REG - Schroder Euro Real - Final Results
05/12/2025 07:00
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RNS Number : 3627K Schroder Eur Real Est Inv Trust PLC 05 December 2025
5 December 2025
SCHRODER EUROPEAN REAL ESTATE INVESTMENT TRUST PLC
("SEREIT"/ the "Company" / "Group")
FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2025
Positive NAV total return underpinned by balance sheet strength and exposure
to winning sectors
Schroder European Real Estate Investment Trust plc, the Company investing in
European growth cities and regions, announces its full year results for the
year ended 30 September 2025.
Robust balance sheet and indexed-linked rent reviews support earnings
resilience and positive total return
- Underlying EPRA earnings of €7.3 million before exceptional items
(30 September 2024: €8.2 million), reflecting the sale of the Frankfurt
investment, with the portfolio continuing to benefit from high occupancy and
strong rent collection
- Dividends declared for the year totalled 5.92 euro cps (30 September
2024: 5.92 euro cps), 94% covered by EPRA earnings before exceptional items,
offering an attractive dividend yield of c.8.2% based on the share price of
63.2 pence sterling as at 1 December 2025
- Net Asset Value ("NAV") of €156.7 million, or 119.2 cps, (30
September 2024: €164.1 million or 122.7 cps), driven by unrealised
revaluation losses
- IFRS profit of €2.2 million (30 September 2024: €0.6 million),
with underlying EPRA earnings more than offsetting negative capital items
(valuation and capital expenditure). Along with the positive impact of the
share buyback programme (2,326,700 shares acquired for £1.5 million (€1.8
million)), this resulted in a +2.0% NAV total return
- c.€8.3 million of available cash, with a further €14.2 million
ring-fenced to cover against the French tax claim, resulting in an LTV of 29%
gross of cash, and 25% net of cash
- Tax disclosure update: as previously announced, the Group received a
notice of adjustment from the French Tax Authority amounting to c.€14.2
million, including interest and penalties. The Group maintains its position
that this amount is not payable and has formally appealed the decision. This
appeal, submitted as a claim to the French Tax Authority, is expected to be
reviewed within a six-month period. If the claim is dismissed, the Group would
escalate the matter to a formal court process, which could take up to two
years to resolve. Based on professional advice, the Board has decided not to
make a provision, as they do not believe that an outflow is probable. The
Group will continue to monitor the situation and will provide further updates
as necessary.
Asset management initiatives with the benefit of on-the-ground local teams and
allocation to higher-growth regions, continue to support valuation resilience
- Direct property portfolio independent valuation declined by 1.4%, to
€194.0 million (net of capex), with a 5% increase in the industrial
portfolio valuations largely offsetting declines in other sectors, primarily
driven by shortening lease terms
- Koninklijke KPN N.V. ("KPN") has provided verbal indication that it
will terminate its lease and vacate the Apeldoorn asset at the end of December
2026. The Company continues to work on solutions for the asset including
re-letting to a replacement tenant or obtaining planning approval for
alternative uses. As previously highlighted, KPN's anticipated departure is
expected to negatively impact the Company's future income profile. In the
event the Investment Manager is unable to fully offset the loss of income from
the Apeldoorn asset, the level of future dividends or earnings cover will
likely be impacted. An update regarding the Group's strategy to maximise value
from the Apeldoorn property will be provided when appropriate
- Concluded ten new leases and re-gears, generating €2.1 million of
annual contracted rent, at a weighted lease term of 11.0 years, further
strengthening the portfolio income profile and improving portfolio occupancy
and which included:
o A long-term lease re-gear to Hornbach, the second largest
tenant in the Company's portfolio by income (10%), in Berlin, extending lease
expiry to December 2037; and
o Post period end, completed two further lettings across 900 sqm
of vacant space at the Paris office asset improving the portfolio occupancy to
97% (30 September 2025 - 94%)
- Select outputs from third-party sustainability and Net Zero Carbon
(NZC) audits across 11 assets have been incorporated into 2025 business plans.
Sir Julian Berney Bt., Chairman, commented:
"The period has been characterised by a cautious recovery in economic
sentiment across key European markets, with inflation pressures gradually
abating and the outlook for interest rates remaining broadly stable, creating
a more favourable borrowing backdrop. There are some encouraging signs that
liquidity within the European real estate market is improving, reflecting a
more balanced alignment between pricing expectations from buyers and sellers,
as well as a gradual restoration of investor confidence and institutional
allocations."
Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment Management
Limited, added:
"We remain focused on asset management initiatives designed to maintain
occupancy, income, and value, while also enhancing asset liquidity. Addressing
Apeldoorn is an immediate priority to help limit the potential impact on
future dividends. However, the diversified nature and resilience of our tenant
base, with assets leased at sustainable rents in strong submarkets, provide a
solid foundation to navigate current market conditions and protect value for
our shareholders."
The Annual Report and Accounts are also being published in hard copy format
and an electronic copy of that document will shortly be available to download
from the Company's web pages www.schroders.co.uk/sereit
(http://www.schroders.co.uk/sereit) .
The Company's Annual Report and Accounts, including the Notice of Annual
General Meeting, will shortly be uploaded to the Financial Conduct Authority's
National Storage Mechanism and will be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . A separate
announcement will be released once this has taken place.
A further announcement will be made shortly to confirm the full timetable of
the fourth interim dividend.
A presentation for analysts and investors will be held at 9 a.m. GMT/11 a.m.
SAST today. Registration for which can be accessed via:
https://www.schroders.events/SEREFY (https://www.schroders.events/SEREFY) .
Enquiries:
Jeff O'Dwyer 020 7658 6000
Schroder Real Estate Investment Management Limited
Natalia de Sousa 020 7658 6000
Schroder Investment Management Limited
Richard Gotla/Dido Laurimore/Oliver Parsons 020 3727 1000
FTI Consulting
Chairman's Statement
Overview
The period has been characterised by a cautious recovery in economic sentiment
across key European markets, with inflationary pressures gradually abating and
the outlook for interest rates remaining broadly stable. This improved
backdrop has led to a more constructive environment for both occupiers and
investors, though underlying uncertainty persists due to ongoing geopolitical
developments and global economic headwinds. There are encouraging signs that
liquidity within the European real estate market is improving, as evidenced
recently by rising transaction volumes for commercial property across the
region. This trend reflects a more balanced alignment between pricing
expectations from buyers and sellers, as well as a gradual restoration of
investor confidence and institutional allocations, in part driven by the more
favourable borrowing backdrop. The increased activity demonstrates the
continued appeal of European commercial real estate as an asset class and
long-term investment, providing further support for the Company's strategy.
Within this context, the Board remains acutely aware of the persistent
discount to NAV at which the Company's shares continue to trade at a discount
that primarily reflects broader market factors, including the challenges
facing smaller listed vehicles regarding liquidity and investor preference for
scale, as well as previously reported specific challenges with regards to
KPN's departure and the French Tax claim. Despite these factors, the
fundamentals underpinning the Company's strategy remain strong, supported by
robust property performance, a resilient balance sheet, and a sustained track
record of income delivery.
We recently announced the appointment of Phil Redding as a non-executive
director becoming the new Chairman of the Board from the next annual general
meeting. Phil will work alongside me until his formal appointment at the
Annual General Meeting, scheduled for 17 March 2026. He brings considerable
and highly relevant experience to the position, having most recently served as
Chief Executive Officer of Tritax EuroBox Plc. In light of Phil's
appointment, the Board believes it is both prudent and appropriate to defer
any formal decisions regarding the Trust's longer-term strategic direction
until the new Chairman has had sufficient opportunity to review the Company
and engage with shareholders. Recent feedback from a number of investors has
been notably positive, particularly in recognition of the way the Trust has
been managed through ongoing market challenges. Key investors have reaffirmed
their support for the Trust, underlining the attractiveness of its income
strength, management and the resilience demonstrated in recent periods.
The Investment Manager continues to deliver results through proactive asset
management, local expertise, and operational excellence, delivering stable
income returns. Recent initiatives, including the disposal in Frankfurt and
the successful re-gear with Hornbach in Berlin, demonstrates the Manager's
ability to drive portfolio-level performance. Moving forward, the Investment
Manager has a robust pipeline of asset management activities which will
further optimise occupancy, income, value, and asset liquidity.
As this will be my final statement as Chairman, I would like to express my
sincere thanks to my fellow Board members, the Investment Manager, and all
stakeholders for their support and dedication over the last 10 years. It has
been a privilege to serve the Company during this period of both challenge and
opportunity. I remain confident in the strength of the Trust's strategy and
management team, and I wish the Company every success in the future under new
leadership.
Results
We are pleased to announce our audited results for the financial year ended
30 September 2025.
IFRS result: The Company delivered an IFRS profit of €2.2 million (compared
to €0.6 million for 30 September 2024) as underlying EPRA earnings more
than offset negative capital items (valuation and capital expenditure).
Including the positive impact of the share buyback, this resulted in a +2.0%
NAV total return for the twelve months.
EPRA earnings: Underlying EPRA earnings were €7.3 million before
exceptional items, and €6.7 million after (compared to €8.2 million for
30 September 2024), with the decline reflecting the sale of the Frankfurt
investment, with the portfolio continuing to benefit from high occupancy and
good rent collection.
Dividend: The Board has maintained the quarterly dividend of 1.48 euro cents
per share. The total dividends declared for the current twelve months amounted
to €7.8 million, equating to 5.92 euro cents per share (compared to 5.92
euro cents per share for 30 September 2024), which offers an attractive
dividend yield of approximately 8.2% per annum based on the share price of
63.2 pence sterling as of 1 December 2025. This dividend is 94% covered by
EPRA earnings, reflecting the lost income as a result of the Frankfurt
disposal during the period, before exceptional items.
As previously announced, the key binary risk to long-term dividends remains
the shortening lease term with KPN in Apeldoorn, the Netherlands, expiring in
December 2026. KPN has verbally confirmed their intention to issue their
formal notice before 31 December 2025 to depart on lease expiry as at
31 December 2026. The manager is actively pursuing various initiatives to
mitigate this impact, including sourcing a replacement tenant and/or selling
the asset to redeploy capital elsewhere.
Portfolio value: The underlying portfolio valuation decreased by
€3.1 million (net of capex), or -1.4%, to €194.0 million, with a 5%
increase in the industrial portfolio, which witnessed a slight tightening of
yields and rental growth, offset by declines in other sectors.
Emphasis on asset management: We executed ten new leases/ re-gears generating
€2.1 million of annual income, including completing a 12-year lease re-gear
with our second largest tenant, Hornbach, at the Berlin DIY asset, which
accounts for 11% of the portfolio income.
Robust balance sheet: The Company's balance sheet continues to be managed
prudently. The outstanding debt balance has reduced to €64.3 million as at
30 September 2025 (compared to €82.5 million for 30 September 2024),
resulting in a prudent LTV of 29% gross of cash and 25% net. The LTV has
increased since the half year as a result of the decision to arrange a bank
guarantee in relation to the French tax disclosure (further information
below).
Energy and carbon: Over the period we incorporated various insights from
on-site and third-party sustainability and Net Zero Carbon ('NZC') audits,
carried out on 11 of 14 assets, directly into our 2025 business plans. This
approach ensures that audit findings inform tangible investment decisions to
enhance asset value and liquidity, in line with our broader portfolio
enhancement objectives. Concurrently, we recorded our largest annual
improvement to date in the Global Real Estate Sustainability Benchmark
('GRESB'), increasing our score by four points to 86, while maintaining our
four-star status.
Tax disclosure: Further to our previous disclosures concerning ongoing
discussions with the French Tax Authority, the Group has now arranged a bank
guarantee post year-end of approximately €12.2 million, excluding interest
and penalties. This reflects the French Tax Authority's requirement for
coverage of only the principal tax amount by the guarantee. Should penalties
and interest accruing up to 30 September 2025 be included, the total sum
increases to €14.2 million. The Group maintains its position that this
amount is not payable and has formally appealed the decision. This appeal,
submitted as a claim to the French Tax Authority, is expected to be reviewed
within a six-month period. If the claim is dismissed, the Group would escalate
the matter to a formal court process, which could take up to two years to
resolve. Based on professional advice, the Board has decided not to make a
provision, as they do not believe that an outflow is probable. The Group will
continue monitoring the situation and will provide further updates as
necessary.
Outlook
The Company's fundamentals remain robust, underpinned by a disciplined
approach to balance sheet management and execution of asset management
initiatives aimed at maximising occupancy, income, value and improving asset
liquidity. While the broader environment continues to be shaped by
geopolitical risks, general macroeconomic sentiment is expected to improve.
The sector is benefitting from long-term structural tailwinds, such as
historically low new supply and a progressive move towards more accommodative
monetary policy across Europe. If these dynamics continue, there is scope for
increased confidence among both occupiers and investors. This, in turn, could
enhance the attractiveness and liquidity of European real estate markets as we
move through the current cycle. In addition, forthcoming resolutions to both
the French Tax and KPN's departure will provide further clarity around the
Company's strategic direction and future positioning.
Sir Julian Berney Bt.
Chairman
4 December 2025
Investment Manager's Report
There is scope for increased confidence among both occupiers and investors,
which could enhance the attractiveness and liquidity of European real estate
markets as we move through the current cycle"
Financial results
The net asset value ('NAV') as at 30 September 2025 stood at
€156.7 million (£136.3 million)(1), or 119.2 euro cents per share
(103.7 pence per share), compared with €164.1 million, or 122.7 cps, as at
30 September 2024. During the period, dividends totalling €7.9 million
were paid and shares totalling €1.9 million were bought back, which
resulted in a NAV total return of 2.0%.
The table below provides an analysis of the movement in NAV during the
reporting period as well as a corresponding reconciliation in the movement in
the NAV euro cents per share.
