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Schroder Real Estate Investment Trust Limited

0.05 (0.11%)
Share Name Share Symbol Market Type Share ISIN Share Description
Schroder Real Estate Investment Trust Limited LSE:SREI London Ordinary Share GB00B01HM147 ORD SHS NPV
  Price Change % Change Share Price Shares Traded Last Trade
  0.05 0.11% 44.25 675,386 16:35:02
Bid Price Offer Price High Price Low Price Open Price
44.10 44.35 45.00 44.10 44.45
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment Trusts & Lrt 24.42 89.37 18.20 243.13 217.30
Last Trade Time Trade Type Trade Size Trade Price Currency
17:15:20 O 6,382 44.312 GBX

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Date Time Title Posts
09/7/201801:02Schroder RE (SREI) One to Watch on Monday -

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Posted at 03/6/2023 17:14 by mirandaj
Just a swift comment on Stanley Green Trading Estate for interest really. I am happy with the other holdings and hope that letting continues well with good percentage increases. They have chosen some very particular and popular places to be.

Obviously the results will tell all but, in the meantime, we had reason to drive over to Manchester Airport and I wanted to have a fleeting look from the A555. We didn't come off on to the A34 as I was happy with what I saw. The airport is only a few minutes away.

The new build seem to have a really high end finish and solar panels everywhere - all looks very high tech! The roads are tarmacadamed and the finish is excellent. The contractors have taken great care. I could not tell if all ready for letting but have no doubt they will have no trouble with them. Rents on the older properties will have been increasing as everywhere but being in such an advantageous position will draw in customers to the various unit.

(Still at a 28% + discount pre results on 8th.)

A little from Kepler's research - RNS dated 9th December 2022:

SREI’s high dividend yield looks attractive versus both peers and other asset classes, including equities, cash and gilts – particularly given how well covered it is. Investors buying now should receive a dividend yield of 7% on an ongoing basis. In addition, the reversionary potential of the portfolio is attractive at 6.6% (versus the benchmark’s 4.8%) and there is a pipeline of asset management opportunities to further grow income.

SREI trades on a very wide discount of 39% at the time of writing, meaning the valuation of the portfolio could fall by c. 25% and the shares would still be on a discount. We think this should give comfort to investors concerned that further falls to the capital value of the portfolio are likely in the coming quarters, given that property valuations come in with a lag. Of course, if interest rates peak lower and sooner than expected, then some of the pressure on pricing will be relieved, although there will still be the impact of a recession to assess.

Additionally, we think the balance sheet looks strong. The decision to fix long-term debt in late 2019 was well timed, and the low rate agreed of 2.5% is extremely attractive in the current environment. We note there is some refinancing risk through the RCF, the hedges on which have to be rolled in July 2023, although this is only 26% of the drawn-down debt. The cheap gearing could provide a tailwind behind the NAV when the recovery comes, and importantly there are very significant cushions over the covenants on the debt

Posted at 18/5/2023 13:54 by skyship
Alluring - I do agree; though won't be adding. One I did add today, reinvesting some of the cash raised from selling EBOX, is the one I consider to be the outstanding BEST BUY in the REIT sector - API.

API, a generalist like SREI, is now anomalously cheap at 49.4pXD - NAV discount at 40%; yield at 8.1%.

I would expect them to recover in the short-term back up to 55p for stats of 33.3% & 7.27%...

Posted at 22/4/2023 12:59 by skyship
Michael Morris, Chief Executive of Picton (PCTN) commented.

‘Our own independent valuation and the recent MSCI figures appear to indicate that the marked repricing seen at the end of last year has substantially run its course. In our portfolio increasing rents and rising rental values are having a positive valuation impact and offsetting some of the outward yield movement we have seen in recent months. Being able to improve occupancy and adapt our portfolio to changing market conditions is also encouraging.’

Their 1.2% fall suggests to me that the Q1 result for SREI could be pretty well flat - perhaps -0.5%. SREI has less office; more Retail Warehouse.

Posted at 26/3/2023 10:06 by mirandaj
Certainly worth watching Nick Montgomery's videos if you have time - to reinforce...


Posted at 10/3/2023 15:47 by starpukka
Opened an srei long spreadbet today for a narrowing of the discount.
Posted at 10/3/2023 14:36 by cwa1
Bar steward bought them SLIGHTLY cheaper than me :-((

Posted at 03/2/2023 11:48 by skyship
riverman - good posts. Things never quite what they seem!

Around the time they took over SREI had a PV of £329m on a 38% LTV; this compares with the current £470m on a 35% LTV.

