Schroder European Real E... Share Discussion Threads

[essentialinvestor] 05/10/2020 14:30

Ah right, I see what you've done.

Pulled forward a muli year transcation and added it on
to current NAV now.

[sharpshare] 05/10/2020 11:37

June NAV 133.4c

"The final sale price of approximately €104 million will deliver net sale proceeds of approximately €70 million when completed, after deducting the c. €30 million cost of refurbishing and re-letting the building. This represents a profit on cost of c. 35%. The sale proceeds will be received in stages and the Company expects the NAV to increase incrementally as sale receipts occur. 50% of the price is to be received on exchange of the definitive deed prior to this calendar year end 2020, with the remainder payable in installments over the subsequent 18 months as construction is completed. The overall increase to the most recent published NAV as at 30 June 2020 is expected to be approximately 15%, subject to programme and cost."

15% of 133.4c is 21.3c

New NAV 154.7c or 141p (GBPEUR 1.097)

[essentialinvestor] 05/10/2020 10:47

Where do you get 1.41 from?.

[sharpshare] 05/10/2020 10:30

SERE looking good value after recent sale announcement.
price 70.5p
NAV after sale of biggest asset around 141p
so discount 50%
look through net LTV about 0%
Div yield about 7.25%
low downside, good upside?

[essentialinvestor] 03/10/2020 17:42

This was an arguably costly mistake:


Since acquisition they have spent €0.8 million on refurbishment and referenced growing competition
in Seville.

It also appears to be worth less than the purchase price.

[speedsgh] 15/9/2020 10:53

Rent collection c.84% of contracted rent as at 15/9/20.

Q3 dividend increased to 1.39 euro cents (approx 1.28p at current fx rates), equivalent to 5.56 euro cents annualised (approx 5.12p annualised). Payable 23/10, UK XD 8/10. Dividend continues to be kept under review.

Unaudited NAV as at 30/6/20 of 133.4 cents (approx 123.0p at current fx rates), a 2.1% reduction compared to 31/3/20.



Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, commented:
"The SERE portfolio continues to hold up well, underpinned by our city, sector and tenant diversification that has led to favourable rent collection statistics and valuation resilience. Our primary focus remains to deliver and capitalise on the Paris Boulogne-Billancourt refurbishment. Successful completion will have the potential to be accretive to NAV and, subject to disposal, provide an opportunity to further diversify the portfolio and provide a path back to the target dividend."

[red ninja] 11/9/2020 11:03

Sentiment seems to have turned against property and although SERE seemed to be breaking upwards over last few days, now it seems to be heading back down.

Of course with the US markets being more bearish and Covid seemingly on the rise in Europe its not a great surprise.

[red ninja] 08/9/2020 11:16

I would say it is a general move out of property.

Retail: not looking too good ie more and more buying online.
Offices: are staff going to want to go back to them.

However is the negativity overblown is the question ?

[rjmahan] 07/9/2020 14:46

What’s happening with this? Why the dip?

[speedsgh] 24/6/2020 09:45

Half-year Report -

Sir Julian Berney, Chairman of the Board, commented:
"During the first half of the year the Company has made good progress with key asset management initiatives, but we enter the second half of the year against an uncertain economic backdrop. We believe the diversification of the portfolio across different countries, sectors and tenants positions it well to withstand a period of market volatility. By reducing the dividend and retaining earnings, we have sought to strengthen the ability of the Company to mitigate the impact of Covid-19 and improve our flexibility to be able to capitalise on asset management opportunities going forward."

Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added:
"The impacts of Covid-19 have yet to fully play out and the depth and recovery of global GDP cannot be predicted with any confidence. Over the period, the SEREIT portfolio has stood up well, underpinned by our tenant and sector diversity that has led to favourable rent collection rates and valuation resilience. Whilst early indicators are that the easing of the lockdown in our key markets is having a positive impact on our tenants' operations, we remain alert to the near-term challenges facing all our stakeholders. Longer term, we continue to believe that the portfolio's weighting towards Continental European 'Winning Cities' like Paris, Berlin, Frankfurt and Hamburg will be beneficial to its future performance and liquidity."

