Schroder’s positioning pays off


Schroder’s positioning pays off

Published Date: 2018-12-04 | Source: Stephen Gunnion | Author: Stephen Gunnion

Schroder’s positioning pays off

The real estate investment trust has sold off lower-yielding properties and bought high-growth industrial assets.

Schroder European Retail Estate Investment Trust (REIT) has continued to position its portfolio in high growth industrial assets, selling lower-yielding retail properties. The European property investor says 100% of its 12 institutional grade properties are now located in the fastest growth cities and regions of continental Europe, which are expected to benefit from positive economic growth.

It says the case for continental European real estate remains compelling, particularly for cities that are attractive places to live, work and visit, have diverse economies and are benefitting from infrastructure investment.

Over the year to end-September, Schroder acquired five properties in high growth sectors and cities, deploying €52 million at an average net income yield of 8%. These include three warehouses in the Netherlands, one in France and a long leased Data Centre in the Netherlands. It sold two French retail properties totalling €44.8 million at an average net income yield of 5%. It said the selling price was a €4.9 million premium to the purchase price.

Its portfolio is now worth €222 million, reflecting an uplift of about 8.1% on the purchase price. It still has €15 million to invest and says it has identified a range of potential investment opportunities in its target sectors that would be accretive to earnings.

Profit increased by 28% to €13.2 million for the year and it delivered a NAV total return of 7.5%. It's paid a dividend of 1.85c for the three months to end-September, taking its total dividend for the year to 7.4c per share, up 42% from last year.

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