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Schroder Real Estate Investment Trust

"Our focus on Winning Cities in the UK offers a competitive advantage in terms of higher levels of GDP, employment and population growth to deliver long-term sustainable income and capital growth."

Key Facts about Schroder Real Estate Investment Trust (SREIT, the Company) as at 30 September 2020

Outperformance of IPD MSCI Benchmark Index1 over interim period to 30 Sep 2020

1.0%

Outperformance of IPD MSCI Benchmark Index over past 12 months

1.1%

Outperformance of IPD MSCI Benchmark Index over past 3 years

2.0% p.a.

Outperformance of IPD MSCI Benchmark Index since IPO in July 2004

1.0% p.a.

NAV total return over interim period to 30 Sep 2020

-2.2%

Number of Properties

39

Portfolio value

£397.8million

Portfolio located in winning cities2

86%3

Disposals completed since January 2019

£95million

Net Initial Yield of disposals completed since January 2019

c.3.0%

Annual interest saving from refinancing of £129.6m term loan with Canada Life

£2.5million p.a.

Loan to Value (LTV) 4

25.9%
Source: Schroders, September 2020.
1 A monthly property performance index which tracks retail, office and industrial properties. The index includes data on actual property transactions from institutional investors and property companies.
2 These Winning Cities are likely to change over time.
3 Versus 82% as at 31 March 2020.
4 This measures the relationship between the loan amount and the market value of the asset securing the loan.

Discrete yearly performance (%)

  12 months to Sep-2020 12 months to Sep-2019 12 months to Sep-2018 12 months to Sep-2017 12 months to Sep-2016
Share price1 -39.5 -3.2 1.4 11.9 2.7
Net Asset Value total return2 -12.6 2.8 8.9 11.8 4.4
SREIT Real Estate Total Return3 -1.1 5.4 11.0 12.2 6.6
MSCI UK Balanced Monthly and Quarterly Funds Quarterly Property Index3 -2.3 2.7 8.6 9.8 4.4
Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
 
1Source: Schroders, Datastream, bid to bid price with net income reinvested in GBP.
2 Source: Schroders, NAV to NAV (per share) plus dividends paid.
3 Source: MSCI Quarterly Version of Balanced Monthly Index Funds (including indirect investments on a like-for-like basis).

Learn more about our assets in through these virtual tours:

Top 10 holdings

Sector weightings

The Company aims to own a diversified portfolio of UK real estate with good fundamental characteristics. The Company principally invests in the office, retail, and industrial commercial real estate sectors and will also consider other sectors including mixed use, residential, hotels, healthcare, and leisure.

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Office (39.4%)

The Company is overweight in offices compared with the MSCI/IPD Benchmark. The focus is on buildings with good fundamentals in those Winning Cities and regions that are attractive to a diverse occupier base. The Company has no exposure to the City of London, which is expected to be most affected by a UK departure from the European Union.

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Retail (23.2%)

17.5% of this is retail sole use and 5.7% is retail mixed use. The retail assets in the portfolio are predominantly well-managed retail warehouses and convenience retail, let at sustainable rents and which benefit from trends including ‘click and collect’. The Company does not own any shopping centres.

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Industrial (29.7%)

The Company owns a range of industrial assets, the most significant being multi-let estates including Milton Keynes and Leeds, which are positively impacted by structural trends and where there are significant asset management opportunities to capture rental growth.

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Other (7.7%)

Other sectors could include mixed use, residential, hotels, healthcare and leisure properties. The Company’s current exposure to ‘Other’ includes a car park at City Tower in Manchester, hotels at City Tower and Headingley Central and a leisure scheme in Luton.

Source: Schroders. Percentage of total real estate portfolio value.

 

Case studies

Figures as at 30 September 2020

University of Law

The University of Law, London



Description: The University of Law campus is an 85,814 sq ft freehold office and educational campus comprising 0.8 acres over four properties.

Asset strategy: To improve the office accommodation to take advantage of healthy levels of occupational demand and reposition the retail and leisure offer.

  • Joint venture:50% share
  • Sector:Office
Bedford

St John’s Retail Park, Bedford



Description: 130,000 sq ft retail warehouse park 1.5 miles from Bedford town centre.

Asset strategy: To improve retailer mix and to negotiate new longer leases in order to preserve the rental income and manage void risk.

  • Sector:Retail

Millshaw Industrial Estate, Leeds



Description: 463,400 sq ft multi-let industrial estate in a prominent location comprising 27 units strategically located south of Leeds city centre close to the M62 and M621 motorways.

Asset strategy: The strategy for 2020 was to refurbish units to drive a higher rental income return, explore the potential for change of use over the longer term and acquire adjoining interests. This has continued to be a top performing asset with many active management examples.

  • Sector:Industrial
Edinburgh

The Tun, Edinburgh



Description: Multi-let office building in Edinburgh city centre, located close to the Royal Mile and Scottish Parliament.

Asset strategy: To capitalise on low supply in the Edinburgh office market and improve rents through new lettings, re-gears and rent reviews.

  • Sector:Office

What are the risks?

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.

Getting started

Investment trusts offer a flexible and effective way to gain exposure to some of the world's most dynamic markets and regions, and can be used to meet a variety of investment outcomes. For more information on how Schroder Real Estate Investment Trust shares can be bought and sold, visit our How to invest page.

Contact Schroders

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.




Worldwide locations

For any further questions, please contact us. 

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