€m cps(2)
NAV as at 1 October 2024 164.1 122.7
Unrealised change in the valuations of the real estate portfolio(3) (2.3) (1.8)
Capital expenditure(3) (0.8) (0.6)
Transaction costs(3) (0.2) (0.1)
Development profit 0.2 0.2
EPRA earnings(4) 6.7 5.1
Non-cash/capital items (1.2) (0.9)
Share buy-back (1.9) 0.5
Dividends paid(5) (7.9) (5.9)
NAV as at 30 September 2025 156.7 119.2
The direct portfolio, after accounting for capital expenditure, declined in
value by €3.1 million.
Accrued transaction costs for the sale of the Frankfurt asset
(€0.2 million) and other non-cash/capital items (€1.1 million mainly
from derivative movements) also contributed to the NAV decline.
EPRA earnings of €6.7 million more than offset the impact from these
capital items and resulted in an overall IFRS profit of €2.2 million.
Transactions
Following the successful completion of various asset management initiatives at
the Frankfurt grocery asset, including securing longer-term leases with anchor
tenants Lidl and Fressnapf, a disposal of the asset was agreed in line with
the 30 September 2024 valuation, with the sale concluding in April 2025.
In addition, the Company completed the sale of its 50% stake in the Metromar
joint venture. The disposal price was in line with the Company's previous
recognition of its interest being nil value, with the outstanding debt
transferring to the purchaser.
1 Exchange rate as at 30 September 2025 of GBP:EUR 1.15
2 Based on 131,407,986 shares per 30 September 2025
3 The unrealised loss in the valuation of the real estate of the
portfolio (€2.3m), net of capital expenditure (€0.8m), reconciles to the
'net gain/(loss) from fair value adjustment on investment property' of
(€3.0m) in the full Annual Report and Accounts.
4 EPRA earnings as reconciled in the full Annual Report and
Accounts.
5 Dividends of 5.92 cps were paid during the financial period. A
dividend for the quarter ended 30 September 2025, of 1.48 Euro cents per
share, was approved and will be paid in February 2026. Total dividends
declared relating to the 12 months' ended 30 September 2025 were 5.92 Euro
cents per share.
Real estate portfolio
As at 30 September 2025, the portfolio comprised 14 institutional grade
properties valued at €194.0 million, generating rental income of
€16.4 million per annum and reflecting a net initial yield of 7.1%. The
independent valuers' portfolio estimated rental value ('ERV') is
€16.0 million per annum.
Key asset management highlights included:
- Ten new leases/re-gears generating €2.1 million of annual
income at a weighted unexpired lease term of 11 years. This includes a 12-year
lease extension of anchor tenant, Hornbach, at the Berlin DIY asset;
- Additionally, two further lettings concluded at the Paris
asset post quarter end leasing up c.900 sqm vacant space, thereby improving
portfolio occupancy from 94% to 97%; and
- Select outputs from third-party sustainability and Net Zero
Carbon (NZC) audits across 11 assets have been incorporated into 2025 business
plans.
The de-risking of Apeldoorn in particular continues to be a main focus. The
building is leased to the Dutch telecommunications company KPN, generating
c.€3 million of rent p.a. with expiry in December 2026. The asset accounts
for 6% of the portfolio's total value and 19% of rent. Independent valuers
have determined the market value based on the present value of the remaining
income and land value. KPN has verbally confirmed their intention to issue
their formal notice before 31 December 2025 to depart on lease expiry as at
31 December 2026. The manager is actively pursuing various initiatives to
mitigate this impact, including sourcing a replacement tenant and/or selling
the asset to redeploy capital elsewhere. Considering the potential
implications of KPN's departure, alternative options and broader portfolio
activity, the Company's ability to maintain its current dividend is likely to
be impacted.
Otherwise, the diversified nature and strength of underlying tenants, and the
assets generally being leased off sustainable rents, is expected to sustain
relatively resilient portfolio income in the current economic environment.
Approximately 36% of the portfolio by value is offices, all of which are in
supply-constrained locations and leased off affordable rents. Our industrial
exposure at 37% is a mixture of distribution warehouses and light industrial
accommodation in growth cities within France and The Netherlands. Our retail
exposure at 14% comprises DIY. Another 9% of the portfolio is allocated to the
alternatives sector, comprising a mixed-use data centre and a car showroom,
with the remaining 4% in available cash.
Strategic Report
At a glance
Portfolio Overview
The Company owns a diversified portfolio of commercial real estate
in Continental Europe with favourable property fundamentals. The
Company has targeted assets located in Winning Cities and Regions and
in high-growth sectors. Winning Cities and Regions are those that are
expected to generate higher and more sustainable levels of economic
growth, underpinned by themes such as urbanisation, demographics,
technology and infrastructure improvements.
Top 14 properties by value
France, Paris
Sector Office
Value(1) (%)(2) €35.6m (18%)
No. of tenants 12
Largest tenant Outscale
Germany, Berlin
Sector Retail (DIY)
Value(1) (%)(2) €27.4m (14%)
No. of tenants 1
Largest tenant Hornbach
Germany, Hamburg
Sector Office
Value(1) (%)(2) €19.8m (10%)
No. of tenants 14
Largest tenant AGT
France, Rennes
Sector Industrial
Value(1) (%)(2) €18.9m (9%)
No. of tenants 1
Largest tenant C-LOG
Germany, Stuttgart
Sector Office
Value(1) (%)(2) €17.9m (9%)
No. of tenants 4
Largest tenant LandBW
The Netherlands, Venray I
Sector Industrial
Value(1) (%)(2) €13.0m 6%
No. of tenants 1
Largest tenant DKL
The Netherlands, Apeldoorn
Sector Other
Value(1) (%)(2) €11.9m (6%)
No. of tenants 1
Largest tenant KPN
The Netherlands, Alkmaar
Sector Industrial
Value(1) (%)(2) €19.9m (5%)
No. of tenants 1
Largest tenant Schuurman Beheer
France, Rumilly
Sector Industrial
Value(1) (%)(2) €10.7m (5%)
No. of tenants 1
Largest tenant Cereal Partners (Nestlé)
The Netherlands, Houten
Sector Industrial
Value(1) (%)(2) €9.5m (5%)
No. of tenants 1
Largest tenant Inventum
France, Cannes
Sector Car Showroom
Value(1) (%)(2) Value(1) (%) €7.2m (4%)
No. of tenants 1
Largest tenant Stellantis
France, Nantes
Sector Industrial
Value(1) (%)(2) €6.3m (3%)
No. of tenants 1
Largest tenant Hachette
The Netherlands, Utrecht
Sector Industrial
Value(1) (%)(2) €3.0m (2%)
No. of tenants 3
Largest tenant Straight Intern. Security
The Netherlands, Venray II
Sector Industrial
Value(1) (%)(2) €2.0m (1%)
No. of tenants 1
Largest tenant So Expo
1 As per third party valuation reports unadjusted for IFRS lease
incentive amounts.
2 Percentages reflect the value of the property asset based on
the total portfolio of €202.3m, including available cash of €8.3m
(internally calculated).
The table below sets out the portfolio's top ten tenants by contracted rent,
which are from a diverse range of industry segments, and represent 73% of the
portfolio.
Top ten tenants
Contracted rent WAULT break WAULT expiry
Rank Tenant Industry Property €m % of total (yrs) (yrs)
1 KPN Telecom Apeldoorn 3.2 19% 1.3 1.3
2 Hornbach DIY Berlin 1.7 10% 12.3 12.3
3 C-log Logistics Rennes 1.3 8% 5.4 5.4
4 Outscale IT Paris 1.1 7% 3.7 6.7
5 Cereal Partners Consumer staples Rumilly 0.8 5% 0.6 0.6
6 DKL Logistics Venray 0.8 5% 3.0 3.0
7 LandBW Government Stuttgart 0.8 5% 0.8 0.8
8 Schuurman Beheer Manufacturing Alkmaar 0.8 5% 12.5 17.5
9 Inventum Manufacturing Houten 0.7 5% 4.3 4.3
10 Filassistance Insurance Paris 0.7 4% 2.3 7.3
Total top ten tenants 11.9 73% 4.5 5.4
Remaining tenants 4.5 27% 2.8 3.9
Total 16.4 100% 4.0 5.0
The largest tenant is KPN, representing 19% of the portfolio's contracted
rent. KPN are a leading telecommunications and IT provider and market leader
in the Netherlands which occupies our mixed-use Apeldoorn asset (data centre
and office). KPN has verbally confirmed their intention to issue their formal
notice before 31 December 2025 to depart on lease expiry as at 31 December
2026.
The second largest tenant is Hornbach, a leading German-based operator of
do-it-yourself ('DIY') stores and home centres. It is representing 10% of the
portfolio rents and is the sole occupier of our Berlin DIY asset, comprising a
four-hectare site that has the potential to benefit from alternative uses.
The remaining large tenants, with businesses across a diversified range of
industries, each account for between 4-8% of portfolio rents. These include
C-log, Outscale, Cereal Partners (Nestlé), DKL, Land Baden-Württemberg,
Schuurman Beheer, Inventum and Filassistance.
Portfolio performance over the 12 month period ending 30 September 2025:
Valuation performance: Over the twelve-month period, the underlying portfolio
valuation decreased by €3.1 million (net of capex), or -1.4%, to
€194.0 million.
The portfolio's industrial assets all increased in value. The Rumilly, Venray
I & II, Alkmaar, Houten, Utrecht and Rennes values (net of capex)
increased by 5% on average, driven by positive investment sentiment
translating into stronger investment volumes and yield compression.
In contrast, the office portfolio value (Paris, Hamburg, Stuttgart) declined
by 5%, owing to continued weaker market sentiment. The Berlin DIY asset value
reduced 2% and the mixed-use data centre in Apeldoorn value declined 13%, due
to the decreasing remaining lease term with KPN.
Total property returns: The portfolio total property return ('TPR') was 5.6%.
With the portfolio benefitting from strong occupancy and high rent collection,
property income returns were strong at +7.1%, thereby more than offsetting
negative capital returns of -1.5% which was primarily a result of shortening
lease lengths.
Strong performance was seen across the industrial portfolio, with Venray
delivering a TPR of +22.3%, Utrecht +24.2%, Rumilly +17.2%, Houten +11.5%,
Nantes +12.4%, Rennes +6.9%, Alkmaar +4.8% and Venray II +4.7%.
Following the Frankfurt sale, the Berlin DIY store is now the sole retail
asset in the portfolio. Since agreeing a long-term lease re-gear with the
asset's sole tenant, the asset has recovered some value again in the most
recent quarters. The property returned 5.5% TPR over the period. The office
portfolio performance was more muted, with Stuttgart delivering a TPR of
+4.6%, Paris Saint-Cloud -0.6%, and Hamburg -4.2%.
The portfolio's mixed-use data centre in Apeldoorn delivered a total return of
+9.0%, with a high income return compensating for a capital value decline. The
Cannes car showroom delivered 11.7%.
Over the longer term, the real estate portfolio has delivered ungeared
property returns of 2.2% over three years and 4.0% over five years.
Berlin, Germany
ASSET MANAGEMENT
Asset overview
Acquired in March 2016 for €24.3 million, the asset comprises a 16,800 sqm
DIY retail scheme held under freehold ownership and fully let to Hornbach. As
at 30 September 2025, the valuation stood at €27.4m.
Located in Mariendorf, approximately 10 km south of Berlin City Centre, the
site spans four hectares in a supply-constrained location surrounded by medium
density residential.
Asset strategy
The strategy over the period was to secure a longer-term re-gear with the
tenant in order to drive value through improving the asset's income security
and liquidity profile, which was successfully achieved in May 2025.
Rationale
- New 12-year triple-net lease agreed with Hornbach, the second
largest tenant in the Company's portfolio with a market capitalisation of
c.€1.4 billion
- Significantly improved the portfolio's income security and
increased the overall portfolio unexpired lease term by 1.3 years
- Achieved an improved BREEAM In Use certification of 'Very
Good' (up from 'Good') upon renewal, through close collaboration with the
tenant and the implementation of light quality and flood risk assessments
- Agreed a partial green lease clause with the tenant,
increasing portfolio area coverage to 55% from 44%
Rumilly, France
ASSET MANAGEMENT
Asset overview
Purchased in August 2018 for €8.5 million, the latest valuation as at
30 September is €10.7 million (prior to any lease re-gear).
The strategically located warehouse has served as the principal distribution
centre for Cereal Partners France (a Nestlé and General Mills joint venture)
for 30 years with daily transfers of c.30 trucks between the site and
Nestlé's Rumilly production facility c.3km away.
Asset strategy
During the period, the focus has been directed towards securing a long-term
re-gear ahead of the tenant's lease expiry in April 2026, with the objective
of enhancing the asset's long-term value through targeted capital investment.
Rationale
- Advanced negotiations and principal agreement with Cereal
Partners France for a new long-term lease. As part of the agreement, the
tenant will invest capex to upgrade the asset's power capacity and air
extraction system within the warehouse
- Concurrently, landlord capex investment to be undertaken to
upgrade the ESFR fire sprinkler system, creation of a footbridge linking the
car park to the offices and of a separate passenger car parking area thereby
enhancing the safety and comfort for building users
- Successful closing expected in Q4 2025 which will enhance
asset liquidity and value
Balance sheet
The Company used the Frankfurt disposal proceeds to repay €6.6 million of
the portfolio loan facility with Deutsche Pfandbriefbank. In addition, the
outstanding loan facility secured against the Seville joint venture
transferred to the purchaser.
