Schroder European Real Estate Investment Trust (Reit), focused on investing in prime real estate across Europe’s growing cities, has updated its net asset value (NAV).
In a first quarterly announcement for its financial year, the group on Tuesday reported a slight decrease in NAV as at end-December to €161.2m or 120.5 euro cents per share, down from €164.1m or 122.7c per share by end-September.
The group declared a first interim dividend of 1.48c per share, offering a 7.3% annualised yield based on the share price of 66.9 pence sterling on March 14, supported by its regular earnings.
“The underlying fundamentals look very appealing, which is being reflected in a further stabilising of yields. We have a clear focus on executing on our asset management initiatives, which will drive the portfolio valuation and earnings,” said company chair Julian Berney.
Despite short-term geopolitical uncertainty, the group said it was focused on giving shareholders access to a diversified continental European portfolio.
Schroder’s property portfolio, which includes various real estate assets, was valued at €206.2m by end-December, a like-for-like decrease of 0.9% over the quarter.
The fall was partly offset by the strong performance of its industrial properties, while office properties and a Berlin DIY investment dropped in value due to a shortening lease term, which reduced their long-term income potential, the group said.
The group’s NAV total return for the first quarter fell by 0.6%, while the company’s underlying earnings from core operations decreased by 5% to €1.9m, excluding exceptional items.
The group sold its Frankfurt grocery investment for €11.8m, which matches the value it had assigned to the property last year. The sale is expected to be finalised by end-March.
After the reporting period, the company sold its 50% share in a joint venture which owned a shopping centre in Seville, Spain. These two sales have strengthened the company’s financial position by lowering its debt-to-value ratio from 25% to about 20% and increasing its cash reserves to about €25m.
“The company continues to review select sustainability-led capex initiatives in the portfolio, which should optimise earnings growth and asset liquidity,” it said.
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