[speedsgh] 24/6/2020 09:38

Second Interim Dividend -

Schroder European Real Estate Investment Trust plc (the "Company") announces its second interim dividend for the year ending 30 September 2020. In light of the ongoing market uncertainty, the Board has reduced the next quarterly dividend to 0.925 euro cents per share, equating to 50% of the target dividend level.

In implementing the dividend strategy, the Board has considered the rent collection and cash position of the Company, alongside market conditions, current asset management activity and the longer term sustainable rental income from the portfolio. By retaining additional cash at this time, the Company will be better positioned to withstand the impact of Covid-19 on the portfolio. The dividend will be kept under close review as clarity improves around the extent of the impacts of Covid-19, including on future rental receipts, property values and asset management initiatives.

The interim dividend payment will be made on Friday, 31 July 2020 to shareholders on the register on the record date of Friday, 17 July 2020. In South Africa, the last day to trade will be Tuesday, 14 July 2020 and the ex-dividend date will be Wednesday, 15 July 2020. In the UK, the last day to trade will be Wednesday, 15 July 2020 and the ex-dividend date will be Thursday, 16 July 2020.

[red ninja] 01/6/2020 20:25

Currently rent collection not looking too bad :-

"Rent collection

As at the close of business on 20 May 2020, the Company had received payments on 83% of monthly rents in respect of April and May 2020. The analysis between sectors for rent collection over April and May is as follows: 98% of office; 84% of industrial/data centre use; and 57% of retail and leisure. We continue to work closely with a number of tenants to agree payment plans/rent deferral and or amendments to lease terms."

However, the may have agree lower term as above and thus the divi may be somewhat lower.

[redponza] 31/5/2020 11:26

This is an investment trust, right?
Due to the short history of the trust, there probably is no revenue reserves....
On the other hand, a 9% yield (if no cut) seems to be very juicy indeed!

[speedsgh] 28/5/2020 19:35

Business update -

Schroder European Real Estate Investment Trust plc ("SEREIT"/the "Company"/"Group"), the company investing in European growth cities, provides a further business update in light of the COVID-19 pandemic and prior to the announcement of its half year results expected to be published towards the end of June 2020.

The Company continues to benefit from the diversification of its portfolio which comprises 13 assets, located in the growth cities and regions of Continental Europe. The portfolio has approximately 100 tenants across a range of sectors and benefits from being well balanced with approximately 75% in the office and industrial/data centre sectors, in cities including Paris, Berlin, Frankfurt, Hamburg and Stuttgart.

Jeff O'Dwyer, Fund Manager, Schroder REIM, commented: "Already we are seeing the easing of lockdown measures across the geographies that we operate in positively impacting on the portfolio. We are taking a methodical approach to asset management, working closely with all our tenants to ensure we have a clear pathway to income visibility, whilst taking measures to protect the long-term interests of our shareholders."

Rent collection

As at the close of business on 20 May 2020, the Company had received payments on 83% of monthly rents in respect of April and May 2020. The analysis between sectors for rent collection over April and May is as follows: 98% of office; 84% of industrial/data centre use; and 57% of retail and leisure. We continue to work closely with a number of tenants to agree payment plans/rent deferral and or amendments to lease terms.

Portfolio update

Retail represents 25% of the portfolio, of which 15% is invested in a Lidl supermarket in Frankfurt and a Hornbach DIY unit in Berlin, both of which have remained open for trade throughout. The Metromar Centre in Seville is the sole shopping centre in the portfolio and represents 10% of the portfolio by value. The centre partly re-opened on 25 May 2020 and the Company is implementing a plan and working with tenants to establish on-going trading positions. The strategy is also focused on working with centre management and tenants to create a safe environment for tenants and consumers.

The Company also continues to progress the previously announced refurbishment of its largest investment in Paris which is leased to engineering and technology consulting specialist, Alten. There will be further updates as we progress matters.

Dividend

As previously announced, the Board will continue to consider carefully future dividend payments, which are under review in light of the short term cash position, in conjunction with longer term sustainable income generated from the portfolio. This will be monitored and a decision will be taken as clarity improves around the economic backdrop.

