Net Asset Value(s)

RNS Number : 7305F

Schroder Eur Real Est Inv Trust PLC

29 July 2016

 

29 July 2016

ANNOUNCEMENT OF NAV AND DIVIDEND FOR PERIOD TO 30 June 2016

Schroder European Real Estate Investment Trust plc (the "Company") today announces its unaudited net asset value for the three months to 30 June 2016 together with its maiden interim dividend.

Net Asset Value

The Company delivered an unaudited net asset value ("NAV") as at 30 June 2016 of €157.1 million or 129.6 cents per share (£1.08 per share).  This reflects a decrease in Euro terms of 1.4% per share compared with the NAV as at 31 March 2016. A breakdown of the NAV movement over the quarter is set out below:

	€m	cps
NAV as at 31 March 2016	159.4	131.5
Unrealised gain in valuation property portfolio	2.2	1.8
Acquisition costs of investments made during period	(5.6)	(4.6)
Unrealised FX gain	0.1	-
Pre-tax operating profit	1.0	0.9
NAV as at 30 June 2016	157.1	129.6

Interim Dividend

The Company announces its maiden interim dividend of 0.8 Euro cents per share for the period from IPO on 9 December 2015 to 30 June 2016. The dividend represents an annualised rate of 2.4% based on the Euro equivalent of the issue price as at admission.

The Company commenced receiving income from its investment portfolio from 31 March 2016 and the dividend is fully covered from contractual income receivable from the current portfolio. Once fully invested, including the debt being drawn, the Company will target 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 7 September 2016 to shareholders on the register on the record date of 19 August 2016.  In South Africa, the last day to trade will be 16 August 2016 and the ex-dividend date will be 17 August 2016. In the UK, the last day to trade will be 17 August 2016 and the ex-dividend date will be 18 August 2016.

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 15 August 2016. UK shareholders are able to make an election to receive dividends in Euro. 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 19 August 2016. 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 23 August 2016.

Shares cannot be moved between the South African register and the UK register between 15 August 2016 and 19 August 2016, both days inclusive. Shares may not be dematerialised or rematerialised in South Africa between 17 August 2016 and 19 August 2016, both days inclusive.

The Company has a total of 121,234,686 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 15% 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 15 August 2016.

Property Portfolio

The Company completed its IPO on 9 December 2015 and as at 30 June 2016 it had assembled a portfolio comprising seven properties independently valued at €147.6 million. This reflects an increase in value of 4.3% compared to the total purchase price of the assets. The portfolio produces a contracted rent of €8.7 million per annum reflecting a net initial yield of 5.3% against the independent valuation and 5.6% against the purchase price. 

The portfolio has over 30 tenants with an average unexpired lease term, assuming all tenants vacate at the earliest opportunity, of 6.8 years. The void rate is less than 1%. The tables below summarise the key portfolio information as at 30 June 2016:

Sector weightings	% Market Value
Retail	52
Offices	48

Country weightings	% Market Value
Germany	55%
France	45%

Investment Progress

The Company has invested over €150 million (including transaction costs) during the past seven months, representing all of the initial equity raised and a substantial portion of the total investment capacity. It is in advanced negotiations to draw debt against a number of the assets, within the overall gearing cap of 35% LTV. This will provide the Company with additional investible funds of up to approximately €70 million. In deploying the additional capital the Company will maintain focus on the growth cities and regions of continental Europe and is aiming to add further diversification to the portfolio by acquiring assets of an industrial / logistic nature. In addition, selective value add investments are being reviewed. The real estate markets in these locations remain competitive and the Company continues to actively pursue negotiations to make further investments over the coming months.

Following the UK vote to leave the EU the Manager has seen no negative impact so far on tenant or investor demand in Continental Europe. However, it has only been a relatively short period of time and the Board and Manager will continue to monitor the impact of this on the Company's strategy. The Company remains positive given its assets are dominated in Euros and that the investments have been made in cities/regions which have traditionally proven to be stable and resilient over the long term.     

Tony Smedley, Head of Continental European Investment at Schroder REIM, said:

"We are pleased to be announcing our maiden fully covered interim dividend today, illustrating the strength of the investment progress achieved to date. With the current uncertainty overshadowing the UK real estate market, we believe it is positive that the assets of the Company are denominated in Euros and that the Company owns income producing assets in cities/regions which have traditionally proven to be stable and resilient over the long term."

Enquiries:

Duncan Owen/Tony Smedley

Schroder Real Estate Investment Management Limited        Tel: [phone]

Ria Vavakis

Schroder Investment Management Limited                            Tel: [phone]

Dido Laurimore                                                                       Tel: [phone]

FTI Consulting

 

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