As a result, total third-party debt reduced to €64.3 million as at
30 September 2025 (from €82.8 million as at 30 September 2024).
Cash levels are totalling €8.3 million of available cash as at
30 September 2025. In addition €14.2 million has been ring-fenced to
secure the French tax claim. Gearing levels are modest, with an LTV of 25% net
of cash and 29% gross of cash. This is well within the Company's net LTV 35%
maximum.
Debt is spread across five loan facilities and secured against ten assets. The
current blended all-in interest rate is 3.8% and the average remaining loan
term is 2.3 years.
The only upcoming loan expiry is secured against the Berlin DIY asset which
has recently undergone a long-term lease re-gear, enhancing its appeal.
We have commenced preliminary discussions with lenders and are confident in
our ability to refinance at similar LTVs, albeit current swap rates would
result in the overall cost of debt increasing. There are no further debt
expiries until December 2027.
The individual loans are detailed in the table below. Each loan is held at the
property-owning level instead of the Group level and is secured by the
individual properties noted in the table. There is no cross-collateralisation
between loans.
Each loan has specific LTV and income default covenants. All loans are in
compliance with their default covenants. We detail the headroom against those
covenants in the latter two columns of the table below.
Lender Property Maturity date Outstanding Interest rate Headroom LTV Headroom net
principal
default
income default
covenant
covenant
(% decline)
(% decline)
VR Bank Westerwald Stuttgart & Hamburg 31/12/2027 €18.00m 3.80% No covenant No covenant
BRED Banque Populaire Paris 15/12/2027 €14.00m 3M Eur+1.9% 13% >50%
Deutsche Pfandbriefbank Berlin 30/06/2026 €9.94m 1.31% >30% >30%
ABN Amro Alkmaar, Houten, Utrecht, Venray I & II 27/09/2028 €13.76m 5.30% >40% >30%
Landesbank SAAR Rennes 26/03/2029 €8.60m 4.3% 17% >40%
Total €64.30m
The German and Dutch loans are fixed-rate for the duration of the loan term.
The Paris loan is based on a margin above three-month Euribor. The Company
benefits from an interest rate hedge, capped at 3.25%, which is covering the
remaining loan period to 15 December 2027. The fair value of the derivative
contract is c.€3,600 as at 30 September 2025.
Outlook
While significant risks and uncertainties persist for both global and European
growth, we expect economic sentiment to improve, primarily due to increased
clarity surrounding tariff agreements and a moderation of geopolitical
pressures. Nevertheless, we recognise that an end to the Russian conflict
would provide the most significant positive impact on macroeconomic conditions
and business sentiment. Despite the broader environment, occupational markets
in key cities across Europe remain notably resilient, particularly in select
sub-markets relevant to our operations.
Our strategy is focused on targeting growth cities and locations, underpinned
by infrastructure improvements, constrained supply, diverse demand, and
investments leased at sustainable rental levels. These factors should help to
maintain liquidity and enhance the value of the majority of our portfolio. We
are progressing lease re-gearing negotiations with principal tenants,
including Nestlé, the State of Baden-Württemberg, and Stellantis. The
successful completions of these will reduce risk across approximately 13% of
the Company's income, thereby enhancing income quality, asset value, and
liquidity.
The Company's outlook and strategic direction are in the short term shaped by
the outcomes at Apeldoorn and the ongoing French tax matter. At Apeldoorn, our
asset management programme is progressing, with options under consideration
including sourcing a replacement tenant and seeking planning approval for
alternative uses. The French tax claim currently remains beyond our direct
influence; however, we retain the financial strength to address the matter
should an unfavourable decision arise.
While we welcome the opportunity to work alongside our new future Chairman, Mr
Phil Redding, developing a strategy focused on maximising shareholder value,
we would also like to thank Sir Julian Berney for the significant contribution
he has made to this Company over the past 10 years. During his term as Chair,
Julian's guidance and support has played a vital role in developing Schroder
European REIT's long-term strategy and we wish him all the best for the
future.
Jeff O'Dwyer
Fund Manager
4 December 2025
Principal risks and uncertainties
The Board is responsible for the Company's system of risk management and
internal control, and for reviewing its effectiveness. The Board has adopted a
detailed matrix of principal risks affecting the Company's business as an
investment trust and has established associated policies and processes
designed to manage and, where possible, mitigate those risks, which are
monitored by the Audit, Valuation and Risk Committee on an ongoing basis. This
system assists the Board in determining the nature and extent of the risks it
is willing to take in achieving the Company's strategic objectives. Both the
principal risks and the monitoring system are also subject to robust review at
least annually. The last review took place in November 2025.
Although the Board believes that it has a robust framework of internal control
in place, this can provide only reasonable, and not absolute, assurance
against material financial misstatement or loss and is designed to manage, not
eliminate, risk.
Attention is drawn to the following key risks, which have previously been
reported on:
• There is a risk to sustaining the current level of dividends
arising from the departure of the tenant KPN at Apeldoorn in December 2026.
KPN has verbally confirmed their intention to issue their formal notice before
31 December 2025 to depart on lease expiry as at 31 December 2026. The
manager is actively pursuing various initiatives to mitigate this impact,
including sourcing a replacement tenant and / or selling the asset to redeploy
capital elsewhere.
• There is an ongoing dispute with the French tax authorities
and following the financial year-end, the Group received a payment demand
amounting to c.€14.2 million, including interest and penalties. The Group
maintains its position that this amount is not payable and has formally
appealed the decision.
Further detail on both risks is set out below.
From an emerging risks and uncertainties perspective, the Board recognises and
continues to be mindful of the changing global environment and the potential
risks posed by volatile markets; inflation and corresponding interest rate
changes; geopolitical uncertainty; structural changes; and occupier
preferences which could affect the use and prospects of some real estate
sectors. The Board receives regular updates on those macro risks from the
Investment Manager. Overall, the diversification of the Company's portfolio,
and its evolving strategy to place greater emphasis on sustainability-led
asset improvements, is expected to help minimise the impact of these factors.
The Board keeps these matters under review, particularly in connection with
its decisions to redeploy investable cash.
The Company's property portfolio remains resilient, as evidenced by rent
collection levels over the financial year. Loan covenants, interest rates,
cost of debt and expiry profiles continue to be actively managed as part of
cash flow forecasting and liquidity management. The Company has substantial
cash available providing a robust position to manage the Company through
current headwinds facing European economies.
During the year, the Board has reviewed the principal risks to ensure that
identified risk and mitigating actions remain appropriate.
A summary of the principal risks and uncertainties faced by the Company, and
the actions taken by the Board to manage and mitigate these risks and
uncertainties, are set out below:
Principal risks Mitigation of risk
Investment and strategy The Board seeks to mitigate these risks by:
An inappropriate investment strategy, or failure to implement the strategy,
could lead to underperformance in the property portfolio compared to the - Diversification of its property portfolio through its
property market generally by incorrect sector or geographic weightings or a investment restrictions and guidelines which are monitored and reported on by
loss of income through tenant failure, both of which could lead to a fall in the Investment Manager.
the value of the underlying portfolio.
- Receiving from the Investment Manager timely and accurate
management information including performance data, attribution analysis,
property level business plans and financial projections.
- Monitoring the implementation and results of the investment
process with the Investment Manager with a separate meeting devoted to
strategy each year.
- Determining a borrowing policy, and ensuring the Investment
Manager operates within its borrowing restrictions and guidelines.
- Reviewing marketing and distribution activity, and considering
the use of a discount control mechanism as necessary.
- Undertaking an annual review of the ongoing suitability of the
Investment Manager.
As previously announced, the key binary risk to sustaining the current level
of dividends remains the shortening lease term with KPN in Apeldoorn, the
Netherlands, expiring in December 2026. The building is leased to the Dutch
telecommunications company KPN, generating c.€3 million of rent p.a. with
expiry in December 2026. The asset accounts for 6% of the portfolio's total
value and 19% of rent. Independent valuers have determined the market value
based on the present value of the remaining income and land value. KPN has
verbally confirmed their intention to issue their formal notice before
31 December 2025 to depart on lease expiry as at 31 December 2026. The
manager is actively pursuing various initiatives to mitigate this impact,
including sourcing a replacement tenant and/or selling the asset to redeploy
capital elsewhere.
Regulatory and tax compliance The Board has appointed the Investment Manager as its Alternative Investment
The Company has to comply with a wide range of legislation and regulations, Fund Manager ("AIFM") in accordance with the Alternative Investment Fund
covering tax, planning, building regulations, health and safety, Company law, Managers Directive ("AIFMD").
accounting, reporting and Listing Rules.
The Investment Manager monitors legal requirements to ensure that adequate
procedures and reminders are in place to meet the Company's legal requirements
and obligations. The Investment Manager undertakes full legal due diligence
with advisors when transacting and managing the Company's assets. All
contracts entered into by the Company are reviewed by the Company's legal and
other advisors.
The Board is satisfied that the Investment Manager has adequate procedures in
place to ensure continued compliance with the regulatory requirements of the
Financial Conduct Authority, the UK Listing Rules of the London Stock
Exchange and any other required authority. The Investment Manager has retained
external tax advisers, who are overseen by the Schroders' tax team, to ensure
compliance with relevant local tax regulations.
With regard to tax, the Group operates in a number of jurisdictions and is
subject to periodic challenges by local tax authorities on a range of tax
matters during the normal course of business. The tax impact can be uncertain
until a conclusion is reached with the relevant tax authority. The Group
addresses this uncertainty by closely monitoring tax developments, seeking
independent advice, and maintaining transparency with the authorities it deals
with as and when any enquiries are made.
As previously reported, the French tax authorities have issued a notice of
adjustment in respect of the tax years 2021 to 2023 and the Group has received
a payment demand amounting to c.€14.2 million, including interest and
penalties. In accordance with the requirements of the French tax authorities,
the Group has arranged a bank guarantee of approximately €12.2 million,
reflecting the requirement for coverage by guarantee of the principal tax
amount only.
The Group maintains its position that this amount is not payable and has
formally appealed the decision. This appeal, submitted as a claim to the
French Tax Authority, is expected to be reviewed within a six-month period. If
the claim is dismissed, the Group would escalate the matter to a formal court
process, which could take up to two years to resolve.
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.
Pending resolution of the matter, the Board considers it prudent to ring-fence
€14.2m (being the amount of the guarantee plus potential interest and
penalties) from its other cash reserves. This is set out in further detail in
note 10 of this Annual Report.
Economic and property market The Board considers economic conditions and the uncertainty around political
The performance of the Company could be affected by economic, currency and events when considering investment decisions. The Board mitigates property
property market risk. In the wider economy this could include inflation, market risk through the review of the Company's strategy on a regular basis
stagflation or deflation (including in respect of costs such as construction and discussions are held to ensure the strategy is still appropriate or if it
costs and operating expenses), economic recessions, movements in foreign needs updating. Diversification of the majority of the portfolio across the
exchange and interest rates or other external shocks. The performance of the office and industrial/logistics sectors in growth cities, and a focus on
underlying property portfolio could also be affected by structural or cyclical functional and affordable space, provides defensive characteristics.
factors impacting particular sectors (for example, retail) or regions of the
property market and counterparty solvency. The portfolio also benefits from a high percentage (approximately 100%) of
inflation-linked leases which contributes to rental growth and mitigates value
declines.
The assets of the Company are almost all denominated in non-sterling
currencies,
predominantly the euro. No currency hedging is planned, but the Board
continues to consider the hedging of dividend payments having regard to
availability and cost.
Valuation An external valuer provides an independent valuation of all assets at least
Property valuations are inherently subjective and uncertain, due to the quarterly. The Audit, Valuation and Risk Committee includes two experienced
individual nature of each property and its liquidity, particularly under chartered surveyors. Members of the Audit, Valuation and Risk Committee meet
stressed market conditions. with the external valuers to discuss the basis of their valuations, and their
quality control processes, on a quarterly basis.
Valuations also include annual reinstatement costs for insurance purposes.
Inflation and availability of goods and services, could heighten the risk
around correct reinstatement values and completion programs.
Gearing and leverage Gearing, including loan covenant compliance, is monitored at quarterly Board
The Company utilises credit facilities. These arrangements increase the funds meetings, and ad hoc as required, and strict restrictions on borrowings are
available for investment through borrowing. While this has the potential to imposed both internally and by lenders. The overall cost of debt is regularly
enhance investment returns in rising markets, in falling markets the impact reviewed with any new debt or refinancing presented to the Schroders Real
and availability of financing could be detrimental to performance, and may Estate Investment Committee and Board for approval.
also result in potential non-compliance with loan covenants or refinancing
risk.
Risk assessment and internal controls
Risk assessment includes consideration of the scope and quality of the systems
of internal control operating within key service providers, and ensures
regular communication of the results of monitoring by such providers to the
Audit, Valuation and Risk Committee, including the incidence of significant
control failings or weaknesses that have been identified at any time and the
extent to which they have resulted in unforeseen outcomes or contingencies
that may have a material impact on the Company's performance or condition.
No significant control failings or weaknesses were identified from the Audit,
Valuation and Risk Committee's ongoing risk assessment which has been in place
throughout the financial year and up to the date of this report. The Board is
satisfied that it has undertaken a detailed review of the risks facing the
Company.
A full analysis of the financial risks facing the Company and its subsidiaries
is set out in note 23.
Viability statement
The Board is required to give a statement on the Company's viability which
considers the Company's current position and principal risks and uncertainties
together with an assessment of future prospects.
The Board conducted this review over a five-year time horizon commencing from
the date of this report which is selected to match the period over which the
Board monitors and reviews its financial performance and forecasting. The
Investment Manager prepares five-year total return forecasts for the
Continental European commercial real estate market. The Investment Manager
uses these forecasts as part of analysing acquisition opportunities as well as
for its annual asset-level business planning process. The Board receives an
overview of the asset-level business plans which the Investment Manager uses
to assess the performance of the underlying portfolio and therefore make
investment decisions such as disposals and investing capital expenditure. The
Company's principal borrowings are for a weighted duration of 2.3 years and
the average unexpired lease term to break, assuming all tenants vacate at the
earliest opportunity, is 4.0 years.
