), provided 
                     that: 
 
                     a.    the maximum number of ordinary shares hereby authorised 
                     to be purchased shall be 14.99% of the issued ordinary shares 
                     on the date on which this resolution is passed; 
 
                     b.    the minimum price which may be paid for an ordinary share 
                     shall be GBP0.01; 
 
                     c.    the maximum price (exclusive of expenses) which may be 
                     paid for an ordinary share shall be the higher of (i) 105% of 
                     the average of the mid-market value of the ordinary shares for 
                     the five business days immediately preceding the date of the 
                     purchase; and (ii) that stipulated by the regulatory technical 
                     standards adopted by the European Union pursuant to the Market 
                     Abuse Regulation; 
 
                     d.    such authority shall expire at the conclusion of the 
                     annual general meeting of the Company to be held in 2020 unless 
                     such authority is varied, revoked or renewed prior to such date 
                     by ordinary resolution of the Company in general meeting; and 
 
                     e.    the Company may make a contract to purchase ordinary 
                     shares under such authority prior to its expiry which will or 
                     may be executed wholly or partly after its expiration and the 
                     Company may make a purchase of ordinary shares pursuant to any 
                     such contract. 
 
Special Resolution 2 12.    That the Directors of the Company be and are hereby 
                     empowered to allot ordinary shares of the Company for cash as 
                     if the pre-emption provisions contained under Article 13 of the 
                     Articles of Incorporation did not apply to any such allotments 
                     and to sell ordinary shares which are held by the Company in 
                     treasury for cash on a non-pre-emptive basis provided that this 
                     power shall be limited to the allotment and sales of ordinary 
                     shares: 
 
                     a.     up to such number of ordinary shares as is equal to 10% 
                     of the ordinary 
                     shares in issue (including treasury shares) on the date on 
                     which this resolution is passed; 
 
                     b     at a price of not less than the net asset value per share 
                     as close as practicable to the allotment or sale; 
 
                     provided that such power shall expire on the earlier of the 
                     conclusion of the annual general meeting of the Company to be 
                     held in 2020 or on the expiry of 15 months from the passing of 
                     this Special Resolution, except that the Company may before 
                     such expiry make offers or agreements which would or might 
                     require ordinary shares to be allotted or sold after such 
                     expiry and notwithstanding such expiry the Directors may allot 
                     or sell ordinary shares in pursuance of such offers or 
                     agreements as if the power conferred hereby had not expired. 
 
                     Close of Meeting. 
 
By Order of the Board 
 
For and on behalf of 
Northern Trust International Fund Administration Services (Guernsey) Limited 
Secretary 
 
20 May 2019 
 
Notes 
 
1.     To be passed, an ordinary resolution requires a simple majority of the 
votes cast by those shareholders voting in person or by proxy at the AGM 
(excluding any votes which are withheld) to be voted in favour of the 
resolution. 
 
2.     To be passed, a special resolution requires a majority of at least 75% 
of the votes cast by those shareholders voting in person or by proxy at the AGM 
(excluding any votes which are withheld) to be voted in favour of the 
resolution. 
 
3.     A member who is entitled to attend and vote at the meeting is entitled 
to appoint one or more proxies to exercise all or any of their rights to attend 
and, on a poll, speak or vote instead of him or her. A proxy need not be a 
member of the Company. More than one proxy may be appointed provided that each 
proxy is appointed to exercise the rights attached to different shares held by 
the member. 
 
4.     A form of proxy is enclosed for use at the meeting. The form of proxy 
should be completed and sent, together with the power of attorney or other 
authority (if any) under which it is signed, or a notarially certified copy of 
such power or authority, so as to reach the Company's Registrars, Computershare 
Investor Services (Guernsey) Limited, at The Pavilions, Bridgwater Road, 
Bristol, BS99 6ZY at least 48 hours before the time of the AGM (excluding any 
part of a day that is not a working day). 
 
5.     Completing and returning a form of proxy will not prevent a member from 
attending in person at the meeting and voting should he or she so wish. 
 
6.     To have the right to attend and vote at the meeting (and also for the 
purpose of calculating how many votes a member may cast on a poll) a member 
must have his or her name entered on the register of members not later than 48 
hours before the time of the AGM. 
 