[rjmahan] 18/4/2020 23:17

Anyone know why the decline on Friday ?

[speedsgh] 05/3/2020 07:49

NAV and Dividend -

Portfolio valuation gain underpins NAV uplift

Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in European growth cities, today announces its unaudited net asset value ("NAV") for 31 December 2019, together with its first interim dividend for the year ending 30 September 2020:

- Unaudited NAV as at 31 December 2019 of €184.0 million or 137.6 cents per share, an uplift of 1.0% over the quarter;

- NAV total return of 2.4% over the quarter and 5.9% over the last 12 months;

- Portfolio valuation, net of capex, increased by 1.1% over the quarter to €246.3 million;

- A first interim dividend of 1.85 euro cents per share will be paid for the year ending 30 September 2020, in line with the target dividend stated at IPO of an annualised rate of 5.5% on the IPO issue price;

- Significant asset management successes, including:

· In Hamburg, the Company has secured a new tenant on a five year lease, for an additional 670 sqm of space; and

· Lease renewals agreed with two existing tenants at St Cloud, Paris, covering 3,150 sqm of floor space, at rents above the previous level paid.

Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, commented:

"Our strategy of investing in a diversified real estate portfolio in winning cities such as Paris, Berlin, Hamburg and Frankfurt has again supported an uplift in NAV and portfolio valuation and a stable and attractive dividend. We are making good progress on the planning, design and financing for the re-development of our largest asset in Boulogne-Billancourt, Paris. Successful completion will deliver profitable growth for the Company and will improve the building's sustainability credentials and income quality."

Interim dividend

The first interim dividend of 1.85 euro cents per share for the year ending 30 September 2020 represents an annualised rate of 5.5% based on the Euro IPO issue price of 137 euro cents per share. This is in line with the Company's target dividend, which is based on paying a dividend based on the longer term sustainable rental income expected to be generated from the portfolio. Based on the GBP IPO issue price of 100 pence per share the annualised yield is 6.4% (based on FX rates as at 31 December 2019.

The dividend is 88% covered from income received during the quarter. As previously noted, we expect dividend cover to reduce whilst we undertake asset management activity across the portfolio, the most significant of which is the refurbishment of our Paris office property Boulogne-Billancourt. These initiatives are expected to improve the longer term income profile of the Company and its dividend cover.

The interim dividend payment will be made on Tuesday, 14 April 2020 to shareholders on the register on the record date of Friday, 27 March 2020. In South Africa, the last day to trade will be Tuesday, 24 March 2020 and the ex-dividend date will be Wednesday, 25 March 2020. In the UK, the last day to trade will be Wednesday, 25 March 2020 and the ex-dividend date will be Thursday, 26 March 2020.

[hiddendepths] 24/2/2020 11:16

Holding up surprisingly well today. Sold mine this morning. Don't like the likely knock-on effects of the Italian Covid-19 outbreak. I suspect the fragile European economy will be pushed into recession, the euro will decline and I am increasingly concerned about European banks.

Just IMHO of course! And basically hardly anyone reads this thread so not trying to influence anyone else.

[speedsgh] 12/12/2019 16:06

Slowdown in European retail weighs on Schroder Reit -

The slump on UK high streets has been exported into Europe, as Schroder European Real Estate (SERE) investment trust is held back by some of its underperforming retail assets.

Annual results from the £150 million European commercial property portfolio showed a tougher 12 months than last year with a 4.1% increase in net asset value (NAV) including dividends the year to 30 September, compared to 7.5% in 2017/18. The total return was dampened by transaction fees and restructuring costs over the year.

Profit slid from €13.2 million in 2018 to €7.4 million and EPRA earnings dipped to €10.5 million from €10.8 million the previous year, although this was enough to cover total dividends of 7.4 cents by 107%. SERE pays quarterly dividends and yields 5.5%.

The investment trust has repositioned over the past 18 months, diversifying its portfolio to include industrial and logistics assets, which have gone from zero to 20%.