The Board's assessment of viability considers the principal risks and
uncertainties faced by the Company, as detailed in the Strategic Review in the
full Annual Report and Accounts, which could negatively impact its ability to
deliver the investment objective, strategy, liquidity and solvency. This
includes consideration of scenario stress testing and a cash flow model
prepared by the Investment Manager that analyses the sustainability of the
Company's cash flows, dividend cover, compliance with bank covenants, general
liquidity requirements and potential legal and regulatory change for a
five-year period.
These metrics are subject to a sensitivity analysis which involves flexing a
number of the main assumptions including macroeconomic scenarios, delivery of
specific asset management initiatives, rental growth and void/re-letting
assumptions. The Board also reviews assumptions regarding capital recycling
and the Company's ability to refinance or extend financing facilities. Steps
which are taken to mitigate these risks as set out in the Strategic Review in
the full Annual Report and Accounts are also taken into account.
Based on the assessment, and having considered in detail base and downside
scenarios modelling, the Directors have concluded that there is a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the five-year period of their
assessment.
Going concern
The Board believes it is appropriate to adopt the going concern basis in
preparing the financial statements. A comprehensive going concern statement
setting out the reasons the Board considers this to be the case is set out in
note 1.
By order of the Board
Sir Julian Berney Bt.
Chairman
4 December 2025
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the Group and the
Company financial statements in accordance with UK-adopted international
accounting standards and applicable law. Under company law, Directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company and of the
profit or loss of the Group and Company for that period. In preparing the
financial statements, the Directors are required to:
- select suitable accounting policies and then apply them
consistently;
- state whether applicable UK-adopted international accounting
standards have been followed for the Group financial statements and the
Company financial statements, subject to any material departures disclosed and
explained in the financial statements;
- make judgements and accounting estimates that are reasonable
and prudent; and
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are also responsible for safeguarding the assets of the Group
and Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records
that are sufficient to show and explain the Group's and Company's
transactions, and disclose with reasonable accuracy at any time the financial
position of the Group and Company, and enable them to ensure that the
financial statements comply with the Companies Act 2006.
The Investment Manager is responsible for the maintenance and integrity of the
Company's web pages. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the Annual Report and Accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group and Company's position and performance,
business model and strategy.
Each of the Directors, whose names and functions are listed in the Directors'
Report, confirm that, to the best of their knowledge:
- the Group and Company financial statements, which have been
prepared in accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position and
profit of the Company; and
- the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group and the Company,
together with a description of the principal risks and uncertainties that it
faces.
On behalf of the Board
Sir Julian Berney Bt.
Chairman
4 December 2025
Consolidated and Company Statements of Comprehensive Income
For the year ended 30 September 2025
Note Group year to Group year to Company year Company year
30/09/25
30/09/24
to 30/09/25
to 30/09/24
€'000
€'000
€'000
€'000
Rental and service charge income 3 20,151 20,647 - -
Property operating expenses 4 (6,272) (5,602) - -
Net rental and related income 13,879 15,045 - -
Net loss from fair value adjustment on investment property 13 (3,013) (7,740) - -
Loss on sale of investment property (27) - - -
Development revenue 14 231 1,500 - -
Development expense 14 (18) (695) - -
Realised gain/(loss) on foreign exchange (10) 4 (10) 4
Net change in fair value of financial instruments at fair value through profit (232) (494) - -
or loss
Management fee income 5 - - 1,393 1,410
Provision of investment made in subsidiaries 15 - - - (50)
Dividends received 8 - - 1,265 2,322
Expenses
Investment management fee 5 (1,803) (1,899) (1,803) (1,899)
Valuer's and other professional fees (848) (719) (371) (217)
Administrator's and accounting fees (512) (586) (112) (120)
Auditor's remuneration and assurance fees 7 (344) (347) (301) (306)
Directors' fees 9 (204) (239) (204) (239)
Other expenses 9 (699) (540) (396) (418)
Total expenses (4,410) (4,330) (3,187) (3,199)
Operating profit/(loss) 6,400 3,290 (539) 487
Finance income 411 654 2,257 2,407
Finance costs (2,663) (2,596) - -
Net finance (costs)/income (2,252) (1,942) 2,257 2,407
Profit before taxation 4,148 1,348 1,718 2,894
Taxation 10 (1,919) (773) (446) -
Profit for the year 2,229 575 1,272 2,894
Total comprehensive income for the year 2,229 575 1,272 2,894
Basic and diluted earnings per share attributable to owners of the parent 11 1.7c 0.4c - -
All items in the above statement are derived from continuing operations. The
accompanying notes 1 to 29 form an integral part of the financial statements.
Consolidated and Company Statements of Financial Position
As at 30 September 2025
Note Group Group Company Company
30/09/25
30/09/24
30/09/25
30/09/24
€'000 €'000 €'000 €'000
Assets
Non-current assets
Investment property 13 192,514 206,522 - -
Investment in subsidiaries 15 - - 69,946 69,921
Receivables from subsidiaries - - 52,948 55,507
Non-current assets 192,514 206,522 122,894 125,428
Current assets
Trade and other receivables 17 10,877 10,026 1,765 909
Interest rate derivative contracts 4 236 - -
Cash and cash equivalents 18 28,362 27,362 12,070 18,165
Current assets 39,243 37,624 13,835 19,074
Total assets 231,757 244,146 136,729 144,502
Equity
Share capital 19 17,966 17,966 17,966 17,966
Share premium 19 43,005 43,005 43,005 43,005
Treasury share reserve 19 (1,815) - - -
Retained earnings/(accumulated losses) 97,499 103,126 74,603 83,002
Total equity 156,655 164,097 135,574 143,973
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 20 54,081 70,471 - -
Deferred tax liability 10 4,278 4,163 - -
Non-current liabilities 58,359 74,634 - -
Current liabilities
Interest-bearing loans and borrowings 20 9,938 - - -
Trade and other payables 21 5,840 4,955 1,155 529
Current tax liabilities 10 965 460 - -
Current liabilities 16,743 5,415 1,155 529
Total liabilities 75,102 80,049 1,155 529
Total equity and liabilities 231,757 244,146 136,729 144,502
Net asset value per ordinary share 22 119.2 122.7 101.4 107.7
The financial statements in the full Annual Report and Accounts were approved
at a meeting of the Board of Directors held on 4 December 2025 and signed on
its behalf by:
Sir Julian Berney Bt.
Chairman
The accompanying notes 1 to 29 form an integral part of the financial
statements.
Registered in England and Wales as a public company limited by shares.
Company registration number: 09382477
Consolidated and Company Statements of Changes in Equity
For the year ended 30 September 2025
Group Note Share capital Share Treasury (Accumulated Other Total equity
€'000
premium
share
losses)/
reserves
€'000
€'000
reserve
Retained
€'000
€'000
earnings
€'000
Balance as at 1 October 2023 17,966 43,005 - (6,142) 116,610 171,439
Transfers - - - 116,610 (116,610) -
Profit for the year - - - 575 - 575
Other comprehensive income/(loss) for the year - - - - - -
Dividends paid 12 - - - (7,917) - (7,917)
Balance as at 30 September 2024 17,966 43,005 - 103,126 - 164,097
Share buyback - - (1,815) - - (1,815)
Profit for the year - - - 2,229 - 2,229
Other comprehensive income/(loss) for the year - - - - - -
Dividends paid 12 - - - (7,856) - (7,856)
Balance as at 30 September 2025 17,966 43,005 (1,815) 97,499 - 156,655
Company Note Share capital Share Treasury (Accumulated Other Total equity
€'000
premium
share
losses)/
reserves(1)
€'000
€'000
reserve
Retained €'000
€'000
earnings(1)
€'000
Balance as at 1 October 2023 17,966 43,005 - (28,818) 116,843 148,996
Transfers - - - 116,843 (116,843) -
Profit for the year - - - 2,894 - 2,894
Other comprehensive income/(loss) for the year - - - - - -
Dividends paid 12 - - - (7,917) - (7,917)
Balance as at 30 September 2024 17,966 43,005 - 83,002 - 143,973
Share buyback - - (1,815) - - (1,815)
Profit for the year - - - 1,272 - 1,272
Other comprehensive income/(loss) for the year - - - - - -
Dividends paid 12 - - - (7,856) - (7,856)
Balance as at 30 September 2025 17,966 43,005 (1,815) 76,418 - 135,574
1 These reserves form the distributable reserves of the Company
and include a historic share premium reduction and may be used to fund
distribution of profits to investors via dividend payments.
The accompanying notes 1 to 29 form an integral part of the financial
statements.
Consolidated and Company Statements of Cash Flows
For the year ended 30 September 2025
Note Group Group Company Company
30/09/25
30/09/24
30/09/25
30/09/24
€'000
€'000
€'000
€'000
Operating activities
Profit before tax for the year 4,148 1,348 1,718 2,894
Adjustments for:
Loss on sale of investment property 27 - - -
Net gain from fair value adjustment on investment property 13 3,013 7,740 - -
Realised foreign exchange loss/(gain) 10 (4) 10 (4)
Provision of investment made in subsidiaries 15 - - - 50
Finance income (411) (654) (2,257) (2,407)
Finance costs 2,663 2,596 - -
Net change in fair value of financial instruments through profit or loss 232 494 - -
Dividend income classified as investing cash flows - - (1,265) (2,322)
Operating cash generated from/(used in) before changes in working capital 9,682 11,520 (1,794) (1,789)
(Increase)/decrease in trade and other receivables (853) (627) (1,033) 276
Increase/(decrease) in trade and other payables 975 (167) 626 (497)
Cash generated from operations 9,804 10,726 (2,201) (2,010)
Finance costs paid (2,640) (2,145) - -
Finance income received 411 654 1,701 4,598
Tax paid (1,299) (1,345) (446) -
Net cash generated from/(used in) operating activities 6,276 7,890 (946) 2,588
Investing activities
Proceeds from sale of investment property 13 11,800 - - -
Investment property disposal costs 13 (227) - - -
Capital expenditure additions (605) (1,682) - -
Loans to subsidiary companies - - - (2,200)
Loan repayment from subsidiary companies - - 3,292 9,820
Investment in subsidiary companies 15 - - (25) -
Dividends received - - 1,265 2,322
Net cash generated from/(used in) from investing activities 10,968 (1,682) 4,532 9,942
Financing activities
Repayment of borrowings 20 (6,563) (3,000) - -
Interest rate derivative contracts purchased - (56) - -
Repayment of loan - (322) - -
Share buyback (1,815) - (1,815) -
Dividends paid 12 (7,856) (7,917) (7,856) (7,917)
Net cash used in financing activities (16,234) (11,295) (9,671) (7,917)
Net increase/(decrease) in cash and cash equivalents for the year 1,010 (5,087) (6,085) 4,613
Opening cash and cash equivalents 27,362 32,445 18,165 13,548
Effects of exchange rate change on cash (10) 4 (10) 4
Closing cash and cash equivalents 28,362 27,362 12,070 18,165
The accompanying notes 1 to 29 form an integral part of the financial
statements.
Notes to the Financial Statements
1. Significant accounting policies
Schroder European Real Estate Investment Trust plc (the 'Company') is a
closed-ended investment company incorporated in the United Kingdom. The
consolidated financial statements of the Company for the year ended
30 September 2025 comprise those of the Company and its subsidiaries
(together referred to as the 'Group'). The Group holds a portfolio of
investment properties in continental Europe. The shares of the Company are
listed on the London Stock Exchange (primary listing) and Johannesburg Stock
Exchange Limited (secondary listing). The registered office of the Company is
1 London Wall Place, London, England EC2Y 5AU.
Statement of compliance
The consolidated financial statements of the Group and Company financial
statements have been prepared under the UK-adopted 'International Accounting
Standards in accordance with the Companies Act 2006'.
The financial statements give a true and fair view and are in compliance with
applicable legal and regulatory requirements and the Listing Rules of the UK
and JSE Listing Authority.
Basis of preparation
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the Group and the
Company financial statements in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006.
The financial statements are presented in euros, rounded to the nearest
thousand. They are prepared on a going concern basis, applying the historical
cost convention, except for the measurement of investment property and
derivative financial instruments that have been measured at fair value.
The accounting policies have been consistently applied to the results, assets,
liabilities and cash flows of the entities included in the consolidated
financial statements.
Going concern
The Directors have examined significant areas of possible financial risk
including: cash held and the liquidity of the Group's assets; forward-looking
compliance with third-party debt covenants, in particular the loan to value
('LTV') covenant and interest cover ratios; the likelihood of any payment of
contingent tax liabilities; potential falls in property valuations; the
non-collection of rent and service charges; and the existing, and future,
anticipated cash requirements of the Group.
Furthermore, ongoing geopolitical developments, and macroeconomic variables
such as projected interest rates and inflation, have also been considered
regarding the Group's property investments in France, Germany and the
Netherlands.
Cash flow forecasts, based on deemed plausible downside scenarios, have led
the Board to conclude that the Group will have sufficient cash reserves to
continue in operation for twelve months from the date of the signing of the
annual report.
The Group has five loans secured by individual assets, with no
cross-collateralisation. All loans are in compliance with their debt
covenants. More details of the individual loans, and headroom on the LTV and
net income default covenants, is provided in the full Annual Report and
Accounts.
The Group has one loan, a Deutsche Pfandbriefbank facility secured against the
Berlin property, maturing in June 2026, which falls within the 12-month going
concern assessment period. The Directors have considered this upcoming
maturity in their assessment and expect to either refinance or source new
financing arrangements prior to maturity. Accordingly, the Directors do not
consider this to give rise to a material uncertainty regarding the Group's
ability to continue as a going concern.
