Schroder European Real E... Investors - SERE

Schroder European Real E... Investors - SERE

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Stock Name Stock Symbol Market Stock Type
Schroder European Real Estate Investment Trust Plc SERE London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 101.00 15:00:33
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speedsgh: ~ Fall in NAV to 147.4 cents (31/12/20 150.7 cents) due to write down of Seville asset to zero. ~ Quarterly dividend increased to pre-Covid level of 1.85 cents. ~ Two special dividends totalling 4.75 cents to be declared over next 12 months from profits of successful sale of Paris, Boulogne-Billancourt. Half-year Report - HTTPS:// FOCUS ON ASSET QUALITY UNDERPINS RESILIENT PERFORMANCE AND DIVIDEND INCREASE -SIGNIFICANT FIREPOWER AVAILABLE FOR POST-PANDEMIC ACQUISITIONS- Schroder European Real Estate Investment Trust plc, the company investing in European growth cities and regions, today announces its half year results for the six months ended 31 March 2021. · Continued resilience of portfolio income through the Covid-19 pandemic, with rent collection remaining strong at approximately 92% for the six month period. Includes 94% of rent collected for the quarter ended 31 March 2021 · Following the successful execution of the Paris, Boulogne-Billancourt sale, there is €60 million of investment firepower for earnings enhancing initiatives · Portfolio value, including cash, of €259.9 million (HY 2020: €247.3 million). Directly held properties delivered like-for-like valuation growth of €5.6 million, or 2.3%, reflecting the Company's exposure to the high growth industrial, data centre, DIY and grocery sectors · Dividends declared of €4.6 million / 3.42 cps for the six months to 31 March 2021, with a reinstatement of the pre-Covid dividend of 1.85 cps due to an improving outlook, strong rent collection, cash position and valuation resilience · Intention to declare two further distributions with a target of approximately 4.75 cents per share each by way of special dividend over the next 12 months, allowing shareholders to benefit from the exceptional profit associated with the successful execution of the Paris, Boulogne-Billancourt business plan Key Financial highlights · Net Asset Value ('NAV') of €197.1 million or 147.4 cps (30 September 2020: €201.8 million), a decrease of €4.7 million over the six month period, primarily driven by the write down of the Group's Seville exposure to nil which in part was offset by an increase in the valuation of the industrial and DIY portions of the portfolio · Loss of €0.7 million (six months ended 31 March 2020: profit of €4.9 million), resulted in a NAV total return of -0.4%. Pre-tax the Company made a profit of €0.8 million (six months ended 31 March 2020: €5.7 million) which was primarily driven by an increase in the valuation of the industrial and DIY portion of the portfolio, partly offset by the write-down of the Seville exposure to nil. · Underlying EPRA earnings of €2.8 million (six months ended 31 March 2020: €4.3 million), reflecting a temporary reduction in income until the re-deployment of the Paris sale proceeds · Low loan to value ('LTV') of 11% net of €57.0 million of available cash (29% gross of cash), with a low weighted average total interest rate of 1.4% ... Sir Julian Berney, Chairman of the Board, commented: "Despite operating against a backdrop of local and national lockdowns, the portfolio valuation has remained resilient over the period, underpinned by uplifts across the industrial portfolio, a number of asset management successes and improving and strong rent collection. As a result, we are pleased to be able to reinstate the dividend to the pre-pandemic level, whilst paying two special dividends to reflect the highly successful execution of the Paris sale and reward shareholders who continue to support the Company." "The Board remains frustrated that the share price has not reflected the robust performance of the business during the pandemic or that the current discount properly reflects its future prospects. Given the healthy cash position, the Board will continue to review the discount and use its discretion to execute measures that it believes should support income and total returns, including new acquisitions." Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added: "Whilst uncertainty relating to the pandemic will continue, we are starting to see some positive signs of growth over 2021 as lockdowns ease and consumer and investor confidence returns. The proceeds from the sale of Boulogne-Billancourt substantially strengthen the Company's balance sheet and provide significant operational and financial flexibility. We are focused on identifying attractive income-generating opportunities in future proof assets that meet our strict investment criteria. These will provide further diversification benefits to the portfolio and assist in maintaining an attractive dividend covered from sustainable rental income, as we seek to maximise shareholder returns."
