REG - Schroder Real Estate - Final Results

Schroder Real Estate Investment TrustAnnouncement

11/06/2025 07:00

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RNS Number : 3142M  Schroder Real Estate Inv Trst Ld  11 June 2025

Schroder Real Estate Investment Trust Limited

 

('SREIT' / the 'Company' / 'Group')

 

RESULTS FOR THE YEAR ENDED 31 MARCH 2025

 

 11% NAV TOTAL RETURN UNDERPINNED BY EARNINGS GROWTH, SECTOR LEADING DEBT
PROFILE, ALIGNMENT WITH HIGHER GROWTH SECTORS, AND ACTIVE ASSET MANAGEMENT

 

Schroder Real Estate Investment Trust Limited, the actively managed REIT
focused on improving the sustainability performance of buildings to generate
higher income and capital growth, today announces its results for the year
ended 31 March 2025. The Company's Annual Report & Consolidated Financial
Statements will also shortly be uploaded to the National Storage Mechanism,
and will be available on the Company's website, www.srei.co.uk
(http://www.srei.co.uk) and can be viewed as a PDF at the following link:
 schro.link/srei2025results (https://schro.link/srei2025results) .

 

Low cost, long term debt and active management drives earnings growth, a fully
covered dividend, and 11.0% NAV total return

 

 * Net asset value ('NAV') increased by 4.8% to £301.4 million, or 61.6 pence
per share ('pps') (31 March 2024: £287.4 million, or 58.8 pps)

 * 4% increase in dividends paid during the financial year to £17.0 million, or
3.48 pps (31 March 2024: £16.4 million, or 3.34 pps), 100% covered by EPRA
earnings

 * NAV total return of 11.0% (31 March 2024: 1.1%), reflecting the Company's
strongest annual performance since 2022

 * IFRS profit of £31.1 million (31 March 2024: £3.1 million), reflecting
positive portfolio revaluation movement

 * Long debt maturity profile of 8.5 years and a low average interest cost of
3.5%, with 88% either fixed or hedged against movements in interest rates

 * Loan to value, net of all cash, of 36.9% (31 March 2024: 37.1%), with ongoing
non-core disposal programme to reduce to within 25-35% target range

 * Best in class governance, with 50% of the Manager's fee linked to market
capitalisation (capped at NAV), and the balance linked to NAV, effective 1
October 2025

 

Sustainability-led active asset management, operational expertise and
increased exposure to higher growth sectors delivers strong underlying
property performance and continued long term outperformance against the MSCI
Benchmark

 

 * 63% of the portfolio value comprising multi-let industrial estates and retail
warehousing, with more than 300 tenants providing a granular and diversified
occupier base

 * Attractive underlying portfolio yield profile, with a net initial yield of
5.6% (MSCI Benchmark: 5.1%) and a reversionary yield of 8.4% (MSCI Benchmark:
6.2%):

o  Fixed income uplifts of £4.1 million expected over the next 12 months

 * ERV growth of 4.2% (MSCI Benchmark: 3.6%)

 * 76 new lettings, rent reviews and renewals across 870,000 sq ft completed
since 1 April 2024, totaling £8.0 million of annualised rent:

o  Rent reviews and renewals agreed 26% and 14% higher than previous levels

 * Portfolio total return for the financial year of 9.1% (MSCI Benchmark: 6.2%),
supported by a high income return of 5.6% (MSCI Benchmark: 4.8%)

 

Progressing sustainability strategy extracting green premium to help drive
earnings growth

 

 * Further progress delivering on the Company's sustainability and Net Zero
Carbon ('NZC') commitments, with asset management initiatives delivering
strong rental growth as the green premium is extracted

 * 15 asset-level NZC or sustainability audits completed, identifying asset
management opportunities

 * 5% annual reduction in both landlord operational energy consumption and
associated scope 1 and 2 greenhouse gas emissions on a like-for-like basis

 * Maintained the Company's Global Real Estate Sustainability Benchmark ('GRESB')
score of 79 out of 100, achieved against the backdrop of a more demanding,
industry wide, assessment approach

 

Alastair Hughes, Chair of the Board, commented:

 

"Although investment and occupational market activity has understandably
slowed in response to the recent macro-economic and geopolitical headwinds,
the yield premium offered by the real estate sector should still nonetheless
support a sustainable recovery over 2025 and 2026.

 

"Our clear and differentiated investment strategy has delivered share price
and MSCI Benchmark outperformance, and a good level of income, over the course
of the year, as well as four consecutive quarters of portfolio valuation
growth, demonstrating the resilience of the underlying portfolio. It is
encouraging that, in many cases, this is being driven by refurbishment and
redevelopment initiatives to improve asset sustainability performance, which
is enabling us to extract the 'green premium' and deliver on our net zero
carbon commitments."

 

Nick Montgomery, Fund Manager, added:

 

"As the UK real estate market continues its recovery, the portfolio's
increasing alignment to higher growth sectors and active strategy has enabled
us to deliver an increase in the fully covered dividend and our strongest
total return performance since 2022. Our focus over the remainder of 2025 is
to maintain the positive momentum of recent months. Continuing to deliver
sustainable earnings growth by executing on our sizeable asset management
programme and crystalising the portfolio's attractive and peer-leading
reversionary potential should support a further rerating of the shares."

 

A webcast presentation for analysts and investors will be hosted today at 9.00
am BST. To register, please visit:

 

https://www.schroders.events/SREI25 (https://www.schroders.events/SREI25)

 

For further information:

 

 Schroder Real Estate Investment Management Limited          020 7658 6000

 Nick Montgomery / Bradley Biggins
 Schroder Investment Management Limited (Company Secretary)  020 7658 6000

 Matthew Riley
 FTI Consulting                                              020 3727 1000

 Dido Laurimore / Richard Gotla / Oliver Parsons

 

 

 

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