7.     Pursuant to Article 41 of the Uncertificated Securities (Guernsey) 
Regulations 2009, entitlement to attend and vote at the meeting and the number 
of votes which may be cast thereat will be determined by reference to the 
register of members of the Company at close of business on 16 September 2019. 
Changes to entries in the register of members of the Company after that time 
shall be disregarded in determining the rights of any member to attend and vote 
at such meeting. 
 
Corporate Information 
 
Registered Address                          Independent Auditor 
PO Box 255                                  KPMG Channel Islands Limited 
Trafalgar Court                             Glategny Court 
Les Banques                                 Glategny Esplanade 
St. Peter Port                              St. Peter Port 
Guernsey GY1 3QL                            Guernsey GY1 1WR 
 
Directors (all Non-executive)               Property Valuer 
Lorraine Baldry (Chairman)                  Knight Frank LLP 
Stephen Bligh                               55 Baker Street 
Alastair Hughes                             London 
Graham Basham                               W1U 8AN 
(All Non - Executive directors) 
 
Investment Manager and Accounting Agent     Joint Sponsor and Brokers 
Schroder Real Estate Investment Management  J.P. Morgan Securities plc 
Limited                                     25 Bank Street 
1 London Wall Place                         Canary Wharf 
London                                      London E14 5JP 
EC2Y 5AU 
                                            Numis Securities Limited 
                                            10 Paternoster Square 
                                            London EC4M 7LT 
 
 
Secretary and Administrator 
Northern Trust International Fund           Tax Advisors 
Administration Services (Guernsey) Limited  Deloitte LLP 
PO Box 255                                  2 New Street Square 
Trafalgar Court                             London EC4A 3BZ 
Les Banques 
St Peter Port                               Receiving Agent and UK Transfer/Paying 
Guernsey GY1 3QL                            Agent 
                                            Computershare Investor Services 
Depository                                  (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    Royal Chambers 
LLP                   St Julian's Avenue 
1 Finsbury Circus     St. Peter Port 
London EC2M 7SH       Guernsey GY1 4HP 
 
 
FATCA GIIN 
5BM7YG.99999.SL.831 
 
 
[1]Source: Oxford Economics/Schroders. 
 
2Like-for-like with MSCI i.e. ignoring standard acquisition costs. 
 
[3] Note Central London is defined by MSCI as City, Mid-Town, West End and 
Inner London. 
 
[4] The Company listed in July 2004. 
 
[5] Loan balance divided by property value as at 31 March 2019. 
 
[6] For the quarter preceding the Interest Payment Date ('IPD'), ((rental 
income received - void rates, void service charge and void insurance)/interest 
paid). 
 
[7] For the four quarters following the IPD, ((rental income to be received - 
void rates, void service charge and void insurance)/interest paid). 
 
[8] Fixed total interest rate for the loan term. 
 
[9] Facility drawn at 31 March 2019 from a total facility of GBP52.5 million. 
 
[10] Total interest rate as at 31 March 2019 comprising 3 months LIBOR of 0.82% 
and the margin of 1.6% at an LTV below 60% and a margin of 1.90% above 60% LTV. 
 
[11] This covenant drops to 60% after year three of the five-year term. 
 
[12] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
[13] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
[14] Consumption relates to external lighting only for a single industrial, 
distribution warehouse, which underwent an extensive LED lighting upgrade 
during the reporting period. 
 
[15] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
[16] This reduction is due to a number of factors, including water leaks that 
were reported to have taken place in 2017 and occupancy changes between the 
reported periods. 
 
[17] This increase is due to a cleaning contractor using a jet washer, which 
was not previously used. 
 
[18] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
[19] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
[20] Mixed Use presents 25% of energy consumption at City Tower, Manchester 
(reflecting the Company's 25% ownership share). 
 
 
 
END 
 

(END) Dow Jones Newswires

May 21, 2019 02:00 ET (06:00 GMT)

1 Year Schroder Real Estate Inv... Chart

1 Year Schroder Real Estate Inv... Chart

1 Month Schroder Real Estate Inv... Chart

1 Month Schroder Real Estate Inv... Chart
Your Recent History
NEX
SREI.GB
Schroder R..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20190822 09:57:13