speedsgh: European Real Estate: Alive and kicking in the Covid crisis - HTTPS:// Video of the recent one-hour programme, including the debate and Q&A, involving Jeff O’Dwyer, fund manager of the Schroder European Real Estate (SERE) investment trust, Simon Moore, director of Trust Research, and Citywire’s Gavin Lumsden. Fresh from a Paris property transaction that added 15% to his trust’s asset value, O’Dwyer outlines the office, retail and logistics properties in France, Germany and the Netherlands he believes offer the most exciting development opportunities. In his presentation and the discussion, O’Dwyer seeks to dispel some of the fears around commercial property during the coronavirus pandemic, explaining: ~ how two of the trust’s three retail properties have performed very strongly during the Covid-19 outbreak; ~ why offices have a future if they remain modern, relevant and accessible; ~ the sort of logistics properties he is seeking to add to the portfolio to take advantage of online shopping in Europe; ~ advantages of a diversified portfolio spread across different sectors; ~ how he and his team identify sub-markets in Europe’s best cities to find well-positioned properties that can be refurbished on higher rents to produce growth in capital and income; ~ the importance of working with commercial tenants to maximise occupancy, rental growth and sustainability of properties. In the Q&A, O’Dwyer answers investors’ questions on dividends, which were halved during the first coronavirus lockdowns and subsequently raised by the board to three quarters of their pre-crisis level, leaving the trust on a 5.5% yield; He also explains what the trust’s board is doing about the trust’s wide, but narrowing, share price discount.
speedsgh: European Real Estate: Alive and kicking in the Covid crisis - HTTPS:// Citywire and Schroders are giving you a chance to learn more about the investment opportunity in European commercial property and to quiz Schroders’ Jeff O’Dwyer about the pros and cons of real estate investment trust at a special one-hour online event at 11.30am on 19 November. Investors have fled the mainstream commercial property market in Europe this year as the coronavirus pandemic has accelerated the decline in high street retailing and raised a big question mark over the future value of offices. These are understandable concerns but, according to O’Dwyer, fund manager of Schroder European Real Estate (SERE), a £174m investment trust offering a 5.5% dividend yield and a wide 40% share price discount, the sector has been oversold. The depressed share prices of diversified real estate investment trusts indicate investors see little value in their portfolios, which O’Dwyer, head of pan-European Real Estate at Schroders, believes is a mistake. AGENDA As with our previous broadcasts, this programme will start with a presentation by O’Dwyer and be followed by a discussion on European real estate with a professional wealth manager alongside O’Dwyer (pictured). There will also be plenty of time for you to submit questions before or on the day in a Q&A that will conclude the online session. In this Citywire Virtual event, O’Dwyer will discuss the opportunities that the real estate sector offers active investors in Europe. With reference to specific case studies, he will show how real estate is about far more than battered retailers and will explain the positive trends that exist alongside the economic pressures from Covid-19. Topics will include: ~ How SERE builds value in the office sector (eg, Boulogne, Paris); ~ Opportunities in data centres and infrastructure (Netherlands); ~ Preserving value in its one shopping centre investment (Seville); ~ ‘Winning cities’ and the story in Berlin; ~ Rental collection supporting attractive dividends.
speedsgh: Rent collection and property valuation update - HTTPS:// Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in European growth cities, today provides an update on rent collection, alongside a quarterly independent valuation of the property portfolio as at 30 September 2020. - Approximately 88% of rent due as at 21 October 2020 has been collected, which is ahead of the amount collected in the previous two quarters. - As at 30 September 2020, the property portfolio was independently valued at €268.6 million, an increase of 9.8%, or €23.9 million, on the 30 June 2020 valuation of €244.7 million. - The valuation increase during the quarter was driven by a number of successful asset management initiatives across the portfolio which included: o Exchanged contracts to sell its Boulogne-Billancourt office asset in Paris for approximately €104 million. The sale is structured as a forward funding, with the building being handed over to the purchaser in H1 2022, following completion of a comprehensive refurbishment which is being undertaken by the Company. The refurbishment and sale follows the agreement of a new 10-year pre-let contract with existing tenant Alten in June this year at a rent 39% higher than the previous rent paid. As at 30 September, the property is held at a valuation of €65.2 million, which reflects the sale price, less an adjustment for the costs, risk and process of the refurbishment. The asset was valued at €41.6 million as at 30 June 2020. o A new five-year lease agreement for a further floor at its Hamburg office investment, representing c. 10% of the lettable area. This resulted in a valuation increase of €0.6 million. o SERE's 50% interest in the Seville shopping centre witnessed a valuation decline of €350,000 or 1.6% over the quarter, resulting in a total valuation decline of 8.6% since the 30 December 2019 valuation (the last quarter not impacted by Covid-19). Recent successful asset management initiatives, including the expansion of the supermarket has helped defend further valuation declines. - The Company remains prudently geared with a loan to value, net of cash, of approximately 25% as at 30 September 2020, with no debt maturity before 2023. In line with previous years, the 30 September 2020 NAV will be included in SERE's full year results for the year ending 30 September 2020, which will be announced on 9 December 2020. There will be a live webcast presentation for analysts and investors on the morning of the results.
