Schroder trims dividend as a safeguard

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Schroder trims dividend as a safeguard

Published Date: 2020-06-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Schroder trims dividend as a safeguard

The real estate investment trust says by retaining additional cash it will be better positioned to withstand the impact of Covid-19 on its portfolio.

Schroder European Real Estate Investment Trust (SEREIT) says the impacts of Covid-19 have yet to fully play out, including how badly the global economy will be affected and how quickly it recovers. As a result, its playing it safe by reducing its second interim dividend to half the targeted level. By retaining additional cash, it says it will be in a better position to withstand the impact of the pandemic on its portfolio.

The real estate investment trust says its properties have stood up well in the face of Covid-19 thanks to its tenant and sector diversity. This had resulted in favourable rent collection rates and valuation resilience. While it appeared that the easing of lockdown conditions in its key markets was having an impact on its tenants' operations, it said it was staying alert for now.

Schroder's €247 million portfolio includes 13 properties across Europe that it has identified as growth regions, including Paris, Berlin, Frankfurt, Hamburg and Stuttgart. Its portfolio includes around 100 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 10% of the portfolio value.

The group reported a 53% increase in IFRS profit to €4.9 million for the six months to end-March while headline earnings per share (EPS) rose 54% to 3.7 euro cents. Headline EPS fell 20% to 3.2c and dividends per share decreased by 25% to 2.8c after it reduced its second interim dividend to 0.925 euro cents due to the ongoing market uncertainty. Its net asset value per share remained steady from September's level at 136.2c.

Schroder said it collected more than 80% of rent due to it over the three months to end-June.

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