Schroder European Real E... Share Discussion Threads

[speedsgh] 12/1/2021 19:17

Rent collection and valuation update -

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 31 December 2020.

- Approximately 89% of rent due for the quarter ending 31 December 2020 has been collected, which is ahead of the amount collected in the previous two quarters of 87%

- As at 31 December 2020, the property portfolio was independently valued at €276.1 million, an increase of 2.8%, or €7.51 million, on the 30 September 2020 valuation of €268.6 million. Net of the €4.6 million capital expenditure invested in the refurbishment of Boulogne Billancourt over the quarter, the valuation increase is €2.91 million, or 1.4%

- Excluding the Boulogne-Billancourt capital investment, the like-for-like valuation increase during the quarter was driven by a number of asset management initiatives which included:

o Two new lease agreements, for five and six years respectively, for a further floor and part floor at its Hamburg office investment, representing c. 10% of the lettable area. This resulted in a valuation increase of €1.2 million or 6.5%

o Yield compression and ERV growth across a number of the industrial assets in the portfolio. This resulted in a valuation increase of €1.41 million or 3.0%

o The value of SERE's 50% interest in the Seville shopping centre declined marginally by €50,000 or 0.2%. The opening of the recently expanded and refurbished Mercadona supermarket has assisted in limiting the decline. This asset is the only asset in the portfolio where the valuers continue to adopt a material uncertainty clause

- The Company remains prudently geared with a loan to value, net of cash, of approximately 25% as at 31 December 2020, with no debt maturity before 2023.

The 31 December 2020 unaudited NAV and dividend will be announced in early March 2021.

[speedsgh] 09/12/2020 12:04

European Real Estate: Alive and kicking in the Covid crisis -

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] 09/12/2020 11:55

FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2020 -

Key Financial highlights

‒ Portfolio valued at €268.6 million1, reflecting a 10.7% uplift during the period (30 September 2019 €242.7 million); the like-for-like valuation movements during the period by sector were Offices +24.9%, DIY/Grocery +1.4%, Industrial +0.5%, Other -4.8% and Shopping centre -9.4%

‒ Net Asset Value ('NAV') of €201.8 million or 150.9 cps, an increase of 10.8% during the period (30 September 2019: €182.1 million or 136.2 cps)

‒ NAV total return of 16.2% (30 September 2019: 4.1%)

‒ Profit increased to €28.4 million (30 September 2019: €7.4 million) driven primarily by the portfolio valuation uplift

‒ Underlying EPRA earnings of €8.6 million (30 September 2019: €10.5 million), with the 2019 earnings having included receipt of a one-off surrender premium of €1.5 million

‒ Loan to value ('LTV') decreased to 24% net of cash (30 September 2019: 26% net of cash) at a weighted average total interest rate of 1.4%

‒ Total dividends declared of 5.7 cps (30 September 2019: 7.4 cps)

‒ Dividend cover of 112% (30 September 2019: 107%)

Operational highlights

‒ Underlying property portfolio total return of 15.7%

‒ Increased portfolio occupancy to 96% (30 September 2019: 94%), with a 5.5 years average lease term to expiry (30 September 2019: 6.4 years)

‒ Successful execution of asset management initiatives across the portfolio:

o Excluding Alten, concluded 10 leases and re-gears, at a rent similar to previous rent of those leases, at a weighted lease term of 5 years

o Reflecting its increasing focus on ESG considerations, the Company increased its GRESB green star rating to three, in recognition of the portfolio's sustainability performance, whilst improving the sustainability rating at the Company's Hamburg office asset with the certification of BREEAM in use

o The Group continues to give support to its tenants, service providers and consumers in understanding the impact Covid-19 is having on their respective positions.

Dividend update

The Board will continue to review the dividend in 2021, in particular having regard to the reinvestment of the Paris Boulogne-Billancourt sale proceeds, market conditions and the longer term sustainable rental income collected from the portfolio.

As announced previously, whilst the refurbishment of Paris Boulogne-Billancourt is being undertaken, it is expected dividend cover from net income will reduce. The Board expects to allocate some of the net sale proceeds from the forward-funding disposal of this asset, towards covering the shortfall in income from Paris Boulogne-Billancourt whilst it is being refurbished and pending reinvestment of the remainder of sale proceeds.

Sir Julian Berney Bt., Chairman, commented:

"Our operationally strong portfolio, focused on the Winning Cities of Continental Europe, provided a solid foundation coming into the pandemic, which has been borne out through our robust rent collection figures. Through active asset management, in particular, the conditional forward sale of Paris Boulogne-Billancourt, we have further strengthened the Company's balance sheet and prospects over the period. We are looking forward to next year with cautious optimism, with a focus on investing the sales proceeds into new acquisition opportunities in high-growth sectors and cities in order to continue growing net income and the dividend and favourably positioning the portfolio to drive the next phase of the Company's growth."

Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added:

"Despite the challenges presented by Covid-19, significant progress has been made during the reporting period in delivering on the stated strategy. Key to this was the successful execution of our Paris Boulogne-Billancourt initiative, a transformational transaction that is highly accretive for shareholders and underpinned this extremely strong set of results. Whilst we continue to deal with small pockets of underperformance in the portfolio, the REIT is extremely well placed as we move into 2021 to deliver further income and capital growth on behalf of shareholders."

