RCS - Schroder Real Estate - Results analysis from Kepler Trust Intelligence

Schroder Real Estate Investment TrustAnnouncement

11/06/2025 16:30

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RNS Number : 4592M  Schroder Real Estate Inv Trst Ld  11 June 2025

Schroder Real Estate (SREI)

11/05/2025

Results analysis from Kepler Trust Intelligence

Schroder Real Estate's (SREI) final results to 31/03/2025 show a NAV total
return of 11.0% for the year, comprising a 4.8% increase in NAV per share and
a 3.5p dividend (2024: 3.34p +4%). The dividend was 100% covered by earnings
and at the current share price SREI's dividend yield is 6.6%.

SREI's underlying property portfolio gave a total return of 9.1%, a
continuation of the long-term outperformance of the benchmark MSCI UK Balanced
Portfolios Quarterly Property Index, which saw a total return of 6.2%.

Performance was driven by a mixture of sector weightings compared to the
benchmark, with SREI's overweight positions in retail warehouse and industrial
sectors, detailed below, and active management, with capital expenditure on
targeted assets and leasing up on SREI's flagship net zero industrial asset at
Stanley Green all contributing to the outperformance.

SREI has always had a focus on high-yielding assets and this means that SREI's
net initial yield, 5.6%, is still at approximately a 100bp premium to UK
10-year gilts, and the dividend yield, 6.6%, over 200bps. On the basis of a
snapshot today this is about right for property, but of course SREI isn't a
static portfolio and one of the most striking numbers is SREI's reversionary
yield, 8.4%, compared to the benchmark's 6.2%. The potential for the manager
to grow income is therefore very strong. While SREI's current 14% discount is
obviously much narrower than it has been, the forward looking potential for
the NAV and income to grow is high, and thus SREI remains, in our view,
undervalued.

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