Schroder Real Regulatory News (SREI)

Schroder Real Estate Investment Trust Ltd - Asset Management Update

PR Newswire

London, June 11

For release 12 June 2018

Schroder Real Estate Investment Trust Limited

("SREIT"/ the "Company" / "Group")

ASSET MANAGEMENT UPDATE

Schroder Real Estate Investment Trust, the actively managed UK-focused REIT, announces that it has completed two new lease agreements that increase income and improve the portfolio’s defensive qualities.

At Victory House in Brighton, BUPA Insurance Services Limited (‘BUPA’) has completed a new ten year lease without breaks at a rent of £1.09 million per annum, reflecting an uplift of 14%. BUPA occupy 45,545 sq ft or 54% of Victory House, a high quality office development adjoining the station, and previously paid £960,000 per annum on a lease with a tenant only break option in 2020. The new lease has a favourable rent review in 2023 to the higher of £1.2 million per annum (i.e. 2% per annum compound) or open market value, subject to a cap of £1.33 million per annum (i.e. 4% per annum compound). As part of the transaction BUPA receives a rent free period of 15 months.

At The Lakes in Northampton, following a refurbishment, the remaining vacant space totalling 9,300 sq ft has been let to Talent Works International Limited, on a ten year lease without breaks, at £172,050 per annum. Talent Works is a specialist recruitment firm who will receive an incentive equating to 15 months rent. The rent is 24% above the rent paid by the previous tenant.

Including the recently announced industrial letting in Swindon, and otherwise adopting the valuation assumptions from 31 March 2018, this activity increases the portfolio’s weighted average unexpired lease term to 6.9 years (31 March 2018: 6.6 years), assuming all tenant breaks are exercised, and reduces vacancy to 6.3% (31 March 2018: 7.2%), calculated as a percentage of rental value.

-ENDS-

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