However, it has not managed to avoid the retail slowdown, reporting demand for retail space in Europe was ‘weak’ as retailers adapted to the shift online by shoppers.

‘While total retail sales in France and Germany could grow by 2-3% in 2019, store sales are likely to shrink,’ said SERE.

‘Several retailers have failed, and even successful retailers like (Zara owner) Inditex have closed more stores than they have opened over the last 12 months and used the weakness of the sector to renegotiate lease terms.’

The most affected part of retail has been general shopping centres, as ‘hypermarkets have cut their non-food sales areas and clothing retailers have contracted’ leaving more empty shops in city centres.

This is bad news for SERE’s Metromar shopping centre in Seville, which has been the main detractor of performance, with its valuation falling 7.8% over the past 12 months.

Metromar has been ‘negatively impacted with increased vacancy’ and ‘we therefore remain constantly vigilant in our management of the asset and are actively reviewing new occupiers and marketing of the centre’, said the trust.

However, the outlook for European retail does not look bright and SERE predicts that rents in prime shopping centres ‘will fall in most European cities over the next three years and that prime shop rents will stagnate’.

The managers of SERE said that the eurozone was currently a ‘two-speed economy’, with a slowdown in manufacturing and growth in the services sector being supported by solid labour markets, rising consumption, and government spending.

‘The risk is that the downturn in manufacturing deepens, possibly because of a disruptive Brexit or a further escalation of the trade dispute and then spreads to the services sector,’ said the trust.

Although manufacturing is causing concern, demand for warehouses in Europe remains strong thanks to online retailers expanding and traditional retailers taking on more space in order to support their growing online sales.

Growth has been matched by supply, but SERE said the shortage of land in major cities has pushed companies to use warehouses in well-connected smaller cities.

‘As a result, rental growth in the logistics market has been limited to around 2% per annum, although some smaller warehouses, which are used for last-mile deliveries in cities and where supply is more constrained, have seen stronger rental growth,’ said the trust.

Having seen its discount narrow this year SERE stands 0.7% below its latest NAV, which makes it slightly better value to Aberdeen Standard European Logistics (ASLI), on a 2% premium. In a quarterly update it indicated it could look to expand with a new share issue having deployed most of the money raised in its flotation two years ago.

[speedsgh] 11/12/2019 14:42

DIVIDEND

The Company has declared a fourth interim dividend in respect of the year ended 30 September 2019 of 1.85 euro cents per share payable on 27 January 2020 to shareholders on the register on 10 January 2020. The total dividends in respect of the year amount to 7.4 euro cents per share.

The latest declared dividend represents an annualised rate of 5.5% based on the euro equivalent of the issue price at admission, again achieving the target dividend stated at IPO. Based on the Euro: GBP exchange rate and GBP share price as at 30 September 2019, this equates to an annualised dividend yield of 5.9%.

The dividends in respect of the year are approximately 107% covered from net income from the portfolio. Dividend cover over the next two years is expected to be reduced whilst the refurbishment of the Paris Boulogne-Billancourt office investment is completed. However, this project will be accretive to NAV and will improve the longer term income profile and dividend cover of the Company, with a new 10 year lease to a strong tenant being agreed in return for the refurbishment. In implementing the dividend strategy going forward, the Board will consider the shorter term cash generation of the Company, alongside the longer term sustainable rental income from the portfolio.

OUTLOOK

Initiatives such as the Paris Boulogne-Billancourt refurbishment and lease regear demonstrate the potential to generate strong shareholder returns from our strategy of focusing on Winning European Cities and active asset management by local teams. Having a diverse portfolio of properties and tenants presents other asset management opportunities to improve value and income. Equally, it also provides defensive attributes if certain sectors or markets come under pressure, for example the exposure to the retail sector in the Seville shopping centre. Alongside the quality of the portfolio, execution of asset management initiatives such as improving the occupancy of the Hamburg and Seville assets will also reduce portfolio risk. This will position the Company well to deliver on our long-term growth ambitions.

