(Alliance News) - Schroder Real Estate Investment Trust Ltd on Tuesday reported a decline in net asset value for its recently ended financial year on debt breakage costs and a fall in the value of its property portfolio.
As at March 31, Schroder REIT reported a net asset value of GBP309.8 million, or 59.7 pence per share, from GBP356.4 million, or 68.7p, the same date the year before.
This was mainly attributed to one-off debt breakage and related costs of GBP27.4 million, linked to the refinancing of a GBP129.6 million fixed rate loan from Canada Life Investments in October 2019.
Schroder REIT's net asset value negative return for the year to the end of March was 1.5%, compared to a total return of 4.5% the year before, reflecting the impact of refinancing.
The trust's property portfolio for the year had a total return of 1.9%, outperforming the MSCI/IPD benchmark index of 0.2%, while net rental and related income dropped to GBP21.2 million from GBP24.2 million the prior year.
In addition, the value of Schroder REIT's property portfolio declined to GBP460.2 million from GBP460.6 million the year before.
Schroder REIT declared a dividend of 2.72p per share, up from 2.53p the year before.
"The Covid-19 pandemic is the first time in living history that the world has faced a Global Health Crisis and so we do not know what will be the outcome. What we can see, however, is that the pandemic has led to horrendous economic data and as a consequence valuation uncertainty across the sector. It is also leading to rent deferrals and reductions in some instances. This has required an immediate focus on rent collection, reducing risk and implementing new property management procedures to ensure tenants can return safely to our buildings," said Global Head Duncan Owen.
"In advance of the Covid-19 pandemic, the company took significant strategic steps to reduce debt and its cost, completed several disposals at profitable levels and focused on robust net operating income. These steps have materially improved the company's competitive position and outlook," Owen added.
Shares in Schroder REIT were down 5.5% at 38.50p on Tuesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
Schroder Real (SREI)