(Alliance News) - Schroder Real Estate Investment Trust Ltd on Tuesday reported a slight decline in net asset value, but noted its dividend is fully covered by earnings, as the company also proposed to put environmental sustainability "at the centre" of its investment proposition.
Schroder REIT is an actively managed UK-focused property investor.
NAV per share on September 30, the end of the company's financial first half, was 60.5 pence, down 1.6% from 61.5p on March 31. Schroder REIT said a rise in real estate yields - meaning lower property values amid steady or rising rents - was offset by a high income return and estimated rental value growth of 2.4%.
NAV total return in the half-year was 1.1%, compared to 0.8% a year before. Total return from the underlying portfolio was 1.9%, compared to negative 0.6% for the trust's benchmark.
Schroder REIT declared a 0.836p dividend for the second quarter, giving a total of 1.67p for the half year, up 4.4% from a year before. It said this is 102% covered by earnings.
The company called an extraordinary general meeting for December 15 to vote on proposed changes to its investment objective and policy. This will be to incorporate a "sustainability improvement and decarbonisation strategy focused on adapting existing buildings into those that are both modern and fit for purpose," Schroder REIT said.
The company hopes to "proactively respond to the UK's net zero carbon objectives, whilst optimising portfolio performance to seek enhanced total returns for shareholders".
Shares were down 2.4% to 43.82p in London on Tuesday afternoon. They are down 5.8% over the past 12 months.
By Tom Waite, Alliance News editor
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Schroder Real (SREI)