Last checked at 
19 Jul 2017 07:00
For release 19 July 2017
Schroder Real Estate Investment Trust Limited
ANNOUNCEMENT OF NAV AND DIVIDEND FOR QUARTER TO 30 JUNE 2017
Schroder Real Estate Investment Trust (the 'Company'), the actively managed UK-focused REIT, announces its net asset value ('NAV') and dividend for the quarter to 30 June 2017.
Net Asset Value
The unaudited NAV as at 30 June 2017 was £335.7 million or 64.8 pence per share ('pps'). This reflects an increase of 1.1% per share compared with the NAV as at 31 March 2017, or a NAV total return, including the dividend of 0.62 pps, of 2.12%. A breakdown is set out below:
£m | pps | Comments | |
NAV as at 31 March 2017 | 332.6 | 64.1 | |
Unrealised change in valuation of direct property portfolio | 5.2 | 1.0 | Reflects a quarterly like-for-like increase in the value of the underlying portfolio of 1.3% before capital expenditure. Note that this includes the underlying valuation movement in the joint ventures, shown separately below |
Capital expenditure | (2.7) | (0.5) | Capital expenditure including the Premier Inn at Leeds Arndale Centre of £2 million and St. John's Retail Park in Bedford of £260,000 |
Unrealised gain on joint ventures | 0.4 | 0.1 | Driven by a 1.2% increase in the value of the University of Law building on Store Street in Bloomsbury |
Net revenue | 3.4 | 0.7 | Results in quarterly dividend cover of 105% |
Dividends paid | (3.2) | (0.6) | Reflects an annualised dividend of £12.8 million or 2.48 pps |
NAV as at 30 June 2017 | 335.7 | 64.8 |
Dividend payment
The Company announces an interim dividend of 0.62 pence per share ('pps') for the period 1 April 2017 to 30 June 2017. The dividend payment will be made on 31 August 2017 to shareholders on the register as at 11 August 2017. The ex-dividend date will be 10 August 2017.
The dividend of 0.62 pps will be designated 0.35 pps as an interim property income distribution ('PID') and 0.27 pps as an interim ordinary dividend.
Performance versus MSCI (formerly IPD) Index
The latest available performance data for the quarter to 31 March 2017 showed that the Company's portfolio produced a total return of 4.2%, outperforming the MSCI peer group on a like-for-like basis, which delivered a return of 2.2%.
Property portfolio
As at 30 June 2017, the underlying portfolio comprised 45 properties valued at £459.2 million. At the same date the portfolio produced a rent of £27.2 million per annum reflecting a net initial yield of 5.6%. The portfolio rental value is £33.4 million per annum, resulting in a reversionary yield of 7.3%.
As at 30 June 2017 the void rate was 6.2% compared with 6% as at 31 March 2017. Following letting activity over the quarter, the average unexpired lease term, assuming all tenants vacate at the earliest opportunity, is seven years. The tables below summarise the portfolio information as at 30 June 2017:
Sector weightings | Weighting % | |
SREIT | MSCI Index* | |
Retail | 30.5 | 36.6 |
Offices | 38.8 | 31.3 |
Industrial | 24.9 | 21.9 |
Other | 5.8 | 10.2 |
* Latest available MSCI Index data as at 31 March 2017
Regional weightings | Weighting % | |
SREIT | MSCI Index* | |
Central London | 7.8 | 14.8 |
South East excluding Central London | 28.8 | 38.0 |
Rest of South | 6.8 | 15.6 |
Midlands and Wales | 27.2 | 14.1 |
North and Scotland | 29.4 | 17.5 |
* Latest available MSCI Index data as at 31 March 2017
Transactions
During the quarter the disposals of the St. Augustine's Courtyard office in Bristol and a high street leisure unit in Watford completed at a combined price of £14.2 million. Both disposals had exchanged unconditionally prior to 31 March 2017.
Asset management
The Company's industrial assets contributed positively to performance over the quarter, driven by letting activity at higher rents:
Milton Keynes, Stacey Bushes Industrial Estate
During the quarter four lettings and lease renewals completed at a total rent of £170,000 per annum. This reflected a 6% premium above the independent valuation assumptions at 31 March 2017. This contributed to a 7.8% increase in the capital value over the quarter to £24.8 million.
Leeds, Millshaw Industrial Estate
During the quarter two lease renewals and a rent review completed at a total rent of £240,000 per annum. This reflected an 8% premium above the independent valuation assumptions at 31 March 2017. This contributed to a 3% increase in the capital value over the quarter to £27.2 million.
Debt
The Company has two loan facilities from Canada Life and Royal Bank of Scotland ('RBS') totalling £150.1 million with an average duration of approximately 8.7 years and an average interest cost of 4.4%. The loans are fully compliant with their covenants.
In addition to the properties secured against the Canada Life and RBS loan facilities, the Company has unsecured properties with a value of £77.4 million and cash of approximately £31.4 million. This results in a loan to value ratio, net of cash, of approximately 26%.
-ENDS-
For further information:
Schroder Real Estate Investment Management Limited:Duncan Owen / Nick Montgomery | 020 7658 6000 |
Northern Trust: Sam Walden / Fraser Hiddelston | 01481 745529 |
FTI Consulting: Dido Laurimore / Ellie Sweeney/Richard Gotla | 020 3727 1000 |