Quite a few of the REITs we own and talk about didn't exist 10yrs ago; but here is a chart showing the share price performance of a select few:

free stock charts from

Posted at 16/12/2022 03:14 by my retirement fund
PortfolioSchroder Real Estate (SREI) owns a diversified portfolio of higher-yielding commercial property which is managed by UK-wide specialist teams to generate a high and growing income together with capital appreciation.Nick and the team at Schroders Capital Real Estate apply a research-led approach to determine attractive asset classes and locations in which to invest, looking ahead to what they think will outperform in the next few years. This dynamic approach to asset allocation is intended to generate a sustainable rising income, as well as capital growth across market cycles.The team forensically model the portfolio to enable them to balance the delivery of a progressive, sustainable dividend in the near term with investing in asset management and redevelopment projects that will drive capital growth and future income increases in the medium to longer term.Sustainability is key to the asset management opportunities the managers are looking for. In their view rising ESG standards and expectations are generating multiple opportunities to carry out value-enhancing asset management activity which can help boost the scarce supply of high-standard property.The focus on opportunities for asset management and rental growth means the portfolio has no exposure to the priciest, lowest-yielding parts of the industrials market, which has helped the portfolio fall less than the benchmark in the sell-off seen this year. SREI's industrial exposure, which was 46.2% at the time of the latest NAV for the end of September, is concentrated in regional, multi-let industrial estates rather than the big-box, single-let warehouses which have come under the most pressure as interest rates have risen. The below chart shows the trust's sector exposure versus that of its MSCI All Property benchmark.A good example of the interest in multi-let industrials and the sustainability strategy is the investment in December 2020 in the Stanley Green Trading Estate in Cheadle, Manchester. This property, with an adjoining 3.4-acre site, was acquired in December 2020 for £17.3m. The current value of £29.5m now makes it a top-ten holding in the portfolio (see table below). Construction of 80,000 sq. ft of operational net-zero carbon (NZC) warehousing, believed to be the first site of its type to achieve this status in the North West, is under way on the 3.4-acre adjoining site.£8.7m is planned to be invested in total on this development, which should generate £1.3m of annual rent once it is complete in January 2023. As at 30 September 2022, the value of the development site was £10m (included within the £29.5m total asset value) and there was a remaining £2.9m to spend on the development. Once complete, the team estimate the value of the development site will increase by £10m to £20m. This assumes a c. 6% yield on the £1.3m in additional annual rent expected to be generated from the new development and means the whole asset would increase in value to £39.5m from £29.5m, all else being equal. Meanwhile the focus has been on regearing leases on the existing accommodation at the estate and negotiating higher rents.We note that as this asset is under development, the £1.3m expected annual rent from the new accommodation has not been included by the valuers in the estimated rental value (ERV) of £35.4m. Before considering the further positive impact of the Cheadle site, this ERV represents a 6.6% yield as at the end-of-September valuation, which already compares favourably to the MSCI benchmark's 4.8%. Similarly, in the last half year the team have completed lease activity with current tenants at Langley Park Industrial Estate in Chippenham at higher rents. A backdated rent review has seen Siemens become the second-largest tenant in the portfolio after a 26% increase in the rent it pays to £1.22m. A new ten-year lease renewal without breaks has been completed with IXYS UK Westcode Ltd, the UK subsidiary of Littelfuse, a global manufacturer which has provided a parent-company guarantee. The rent is £465,000 per annum, or £5.50 per sq. ft, reflecting a 31% increase over the current contracted rent of £355,000 per annum. IXYS received 12 months rent free (until December 2023), and will also receive a contribution to repair works of up to the value of £250,000 if undertaken within two years of lease completion. The lease includes a rent review at year five to the higher of open-market value or RPI, with a collar of 1% per annum and a cap of 5% per annum.There is an application in process to extend the amount of space available on the site from 400,000 to 530,000 sq. ft, while the addition of PV panels and EV chargers should improve the ESG credentials of the asset. The manager is engaging with current tenants on a potential larger scheme.Finally, at 106 Oxford Road in Uxbridge, a lease variation was completed on 25 October 2022 with the sole tenant Buckinghamshire New University (BNU), thus removing the tenant break option in November 2023 and providing certainty of income until the lease expires in November 2028. The tenant received nine months rent free, and the rent will increase by 13% – from £1.15m per annum to a guaranteed £1.3m per annum – in January 2024. Having completed the regear, the team are exploring the potential for a longer-term lease commitment in return for the university carrying out more significant sustainability improvements to the building, which would be in line with both BNU's own ESG-related commitments and SREI's ESG-focussed strategy.In order for the managers to effectively deliver their hands-on active management and development approach, they seek to reinvest proceeds from the sale of smaller, non-core assets into larger assets where more scope is perceived to exist for generating excess investment returns by leveraging the inherent opportunities for development that might exist within larger assets. A relatively higher return on invested capital can be captured by this method compared to acquiring further assets. The manager also seeks to acquire adjoining assets or plots to realise scale benefits. In addition, different uses can be assigned, leases can be managed creatively and tenants with higher-spec requirements can be accommodated, in exchange for higher rents.The real estate team in the UK are based in offices in both London and Manchester. Nick is able to draw on a team of more than 100 people, including experienced, specialist asset managers within each of the real estate sectors in which SREI invests. Being able to access this large team's experience in individual stock selection and using their knowledge to inform judgement of reversionary yield, development initiatives and the cost of capex – along with other investment considerations – is a potential competitive advantage.In addition, the relationships held across the team mean the manager benefits from excellent access to deal flow, including off-market transactions. Real estate is an imperfect market where mispriced and undermanaged assets can be found, but only if there is access to deal flow.Store Street in Bloomsbury, London is an 86,000 sq. ft office property that is currently let to The University of Law and is near the site of the new Crossrail station in an area under redevelopment. Near UCL and surrounded by properties housing tenants in the life sciences, tech and media sectors, there is scope to expand the site, potentially more than double the rent, and seek tenants in these fast-growing areas.These projects indicate the scale SREI is able to operate at and the diversity of the toolsets the manager is able to bring to bear. Stanley Green, Langley Park and Store Street are all actual or prospective examples of purchasing adjoining sites to enable value-accretive developments. This fits with the strategic preference for larger assets which bring a broader scope for diverse asset management opportunities.Transactions over the past year have helped push the allocation outside London and the South East up to 72.6%. We think this is illustrative of the entrepreneurial management spirit: Nick is clearly looking for sites with strong locations and fundamentals but where investment is needed to extract full value. We think it should be noted that while SREI sets out to be a 'core' portfolio, this does not mean steady and dull: the high degree of asset management activity across various verticals offers many ways to add value, and this has contributed to above-market returns. The geographical allocation also reflects the search for purchases with more attractive pricing and asset management opportunities. We note that the net initial yield of 5.4% on the portfolio compares to 4.1% on the benchmark. At the half-year end the portfolio void rate was 8.8%, calculated as a percentage of estimated rental value. This is in the middle of the ten-year range of 5–13% and compares with the benchmark void rate of 7.9%. Of the 8.8% void, 1.4% was under refurbishment and 2.5% was under offer. The portfolio weighted average lease length, calculated to the earlier of lease expiry or break, was 5.1 years.The portfolio is diversified by both tenant type and location. Not having high exposure to a small number of tenants is especially important as we enter a recessionary environment where maintaining rent collection, rent levels and therefore total income should be a performance differentiator.The table below shows the 15 largest tenants by annual rent and shows no exposure to high street fashion or leisure. Only three tenants represent more than 2% of portfolio annual rent, and the manager believes these are profitable businesses and strong covenants.A strong tenant base should lead to SREI's income remaining relatively resilient, and this is reflected in the September quarter rent collection, which was 99%.
Posted at 22/10/2022 11:35 by kenmitch
Strongly agree chucko1 and especially so how AEWU (my best performing Commercial Property REIT and 13% dividend at my buy price) has significantly enhanced value through their judicious use of cash.

