Sustainability, Disposal and Asset Management U...

For release 15 December 2020

Schroder Real Estate Investment Trust Limited
("SREIT"/ the "Company" / "Group")

SUSTAINABILITY RATING, DISPOSAL AND ASSET MANAGEMENT UPDATE

Schroder Real Estate Investment Trust, the actively managed UK-focused REIT, provides an update on recent positive activity across its portfolio.

Three Green Stars awarded in annual GRESB survey

The Company has retained its three star rating in the GRESB global sustainability benchmark assessment for real estate assets and came first in its peer group of nine internally and externally managed listed real estate investment companies.  The 2020 GRESB Assessment structure fundamentally changed from the 2019 Assessment, establishing a new, more challenging baseline for measuring sustainability performance.

Participation in the GRESB survey is part of the Company’s broader ESG and positive impact strategy which is integral to the investment process.  Further information can be found within the Company’s latest Sustainability Guide at https://www.schroders.com/en/uk/private-investor/fund-centre/funds-in-focus/investment-trusts/schroders-investment-trusts/schroder-real-estate-investment-trust/sustainability/.

Disposal of The Portergate, Sheffield

The Company announces that it has exchanged unconditional contracts to sell The Portergate, a 49,500 sq ft office in Sheffield, to a private purchaser, for £4.2 million. The buyer has paid a deposit of 10% of the purchase price with completion due on 5 February 2021.  The price is in-line with the independent valuation as at 30 September 2020.  The property is 80% vacant by area following the departure of the previous tenant, Aviva, who vacated in return for a £1.2 million prior payment to the Company.   

The Company has reviewed refurbishment options and concluded that a disposal at the agreed price is the most attractive option with proceeds to be recycled into income producing investments.  The asset is the Company’s largest void and, based on the tenancy information at 30 September 2020, the disposal reduces the portfolio void rate from 7.2% to 5.5%, calculated as a percentage of the portfolio estimated rental value (‘ERV’).

Recent asset management activity

The Company continues to complete positive asset management initiatives across the portfolio, with the recent activity totalling approximately 40,000 sq ft and generating an initial £278,548 of rent per annum.  This activity is summarised below: 

Multi-let industrial portfolio

Leeds, Millshaw Industrial Estate

A new five year lease has been completed on a 22,972 sq ft unit with Power EC Limited, an electrical appliance wholesaler, at a rent of £143,575 per annum or £6.25 per sq ft. This is 4% ahead of the estimated ERV of £6.00 per sq ft and 45% ahead of the rent paid immediately prior to the recent refurbishment of the unit. The tenant received three months rent free.

Milton Keynes, Stacey Bushes Industrial Estate

A new five year lease has been completed on a 5,263 sq ft to Tiger Window Blinds at a rent of £39,473 per annum or £7.50 per sq ft which is in-line with ERV.  The tenant received three months rent free.

A new three year lease has been completed on a 2,180 sq ft unit with Mitchell Ryan Limited, an ecommerce company, at a rent of £23,000 per annum or £10.55 per sq ft which is in-line with ERV.

Norwich, Union Park Industrial Estate

A new nine year lease has been completed on a 4,112 sq ft unit with In Demand Toys, a toy e-commerce store, at a rent of £23,000 per annum or £5.59 per sq ft. This is 2% ahead of the ERV of £5.50 per sq ft.  There is a break option in year five.

Mixed use

Liverpool, Church Street

A new five year lease renewal has completed with Driscoll Kingston Solicitors for 4,912 sq ft at a rent of £49,500 per annum or £10.08 per sq ft, increasing to £66,000 per annum in November 2023 or 13.43 per sq ft.  This compares with an ERV of £8.50 per sq ft. The tenant will receive twelve months rent free and a break option in year three subject to a six months rental penalty.

-ENDS-

For further information:

Schroder Real Estate Investment Management Limited: Duncan Owen / Nick Montgomery / Frank Sanderson	020 7658 6000
Northern Trust: Jingjing Qi	01481 745529
FTI Consulting: Dido Laurimore / Richard Gotla / Meth Tanyanyiwa	020 3727 1000