speedsgh: European logistics yield falls below 6% for first time on record - HTTP:// The overall European logistics yield dropped 14bps to 5.95% in Q2 2018, the first time it has fallen below 6% since Cushman & Wakefield began consistently tracking the three main property sectors in 1992, according to the firm’s DNA of Real Estate report. All logistics markets monitored in Germany, Italy and Sweden recorded inward yield movements during the second quarter, and a couple of UK locations also contributed to the overall shift down to 5.95%. About a third of the monitored office locations saw some yield compression with a prime weighted average down from 4.49% to 4.42%. In contrast, high street retail yields softened in a few locations and the overall prime yield moved out by 1bps to 4.19%. Despite the fall in the prime logistics yield below 6%, the gap relative to office and retail is still higher than in the previous cycle. Office rents grew at a robust rate of 0.8% q-o-q with several markets – across different countries and regions in Europe – seeing increases up to 5%. Limited rental growth was recorded in the retail sector while rental correction in Turkey offset this growth, resulting in the weighted average rent 0.1% lower than the first quarter. Offices Office rents remained on a strong upward trajectory for the seventh consecutive quarter. Average office rents grew by 0.8% in Q2 with growth recorded in 11 out of the 47 monitored office markets. Rome led the way with growth at 5.0%, supported by strong occupier demand in Q2. This positive momentum was also evident in other regions. Markets in Benelux, CEE, Germany, Nordics, Semi-core and the UK all saw some level of rent edging up. Barcelona was one of the office markets that outperformed in Q2 with a rental increase of 4.2% q-o-q and 11.1% y-o-y. In the UK, weighted average rent shifted up by 0.1%. Birmingham and Glasgow had small increments in prime rents whereas Central London and other regional markets remained flat. Nigel Almond, Head of Data Analytics, Cushman & Wakefield EMEA Research & Insight, said: “Berlin is the only German office market where rental growth was recorded in Q2, although with the support of solid economic fundamentals and occupational demand, we expect prime rents to grow further, along with other leading German cities in the second half of 2018. Following recent modest falls, rents across London were flat in Q2, in part supported by relatively strong leasing market activity. But Brexit uncertainties, weaker job creation, and above-average completions places risk on the downside for the evolution of rents in the short to medium term”. Average European office yields fell 7bps to 4.42%, setting a new low since 2001, with 14 out of the 47 monitored European markets recording inward movement and no outward movement in other markets. Six UK regional markets (Birmingham, Bristol, Leeds, Manchester, Newcastle and Edinburgh) moved down 25bps in Q2, and now every UK regional market had some level of yield compression in the past year following a period of no movement in the 12 months before. Benelux is another region where key markets saw yield compression of 11bps to 4.76%. German yields showed similar trend to rents and had minimum movement in Q2 (down 1bp to 3.09%), as investors take a more cautious approach to pricing with yields across Germany some of the lowest across Europe. Logistics Five out of the 45 monitored logistics markets saw some rental growth and all other markets remained flat in Q2. Manchester recorded solid growth of 16.7% q-o-q and 25% y-o-y supported by major leasing transaction activity this quarter. Elsewhere, pockets of growth were found in Helsinki (+4.3%), Budapest (+3.9%) and Rome (+3.8%). Average yield fell by a substantial 14bps q-o-q and 42bps y-o-y which is the largest annualised reduction in the past nine quarters. Logistics yields fell in 15 out of the 45 monitored markets including all locations in Germany, Italy and Sweden. Benelux and CEE markets, on the other hand, had less substantial yield compression. Lisa Graham, Head of EMEA Industrial and Logistics Research & Insight, Cushman & Wakefield, added: “Logistics properties have increasingly become a desirable asset for real estate investors on the back of the growth for e-commerce and the streamlining of supply chains, and now account for a growing share of investment activity supporting a strong reduction in yields over this period. Yields in almost all monitored markets are at their 10-year low, although we believe there is still room for further downward movement in selected markets during the second half of the year.” High Street Retail Overall high street retail rents softened marginally by 0.1% with growth recorded in just five markets q-o-q. More than half the monitored markets had no movement in rents at all in the past 12 months. Budapest topped the rental growth for a second quarter with a 7.7% increase q-o-q and 16.7% y-o-y, reflecting strong local consumption and demand from retailers. Lisbon followed closely at 4.0% growth q-o-q and 13.0% y-o-y. High street retail yields edged up 1bp to 4.19%, which put an end to a four-year long yield compression. While yields in most continental European markets stayed flat and on their 10-year low, UK yields started to move out (+1bp to 3.23% in Q2) and further away from its 10-year low of 3.12%. Investors are increasingly cautious towards the UK retail sector as several retailers seek to shrink the number of stores or reductions in rents on the back of weaker trading and growing online sales. This has led to a reduction in overall investment activity. With strong GDP growth, Budapest again ranked first in the yield chart with a 25bps downward shift in Q2 and Cushman & Wakefield research indicating there is still room for further yield compression in the Hungarian capital, along with other key markets in CEE including Warsaw and Bucharest where retail assets are still ranked as fairly-priced.
