The investment objective of Schroder Real Estate Investment Trust ('the Company') is to provide shareholders with an attractive level of income together with the potential for income and capital growth as a result of its investments in, and active management of, a diversified portfolio of UK commercial real estate.
Alignment with higher growth sectors and asset management driving returns
|Financial Performance||Property Performance||Income
|NAV total return 5.4%, over quarter to 30 June 2022This follows a NAV total return of 30.9% over the year to 31 March 2022£3.9 million dividends paid (0.795 pps) in the quarter,
+3% compared to the previous quarterEPRA dividend cover 102%29.0% net loan to value at average cost of 2.7% p.a.Average term loan maturity of 14 years, and refinanced RCF during the quarter with five year termShare price trading at a 32% discount to NAV as at close 29 July
|LFL portfolio value growth net of capex of 3.0%(Benchmark 2.0%)22 leasing transactions since 31 March 2022 totalling £3.2 million, generating £1.5 million upliftSold Portsmouth single let industrial unit for £6.5 million, a 33% premium to book value and NIY of 3.2%Higher yielding acquisition of Manchester mixed use asset post year end for £14.7 million, NIY of 7.8%||Portfolio net initial yield 5.2% (Benchmark 3.9%)Portfolio reversionary yield of 6.4% (Benchmark 4.6%)98% rent collection for the quarter to June 20223% dividend increase for the quarter to March 2022, paid in June 2022 – and a further 1% increase for the dividend to be paid in AugustDividend now 4% ahead of the pre pandemic level||Announced NZC pathwayRetained three star rating in the 2021 GRESB Benchmark with improved scoreEPRA Best Practice Sustainability Reporting Gold Award for fourth consecutive year80,000 sq ft operationally Net Zero Carbon (‘NZC’) scheme at Stanley GreenEngaging with planning authorities on a NZC scheme at Langley Park Industrial Estate, Chippenham||Thematic focus on sustainability – manufacture green premium, address embodied carbonFocussed on sustainable income growth through active management and capital investment Asset management delivering operational excellence and sustainability improvementsShare buybacks recommencedBoard succession with Alastair Hughes appointed Chairman in July 2022, Priscilla Davies appointed SID|
|Discrete yearly performance (%)||12 months to Jun-2022||12 months to Jun-2021||12 months to Jun-2020||12 months to Jun-2019||12 months to Jun-2018|
|SREIT NAV Total Returns2||31.2||0.0||-13.1||2.9||10.8|
|SREIT Real Estate Total Returns3||23.8||11.0||-1.1||5.7||11.9|
|MSCI Balanced Monthly and Quarterly Index funds3||19.6||7.1||-2.3||3.7||9.7|
Bradley joined Schroders in 2014 and is Fund Manager for Schroder Real Estate Investment Trust Limited. He has 13 years of experience in financial services and was previously in the Schroders Group M&A team where he sourced and executed a number of acquisitions, disposals and strategic projects on behalf of Schroders plc. Prior to joining Schroders Bradley was in the finance team at Barclays and prior to that he trained and qualified as a chartered accountant at Moore Stephens.
Bradley holds a BSc (Hons) Mathematics from the University of Bath, is a CFA Charterholder, a Member of the Institute of Chartered Accountants in England and Wales and a FCA Certificated Person.
Nick Montgomery is Head of UK Investment and Executive Director at Schroder Real Estate. He joined Schroders in January 2012 from Invista Real Estate Investment Management where he was Head of UK Commercial Funds. Previously Nick worked at Gatehouse Investment Management. He started his investment management career in 1999 at LaSalle Investment Management managing institutional pension fund property portfolios. Nick holds a BSc (Hons) in Estate Surveying from Nottingham Trent University. He is a member of the Royal Institution of Chartered Surveyors.
The investment policy of the Company is to own a diversified portfolio of UK real estate underpinned by good fundamental characteristics. The Group invests principally in the industrial, office and retail sectors and will also consider other sectors including mixed-use, residential, hotels, healthcare and leisure.
Investments in real estate are relatively illiquid and more difficult to realise than equities or bonds.
Yields may vary and are not guaranteed.
The use of gearing is likely to lead to volatility in the Net Asset Value ("NAV") meaning that a relatively small movement either down or up in the value of the Company's total assets will result in a magnified movement in the same direction of that NAV.
There is no guarantee that the market price of shares in a UK Real Estate Investment Trust such as SREIT will fully reflect their underlying NAV.
The value of real estate is a matter of a valuer's opinion rather than fact.
This UK Real Estate Investment Trust should be considered only as part of a balanced portfolio, of which it should not form a disproportionate part.