REG - Schroder Real Estate - Interim results for the period ended 30 Sept 2024

Schroder Real Estate Investment TrustAnnouncement

26/11/2024 07:00

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RNS Number : 5906N  Schroder Real Estate Inv Trst Ld  26 November 2024

Schroder Real Estate Investment Trust Limited

 

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

 

RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

 

SECTOR LEADING DEBT PROFILE AND ASSET MANAGEMENT SUPPORTING FULLY COVERED AND
GROWING DIVIDEND AND POSITIVE PORTFOLIO CAPITAL GROWTH

 

Schroder Real Estate Investment Trust Limited, the actively managed REIT
focused on improving the sustainability performance of buildings to generate
higher income, today announces its interim results for the six months ended 30
September 2024. These are also available on the Company's
website, https://www.srei.co.uk (https://www.srei.co.uk/) and are available
in unedited full text on the national storage mechanism. The interim results
are also available as a PDF at the following link:
 https://schro.link/sreitinterim24 (https://schro.link/sreitinterim24) .

 

High income return and sector leading debt profile underpins earnings growth,
a fully covered and growing dividend, and a 4.0% NAV total return

 

-     Net asset value ('NAV') increased by 1.0% to £290.7 million or 59.4
pps (31 March 2024: £287.4 million, or 58.8 pps), driven by ERV growth of
1.7%, with yields stabilising

-     Dividends paid in the period totalling £8.3 million, or 1.71
pps (30 September 2023: £8.2 million, or 1.67 pps), 102% covered by EPRA
earnings

-     Positive NAV total return of 4.0% (30 September 2023: 1.1%)

-     Long debt maturity profile of 9.1 years and a low average interest
cost of 3.5%, with 89% of debt either fixed or hedged against movements in
interest rates

-     Further 3% increase in the quarterly dividend to 0.879 pps for the
quarter ended 30 September 2024, to be paid in December 2024

 

Active management and increased allocation to higher growth sectors delivering
continued rental growth and sustained long term outperformance against the
MSCI Benchmark

 

-     Long-term outperformance of the underlying portfolio recognised in
the 'MSCI UK and European Property Investment Awards 2023', winning the
'Highest 10-year risk adjusted relative return' for all UK and Continental
European funds, with a total return of 8.45% per annum to 31 December 2023

-     Attractive underlying portfolio yield profile, with a net initial
yield of 6.1% (MSCI Benchmark: 5.1%) and a reversionary yield of 8.5% (MSCI
Benchmark: 6.1%) (31 March 2024: 8.4%)

-     Like-for-like and net of capex the portfolio valuation increased by
0.9% to £465.5 million (31 March 2024: £459.3 million)

-     45 new lettings, rent reviews and renewals across 476,000 sq. ft
completed since the start of the period, totalling £4.8 million in annualised
rental income

-     Six-month total return from the underlying portfolio of 3.8% (MSCI
Benchmark: 2.6%), largely driven by a higher income return of 2.9% (MSCI
Benchmark: 2.4%)

-     Post period end, completed £1.475 million disposal of non-core
office asset in Bedford, 23% ahead of 30 September 2024 book value

 

Progressed sustainability strategy, which underpins our active management

 

-     Further progress delivering on the Company's sustainability and Net
Zero Carbon ('NZC') commitments, with four asset-level NZC audits completed

-     Retained Gold award for reporting under the EPRA Sustainability Best
Practice Recommendations, for the seventh year running

-     Maintained the Company's Global Real Estate Sustainability Benchmark
('GRESB') score of 79 out of 100, placing second amongst a peer group
comprising seven UK diversified listed REITs (2023: first of six)

 

Alastair Hughes, Chair of the Board, commented:

 

"We have witnessed some yield compression for the first time since June 2022
and, perhaps more importantly, tenant demand outstripping available supply in
several sectors driving rental growth and overall returns. This favourable
momentum combined with our quality portfolio, strategic asset management, cost
discipline and our low cost of debt should provide the opportunity for
sustained and growing income."

 

Nick Montgomery, Fund Manager, added:

 

"This has been another period of positive financial and operational
performance, which has enabled us to again increase the dividend, rewarding
shareholders for their continued support. Our programme of sustainability-led,
value enhancing investments into the existing portfolio has delivered earnings
growth and underpinned our highest six-month portfolio total return
performance since June 2022, with a significant near-term rent reversion to
capture that should maintain this trajectory."

 

A live webcast presentation for analysts and investors will be hosted today at
8.30am GMT. In order to register, please visit:

 

https://www.schroders.events/SREITHY24
(https://www.schroders.events/SREITHY24)

 

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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