[speedsgh] 11/12/2019 14:39

FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2019 -

Operational highlights
- Agreed a conditional new long-term lease and capex programme at the Group's largest asset, Boulogne-Billancourt office in Paris, providing future potential capital value and income upside
- Portfolio allocation to higher growth logistics sector increased to 20% (30 Sept 2018: 13%) with the acquisition of a French logistics asset for €18.2 million
- Underlying property portfolio total return of 7.7% (excluding the impact of transaction costs) (30 September 2018: 10.8%)
- 100% of the portfolio's 13 institutional grade properties located in cities and regions of Continental Europe that are in the top two quartiles of forecast economic growth
- Portfolio valued at €242.7 million (on a proportionally consolidated basis), reflecting an uplift of approximately 9.0% on purchase price
- Conclusion of 18 new leases and re-gears with a total annual rental income of €1.6 million, generating a c.2% increase in annualised income on a like-for-like basis and secured at a weighted lease term of c.9 years. The overall unexpired lease term across the portfolio is 5.0 years to first break and 6.4 years to expiry
- Achieved a Global Real Estate Sustainability Benchmark ('GRESB') Green Star for 2019

Financial highlights
- Net Asset Value ("NAV") of €182.1 million or 136.2 cps (30 September 2018: €182.1 million / 136.2 cps)
- Total dividends declared of 7.4 cps, in line with target of 5.5% annualised yield against the Euro IPO issue price
- EPRA earnings of €10.5 million (30 September 2018: €10.8 million), resulting in dividend cover of 107% (30 September 2018: 109%)
- Profit for the year of €7.4 million (30 September 2018: €13.2 million), predominantly reflecting lower valuation gains on investment properties
- NAV total return of 4.1% (30 September 2018: 7.5%), reflecting the impact of acquisition costs and one-off tax restructuring costs
- Loan to value ('LTV') of 29% (30 September 2018: 26%) at a weighted average total interest rate of 1.4%. Additional loans completed post period take the LTV to 31%.

Commenting, Sir Julian Berney, Chairman of the Board, said: "2019 has been an important year in positioning SEREIT to deliver long-term income and capital growth. Our increasingly diversified portfolio by sector, geography and tenant has underpinned a period of stable financial and operational performance, supporting the delivery of the attractive and well covered dividend, whilst also improving the Company's defensive characteristics. At the same time, initiatives such as the Paris Boulogne-Billancourt refurbishment and lease regear demonstrate the potential to generate strong shareholder returns from our strategy of focusing on Winning European Cities, where all 13 of the Group's assets are situated."

Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added: "Property markets in our target cities are performing well. Whilst there are pockets of weakness, such as in the retail shopping centre sector, our limited exposure to underperforming parts of the market and balanced portfolio helps mitigate us against these. Alongside progressing the Paris redevelopment and other initiatives to further improve our income profile, the ambition for 2020 is that we will grow the portfolio via new acquisitions in our target Winning cities, benefitting from both the macro trends supporting attractive real estate returns, as well as the Company's extensive local market expertise."

[speedsgh] 14/11/2019 10:11

Robust growth maintained in Europe’s commercial real estate markets -

[speedsgh] 30/10/2019 11:09

New lettings and increase to debt facility -

Schroder European Real Estate Investment Trust Plc ("SERE" or the "Company"), the company investing in European growth cities, announces it has completed three new lease agreements at its Saint-Cloud office investment in Paris. It has also increased the debt facility secured against the asset by €4 million, taking the total loan to €17 million, with the proceeds being used to fund the ongoing portfolio-wide capital expenditure programme.

Asset management

Totaling c. 3,720 sqm of space, the new lease agreements will generate €0.8 million of annual rental income. Details of the individual transactions are as follows:

· A lease extension and floorspace expansion with existing occupier Outscale, the cloud operating system company, taking its occupancy from c. 1,695 sqm to c. 2,600 sqm. The six year fixed term lease commences in April 2020, at a rent of €0.6 million p.a., reflecting an uplift of €0.25 million on the previous agreement;

· A new three year lease with Ascott Informatique, an IT company, for 850 sqm, commencing September 2019, at a rent of €0.17 million p.a.; and

· A new 12 year lease with a government body for c. 270 sqm of storage accommodation, at a rent of €22,000 p.a.

