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Announcement Of NAV And Dividend
Schroder European Real Estate Investment Trust PLC
(Incorporated in England and Wales)
Registration number: 09382477
JSE Share Code: SCD
LSE Ticker: SERE
ISIN number: GB00BY7R8K77
10 September 2019
ANNOUNCEMENT OF NAV AND DIVIDEND
Schroder European Real Estate Investment Trust plc ("SERE" or the "Company"), the company investing in
European growth cities, today announces its unaudited net asset value ("NAV") for 30 June 2019, together
with its third interim dividend for the year ending 30 September 2019:
- Unaudited NAV as at 30 June 2019 of €183.3 million or 137.1 cents per share; an uplift of 0.3% over the
quarter;
- NAV total return of 1.7% over the quarter;
- A third interim dividend of 1.85 euro cents per share will be paid for year ending 30 September 2019, in-line
with the target dividend stated at IPO of an annualised rate of 5.5% on the IPO issue price and approximately
6.0% as of 6 September 2019 based on the closing share price.
Jeff O'Dwyer, of Schroder Real Estate Investment Management Limited, added:
"Our focus continues to be on delivering an asset management programme that will further strengthen the
income, portfolio diversity and shareholder returns. For example, the pre-let redevelopment at the Paris
office, Boulogne-Billancourt, will be transformational for the Company. The high quality portfolio and
diversified geography, tenant and sector profile means the Company is well positioned across the strongest
cities in Continental Europe.”
Net Asset Value
The table below provides a breakdown of the movement in NAV during the reporting period:
€m(1) Cps(2) %(3)
Brought forward NAV as at 1 April 2019 182.8 136.7
Unrealised gain in valuation of the property portfolio 1.7 1.3 1.0
Capital expenditure (0.7) (0.6) (0.5)
EPRA earnings 2.5 1.9 1.4
Non-cash items (0.5) (0.3) (0.2)
Dividend paid (2.5) (1.9) (1.4)
NAV as at 30 June 2019 183.3 137.1 0.3
(1) Management reviews the performance of the Company principally on a proportionally consolidated basis. As a result, figures quoted in
this table include the Company's share of joint ventures on a line-by-line basis and exclude non-controlling interests in the Company's
subsidiaries.
(2) Based on 133,734,686 shares
(3) % change based on starting NAV 1st April 2019
Interim dividend
The third interim dividend of 1.85 euro cents per share for the year ending 30 September 2019 represents an
annualised rate of 5.5% based on the Euro IPO issue price of 137 euro cents per share. This is in line with the
Company's target dividend, which is based on paying a sustainable dividend based on the annualised income
expected to be generated from the portfolio. Based on the GBP IPO issue price of 100 pence per share the
annualised yield is 6.8% (based on FX rates as at 30 June 2019).
The dividend is 100% covered from income received during the quarter. Dividends for the first nine months of
the financial year are 106% covered from net income received.
The interim dividend payment will be made on Monday, 21 October 2019 to shareholders on the register on
the record date of Friday, 4 October 2019. In South Africa, the last day to trade will be Tuesday, 1 October
2019 and the ex-dividend date will be Wednesday, 2 October 2019. In the UK, the last day to trade will be
Wednesday, 2 October 2019 and the ex-dividend date will be Thursday, 3 October 2019.
The interim dividend will be paid in GBP to shareholders on the UK register and Rand to shareholders on the
South African register. The exchange rate for determining the interim dividend paid in Rand will be confirmed
by way of an announcement on Monday, 23 September 2019. UK shareholders are able to make an election to
receive dividends in Euro rather than GBP should that be preferred. The form for applying for such election can
be obtained from the Company's UK registrars (Equiniti Limited) and any such election must be received by the
Company no later than Friday, 4 October 2019. The exchange rate for determining the interim dividend paid in
GBP will be confirmed following the election cut off date by way of an announcement on Monday, 7 October
2019.
Shares cannot be moved between the South African register and the UK register between Monday, 23
September 2019 and Friday, 4 October 2019, both days inclusive. Shares may not be dematerialised or
rematerialised in South Africa between Wednesday, 2 October 2019 and Friday, 4 October 2019, both days
inclusive.
The Company has a total of 133,734,686 shares in issue on the date of this announcement. The dividend will
be distributed by the Company (UK tax registration number 21696 04839) and is regarded as a foreign
dividend for shareholders on the South African register. In respect of South African shareholders, dividend tax
will be withheld from the amount of the dividend noted above at the rate of 20% unless the shareholder
qualifies for the exemption. Further dividend tax information for South African shareholders will be included in
the exchange rate announcement to be made on Monday, 23 September 2019.
Property portfolio
As at 30 June 2019, the Company owned 13 properties located in growth cities of Continental Europe,
independently valued at €241.6 million at a blended net initial yield of 6.2%. Over the quarter, the portfolio
value, net of capex, increased by 0.5%. The portfolio generated a net property rental income of €3.9 million,
representing an ungeared quarterly property income return of 1.6% (equating to 6.7% on an annualised basis).
The annual contracted rent is €17.4 million, with an average unexpired lease term to first break and expiry of
4.8 years and 6.2 years.
The country and sector allocations for the portfolio as at 30 June 2019 are set out in the table below:
Country Allocation Sector Allocation
France 43% Office 46%
Germany 30% Retail 26%
Netherlands 17% Industrial 20%
Spain 10% Mixed 8%
Total 100% Total 100%
The Company has three urban retail assets in the portfolio in Berlin, Frankfurt and Seville. The Berlin and
Frankfurt investments are 100% occupied on long term leases. The Seville investment is a shopping centre that
we are continuing to actively manage to optimise income and value.
Asset Management update
During the period the Company completed two asset management initiatives:
• At its Paris office investment Boulogne-Billancourt, the Company has signed heads of terms for a
conditional long term lease commitment with existing tenant Alten in conjunction with the
advancement of feasibility, design and planning to refurbish the building to grade A standard. If
concluded, it has the potential to be accretive to the company, delivering both NAV return upside and
improving the longer-term income and portfolio profile. The construction period is forecast to take
15-18 months and Alten will relocate during that period. Whilst a number of options are being
considered, it is likely that the Company will fund this project using debt, which would take the overall
gearing level to circa 35% LTV, which is within the Company’s gearing target.
• In Hamburg, the Company has secured a new tenant on a seven year lease, for an additional 640 sqm
of space. It follows the completion of two new leases with tenants in the education and IT sectors for
over c. 40% of space announced in the Half Year results, all achieved above target. Advanced
discussions are ongoing for a further floor, which will leave three floors, equating to c. 2,000 sqm or
27% of property by ERV, remaining to be leased.
Enquiries:
Duncan Owen/Jeff O'Dwyer
Schroder Real Estate Investment Management Limited Tel: 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited Tel: 020 7658 2371
Dido Laurimore/Richard Gotla Tel: 020 3727 1000
FTI Consulting
JSE Sponsor:
PSG Capital
Date: 10/09/2019 08:00:00
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