After due consideration, the Directors have not identified any material
uncertainties which would cast significant doubt on the Group's ability to
continue as a going concern for a period of not less than 12 months from the
date of the approval of the consolidated annual report and financial
statements, which would be 31 December 2026. The Directors have satisfied
themselves that the Group has adequate resources to continue in operational
existence for the foreseeable future.
Use of estimates and judgements
The preparation of financial statements under the UK-adopted international
accounting standards, in conformity with the Companies Act 2006, requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts of assets and liabilities,
income and expenses. These estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which
the estimates are revised and in any future periods affected.
The most significant estimates made in preparing these financial statements
relate to the carrying value of investment properties, as disclosed in
note 13, which are stated at fair value. The fair value of investment
property is inherently subjective because, in the absence of
readily-observable market data, the valuer has to make professional judgements
on valuation inputs. The Group uses an external professional valuer to
determine the relevant amounts.
The following are other areas of estimates and judgements:
- Tax provisioning and disclosure: Management uses external tax
advisers to monitor changes in tax laws in countries where the Group has
operations. New tax laws that have been substantively enacted are recognised
in the Group's and Company's financial statements. The Group is also subject
to periodic challenges by local tax authorities on a range of tax matters
during the normal course of business. Where changes to tax laws or challenges
by local tax authorities give rise to a potential contingent liability, the
Group discloses the estimated amounts appropriately within the notes to the
financial statements (further details are disclosed in note 10).
- IFRS 9 expected credit losses: All receivables, inter-company
loans are financial assets and must therefore be assessed for impairment using
the forward-looking expected credit loss model. Where an impairment is
identified, appropriate recognition is required in the consolidated statement
of comprehensive income, together with appropriate disclosure and sensitivity
analysis in the notes to the financial statements. These judgements were also
considered within the impairment in the investments held in subsidiaries for
the parent Company.
Basis of consolidation
Subsidiaries
The consolidated financial statements comprise the financial statements of the
Company and all of its subsidiaries drawn up to 30 September each year.
Subsidiaries are those entities, including special purpose entities,
controlled by the Company. Control exists when the Company is exposed to, or
has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities
of the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until
the date that control ceases. Where properties are acquired by the Group
through corporate acquisitions, but the acquisition does not meet the
definition of a business combination, the acquisition is treated as an asset
acquisition.
Transactions eliminated on consolidation
Intra-group balances, and any gains and losses arising from intra-group
transactions, are eliminated in preparing the consolidated financial
statements. Gains arising from transactions with joint ventures are eliminated
to the extent of the Group's interest in the entity. Losses are eliminated in
the same way as gains but only to the extent that there is no evidence of
impairment.
Investment property
Investment property comprises land and buildings held to earn rental income
together with the potential for capital growth.
Acquisitions and disposals are recognised on an unconditional exchange of
contracts. Acquisitions are initially recognised at cost, being the fair value
of the consideration including any transaction costs associated with the
investment property.
After initial recognition, investment properties are measured at fair value
with unrealised gains and losses recognised in profit or loss. Realised gains
and losses on the disposal of properties are recognised in profit or loss in
relation to the carrying value at the beginning of the accounting period. Fair
value is based on the market valuations of the properties as provided by a
firm of independent chartered surveyors at the reporting date. Market
valuations are carried out on a quarterly basis.
As disclosed in note 24, the Group leases out all owned properties on
operating leases which are classified and accounted for as an investment
property where the Group holds it to earn rentals, capital appreciation, or
both. Any such property leased under an operating lease is classified as an
investment property and carried at fair value.
Please refer to note 13 for disclosure of key inputs, assumptions and
sensitivities with respect to the fair valuation of investment properties.
Prepayments
Prepayments are carried at cost and released to the statement of comprehensive
income on a straight-line basis.
Leases
Leases in which a significant portion of the risks and rewards of ownership
are retained by another party, the lessor, are classified as operating leases.
Rental income, including prepayments, received under operating leases (net of
any incentives granted by the lessor) are recognised in the statement of
comprehensive income on a straight-line basis over the period of the lease.
Properties leased out under operating leases are included as investment
properties in the consolidated statement of financial position (note 13).
Financial assets and liabilities
Non-derivative financial assets and liabilities
Non-derivative financial assets are measured at amortised cost less impairment
whereas financial liabilities are measured at amortised cost. The Group
calculates impairment provisions for non-derivative financial assets based on
lifetime expected credit losses under IFRS 9.
Cash and cash equivalents
Cash at bank, and short-term deposits that are held to maturity, are carried
at amortised cost. Cash and cash
equivalents are defined as cash in hand, demand deposits and short-term,
highly liquid investments readily convertible to known amounts of cash and
subject to insignificant risk of changes in value. For the purposes of the
statement of cash flows, cash and cash equivalents comprise of cash in hand
and short-term deposits at banks with an original term of three months or
less.
The cash and cash equivalents are freely available unless otherwise disclosed.
Restricted cash
Cash balances that are not available for general use by the Group are
classified as restricted cash. These balances typically relate to amounts held
in escrow, debt service reserve accounts, or other arrangements required under
loan agreements or regulatory obligations. Restricted cash is carried at
amortised cost and excluded from the definition of cash and cash equivalents
in the statement of cash flows.
Loans and borrowings
Borrowings are recognised initially at the fair value of the consideration
received less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any
difference between cost and redemption value being recognised in the profit or
loss over the period of the borrowings on an effective interest basis.
Borrowing costs such as arrangement fees are capitalised and amortised over
the loan term.
Derivative financial assets and liabilities
Derivative financial assets and liabilities comprise interest rate caps for
hedging purposes (economic hedge). These are recognised at fair value, with
the revaluation gains or losses immediately recorded in the statement of
comprehensive income.
Share capital
Ordinary shares, including treasury shares, are classified as equity when
there is no obligation to transfer cash or other assets. The Company's
accounting policy is to fix the share capital at the spot rate at the date of
issue. The Company does not retranslate its share capital at the end of each
reporting period.
Share premium
Share premium represents the excess of proceeds received over the nominal
value of new shares issued. The Company's accounting policy is to fix the
share premium at the spot rate at the date of issue. The Company does not
retranslate its share premium at the end of each reporting period.
Share buyback
Shares purchased are recognised on the trade date and debited to the treasury
share reserve in the Statement of Changes in Equity. Any broker's fees
relating to the share buyback are debited to other expenses.
Other reserves
Other reserves consist of a share premium reduction reserve arising from the
conversion of share premium into a distributable reserve.
Dividends
Final dividends to the Company's shareholders are recognised as a liability in
the Group's financial statements in the period in which the dividends are
approved by the Company's shareholders. Interim dividends are recognised when
paid.
Impairment
Investments
The carrying amounts of the Group's and Company's investments, other than
investment property but including joint ventures and investments held in
subsidiaries, are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to that asset.
An impairment loss is recognised if the carrying amount of an asset or its
cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognised in the profit or loss.
Revenue
Rental income
Rental income from operating leases is recognised on a straight-line basis
over the lease term. When the Group provides incentives to its tenants, the
cost of incentives is recognised over the lease term, on a straight-line
basis, as a reduction of rental income.
Where a rent incentive fits the definition of a lease modification under IFRS
16, the cost of incentives is recognised over the remaining lease term
starting from the effective date of the lease modification, on a straight-line
basis, as a reduction of rental income.
Service charges
These include income in relation to service charges, directly recoverable
expenditure and management fees. Revenue from services is recognised over
time, as the services are rendered, reflecting the ongoing transfer of
control, including where services are delivered by third-party service
providers.
Finance income and costs
Finance income comprises interest income on funds invested that are recognised
in the statement of comprehensive income. Finance income is recognised on an
accruals basis.
Finance costs comprise interest expenses on borrowings that are recognised in
the statement of comprehensive income. Attributable transaction costs incurred
in establishing the Group's credit facilities are deducted from the fair value
of borrowings on initial recognition and are amortised over the lifetime of
the facilities through profit or loss. Finance expenses are accounted for on
an effective interest basis.
Expenses
All expenses are accounted for on an accruals basis. They are recognised in
the statement of comprehensive income in the year in which they are incurred
on an accruals basis.
Taxation
The Company and its subsidiaries are subject to income tax on any income
arising on investment properties after deduction of debt financing costs and
other allowable expenses.
Income tax on the profit or loss for the year comprises current and deferred
tax. Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantially enacted at the reporting date,
and any adjustment to tax payable in respect of previous periods.
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. Deferred tax is
determined using tax rates (and laws) that have been enacted, or substantially
enacted, by the date of the statement of financial position and are expected
to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilised.
Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment
of business, being property investment, and in one geographical area,
continental Europe. The chief operating decision-maker is considered to be the
Board of Directors who are provided with consolidated IFRS information on a
quarterly basis.
Foreign currency translation
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency').
The functional currency of all the entities in the Group is the euro, as this
is the currency in which the majority of investment takes place and in which
the majority of income and expenses are incurred. The financial statements are
also presented in euros.
Foreign currency transactions are translated into euros using the exchange
rate prevailing at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions are recognised in
profit or loss in the statement of comprehensive income.
Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated into the presentational currency using the
exchange rate prevailing at that date. Foreign exchange differences arising on
translation to the presentation currency are taken to the consolidated
statement of comprehensive income.
2. New standards and interpretations
New standards and interpretations adopted by the Group
In the current year, the Group has applied one new standard and amendment to
IFRS Accounting Standards issued by the International Accounting Standards
Board ('IASB') which is mandatorily effective for an accounting period that
begins on or after 1 October 2024. The adoption has not had any material
impact on the disclosures or on the amounts reported in these financial
statements.
These new standards and amendments are listed below:
- Amendments to IAS 21 - Lack of exchangeability
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRS Accounting Standards that have been
issued but are not yet effective:
- IFRS 18 - Presentation and Disclosures in the Financial
Statements
- IFRS 19 - Subsidiaries without Public Accountability
disclosures
- Amendments to IFRS 9 and IFRS 7 on Classification and
Measurement of Financial Instruments
- Amendments to IFRS 9 and IFRS 7 - Contracts Referencing
Nature-dependent Electricity
- Annual Improvements to IFRS - Volume 11
The Directors do not expect that the adoption of the standards listed above
will have a material impact on the financial statements of the Group in future
periods.
3. Rental and service charge income
Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000
€'000
€'000
€'000
Rental income 16,007 16,385 - -
Service charge income 4,144 4,262 - -
20,151 20,647 - -
Service charge income is charged in addition to rent payments to cover the
landlord's costs. Factors such as the size of the asset, number of occupants,
occupancy rates and purpose of the asset can affect the amount and timing of
revenue and cash flows.
The Group has concluded that it transfers control of these services over time,
as services are rendered by the third party service providers, because this is
when tenants receive and, at the same time, consume the benefits from these
services.
The service charge receivable amounts to €3,272,000 (2024: €3,972,000).
Payment of service charge income from tenants is impacted by the timing of
service charge reconciliations by property managers.
4. Property operating expenses
Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000
€'000
€'000
€'000
Repairs and maintenance 2,655 2,750 - -
Service charge, insurance and utilities on vacant units 1,445 670 - -
Real estate taxes 1,383 1,474 - -
Property management fees 320 375 - -
Other 469 333 - -
6,272 5,602 - -
All the above amounts relate to either service charge or property operating
expenses recoverable from tenants, except for €2,128,000
(2024: €1,340,000) attributable to non-recoverable landlord expenses. The
increase in 2025 is due to non-recoverable costs exceeding expectations,
primarily arising from the completion of service charge reconciliations
carried out subsequent to year end for prior periods.
5. Material agreements
Schroder Real Estate Investment Management Limited ('SREIM') is the Investment
Manager to the Company. The Investment Manager is entitled to a fee together
with reasonable expenses incurred in the performance of its duties. The fee is
payable monthly in arrears and shall be an amount equal to one 12th of the
aggregate of 1.1% of the EPRA NAV of the Group. The Investment Management
Agreement can be terminated by either party on not less than 12 months'
written notice, such notice not to expire earlier than the third anniversary
of admission, or on immediate notice in the event of certain breaches of its
terms or the insolvency of either party. The total charge to profit or loss
during the year was €1,803,000 (2024: €1,899,000). At the year end
€579,000 (2024: €140,000) was outstanding.
SREIM charges accounting services to the Company with a minimum contracted
annual charge of €81,000 (£70,000). The total charge to the Company was
€112,000 (2024: €102,000). At the year end €30,000 (2024: €8,000)
was outstanding. SREIM also charged accounting services to the subsidiaries
registered in Luxembourg at a contracted annual charge of €135,000 up until
10 March 2024. These fees were included in administrator's and accounting
fees in the Consolidated Statement of Comprehensive Income. Effective
11 March 2024, CBRE Investment Accounting & Reporting Solutions
(IA&R) was formally engaged to provide accounting services to the
Luxembourg subsidiaries, and their fees are included within administrators'
and accounting fees.
SREIM provides administrative and company secretarial services to the Group
with a contracted annual charge of €58,000 (£50,000). The total charge to
the Group was €58,000 (2024: €58,000). These are included in
administrator's and accounting fees in the consolidated statement of
comprehensive income. At the year end €19,000 (2024: €5,000) was
outstanding.
Details of Directors' fees are disclosed in note 9.
The Company received management fees of €1,393,000 (2024: €1,410,000)
from subsidiary companies during the year. The amounts recharged to
subsidiaries and outstanding are provided in the following table.
