Schroder European Real Estate Investment Trust (Reit), which invests in property in European growth cities, says its direct property portfolio was independently valued at €208.1m at the end of September, reflecting a marginal decrease of 0.1%.
“This is the second consecutive quarter of stabilising values and recent European central bank rate cuts are expected to have a further positive impact on investor and occupier confidence, liquidity and values,” the company said in a statement on Wednesday.
Two properties witnessed a valuation increase over the quarter — the Cannes Car Showroom and the Stuttgart office. All other property values remained flat, except for the mixed-used data centre in Apeldoorn, which fell by €0.45m due to the declining remaining lease term, Schroder said.
The portfolio’s income profile remains robust, benefiting from 100% rent collection over the quarter and high occupancy of 96%.
Based on end-September values, the portfolio loan-to-value is about 33% based on gross asset value and 25% net of cash, providing significant flexibility, it said.
“Following the recent period of macro volatility, there is increasing evidence that the market has reached an inflection point. Falling inflation and interest rates are providing an underpin for improving investor sentiment and liquidity, which is translating into valuation resilience, and provides an encouraging platform as we look ahead to 2025,” said chair Sir Julian Berney.
In June, Business Day reported that the group grew underlying earnings from operational activities (EPRA) 3% to €4.3m for the six months ended March.
Jeff O’Dwyer, fund manager for Schroder Real Estate Investment Management, said at the time of the release of the first-half results that progressing the group’s sustainability programme would form a key part of the strategy in 2024 and 2025.
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