It’s interesting too that AEWU, unlike SREI, have not only maintained the dividend so far but unlike SREI have achieved that without buying back. Also despite those buybacks the AEWU discount (source aic) is 29% and SREI 49%.

And AEWU year to date share price performance is better too with AEWU down 21% and SREI down 24%.

btw……the quality of the posts on the REIT threads is exceptional (in sharp contrast to the many awful ADVFN threads) and I for one really appreciate that. And a special thanks on top to the prolific SpectoAcc. Such quality and posts like his are a fabulous source for lurkers.

Finally I know my negative opinions on REITS buying back are shared by almost no-one else on the REIT threads so apart from occasional references to them I’m resisting posting my views. Other share price influencing issues so well covered on these REIT threads are far more important at present.

Thanks all.

Posted at 07/6/2022 18:09 by speedsgh
Intersting to compare with Picton Property Income (PCTN). They listed on 19/12/2005 (SREI listed on 23/7/2004). I don't know how to post charts but AFAICS if you compare the SREI share price performance against PCTN from 19/12/2005 to date, Picton has outperformed SREI by just under 100%. NOTE: this is just share price return, not total return.

SLI listed on 20/3/2006. Share price return for SLI is approx 30% better than SREI since SLI listed.

Schroder Real Estate Inv... share price data is direct from the London Stock Exchange
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