Schroder Real Regulatory News (SREI)

Schroder Real Estate Investment Trust Ltd - Announcement of NAV & Reinstatement of Dividend

PR Newswire

London, July 20

For release 20 July 2020

Schroder Real Estate Investment Trust Limited

ANNOUNCEMENT OF NAV AND REINSTATEMENT OF DIVIDEND FOR QUARTER TO 30 JUNE 2020

Schroder Real Estate Investment Trust (the ‘Company’ or ‘SREIT’), the actively managed UK-focused REIT, announces its net asset value (‘NAV’) and dividend for the quarter to 30 June 2020.

Net Asset Value

The unaudited NAV as at 30 June 2020 was £299.3 million or 57.7 pence per share ('pps'). This reflects a decrease of -3.4% per share compared with the NAV as at 31 March 2020. A breakdown is set out below:

Rent collection

The rent collected that was payable in March 2020 for the period ended 30 June 2020 currently totals 75% of contracted rents.

The rent collected that was payable in June 2020 for the period ended 30 September 2020 currently totals 74% of contracted rents. The breakdown between sectors for rent collection is 91% of office collected, 78% of industrial collected, 33% of retail and leisure collected, and 91% of other collected.

The Company remains in active dialogue with its tenants for all rents due to be paid. The Company is in the process of documenting arrangements for rents to be deferred or waived in return for lease extensions. A portion of rents are also being paid monthly rather than quarterly in advance to support tenants’ cashflows. Completion of this activity should improve rent collection.

Dividend payment

In light of market uncertainty relating to Covid-19 the Board postponed the dividend payment for the quarter to 31 March 2020, stating that it would review future dividend payments once there was further clarity on rent collection for the June and September payment dates.

Following progress with rent collection and discussions with tenants, the Board reinstates the interim dividend at 0.38575 pps for the period 1 April 2020 to 30 June 2020. This equates to a 50% payout compared to the previous dividend level of 0.7715 pps. The reinstatement of the dividend is earlier than anticipated due to good progress made. The level of the next quarterly dividend will be reviewed based on future rental collection rates and the recovery of arrears.

The dividend payment will be made on 14 August 2020 to shareholders on the register as at 31 July 2020. The ex-dividend date will be 30 July 2020. The dividend of 0.38575 pps will be wholly designated as an interim property income distribution (‘PID’).

Balance sheet and debt

As at 30 June 2020, the Company has cash of £85.4 million and unsecured property with a value of £38.7 million. This results in a loan to value ratio, net of cash, of approximately 24%.

The Company has two loan facilities, a £129.6 million term loan with Canada Life and a £52.5 million revolving credit facility (‘RCF’) with Royal Bank of Scotland. As at 30 June 2020, both the Canada Life facility and RCF were fully drawn with an average duration of approximately 12 years and an average interest cost of 2.25%.

Performance versus latest available MSCI Benchmark Index

Over the quarter to 31 March 2020, the underlying portfolio produced a total return of -1.0% compared with the MSCI Index of -1.2%. For the 12 months to 31 March 2020 the underlying portfolio produced a total return of 1.9% compared with MSCI of 0.2%.

Property portfolio

As at 30 June 2020, the underlying portfolio comprised 39 properties valued at £395.4 million. At the same date the portfolio produced a rent of £24.0 million per annum reflecting a net initial yield of 5.7%. The portfolio’s estimated rental value is £29.4 million per annum, resulting in a reversionary yield of 7.4%.

As at 30 June 2020, the void rate was 6.6% calculated as a percentage of rental value which compared with 7.3% as at 31 March 2020. The average unexpired lease term, assuming all tenants vacate at the earliest opportunity, is 5.8 years. The tables below summarise the portfolio information as at 30 June 2020:

*Latest available Index data as at 31 March 2020

Asset management

Since the year end at 31 March 2020, 19 lettings, renewals and reviews have completed across the portfolio with a total rent of £1.9 million per annum. This activity generated additional contracted rental income of approximately £270,000 per annum compared with the position at the year end. The Company has made a separate announcement outlining this activity in more detail.

-ENDS-

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