REG - Schroder Euro Real - Announcement of NAV and Quarterly Dividend

Schroder European Real Estate Investment TrustAnnouncement

12/09/2025 07:00

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RNS Number : 0355Z  Schroder Eur Real Est Inv Trust PLC  12 September 2025

12 September 2025

 

SCHRODER EUROPEAN REAL ESTATE INVESTMENT TRUST PLC

("SEREIT"/ the "Company" / "Group")

 

ANNOUNCEMENT OF NAV AND QUARTERLY DIVIDEND

 

Resilient portfolio valuations and asset management initiatives underpin
positive total return

 

Schroder European Real Estate Investment Trust plc, the Company investing in
European growth cities and regions, provides a business update and announces
its unaudited quarterly dividend and net asset value ("NAV") as at 30 June
2025.

 

-     Underlying quarterly earnings from operational activities ("EPRA
earnings") of €1.5 million (quarter ended 30 June 2024: €2.0 million), and
€1.7 million adjusted for exceptional items, the small reduction primarily
reflecting the sale of the Frankfurt DIY asset in the previous quarter;

-     The property portfolio was independently valued at €193.9 million,
materially unchanged  from the prior quarter, with the total portfolio value
remaining resilient over the quarter. Robust industrial portfolio valuations,
and an uplift in Berlin, offset declines in other sectors, primarily driven by
shortening lease terms;

-     Third quarterly interim dividend of 1.48 euro cents per share
("cps") declared, 90% covered by adjusted EPRA earnings, reflecting an
annualised dividend yield of c.7.6% based on the current share price((1));

-     Total interim dividends declared relating to the nine months of the
current financial year of 4.44 euro cps, 96% covered by EPRA earnings adjusted
for exceptional items;

-     Unaudited NAV of €157.6 million, or 119.8 euro cents per share
("cps") (31 March 2025: €158.9 million, or 120.1 euro cps), driven primarily
by the share buyback and a shortfall in dividend cover;

-     Positive NAV total return of 1.0% for the quarter; the NAV total
return for the nine months of the current financial year is 1.3%;

-     The Company remains well positioned with a strong balance sheet, an
available cash balance of approximately €24 million, and a loan to value
ratio ("LTV") of 19% net of cash and 28% gross of cash;

-     Several value-enhancing asset management initiatives concluded
including:

o  At the Berlin DIY asset a new 12-year lease extension was completed with
the sole tenant, Hornbach, which is the second largest tenant in the Company's
portfolio by income; and

o  A new 3/6/9 year lease was completed at the Saint-Cloud, Paris, office
asset for 609 sqm of space on level two, at a rent in line with market levels.

-     Continued to advance lease re-gearing discussions regarding the
Stuttgart office and the French industrial investments in Rumilly, Nantes and
Cannes.

 

Tax disclosure update

As an update to previous disclosures relating to the ongoing discussions with
the French Tax authority, the Group has received a payment demand from the
French Tax Authority amounting to c.€14.2 million, including interest and
penalties. The Group considers that this amount is not due and intends to file
an appeal against the decision. Nevertheless, the Board considers it prudent
to ring-fence the amount demanded from its other cash reserves, and is
considering its options, including making a payment of tax on account in line
with French judicial procedures. Having taken professional advice, the Board
remains of the opinion that the Group's position is ultimately more likely
than not to prevail, such that a net outflow is not probable, and hence no tax
provision has been recognised.

 

Interim dividend

Announcement of a third quarterly interim dividend of 1.48 euro cps, which is
90% covered by adjusted EPRA earnings, reflecting the sale of the Frankfurt
DIY asset in the previous quarter and higher than normal exceptional items.
Annualising the dividend provides investors with a dividend yield of c.7.6%,
based on the share price as at 10 September 2025((1)).

 

Total dividends declared relating to the nine months of the current financial
year are 4.44 euro cps, 96% covered by adjusted EPRA earnings.

 

The interim dividend payment will be made on Friday 7 November 2025 to
shareholders on the register on the record date of Friday 3 October 2025. In
South Africa, the last day to trade will be Tuesday 30 September 2025 and the
ex-dividend date will be Wednesday 1 October 2025. In the UK, the last day to
trade will be Wednesday 1 October 2025 and the ex-dividend date will be
Thursday 2 October 2025.

 

The interim dividend will be paid in British pound sterling ("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 South
African Rand ("Rand") will be confirmed by way of an announcement on Tuesday
16 September 2025. 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 3 October 2025. 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 6 October 2025.

 

Shares cannot be moved between the South African register and the UK register
between Tuesday 16 September 2025 and Friday 3 October 2025, both days
inclusive.

 

Shares may not be dematerialised or rematerialised in South Africa
between Wednesday 1 October 2025 and Friday 3 October 2025, both days
inclusive.

 

The Company has a total of 133,734,686 shares in issue on the date of this
announcement (including those held in treasury). 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 Tuesday 30 September 2025.

 

Net Asset Value

The table below provides a breakdown of the movement in NAV during the quarter
ended 30 June 2025:

                                                                 €m     cps((2))
 Brought forward NAV as at 1 April 2025                          158.9  120.1
 Unrealised movement in the valuation of the property portfolio  (0.1)  (0.1)
 Capital expenditure                                             0.0    0.0
 EPRA earnings                                                   1.5    1.2
 Non-cash items                                                  (0.1)  (0.1)
 Share buyback                                                   (0.6)  0.2
 Dividend paid                                                   (2.0)  (1.5)
 NAV as at 30 June 2025                                          157.6  119.8

 

Property portfolio

The direct property portfolio was independently valued at €193.9 million (30
June 2024 €196.5 million on a like-for-like basis), reflecting stable values
across the period. Robust valuations within the industrial portfolio, along
with a positive revaluation of the Berlin asset, helped to offset declines in
other sectors, which were primarily driven by shortening lease terms.

 

During the period a new 12-year lease extension with Hornbach, at the Berlin
investment, was successfully agreed, resulting in a €1 million valuation
increase. This transaction has further strengthened both the portfolio's
income security and the weighted average lease expiry, which has risen by
approximately 1.3 years.

 

Management is also actively advancing discussions regarding lease re-gears in
Stuttgart, Rumilly, Nantes, and Cannes. Completion of these initiatives will
positively impact the portfolio value and income and the weighted average
unexpired lease term.

 

KPN is still expected to vacate the Apeldoorn asset at the end of December
2026. As a result, we are assessing options including sourcing a replacement
tenant, or securing planning approval for alternative uses. Should KPN vacate
as expected, and as previously announced, there may be an impact on the
Company's ability to maintain its current dividend level. However, management
is taking steps to mitigate any potential effects.

 

Balance sheet

The Company remains well positioned with cash reserves of approximately €24
million, and of which €14.2m has been ring-fenced as noted above in relation
to the French Tax discussions. Based on 30 June 2025 values, the portfolio LTV
is approximately 28% based on gross asset value and 19% net of cash.

 

Footnote (1): Based on a share price of c.66.8p as at 10 September 2025.

Footnote (2): Based on 131,509,386 shares in issue as at 30 June 2025.

 

-Ends-

Enquiries:

Jeff O'Dwyer

Schroder Real Estate Investment Management Limited
           Tel: 020 7658 6000

Natalia de Sousa

Schroder Investment Management Limited
                       Tel: 020 7658 6000

Dido Laurimore/Richard Gotla/Ollie Parsons

FTI Consulting
 
 Tel: 020 3727 1000

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