[speedsgh] 09/12/2020 11:49

Dividend Declaration -

Schroder European Real Estate Investment Trust plc (the "Company") announces its fourth interim dividend for the year ended 30 September 2020 of 1.57 euro cents per share.

The interim dividend payment will be made on Monday, 25 January 2021 to shareholders on the register on the record date of Friday, 8 January 2021. In South Africa, the last day to trade will be Tuesday, 5 January 2021 and the ex-dividend date will be Wednesday, 6 January 2021. In the UK, the last day to trade will be Wednesday, 6 January 2021 and the ex-dividend date will be Thursday, 7 January 2021.

The interim dividend will be paid in sterling to shareholders on the UK register and rand to shareholders on the South African register... The exchange rate for determining the interim dividend paid in sterling will be confirmed following the election cut off date by way of an announcement on Monday, 11 January 2021...

[speedsgh] 11/11/2020 12:02

European Real Estate: Alive and kicking in the Covid crisis -

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.

[skyship] 26/10/2020 16:07

Sharpshare - message for you on the JDT thread

[sharpshare] 22/10/2020 11:11

"As at 30 September 2020, the property portfolio was independently valued at EUR268.6 million, an increase of 9.8%, or EUR23.9 million, on the 30 June 2020 valuation of EUR244.7 million"

"Unaudited NAV as at 30 June 2020 of EUR178.4 million or 133.4 cents per share,"

So 30 Sep 2020 NAV about EUR 178.4m + EUR 23.9m = EUR 202.3m

shares in issue: 133,734,686

NAV per share 151.26c or 136.7p (GBPEUR 1.1065)

[speedsgh] 22/10/2020 11:01

Rent collection and property valuation update -

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.

[hindsight] 07/10/2020 12:48

I will write EI, but like you dont expect too much. Im getting twitchy re covid and the general price bounce in the sector

[essentialinvestor] 07/10/2020 11:56

Is that deal definite, meaning is the buyer now legally obliged to complete,
or is that the next stage.

That's a key element to clarify.

[apollocreed1] 07/10/2020 02:30

I sold RGL to buy SERE. The discount is much larger and the sale of the Paris development gives me a lot more confidence in the valuation of the other assets.

[essentialinvestor] 06/10/2020 13:21

hindsight, it's a vaid question, although I'm not sure what the legalities are.

You could always ask Schroders directly, should be contact details on the IR site,
would doubt they would comment further though.

[hindsight] 06/10/2020 13:10

Why I ask, is that a blue chip company or a regus offshore type differ a bit these days
Imagine when they have half proceeds "50% of the price is to be received on exchange of the definitive deed prior to this calendar year end 2020" things be safe as no doubt have dafault clauses, but till then its thier word if dont know who they are dealing with

[essentialinvestor] 06/10/2020 12:58

The buyer has not been named, unless im misreading the above?.

And how can a refurbishment project take until 2022?, that makes no sense to me.

They should have provided more detail and clarity

[sharpshare] 06/10/2020 11:55

"The sale is structured as a forward funding, with the building being handed over to the purchaser in H1 2022"

So buyer not directly named then?

[essentialinvestor] 06/10/2020 11:40

Yes, as apllies to any other property business.

I'm not convinced of the investment csse here, but will keep this on a watchlist

[red ninja] 06/10/2020 10:34

Isn't the NAV value subject to some downward revision on some assets ie the Seville shopping centre ?

[hindsight] 06/10/2020 09:05

Sharpshare, did it name who the buyer was ?

[essentialinvestor] 05/10/2020 23:31

Think it's worth keeping an eye on,

however what I'm less confident on is attempting to access

the value of their other assets.

Would be nice to see a few BOD buys.


Not sure if the new COVID restrictions in Paris from today impact the construction project as
the office refurb is still ongoing.

Also is that a definite sale?, I'm unfamiliar with the Frech commercial property buying process.

Can the buyer still withdraw from the contract before December etc.

[m_kerr] 05/10/2020 23:26

thanks, surely larger capital base means costs spread out over more assets? yes the seville deal looks like a disaster, but even so, with roughly 25% of the portfolio being crystallised at a significant premium to NAV, this leaves the remainder of the portfolio trading at such large discount, you could write that value down to 0 and still discount the remainder of the portfolio by a significant amount, and still leave a margin of safety on the current valuation.

[essentialinvestor] 05/10/2020 23:14

The capital increase since inception is circa 11%.

Not including the Paris sale which is yet to conclude.


Seville was a really poor buy imv, that hasn't helped sentiment.

It's only a 50% share in that development which is arguably even worse
if they wanted to exit.

[m_kerr] 05/10/2020 23:06

this trades on quite a large discount. any reason? i'm looking at this and thinking the only bad asset is the seville shopping centre which is about 8-9% of gross assets. they seem to have a good logical case behind each asset, and there's modest leverage. only fly in the ointment other than seville is the high ongoing charges? they seem to be going up and up year on year. 2.95% at the latest half year results. any one invested and have any idea why this is?

[essentialinvestor] 05/10/2020 15:36

Well in terms of the current situation it looks like Paris

is going back in to lockdown.

[sharpshare] 05/10/2020 15:33

Need to look to the future!