LONDON (Alliance News) - Schroder Real Estate Investment Trust Ltd said Tuesday it saw a slight rise in its net asset value for its recently ended financial year, as it continued with its Winning Cities strategy.
In a separate announcement, Schroder REIT said it has sold a warehouse in Acton, London, let to Booker Ltd to an unnamed purchaser for GBP18.9 million, reflecting a net initial yield of 3.5%. The sale of the 64,614 square feet warehouse is due to be completed on November 15.
For the year to the end of March, the trust's net asset value increased to GBP356.4 million, or 68.7 pence per share, from GBP353.6 million or 68.2p per share the year before.
Schroder REIT's net asset value total return was 4.5%, compared to 10.5% the year before, reflecting the impact of refinancing and acquisition costs.
The trust's property portfolio for the year saw a total return of 7.2%, outperforming the MSCI/IPD benchmark index of 5.2%, while net rental and related income increased to GBP24.2 million from GBP23.9 million the prior year.
However, the value of Schroder REIT's property portfolio declined to GBP460.6 million from GBP477.5 million the year before, reflecting a tough market environment.
For the past few years, the company has adopted an investment strategy focused on 'winning cities' - locations experiencing higher levels of gross domestic product, employment and population growth with diverse local economies.
Schroder REIT declared a dividend of 2.53 pence per share, up from 2.48p the prior year.
"Successful execution of our strategy over the year has supported a dividend increase in contrast to the real estate market slowdown. It has also further enhanced our flexibility and balance sheet strength against the backdrop of a more uncertain market environment," said Duncan Owen, global head of Schroder Real Estate.
"Recent disposals have realised profits at the same time as the market is experiencing wider price falls. Reinvestment will target higher income returns than the sales and this will increase net operating income. In the meantime, the company is positioned to explore alternative refinancing strategies which may further increase net operating income," Owen added.
Shares in Schroder Real Estate Investment Trust were up 0.5% at 58.50 pence on Tuesday.
Schroder Real (SREI)