Fees recharged in the year to 30 September Fees outstanding as at 30 September
€'000
€'000
Subsidiary 2025 2024 2025 2024
SCI SEREIT Rumilly 67 48 19 12
SAS Clarity Developpement 103 375 2 189
SEREIT Berlin DIY Sàrl 170 134 47 34
SEREIT Hamburg Sàrl 127 109 34 55
SEREIT Stuttgart Sàrl 112 89 31 22
SEREIT Frankfurt Sàrl 40 56 - 14
SCI SEREIT Directoire 231 182 62 46
SEREIT Apeldoorn Sàrl 78 70 21 17
SEREIT UV Sàrl 172 121 47 31
SEREIT Alkmaar Sàrl 60 54 19 13
SCI SEREIT Pleudihen 136 91 33 46
SCI SEREIT Nantes 39 29 11 15
SCI LC Invest 40 34 12 17
SEREIT Holdings Sàrl 18 18 5 5
Total 1,393 1,410 343 516
6. Provision of loan made to Seville joint venture
The Seville entity, which owned a shopping centre in Seville, was sold for
€1 on 30 January 2025. The Group previously owned 50% of the Metromar
entity through a joint venture and had advanced €10.0 million as a loan and
was owed interest of €2.5 million (30 September 2024: €2.4 million).
The loan carried a fixed interest rate of 4.37% per annum payable quarterly.
The loan had previously been fully impaired and was written off on the sale of
the Seville entity. No gain or loss has been recognised.
7. Auditor's remuneration and assurance fees
The Group's total audit fees for the year are €344,000 (2024: €347,000)
which includes the Group audit and the individual statutory audits. The
Company's total audit fees for the year were €301,000 (2024: €244,000)
which only covers the Group audit.
The interim review fee was €51,700 (2024: €52,100) which is an assurance
related non-audit service and is included in the total auditor's remuneration
for the year. The auditor did not perform any other non-audit services for the
Group during the year (2024: €Nil).
8. Dividends received
During the year the Group did not receive any dividends from its joint venture
operation Urban SEREIT Holdings Spain S.L. (2024: €Nil) (see note 16).
During the year the Company received dividends from its subsidiary
undertakings. €1,265,000 (2024: €722,000) was received from OPPCI SEREIT
France, €Nil (2024: €Nil) was received from SEREIT Holdings France and
€Nil (2024: €1,600,000) was received from SAS Clarity Development.
9. Other expenses
Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000
€'000
€'000
€'000
Directors' and officers' insurance premium 12 14 12 14
Bank charges 81 71 9 9
Regulatory costs 111 73 89 51
Marketing 46 83 46 83
Other expenses 449 299 240 261
699 540 396 418
Directors are the only officers of the Company and there are no other key
personnel. The Group has one employee; for further details see note 28. The
Directors' annual remuneration for services to the Group was €153,000
(2024: €215,000), as set out in the Directors' Remuneration Report in the
full Annual Report and Accounts. The total charge for Directors' fees was
€204,000 (2024: €239,000), which included employer's National Insurance
contributions. Other expenses include items such as domiciliation fees and
registrar fees.
10. Taxation
30/09/2025 30/09/2024
€'000
€'000
Current tax charge 1,340 1,017
Current tax adjustment in respect of prior periods 464 (182)
Deferred tax (credit)/charge 115 (62)
Tax expense/(credit) in year 1,919 773
Reconciliation of effective tax rate
Profit before taxation 4,148 1,348
Effect of:
Tax charge at weighted average corporation tax rate of 23.90% (2024: 23.40%) 1,166 468
Tax exempt income or non-deductible losses (224) 185
Tax adjustment on net revaluation loss 299 543
Capital gains tax 361 -
Minimum Luxembourg tax charges 38 84
Current year losses for which no deferred tax is recognised 61 -
Tax effect of property depreciation (396) (468)
Tax adjustment in respect of prior periods 464 (182)
Tax effect on disallowable expense 162 -
Other permanent differences (12) 143
Total tax expense in the year 1,919 773
The effective tax rate is a weighted average of the applicable tax rates in
the countries the Group has operations. As at 30 September 2025, the deferred
tax liability is €4,278,000 (2024: €4,163,000). A potential deferred tax
asset of €3,052,000 (2024: €1,741,000) arose on tax losses which has not
been provided for.
SEREIT plc has elected to be treated as a société d'investissement
immobilier cotée ('SIIC') for French tax purposes. Provided that SEREIT plc
meets certain requirements, the SIIC should be exempt from French CIT on net
rental income and gains arising from interests in property. Management intends
that the Group will continue to comply with the SIIC regulations for the
foreseeable future.
The Group operates in a number of jurisdictions and is subject to periodic
challenges by local tax authorities on a range of tax matters during the
normal course of business. The tax impact can be uncertain until a conclusion
is reached with the relevant tax authority. The Group addresses this
uncertainty by closely monitoring tax developments, seeking independent advice
and maintaining transparency with the authorities it deals with as and when
any enquiries are made.
The French tax authorities commenced a tax audit in previous years, requesting
information on tax filings made in relation to the Group's SIIC structure. The
potential exposure was estimated as €12.2 million excluding interest and
penalties (2024: €12.6 million). In September 2025, the French tax
authorities demanded this amount be paid or secured by a guarantee. Post year
end, the group arranged a bank guarantee in response to this demand, and on
10 November 2025 €12,143,735 was transferred to a pledged account with
Credit Agricole in accordance with the cash pledge agreement supporting that
guarantee. As a result, this cash is restricted until future reporting
periods. The Group maintains its position that the amount is not payable and
has formally appealed the decision. The appeal, submitted to the French Tax
Authority, is expected to be reviewed within six-months. If the claim is
dismissed, the Group would escalate the matter to a formal court process,
which could take up to two years to resolve. 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
accordingly no tax provision has been recognised. We will continue to provide
market updates as appropriate.
However, the position will remain uncertain until a conclusion is reached.
11. Earnings per share
Basic earnings per share
The basic earnings per share for the Group is calculated by dividing the net
profit after tax attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares in issue during the year.
30/09/2025 30/09/2024
Total comprehensive income for the year €2,229,000 €575,000
Weighted average number of ordinary shares in issue 132,082,196 133,734,686
Basic IFRS earnings per share (cents per share) 1.7 0.4
Diluted earnings per share
The Group has no dilutive potential ordinary shares and hence the diluted
earnings per share is the same as the basic earnings per share in both 2024
and 2025.
Headline earnings per share
The headline earnings and diluted headline earnings for the Group is 4.9 euro
cents per share (2024: 6.1 euro cents per share) as detailed in the full
Annual Report and Accounts.
12. Dividends paid
Interim dividends of €7,856,000 (2024: €7,917,000) were paid to the
shareholders of SEREIT plc during the year as follows:
In respect of Ordinary Rate 30/09/2025
shares
(cents)
€'000
Interim dividend paid on 1 November 2024 133,734,686 1.48 1,979
Interim dividend paid on 31 January 2025 133,734,686 1.48 1,979
Interim dividend paid on 15 May 2025 131,817,486 1.48 1,952
Interim dividend paid on 15 August 2025 131,509,386 1.48 1,946
Total interim dividends paid 7,856
In respect of Ordinary Rate 30/09/2024
shares
(cents)
€'000
Interim dividend paid on 17 November 2023 133,734,686 1.48 1,980
Interim dividend paid on 25 January 2024 133,734,686 1.48 1,979
Interim dividend paid on 10 May 2024 133,734,686 1.48 1,979
Interim dividend paid on 12 August 2024 133,734,686 1.48 1,979
Total interim dividends paid 7,917
13. Investment property
Group €'000
Fair value as at 1 October 2023 213,098
Acquisitions -
Acquisition costs -
Disposals -
Additions 1,164
Net loss from fair value adjustment on investment property (7,740)
Fair value as at 30 September 2024 206,522
Acquisitions -
Acquisition costs -
Additions 605
Disposals (11,600)
Net loss from fair value adjustment on investment property (3,013)
Fair value as at 30 September 2025 192,514
In 2024 and 2025, the Group held one leasehold property.
The value of the respective sectors held were as follows:
Sector 2025 2024
€'000
€'000
Industrial 81,520 77,921
Retail (including retail warehousing) 27,130 39,328
Offices 83,864 89,273
Total 192,514 206,522
The investment property in Frankfurt was sold on 30 April 2025 for
€11,800,000. The fair value of the investment property was €11,600,000
resulting in a loss on disposal after disposal costs of €27,425. The
proceeds from the sale were utilised to partially repay the loan balance with
Deutsche Pfandbriefbank AG and cure the loan covenants. See note 20 for
further details.
The fair value of investment properties, as determined by the valuer, totals
€194,040,000 (2024: €208,050,000) with the valuation amount relating to a
100% ownership share for all the assets in the portfolio.
None of this amount is attributable to trade or other receivables in
connection with lease incentives. The fair value of investment properties per
the consolidated financial statements of €192,514,000
(2024: €206,522,000) includes a tenant incentive adjustment of €1,526,000
(2024: €1,528,000).
The net valuation loss on investment property of (€3,013,000) (2024: loss
of €7,740,000) consists of net property revaluation losses of €3,011,000
(2024: losses of €7,239,000) and a movement of the above-mentioned tenant
incentive adjustment of €2,000 (2024: €501,000).
The fair value of investment property has been determined by Savills (UK)
Limited (2024: Knight Frank LLP), a firm of independent chartered surveyors,
who are registered independent appraisers. The valuation has been undertaken
in accordance with the RICS Valuation - Global Standards November 2021,
incorporating the International Valuations Standards, and RICS Professional
Standards UK, November 2018 (effective January 2019).
The properties have been valued on the basis of 'fair value' in accordance
with the RICS Valuation - Professional Standards VPS4(1.5) Fair Value and
VPGA1 Valuations for Inclusion in Financial Statements which adopt the
definition of fair value used by the International Accounting Standards Board.
The valuation has been undertaken using an appropriate valuation methodology
and the valuer's professional judgement. The valuer's opinion of fair value
was primarily derived using recent comparable market transactions on arm's
length terms, where available, and appropriate valuation techniques (The
Investment Method).
The properties have been valued individually and not as part of a portfolio.
The Group has incorporated Environmental, Social and Governance ('ESG')
objectives into its core investment strategy and at every stage of the
investment process. It has clearly defined its social and environmental
targets into distinct categories, for which each has clear and measurable
impact objectives. The valuers take into account environmental considerations
in their assessment of ERV, discount rate and capital expenditure assumptions
for each asset. Some examples include: Hamburg office (c.€0.6m provisioned)
for future rooftop terrace works, utility monitoring and management and tenant
wellbeing measures in order to continue to keep the asset relevant for
occupiers; Stuttgart (c.€0.5m); Paris Saint-Cloud (c.€2.3m) and Rumilly
(c.€0.6m) which includes fire sprinklers and replacement of gas boilers to
heat pumps relating to fire security enhancements and co-ownership works which
will improve ESG ratings in line with Tertiary Decree requirements.
A provision or contingent liability would only be recognised in the
consolidated financial statements if the ESG factors led to a constructive or
legal obligation for the Group. None of the above amounts have been provided
for in the 30 September 2025 annual accounts as there is no legal or
constructive obligation to perform these works at the reporting date.
The Group's total valuation fees for the year are €68,000
(2024: €73,000). During the year, the Group changed valuers resulting in
fees of €44,000 payable to Savills (UK) Limited and fees of €22,000
payable to Knight Frank LLP. The fees payable to Savills (UK) Limited and
Knight Frank LLP are less than 5% of its total revenue in any year.
All investment properties are categorised within Level 3 of the fair value
hierarchy, as they use significant unobservable inputs. There have not been
any transfers between levels during the year. Investment properties have been
classed according to their real estate sector. Information on these
significant unobservable inputs per class of investment property is disclosed
below:
Quantitative information about fair value measurement using unobservable
inputs (Level 3) as at 30 September 2025:
2025 Industrial Retail Office Total
(incl. retail
warehouse)
Fair value (€'000) 74,300 27,400 92,340 194,040
Area ('000 sqm) 89,991 16,800 58,736 165,527
Net passing rent € per sqm per annum Weighted average(1) 60.79 100.00 157.52 99.10
Gross ERV € per sqm per annum Weighted average(1) 63.36 101.24 146.81 96.81
Net initial yield(2) (%) Weighted average(1) 4.98 - 8.94 5.54 4.62 - 22.09 4.62 - 22.09
1 Weighted by market value.
2 Yields based on rents receivable after deduction of head rents
and non-recoverables.
2024 Industrial Retail Office Total
(incl. retail
warehouse)
Fair value (€'000) 77,950 39,500 90,600 208,050
Area ('000 sqm) 95.030 21.326 54.580 170.936
Net passing rent € per sqm per annum Range 33.23-118.05 56.85-108.12 120.65-163.59 33.23-163.59
Weighted average(1)
64.98
92.80
138.14
102.12
Gross ERV € per sqm per annum Range 44.00-115.36 101.58-163.33 79.93-233.70 44.00-233.70
Weighted average(1)
64.78
120.03
185.21
127.71
Net initial yield(2) (%) Range 5.43-9.61 1.99-5.94 4.39-19.94 1.99-19.94
Weighted average(1)
6.62
6.15
7.02
6.44
1 Weighted by market value.
2 Yields based on rents receivable after deduction of head rents
and non-recoverables.