speedsgh: O'Dwyer hunts for ‘large industrials’ for European Reit - HTTP:// Schroder European Real Estate (SERE) is looking for industrial assets to redeploy the cash it made from the sale of two French supermarkets. In half-year results to 31 March, the real estate investment trust (Reit) generated a 6.1% total return on net assets up from 2.5% in the six-month period a year ago. A €1.85 per share quarterly dividend was fully covered by earnings after the recent €20 million purchase of a data centre in the Netherlands yielding 10%, said manager Jeff O'Dwyer, who took over the €237 million at the start of the year after Tony Smedley resigned. O'Dwyer said this meant the trust had hit its original dividend yield target of 5.5% for investors who bought the shares at 100p when they floated in December 2015. The purchase was made from the €30 million war chest the trust had at the end of the year, topped up by the sale of two Casino supermarkets in France, which were sold to their joint venture partner at a 10% premium over their December valuation. O’Dwyer said he was looking for ‘large industrial assets to redeploy the Casino money’, which had yielded 5%, and would not reinvest in supermarkets as he aimed for ‘higher yields and greater diversification’ within the portfolio. He said he was ‘in negotiations on a number of new opportunities in both new and existing sectors’. ‘Our aspirations are to grow the portfolio through a disciplined and consistent approach centred on enhancing income and shareholder returns,’ he added. The trust holds 10 assets, four in Germany, four in France, one in Spain, and the newest investment in the Netherlands. The portfolio is split 46% in retail, 46% in offices, and 8% in mixed assets. O’Dwyer (pictured) picks investments in ‘winning’ cities that are experiencing fast growth rather than countries, including Berlin, Hamburg, Stuttgart, Frankfurt, and Paris. While the eurozone may face a slowdown in growth and political uncertainty O’Dwyer said it had experienced its strongest period of growth during the last 10 years and forecast eurozone GDP will grow by 2-2.5% through 2018/19. ‘Investment is increasing, while unemployment continues to fall with consumer spending increase,’ he said. ‘The acceleration in world trade means that external demand in the form of export should continue to grow. While stronger growth will feed through to higher inflation, [we] expect it to remain at around 1.5% per annum over the next couple of years.’ Inflation at that level meant the European Central Bank would be ‘unlikely to raise interest rates before 2019’, he said. O’Dwyer was unconcerned about the political turbulence facing Europe after the election of a eurosceptic, populist government in Italy. ‘Italy is a market that we can invest but it would have to be a very good investment to take on the risk – not just political risk, but transparency risk, litigation risk, and tax risk. We are not seeing – when compared to other areas on a risk-adjusted basis – the attraction,’ he said. Overall he ‘looks through political risk’ when making investment decisions. ‘If we were worried about political risk each day we would never get anything done,’ said O’Dwyer. ‘We aim to grow irrespective of politics.’ O’Dwyer said he would look to raise more money from investors when the time was right, although with the shares trading 8% below net asset value (NAV), a share issue is not imminent. ‘The intention has been to double the size [of the trust] and take it to €500 million and all the investors would like to see that happen, but as for when – it will be at an appropriate time and we will do it when it will benefit existing shareholders,’ he said. At yesterday's closing price 114p, SERE yields 4.8%.
speedsgh: Excerpt from the following article... Urban logistics: it’s always worth going the ‘last mile’ - HTTP:// Europe is set to follow the UK’s example What we have witnessed in the UK is now happening in Europe. Online retailing is a little less advanced in Europe compared to the UK, but it is changing quickly. In 2016, it grew at a faster rate in Europe than the UK a trend expected to be maintained for at least the next five years. This is being driven by several factors: first, the rapid expansion of major online retailers such as Zalando, ASOS, Amazon and others; and second, consumers are becoming increasingly confident in buying online due to wider availability, faster broadband, more mobile devices and simpler payment systems, which in turn is driving yet more online retail growth. Furthermore, major European cities are growing at least as fast as London has been, and they are also experiencing the same shortages of developable land for urban logistics. This makes investment in the sector look appealing. Trends set to continue and intensify, especially in Europe Overall, the trends in the logistics sector are set to intensify, and this supports value and growth in urban logistics. There will be no let-up in population growth in major cities and online retail will continue to expand its requirements for urban logistics units. We are becoming increasingly used to seeing Amazon deliveries and the vans of parcel delivery operators such as DPD shuttling around city streets. But this is balanced against a diminishing supply of land for logistics development in major cities. Rental growth should continue to be strong for property investors. As such, it’s always worth going the ‘last mile’, thanks to the logic of urban logistics.
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