TIDMSERE
RNS Number : 9420L
Schroder Eur Real Est Inv Trust PLC
25 July 2017
25 July 2017
ANNOUNCEMENT OF NAV AND DIVIDEND FOR PERIOD TO 30 June 2017
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
2017, together with its dividend relating to the three months from
1 April to 30 June 2017.
Net Asset Value
The Company generated an unaudited NAV as at 30 June 2017 of
EUR176.9 million or 132.3 cents per share (116.1 pence per share
based on 30 June 2017 exchange rates). This represents an NAV total
return of 1.5% over the quarter.
The table below provides a breakdown of the movement in NAV
during the reporting period:
EURm(1) Cps(2) %(3)
=============================== ========= ========= =====
NAV as at 31 March 2017 175.9 131.5
=============================== ========= ========= =====
Unrealised gain in valuation
of the property portfolio 1.1 0.8 0.6
=============================== ========= ========= =====
Transaction costs of
investments made during
quarter (0.7) (0.5) (0.4)
=============================== ========= ========= =====
Net operating income 2.3 1.8 1.4
=============================== ========= ========= =====
Other non-cash items (0.1) (0.1) (0.1)
=============================== ========= ========= =====
Approved dividend payable (1.6) (1.2) (0.9)
=============================== ========= ========= =====
NAV as at 30 June 2017 176.9 132.3** 0.6
=============================== ========= ========= =====
(1) Management reviews the performance of the Company
principally on a proportionally consolidated basis. As a result,
figures quoted in this table include the Company's share of joint
ventures on a line-by-line basis and excludes non-controlling
interests in the Company's subsidiaries.
(2) Based on 133,734,686 shares
(3) % change based on starting NAV 31 March 2017
Interim Dividend
The Company announces a third interim dividend in respect of the
year ending 30 September 2017 of 1.5 euro cents per share, its
fourth consecutive increase since the Company's IPO. This dividend
represents an annualised rate of 4.4% based on the euro equivalent
of the issue price as at admission. The dividend is fully covered
from income receivable from the current portfolio, reflecting a
pay-out ratio of 87% based on net operating income of EUR2.3
million for the quarter ending 30 June 2017.
Once fully invested, including the debt being drawn, the
Company's objective is to pay an annualised euro dividend yield of
5.5% based on the euro equivalent of the issue price as at
admission.
The interim dividend payment will be made on Friday, 1 September
2017 to shareholders on the register on the record date of Friday,
18 August 2017. In South Africa, the last day to trade will be
Tuesday, 15 August 2017 and the ex-dividend date will be Wednesday,
16 August 2017. In the UK, the last day to trade will be Wednesday,
16 August 2017 and the ex-dividend date will be Thursday, 17 August
2017.
The interim dividend will be paid in GBP 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 Rand
will be confirmed by way of an announcement on Monday, 7 August
2017. UK shareholders are able to make an election to receive
dividends in Euro rather than GBP should that be preferred. The
form for applying for such election can be obtained from the
Company's UK registrars (Equiniti Limited) and any such election
must be received by the Company no later than Friday, 18 August
2017. The exchange rate for determining the interim dividend paid
in GBP will be confirmed following the election cut off date by way
of an announcement on Monday, 21 August 2017.
Shares cannot be moved between the South African register and
the UK register between Monday, 7 August 2017 and Friday, 18 August
2017, both days inclusive. Shares may not be dematerialised or
rematerialised in South Africa between Wednesday, 16 August 2017
and Friday, 18 August 2017, both days inclusive.
The Company has a total of 133,734,686 shares in issue on the
date of this announcement. The dividend will be distributed by the
Company (UK tax registration number 21696 04839) and is regarded as
a foreign dividend for shareholders on the South African register.
In respect of South African shareholders, dividend tax will be
withheld from the amount of the dividend noted above at the rate of
20% unless the shareholder qualifies for the exemption. Further
dividend tax information for South African shareholders will be
included in the exchange rate announcement to be made on Monday, 7
August 2017.
Property Portfolio
As at 30 June 2017, the Company owned nine properties,
independently valued at EUR210.1 million, up from EUR208.9 million
(independent valuation as at 31 March 2017 including the Seville
acquisition), representing an increase of 0.6%.
The portfolio generated net property income of EUR3.2 million
over the quarter, representing an ungeared quarterly property
income return of 1.6%.
The current valuation reflects an increase of 6.2% compared to
the combined purchase price of the nine assets in the portfolio.
All leases are indexed and individual asset business plans are
being implemented to improve future earnings and capital
growth.
During the quarter, the Company acquired a 50% interest in the
Metromar Shopping Centre, Seville for a purchase price of EUR26.2
million (50% interest), representing a net initial yield of 6.2%.
The 23,500 sqm shopping centre is let to 50 tenants, with a
significant convenience retail offering, anchored by a 2,300 sqm
Mercadona grocery supermarket. Work is already underway to further
enhance dwell time at the centre.
The portfolio is 99% occupied and generates EUR14.0 million p.a.
of contracted rental income, representing a real estate net initial
yield of 5.9% on valuation and a geared property yield of over 8%.
The average unexpired lease term is 4.5 years to first break and
6.9 years to expiry.
The portfolio's country and sector allocations are set out in
the table below:
Country allocation Portfolio Sector allocation Portfolio
(% contracted at 30 June (% contracted at 30 June
rent) 2017 rent) 2017
=================== =========== ================= ===========
France 55% Office 53%
=================== =========== ================= ===========
Germany 30% Retail 47%
=================== =========== ================= ===========
Spain 15%
=================== =========== ================= ===========
Total 100% Total 100%
=================== =========== ================= ===========
Investment Progress
The Company has invested over EUR211 million since IPO 18 months
ago, constructing a property portfolio with a diversified income
profile across key growth cities in Continental Europe. A total of
EUR60.4 million of debt has been drawn, equating to an LTV of 26%
at an average weighted interest rate of 1.31% p.a. and an average
weighted duration of approximately seven years.
The Company has remaining investment capacity of approximately
EUR30 million and an attractive pipeline of suitable opportunities
in target growth cities and regions. The Company is currently in
exclusivity to acquire two logistic investments, totalling
approximately EUR20 million, that would provide further sector and
tenant diversification and at income yields that are accretive to
the Company's existing portfolio.
Tony Smedley, Head of Continental European Investment at
Schroder REIM, said:
"It is pleasing to report another quarter of strong progress,
following on from the Half Year results in May. The Company's NAV
and dividend growth is a reflection of the team's ability to
identify, acquire and manage assets that deliver on the Company's
stated objectives.
"Over 80% of the portfolio is located in Europe's fastest
growing locations by GDP growth. We are well positioned to focus on
generating long term shareholder value, as we look at the available
options to grow the Company over the medium-to-long term."
Enquiries:
Duncan Owen/Tony Smedley
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla Tel: 020 3727 1000
FTI Consulting
This information is provided by RNS
The company news service from the London Stock Exchange
END
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