Sensitivity of measurement to variations in the significant unobservable
inputs
The significant unobservable inputs used in the fair value measurement
(categorised within Level 3 of the fair value hierarchy) of the Group's
property portfolio, together with the impact of significant movements in these
inputs on the fair value measurement, are shown below:
Unobservable input Impact on fair value measurement Impact on fair value measurement
of significant increase in input
of significant decrease in input
Passing rent Increase Decrease
Gross ERV Increase Decrease
Net initial yield Decrease Increase
Equivalent yield Decrease Increase
There are interrelationships between the yields and rental values as they are
partially determined by market rate conditions. The sensitivity of the
valuation to changes in the most significant inputs per class of investment
property are shown below:
Estimated movement in fair value of investment properties at 30 September Industrial Retail Office Total
2025
€'000
€'000
€'000
€'000
Increase in ERV by 10% 5,840 1,700 7,200 14,740
Decrease in ERV by 10% (5,840) (1,800) (6,900) (14,540)
Increase in net initial yield by 0.5% (5,480) (2,270) (6,510) (14,260)
Decrease in net initial yield by 0.5% 6,460 2,260 7,720 16,940
Estimated movement in fair value of investment properties at 30 September Industrial Retail Office Total
2024
€'000
€'000
€'000
€'000
Increase in ERV by 10% 1,500 3,350 6,350 11,200
Decrease in ERV by 10% (1,500) (3,350) (6,300) (11,150)
Increase in net initial yield by 0.5% (2,300) (3,400) (6,750) (12,450)
Decrease in net initial yield by 0.5% 2,600 4,150 8,200 14,950
14. Recognition of development revenue and profit
During the financial year ended 30 September 2021, the Group transferred
legal title of its office asset in Boulogne-Billancourt, Paris, to a purchaser
under a forward-funded sale agreement. The arrangement comprised two
performance obligations: the sale of the asset and the completion of
refurbishment works on behalf of the purchaser over an initially planned
period of 18 months.
The development revenue is variable and recognised over time based on the
achievement of contractual milestones, the stage of completion and
consideration of associated development risks. The total development revenue
expected under the contract is €30.4 million (2023: €30.4 million).
During the year the Group incurred costs of €17,900 (2024: expense
€695,000), which cumulatively to date, represents 99.6% of the total project
expenditure and a sum of €231,000 (2024: €1.5 million) of development
revenue has been recognised following consideration of the factors identified
above. Total development revenue from this contract recognised since inception
is €29.8 million, which represents 98% of total development revenue. The
cash received in the year was €850,000. The remaining development revenue is
expected to be recognised in the year ending 30 September 2026. The lag
between development revenue and development cost represents the inherent
development risk that can be evident in such projects.
The total amount of the contract asset recognised by the Group that is due
from the purchaser thereby totalled €200,000 (2024: €1.3 million) at the
end of the financial year and is included in trade and other receivables.
The below sensitivity table presents the change in the total development
revenue expected from the purchaser if the variable consideration increases or
decreases by 10%. Note that the maximum amount of variable revenue remaining
that could be recognised is €600,000. This is also the expected amount of
revenue to be received, therefore no +10% analysis is performed.
2025 -10% 0% +10%
Variable development revenue expected from the purchaser (€m) 0.5 0.6 0.6
2024 -10% 0% +10%
Variable development revenue expected from the purchaser (€m) 0.7 0.8 0.8
15. Investment in subsidiaries
Company Company Company
2025
2024
€'000
€'000
Balance as at 1 October 69,921 69,921
Additions 25 50
Provision of investment made in subsidiaries - (50)
Balance as at 30 September 69,946 69,921
During the year to 30 September 2025, SEREIT plc invested €25,000 into
SEREIT (Jersey) Limited through an inter-company loan converted to equity.
SEREIT Finance Sàrl was dissolved on 15 September 2025.
The subsidiary companies listed below are those which were part of the Group
as at 30 September 2025. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Group and
the proportion of ownership of interests held equals the voting rights held by
the Group.
Undertaking Country of incorporation Group ownership Registered office address
SEREIT (Jersey) Limited Jersey 100% 22 Grenville Street, Jersey, JE4 8PX
SEREIT Holdings Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
OPPCI SEREIT France France 100% 153 Rue Saint Honoré, 75001 Paris
SCI SEREIT Rumilly France 100% 8-10 Rue Lamennais, 75008 Paris
SEREIT Berlin DIY Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT Hamburg Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT Stuttgart Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT Frankfurt Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SCI SEREIT Directoire France 100% 8-10 Rue Lamennais, 75008 Paris
SEREIT Apeldoorn Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT UV Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT Alkmaar Sàrl Luxembourg 100% 404, Route d'Esch, Luxembourg, 1471
SEREIT Holdings France SAS France 100% 8-10 Rue Lamennais, 75008 Paris
SCI SEREIT Pleudihen France 100% 8-10 Rue Lamennais, 75008 Paris
SAS Clarity Development France 100% 8-10 Rue Lamennais, 75008 Paris
SEREIT France Invest SAS France 100% 8-10 Rue Lamennais, 75008 Paris
SCI SEREIT Nantes France 100% 8-10 Rue Lamennais, 75008 Paris
SCI LC Invest France 100% 8-10 Rue Lamennais, 75008 Paris
16. Investment in joint venture
On 30 January 2025, the Group disposed of its 50% interest in Metromar
Retail, held through Urban SEREIT Holdings Spain S.L., for a consideration of
€1. Following this disposal, the Group no longer has any interest in the
joint venture as at 30 September 2025. Prior to the sale, the investment was
held at a carrying value of nil (2024: nil), as it had been fully impaired in
prior periods
As at 30 September 2025, the Group held no interest in the joint venture,
Urban SEREIT Holdings Spain S.L. This followed the sale of Urban SEREIT
Holding's interest in Metromar Retail, the entity owning a shopping centre in
Seville, for €1 on 30 January 2025. Concurrently, on 30 January 2025, the
Group divested its 50% holding in the Metromar joint venture. The joint
venture's primary business address was Calle Velázquez 3, 4th Madrid 28001,
Spain.
17. Trade and other receivables
Group Group Company Company
2025
2024
2025
2024
€'000
€'000
€'000
€'000
Rent and service charges receivable 4,740 5,091 - -
Amounts due from subsidiary undertakings - - 983 836
VAT receivable 421 322 14 11
Rental and security deposits 1,430 1,401 - -
Proceeds receivable from development(1) 213 1,338 - -
Withholding tax receivable 497 - - -
Other debtors and prepayments 3,576 1,874 768 62
10,877 10,026 1,765 909
1 Refer to note 14 for proceeds due from the development of
Boulogne-Billancourt in Paris.
Other debtors and prepayments includes tenant incentives of €1,526,000
(2024: €1,528,000). IFRS 9 requires an impairment review to be made for
certain financial assets including rent and service charge receivable, using a
forward-looking expected credit loss model. Rent and service charge
receivables includes a provision of €3,000 (2024: €51,000).
18. Cash and cash equivalents
Group Group Company Company
2025
2024
2025
2024
€'000 €'000 €'000 €'000
Cash at bank and in hand 26,524 27,362 12,070 18,165
Restricted cash 1,838 - - -
28,362 27,362 12,070 18,165
Restricted cash of €1,837,500 represents cash put on deposit to cure the LTV
covenant in line with the Deutsche Pfandfbriefbank AG bank loan agreement and
following the sale of the Group's Frankfurt asset. See note 20 for further
details.
Post year end, on 10 November 2025 €12,143,735 was transferred to a pledged
account with Credit Agricole in line with the cash pledge agreement as
requested by the French Tax Authority for the arrangement of the guarantee
related to the French tax audit.
19. Share capital and share premium
Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000
€'000
€'000
€'000
Ordinary share capital 17,966 17,966 17,966 17,966
Share premium 43,005 43,005 43,005 43,005
As at 30 September 2025, the share capital of the Company was represented by
131,407,986 ordinary shares (2024: 133,734,686 ordinary shares) with a par
value of 10.00 pence.
Issued share capital
As at 30 September 2025, the Company had 131,407,986 ordinary shares in issue
(2024: 133,734,686), after deducting 2,326,700 shared held in treasury.
Accordingly, the total number of voting rights at 30 September 2025 was
131,407,986 (2024: 133,734,686).
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
Treasury capital
As at 30 September 2025, the Company had 2,326,700 ordinary shares
(2024: nil) held in treasury.
20. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group's
interest-bearing loans and borrowings. For more information about the Group's
exposure to interest rate risk, see note 23.
Group Group Company Company
2025
2024
2025
2024
€'000
€'000
€'000
€'000
As at 1 October 70,471 73,623 - -
Drawdown of new loans - - - -
Repayment of loans (6,563) (3,000) - -
Capitalisation of finance costs - (322) - -
Amortisation of finance costs 111 170 - -
As at 30 September 64,019 70,471 - -
Borrowings are removed from the statement of financial position when the
obligation specified in the contract is discharged, cancelled or expired.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least
12 months after the reporting period.
Bank loan - ABN AMRO
The Group entered into a facility of €13.76 million with ABN AMRO during
the year ended 30 September 2023. The loan was fully drawn down on
28 September 2023 and matures on 27 September 2028.
It carries an interest rate of 5.3% which is payable quarterly. The debt has
an LTV covenant of 62.5%, with a cash trap of 55% which reduces by 1% each
year from 1 September 2024 and the debt to yield ratio should be above 12.5%.
The lender has a charge over property owned by the Group with a value of
€38.44 million. A pledge of all shares in the borrowing Group company is in
place.
Bank loan - BRED Banque Populaire
The Group entered into a loan facility totalling €13.0 million with BRED
Banque Populaire during the year ended 30 September 2018.
The total amount was fully drawn and was initially due to mature on
15 December 2024. The loan carries an interest rate which is the aggregate of
the applicable Euribor three-month rate and a margin of 1.30% per annum,
payable quarterly. The facility was subject to an arrangement fee of €70,000
which is being amortised over the period of the loan. The debt has an LTV
covenant of 60% and the interest cover ratio ('ICR') should be above 400%. The
Group has purchased an interest rate cap to have risk coverage on the
variation of the interest rate.
During the year ended 30 September 2020, the Group received a further
€4.0 million of debt into SCI Directoire under its existing loan facility
with BRED Banque Populaire. The additional loan amount carries an interest
rate of 1.45% and was subject to a €30,000 arrangement fee which will be
amortised over the period of the loan.
On 15 December 2023, the Group completed an early refinancing of the loan,
extending the term by three years from 15 December 2024 to 15 December 2027,
with an option of a further year. The principal of the loan was also reduced
by €3.0 million from €17.0 million to €14.0 million. Following the
refinancing, the loan now carries an interest rate which is the aggregate of
the applicable Euribor 3 months rate and a margin of 1.90% per annum, payable
quarterly. The lender has a charge over property owned by the Group with a
value of €35.6 million. A pledge of all shares in the borrowing Group
company is in place.
Bank loan - Deutsche Pfandbriefbank AG
The Group had two loan facilities totalling €30.50 million with Deutsche
Pfandbriefbank AG which were entered into during the year ended 30 September
2016.
One of the loan facilities totalling €14.0 million was repaid in March 2023
and carried a fixed interest rate of 0.85% per annum payable quarterly.
The remaining loan totalling €9.94 million matures on 30 June 2026 and
carries a fixed interest rate of 1.31% per annum. An additional fixed fee of
0.30% per annum was payable until certain conditions relating to the Frankfurt
property were fulfilled on 30 December 2016. The facility was subject to a
0.35% arrangement fee which is being amortised over the period of the loan.
The debt has a LTV covenant of 65% and the debt yield must be at least 8%.
On 29 April 2025, the Group repaid €6.6 million of the loan following the
disposal of the property in Frankfurt. To ensure continued compliance with the
WAULT and LTV covenants, €2.5 million was placed on deposit in agreement
with the lender. The WAULT covenant test was subsequently satisfied following
a lease regear, allowing €0.7 million to be released back to the Group on
1 October 2025. No covenant breach occurred during the year to 30 September
2025.
The lender has a charge over property owned by the Group with a value of
€27.4 million. A pledge of all shares in the borrowing Group companies is
in place.
Bank loan - Westerwald Bank eG
The Group entered into a facility of €18.0 million with Westerwald bank on
31 March 2023. The loan has been fully drawn and matures on 31 December
2027. It carries an interest rate of 3.8% which is payable quarterly.
The lender has a charge over property owned by the Group with a value of
€37.7 million.
Bank loan - Landesbank Saar
The Group entered into a loan facility of €8.6 million with Landesbank Saar
on 27 March 2019.
The loan was initially due to mature on 28 March 2024 and carried an interest
rate of 1.40% plus Euribor three-month per annum, payable quarterly. An
additional 25bps was applied to the margin if the LTV was between 56% and 60%,
or 50bps if the LTV was above 60%. The facility was subject to a €56,000
arrangement fee which was amortised over the period of the loan. The debt had
an LTV covenant of 64% and the interest cover was required to be above 220%. A
pledge of all shares in the borrowing Group company is in place.
On 26 March 2024, the Group refinanced the loan, the loan now matures on
26 March 2029 and attracts interest at a fixed rate of 4.3%. As a result of
the refinancing, the covenants were amended. An additional 25bps is now
applied to the interest rate if the LTV is between 50% and 53%, or 50bps if
the LTV is between 53% and 55%. The debt now has an LTV covenant of 55% and
the interest cover should be above 200%.
21. Trade and other payables
Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000 €'000 €'000 €'000
Rent received in advance 1,530 1,001 - -
Rental deposits 1,439 1,411 - -
Interest payable 394 486 - -
Retention payable - - - -
Amounts due to subsidiary undertakings - - 180 58
Accruals 2,311 1,699 924 424
Trade payables 166 358 51 47
5,840 4,955 1,155 529
All trade and other payables are interest free and payable within one year.
Included within the Group's accruals are amounts relating to management fees
of €579,000 (2024: €140,000) and property expenses of €172,000
(2024: €626,000).