Acquired in February 2017 for approximately €30 million, the 15,800 sqm office building, in Ile de France, Western Paris, is around 90% let to 11 tenants and is valued at €37.9 million (as at 30 September 2019).

Increased debt facility

The Company has also completed a €4 million increase to its existing debt facility secured against the asset, with Banque Populaire, taking the total loan to €17 million.

The loan represents an LTV of 45% against the value of the property. The loan matures in December 2024 and has a margin of 1.33% above the 3 month Euribor rate. With Euribor currently negative, it is applied at zero, resulting in a current total all-in interest cost of 1.33% p.a. The Company has acquired an interest rate cap to limit the maximum future potential interest cost if Euribor were to increase, to an all-in rate of 2.6% p.a.

The loan proceeds will be used to fund capital expenditure across the portfolio. This will include preliminary works at the Company's other Paris office investment, Boulogne-Billancourt, where a conditional agreement for a long term lease has now been signed with the existing tenant Alten, effective on completion of a comprehensive refurbishment of the building. The Company is progressing with planning and detailed design work for this refurbishment, with an expectation of starting the full works program in H1 2020. Once complete, the project will enhance the building quality and income profile of the portfolio and has the potential to deliver attractive development profits.

Following the loan increase, the Company has total outstanding debt of €77 million across six facilities, representing an LTV of just under 30% against the overall gross asset value of the Company. The current blended all-in interest rate is 1.4%, substantially below the portfolio net initial yield against current valuation of c. 6.2%. The Company expects to take further gearing to fund the Paris Boulogne-Billancourt refurbishment project, which would take overall gearing to circa 35% LTV.

Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, commented: "We continue to make good progress with our asset management programme, demonstrating the ongoing demand from a diverse range of occupiers for space in our properties. The transformational redevelopment of Boulogne-Billancourt remains on track and we look forward to providing the market with further updates in due course."

[red ninja] 10/9/2019 12:16

From report there is steady progress :-

"During the period the Company completed two asset management initiatives:

-- At its Paris office investment Boulogne-Billancourt, the Company has signed heads of terms for a conditional long term lease commitment with existing tenant Alten in conjunction with the advancement of feasibility, design and planning to refurbish the building to grade A standard. If concluded, it has the potential to be accretive to the company, delivering both NAV return upside and improving the longer-term income and portfolio profile. The construction period is forecast to take 15-18 months and Alten will relocate during that period. Whilst a number of options are being considered, it is likely that the Company will fund this project using debt, which would take the overall gearing level to circa 35% LTV, which is within the Company's gearing target.

-- In Hamburg, the Company has secured a new tenant on a seven year lease, for an additional 640 sqm of space. It follows the completion of two new leases with tenants in the education and IT sectors for over c. 40% of space announced in the Half Year results, all achieved above target. Advanced discussions are ongoing for a further floor, which will leave three floors, equating to c. 2,000 sqm or 27% of property by ERV, remaining to be leased.
"

[speedsgh] 10/9/2019 09:20

Announcement of NAV and dividend -

Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in European growth cities, today announces its unaudited net asset value ("NAV") for 30 June 2019, together with its third interim dividend for the year ending 30 September 2019:

- Unaudited NAV as at 30 June 2019 of €183.3 million or 137.1 cents per share; an uplift of 0.3% over the quarter;

- NAV total return of 1.7% over the quarter;

- A third interim dividend of 1.85 euro cents per share will be paid for year ending 30 September 2019, in-line with the target dividend stated at IPO of an annualised rate of 5.5% on the IPO issue price and approximately 6.0% as of 6 September 2019 based on the closing share price.

Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, added:

"Our focus continues to be on delivering an asset management programme that will further strengthen the income, portfolio diversity and shareholder returns. For example, the pre-let redevelopment at the Paris office, Boulogne-Billancourt, will be transformational for the Company. The high quality portfolio and diversified geography, tenant and sector profile means the Company is well positioned across the strongest cities in Continental Europe."...

