Schroder European Real Estate Investment Trust
Launching on 9 December, the Schroder European Real Estate Investment Trust targets growth regions in Continental Europe and aims to provide a regular and attractive level of income together with the potential for long term income and capital growth. The Trust is managed by Tony Smedley, an experienced real estate investment manager, who is supported by nearly 100 real estate professionals located in key hubs across Europe, including London, Paris, Frankfurt and Zurich.
The Trust targets specific cities across the region with large, liquid real estate markets that offer superior growth potential. It invests in a range of real estate assets including offices and retail and leisure developments.
The Trust will be listed on the market of the London Stock Exchange, with a secondary listing in South Africa.
- Focus on the growth regions and cities of Europe. The Trust will target the major conurbations of Continental Europe where GDP is expected to outperform national averages and where pricing is considered attractive and rental growth forecast.
- Attractive market outlook. The current gap between real estate investment yields and government yields is attractive from a historic perspective. There has been limited development of new accommodation in some locations and as growth returns to these markets the limited supply should drive rental growth.
- Attractive income distribution with potential for long-term income and capital growth. Focus on investing in core/core+, income producing real estate, targeting a fully covered dividend of 5.5% p.a. once fully invested. Active asset management intended to enhance total returns.
- Robust capital structure. Closed ended fund structure listed on the main market of the London Stock Exchange. Modest gearing capped at 35% LTV.
- Investment expertise. Schroders has been managing real estate investments for 40 years and currently has £11.6 billion of real estate AUM. Teams based in London, Frankfurt, Paris, Zurich, Luxembourg and Stockholm, with 100 real estate staff.
- Strong deal flow and pipeline of investments. On average, we see over £1 billion of Continental European investments introductions each month. Pipeline of six potential assets across France, Germany and Belgium with an average yield in excess of 6%.
What are the risks?
- Past performance is not a guide to future performance.
- The value of investments, and the income from them, can rise and fall and investors may not get back the amount originally invested.
- Companies which invest in a smaller number of assets carry more risk than those spread across a larger number of assets.
- The Company may invest solely in property located in one country or region. This can carry more risk than investments spread over a number of countries or regions.
- The Company may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the assets purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.
- The fund holds investments denominated in currencies other than sterling, changes in exchange rates will cause the value of these investments, and the income from them, to rise or fall.
- The dividend yield is an estimate and is not guaranteed
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