22. Net asset value per ordinary share and share buyback
Between the 20 January 2025 to 30 September 2025, the Company repurchased
2,326,700 shares for a sum of £1,527,485 (€1,814,942) million at an
average price of 0.66 pence per share. As a result of the buyback, the number
of ordinary shares in issue reduced from 133,734,686 to 131,407,986 during the
reporting period.
The NAV per ordinary share of 119.2 euro cents per share (2024: 122.7 euro
cents per share) is based on the net assets attributable to ordinary
shareholders of the Group of €156,655,000 (2024: €164,097,000), and
131,407,986 ordinary shares in issue at 30 September 2025 (2024: 133,734,686
ordinary shares).
23. Financial instruments, properties and associated risks
Financial risk factors
The Group holds cash and liquid resources as well as having debtors and
creditors that arise directly from its operations. The Group uses interest
rate caps when required to limit exposure to interest rate risks, but does not
have any other derivative instruments. The financial risk profile of the Group
has been heightened, in part due to ongoing geopolitical developments,
together with macroeconomic uncertainty.
The main risks arising from the Group's financial instruments and properties
are market price risk, currency risk, credit risk, liquidity risk and interest
rate risk. The Board regularly reviews and agrees policies for managing each
of these risks and these are summarised below:
Market price risk
Rental income and the market value for properties are generally affected by
overall conditions in the economy, such as changes in gross domestic product,
employment trends, inflation and changes in interest rates. Changes in gross
domestic product may also impact employment levels, which in turn may impact
the demand for premises. Furthermore, movements in interest rates may also
affect the cost of financing for real estate companies.
The Group's investments comprise of continental European commercial property.
Property and property-related assets are inherently difficult to value due to
the individual nature of each property. As a result, valuations are subject to
substantial uncertainty. There is no assurance that the estimates resulting
from the valuation process will reflect the actual sale's price even where
such sales occur shortly after the valuation date.
Both rental income and property values may also be affected by other factors
specific to the real estate market, such as competition from other property
owners; the perceptions of prospective tenants of the attractiveness,
convenience and safety of properties; the inability to collect rents because
of bankruptcy or the insolvency of tenants; the periodic need to renovate,
repair and re-lease space and the costs thereof; the costs of maintenance and
insurance, and increased operating costs.
The Board monitors the market value of investment properties by having
independent valuations carried out quarterly by a firm of independent
chartered surveyors. See note 13.
At the date of signing this report, the conflict in Ukraine continues to have
societal and economic impact. The Group does not have a material direct
exposure to Russia or Ukraine, but continues to monitor the
situation closely.
Currency risk
The Group's policy is for Group entities to settle liabilities denominated in
their functional currency with the cash generated from their own operations in
that currency. Where Group entities have liabilities in a currency other than
their functional currency (and have insufficient reserves of that currency to
settle them), cash already in that currency will, where possible, be
transferred from elsewhere within the Group. The functional currency of all
entities in the Group is the euro. Currency risk sensitivity has not been
shown due to the small values of non-euro transactions. The table below
details the Group's exposure to foreign currencies at the year end:
Net assets Group Group Company Company
30/09/2025
30/09/2024
30/09/2025
30/09/2024
€'000
€'000
€'000
€'000
Euros 156,488 163,912 135,407 143,788
Sterling 78 28 78 28
Rand 89 157 89 157
156,655 164,097 135,574 143,973
Interest rate risk
Exposure to market risk for changes in interest rates relates primarily to the
Group's long-term debt obligations and to interest earned on cash balances. As
interest on the Group's long-term debt obligations is payable on a fixed-rate
basis, or is capped, the Group has limited exposure to downside interest rate
risk, but is exposed to changes in fair value of long-term debt obligations
such as derivatives which are driven by interest rate movements. As at
30 September 2025, the total carrying value of the Group's loans was
€64.3 million (2024: €70.9 million). Although held at carrying value in
the financial statements, the Group has its fixed-rate debt fair valued, and
as at 30 September 2025, the fair value of the Group's fixed rate debt was
€51.58 million (2024: €56.51 million). The carrying value for the
fixed-rate debt was €50.30 million (2024: €56.86 million). The Group
does not fair value variable rate debt. The carrying value of the variable
rate debt, which is €14.0 million (2024: €14.0 million), is deemed to
approximate the fair value. A 1% increase or decrease in short-term interest
rates would decrease or increase the annual income and equity by
€0.1 million (2024: €0.1 million) based on the net of cash and variable
debt balances as at 30 September 2025. 1% has been chosen as the sensitivity
rate to demonstrate the linear relationship to interest rate changes.
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet a commitment that it has entered into with the Group. In the
event of default by an occupational tenant, the Group will suffer a rental
income shortfall and incur additional costs, including legal expenses, in
maintaining, insuring and re-letting the property.
On initial recognition the Group calculates the expected credit loss for rent
and service charge receivables based on the lifetime expected credit losses
under the IFRS 9 simplified approach.
The Investment Manager reviews reports prepared by Dun & Bradstreet or
other sources, to assess the credit quality of the Group's tenants and aims to
ensure there is no excessive concentration of risk and that the impact of any
default by a tenant is minimised.
In respect of credit risk arising from other financial assets, which comprises
of cash and cash equivalents, exposure to credit risk arises from default of
the counterparty with a maximum exposure equal to the carrying amounts of
these instruments. In order to mitigate such risks, cash is maintained with
major international financial institutions with high-quality credit ratings.
The table below shows the balance of cash and cash equivalents held with
various financial institutions at the end of the reporting year.
Bank Ratings as at Group balance Company
30/09/2025
at 30/09/2025
balance at
€'000
30/09/2025
€'000
HSBC Bank plc AA- 479 404
ING Bank N.V. AA- 6,827 -
BNP Paribas A+ 596 -
BRED Banque Populaire A+ 817 -
Santander A+ 159 0
Societe Generale SA A- 3,638 300
Commerzbank AG A 1,570 -
FirstRand Bank Limited BB- 89 89
Royal Bank of Scotland International AA- 11,277 11,277
ABN AMRO Bank A 1,072 -
Deutsche Pfandfbriefbank - restricted cash due to LTV reserve A- 1,838 -
28,362 12,070
Bank Ratings as at Group balance Company
30/09/2024
at 30/09/2024
balance at
€'000
30/09/2024
€'000
HSBC Bank plc AA- 5,907 5,707
ING Bank N.V. AA- 2,876 -
BNP Paribas A+ 883 -
BRED Banque Populaire A 278 -
Santander A- 529 496
Societe Generale SA A- 4,594 1,935
Commerzbank AG A 1,466 -
FirstRand Bank Limited BB- 157 157
Royal Bank of Scotland International A 9,870 9,870
ABN AMRO Bank A 802 -
27,362 18,165
The maximum exposure to credit risk for rent and service charge receivables at
the reporting date by type of sector was:
30/09/2025 30/09/2024
Carrying
Carrying
amount
amount
€'000
€'000
Office 4,022 4,157
Retail (including retail warehousing) 10 239
Industrial 708 695
4,740 5,091
Rent and service charges receivables which are past their due date, but which
were not impaired at the reporting date, were:
30/09/2025 30/09/2024
Carrying
Carrying
amount
amount
€'000
€'000
0-30 days 741 276
31-60 days 211 61
61-90 days 4 2
91 days plus 176 346
1,132 685
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in
meeting its financial obligations.
Investments in property are relatively illiquid. However, the Group has tried
to mitigate this risk by investing in properties that it considers to be good
quality.
In certain circumstances, the terms of the Group's debt facilities entitle the
lender to require early repayment and in such circumstances the Group's
ability to maintain dividend levels and the net asset value could be adversely
affected. There is an additional liquidity risk at this year end, as the loan
secured on the Berlin property is due to mature in June 2026, and the Group is
actively progressing refinancing options to mitigate this. The Group continues
to monitor refinancing requirements closely and engages with lenders well in
advance of facility maturities to manage upcoming obligations. The Investment
Manager prepares cash flows on a rolling basis to ensure the Group can meet
future liabilities as and when they fall due.
The following table indicates the undiscounted maturity analysis of the
financial liabilities.
As at 30 September 2025 Carrying Expected 6 months 6 months 2-5 years More than
amount
cash flows
or less
to 2 years
€'000
5 years
€'000
€'000
€'000
€'000
€'000
Financial liabilities
Interest-bearing loans and
borrowings and interest 64,297 70,644 1,231 13,483 55,930 -
Trade and other payables 5,840 4,839 4,839 - - -
Total financial liabilities 70,137 75,483 6,070 13,483 55,930 -
As at 30 September 2024 Carrying Expected 6 months 6 months 2-5 years More than
amount
cash flows
or less
to 2 years
€'000
5 years
€'000
€'000
€'000
€'000
€'000
Financial liabilities
Interest-bearing loans and borrowings and interest 70,860 80,368 1,358 20,536 58,474 -
Trade and other payables 4,955 3,954 3,954 - - -
Total financial liabilities 75,815 84,322 5,312 20,536 58,474 -
Fair values
The fair values of financial assets and liabilities approximate their carrying
values in the financial statements.
The fair value hierarchy levels are as follows:
- Level 1 - quoted prices (unadjusted) in active markets for
identical assets and liabilities;
- Level 2 - inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 - inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
There have been no transfers between Levels 1, 2 and 3 during the year
(2024: none).
The following summarises the main methods and assumptions used in estimating
the fair values of financial instruments and investment property (which is a
non-financial asset).
Investment property - Level 3
Fair value is based on valuations provided by an independent firm of chartered
surveyors and registered appraisers. These values were determined after having
taken into consideration recent market transactions for similar properties in
similar locations to the investment properties held by the Group. The fair
value hierarchy of investment property is Level 3. See note 13 for further
details.
Interest-bearing loans and borrowings - Level 2
Fair values are based on the present value of future cash flows discounted at
a market rate of interest. Issue costs are amortised over the period of the
borrowings.
Trade and other receivables/payables
All receivables and payables are deemed to be due within one year and as such
the carrying value approximates the fair value.
Derivatives - Level 2
Fair values of derivatives are based on current market conditions such as the
current EURIBOR rate compared to the terms of the derivative agreements.
Capital management
The Board's policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence, and to sustain future development of
the business. The objective is to ensure that it will continue as a going
concern and to maximise return to its equity shareholders through an
appropriate level of gearing.
The Group's debt and capital structure comprises the following:
30/09/2025 30/09/2024
€'000
€'000
Debt
Loan facilities and accrued interest 64,692 70,806
Equity
Called-up share capital and share premium 60,971 60,971
Retained earnings and other reserves 95,684 103,126
Total equity 156,655 164,097
Total debt and equity 221,347 234,903
There were no changes in the Group's approach to capital management during the
year.
The Company's capital structure is comprised of equity only.
24. Operating leases
The Group leases out its investment property under operating leases. At
30 September 2025, the future minimum lease receipts under non-cancellable
leases are as follows:
The Group as a lessor 30/09/2025 30/09/2024
€'000
€'000
Less than one year 14,074 16,023
Between one and two years 11,146 12,675
Between two and three years 9,590 8,610
Between three and four years 8,350 6,445
Between four and five years 7,031 5,061
More than five years 27,477 14,463
77,668 63,277
The total above comprises the total contracted rent as at 30 September 2025.
25. Related party transactions
Material agreements are disclosed in note 5 and Directors' emoluments are
disclosed in note 9. Loans to related parties are disclosed in the
consolidated and company statements of financial position and other amounts
due from related parties are disclosed in note 17.
Details of dividends received from the joint venture are disclosed in
note 16.
Interest receivable from the joint venture was impaired during the year; refer
to note 6 for further details.
26. Contingent liability
There are no contingent liabilities other than those disclosed in note 10.
27. Capital commitments
At 30 September 2025 the Group has only de minimus remaining costs to be
incurred in relation to Paris BB.
28. Employees
The Group has one employee who is appointed by the French branch of the
Company. The total charge for the employee during the year was €23,000
(2024: €22,000).
29. Post balance sheet events
There were no significant events occurring after the balance sheet date other
than those disclosed in note 18.
Status of results announcement
2025 Financial Information
The figures and financial information for 2025 are extracted from the Annual
Report and Accounts for the year ended 30 September 2025 and do not constitute
the statutory accounts for that year. The Annual Report and Accounts include
the Report of the Independent Auditors which is unqualified and does not
contain a statement under either section 498(2) or section 498(3) of the
Companies Act 2006. The Annual Report and Accounts will be delivered to the
Registrar of Companies in due course.
2024 Financial Information
The figures and financial information for 2024 are extracted from the
published Annual Report and Accounts for the year ended 30 September 2024 and
do not constitute the statutory accounts for the year. The Annual Report and
Accounts have been delivered to the Registrar of Companies and included the
Report of the Independent Auditors which was unqualified and did not contain a
statement under either section 498(2) or section 498(3) of the Companies Act
2006.
Neither the contents of the Company's web pages nor the contents of any
website accessible from hyperlinks on the Company's web pages (or any other
website) is incorporated into, or forms part of, this announcement.
5 December 2025
For further information:
Natalia de Sousa
Schroder Investment Management Limited
E-mail: AMCompanySecretary@Schroders.com
(mailto:AMCompanySecretary@Schroders.com)
Issued by Schroder Investment Management Limited. Registration No 1893220
England.
Authorised and regulated by the Financial Conduct Authority. For regular
updates by e-mail please register online at www.schroders.com
(https://www.schroders.com/en/global/individual/) for our alerting service.
ENDS
A copy of the 2025 Annual Report will shortly be submitted to the FCA's
National Storage Mechanism and will be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
The 2025 Annual Report will shortly be available on the Company's web pages at
www.schroders.co.uk/sereit (http://www.schroders.co.uk/sereit) where
up-to-date information on the Company, including daily NAV and share prices,
factsheets and portfolio in formation can also be found.
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. END FR USAARVAUURUA
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