Schroders launch European Real Estate Investment Trust to complement UK and Swiss Investment Trusts
Schroder Real Estate is today announcing the launch of a European real estate investment trust that will have its primary listing on the London Stock Exchange (LSE) and a secondary listing on the Johannesburg Stock Exchange (JSE). The Schroder European Real Estate Investment Trust (SEREIT) is the latest trust to be launched by Schroders and the first for 10 years. It is also the first ever European direct real estate investment trust to be listed on the London and Johannesburg Stock Exchanges simultaneously.
The Schroder European REIT will offer investors liquid access to key continental European markets focusing on investment into targeted growth cities. The initial placing has raised £107.5 million with the objective to grow the trust to a similar size as its UK equivalent SREIT, which recently won an award[i] for the best performing UK real estate investment trust.
Duncan Owen, Global Head of Real Estate, Schroders commented:
“With the already strong performance of SREIT, EREIT and ImmoPlus[ii], this new launch has strengthened our position as the leading investment manager of listed real estate trusts. We are now the only manager to offer UK, Swiss and continental European real estate investment trusts.
“Through this process we have developed good new relationships with a large number of South African institutions and wealth managers; we very much look forward to working with them going forward.”
SEREIT provides investors with the opportunity to invest in an actively managed fund, targeting real estate with strong fundamentals in winning cities[iii]. GDP growth is returning to the winning cities and regions of continental Europe[iv] and is at an earlier stage of recovery than the UK[v]. Schroder Real Estate has identified key target centres in the Eurozone where there is rental growth as a consequence of constrained supply, improving infrastructure and competing demand from high growth companies for multiple uses.
Schroders will invest up to 10%, or a maximum of £15 million in the fund, providing strong alignment of interest with shareholders. A fully covered dividend to shareholders of 5.5% per annum is targeted once the initial capital is fully invested and debt is drawn down. The investment trust will have debt at a maximum level of 35% Loan To Value (LTV). Indicative debt funding rates in continental Europe are currently offering an attractive spread to yields.
Shares will trade on both the LSE and JSE from 9th December 2015.
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Notes to Editors
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Schroder Real Estate
Schroders has managed real estate funds since 1971 and currently has £12.4 billion (€16.8 billion /US$18.7 billion) of gross real estate assets under management as at 30 September 2015. The team comprises over 100 real estate professionals providing on the ground expertise, located in offices including London, Paris, Frankfurt, Stockholm, Zurich and Luxembourg.
Most of the property funds referred to are unauthorised collective investment schemes as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction.
For further information about Schroders’ property business visit www.schroders.com/realestate
Schroders is a global asset management company with £294.8 billion (EUR 400.0 billion/$446.5 billion) under management as at 30 September 2015. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors. With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
Further information about Schroders can be found at www.schroders.com.
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[i] Schroders UK Real Estate Investment Trust (SREIT) was recently recognised as the Best Property Trust by Investment Week, November 2015
[ii] Source: Schroders
[iii] Cities that Schroder Real Estate has identified as having long-term growth potential
[v] Source: Oxford Economics, June 2015