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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 as at 30 September 2019

Outperformance of IPD MSCI Benchmark Index over past 6 months

1.4%

Outperformance of IPD MSCI Benchmark Index over past 3 years

2.4% p.a

Outperformance of IPD MSCI Benchmark Index since IPO in July 2004

1.1% p.a

Portfolio located in Winning Cities

96%

Net Asset Value (NAV) total return for year to September 2019

1.3%

Number of Properties

44

Portfolio value

£462.7million

Loan to value, net cash

c.22%

Discrete yearly performance (%)

  Q3/2018 - Q3/2019 Q3/2017 - Q3/2018 Q3/2016 - Q3/2017 Q3/2015 - Q3/2016 Q3/2014 - Q3/2015
Share price1 -3.2 1.4 11.9 2.7 6.5
Net Asset Value total return2 2.8 8.9 11.8 4.4 15.4
SREIT Real Estate Total Return3 5.2 11.0 12.2 6.6 15.2
MSCI Quarterly Version of Balanced Monthly Index Funds3 2.5 8.6 9.7 4.2 14.0

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.

1 Source: 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 Invex Funds (including indirect investments on a like-for-like basis.

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 (36.1%)

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 (24.1%)

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 (33.1%)

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 (6.8%)

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.

 

Case studies

Figures as at 30 September 2019

Manchester

City Tower, Manchester



Description: 610,000 sq ft of office, retail, leisure and hotel accommodation on a three acre island site in the heart of Manchester.

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:25% share
  • Sector:Mixed use
Milton

Stacey Bushes Industrial Estate, Milton Keynes



Description: 345,000 sq ft multi-let industrial estate comprising 42 units immediately adjacent to the A5 dual carriageway on the west side of Milton Keynes.

Asset strategy: To consolidate the higher rental tone to grow net income, and enlarge the footprint by acquiring an adjoining ownerships and developing new units.

  • Sector:Industrial

Millshaw Industrial Estate, Leeds



Description: 460,000 sq ft multi-let industrial estate comprising 27 units. Strategically located two miles south of Leeds city centre, the property is adjacent to White Rose Office Park and benefits from close proximity to the M62 and M621 motorways

Asset strategy: To refurbish units to drive further rental income growth and progress planning for higher value alternative uses given the prominent site frontage to the Leeds ring road.

  • Sector:Industrial
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

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 32 locations across Europe, the Americas, Asia, the Middle East and Africa.


Worldwide locations

For any further questions, please contact us. 

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