Schroder grows value in tough market


Schroder grows value in tough market

Published Date: 2021-01-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Schroder grows value in tough market

The real estate investment trust has benefitted from new leases while investing in its landmark Paris property.

Schroder European Real Estate Investment Trust says the value of its portfolio has increased after it signed new leases and the rental value of its properties improved. Rental collections have also continued to improve.

In a first-quarter update, the European property owner said approximately 89% of rent due for three months to end-December had been collected, ahead of the 87% it collected in the previous two quarters. At the end of December, its property portfolio was independently valued at €276.1 million, an increase of 2.8% on the 30 September valuation of €268.6 million. Net of the €4.6 million capital expenditure invested in the refurbishment of its Boulogne Billancourt property in Paris, the valuation increase was 1.4%.

Schroder's portfolio includes 13 properties across Europe that it has identified as growth regions, including Paris, Berlin, Frankfurt, Hamburg and Stuttgart. Its portfolio includes 95 tenants across a range of industries, with about three quarters in the office, industrial and data centre sectors. Retail makes up the other quarter of its portfolio, with 15% invested in a Lidl supermarket in Frankfurt and a Hornbach DIY unit in Frankfurt. The Metromar Centre in Seville is the only shopping centre in its portfolio, representing 8% of the portfolio value.

Excluding the Boulogne-Billancourt capital investment, Schroder said the like-for-like valuation increase during the quarter was driven by a number of asset management initiatives which included two new lease agreements, for five and six years respectively, for a further floor and part floor at its Hamburg office investment; yield compression; and ERV (estimated rental value) growth across a number of the industrial assets in the portfolio. The value of its 50% interest in the Seville shopping centre declined marginally by €50,000 or 0.2%. It said the opening of the recently expanded and refurbished Mercadona supermarket had assisted in limiting the decline. The centre is the only asset in the portfolio where the valuers continue to adopt a material uncertainty clause.

Schroder said it remained prudently geared with a loan to value, net of cash, of about 25% at the end of December and no debt maturity before 2023.

The company's shares rose 0.7% to R21.99 in light trade yesterday.

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