INTERIM DIVIDEND
The third interim dividend of 1.85 euro cents per share for the year ending 30 September 2019 represents an annualised rate of 5.5% based on the Euro IPO issue price of 137 euro cents per share. This is in line with the Company's target dividend, which is based on paying a sustainable dividend based on the annualised income expected to be generated from the portfolio. Based on the GBP IPO issue price of 100 pence per share the annualised yield is 6.8% (based on FX rates as at 30 June 2019).

The dividend is 100% covered from income received during the quarter. Dividends for the first nine months of the financial year are 106% covered from net income received.

The interim dividend payment will be made on Monday, 21 October 2019 to shareholders on the register on the record date of Friday, 4 October 2019. In South Africa, the last day to trade will be Tuesday, 1 October 2019 and the ex-dividend date will be Wednesday, 2 October 2019. In the UK, the last day to trade will be Wednesday, 2 October 2019 and the ex-dividend date will be Thursday, 3 October 2019...

[speedsgh] 19/6/2019 08:51

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2019 -

Financial highlights

‒ Net Asset Value ('NAV') of €182.8 million or 136.7 cps (30 September: €182.1 million or 136.2 cps), an increase over the period of 0.4%

‒ NAV total return of 1.7% (31 March 2018: 6.1%)

‒ Underlying EPRA earnings of €5.4 million (31 March 2018: €6.5 million)

‒ Profit for the six months of €3.2 million (31 March 2018: €10.8 million, which included a number of one-off gains)

‒ Total dividends declared relating to the six months of 3.7 cps, in-line with target of 5.5% annualised yield against the euro IPO issue price

‒ Dividend cover of 108% (31 March 2018: 100%)

‒ Loan to value ('LTV') of 28% (30 September 2018: 26%) at a weighted average total interest rate of 1.4%

Operational highlights

‒ 100% of the portfolio's 13 institutional grade properties located in the fastest growing cities and regions of Continental Europe

‒ Improved portfolio diversification, increasing exposure to higher growth logistics warehouse sector from 13% to 19% (31 March 2018: 0%)

‒ Maintained high portfolio occupancy of almost 100%, with a 6.5 years average lease term to expiry

‒ Ongoing execution of asset management initiatives across the portfolio:

o Agreed conditional heads of terms (post period end) for a new long-term lease and capex programme with current tenant Alten, for 6,800 sqm, at the Boulogne-Billancourt office investment in Paris

o Completion of €0.8 million refurbishment program at the Metromar Shopping Centre in Seville to improve centre vibrancy and visitor appeal

o Completed two new leases with tenants in the education and IT sectors for over c. 40% of space in Hamburg, at rents above business strategy. Detailed discussions ongoing for a further two floors, representing an additional c. 25% of space

‒ Current portfolio valued at €240 million* reflecting an uplift of approximately 7.8% on purchase price, with transaction costs now fully recovered through valuation uplifts since acquisition

‒ Underlying property portfolio total return of 3.5% over six months (excluding the impact from transaction costs)

* Includes the Group's share of the Seville property proportionally valued at €26.4 million.

Commenting, Sir Julian Berney, Chairman of the Board, said:
"This has been an active six month period for the Company which has seen us make important progress, improving the long-term income profile of the Company and increasing our exposure to higher growth regions and sectors. The Company has an exciting asset management opportunity to invest into its Paris Boulogne-Billancourt office investment, potentially delivering growth in rental income and capital value and improving the quality and defensive characteristics of the portfolio. This is a good example of how our investment strategy of targeting assets with strong property fundamentals in European Winning Cities provides opportunities for growth."

Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added: "The recent French logistics acquisition is further evidence of our focus on assembling a diversified portfolio in winning cities and regions across continental Europe. The Company now has c. 20% of its assets in industrial warehousing, up from 0% twelve months ago. The majority of European real estate markets are performing well, particularly in Berlin, Frankfurt, Hamburg, Stuttgart and Paris, those cities where the Company has the majority of its exposure. We continue to focus on delivering our asset management programme and the optimal financing structure for this, in order to strengthen the income and portfolio profile, and support our ambition to grow the size of the Company."