Schroders earmarks €60m for European acquisitions
Schroders’ European real estate trust is gearing up for post-pandemic acquisitions.
Jeff O’Dwyer, fund manager for Schroder European Real Estate Investment Trust, said the London-listed REIT has €60m (£51m) looking for a home in new deals.
“We expect to see more deal flow as we come out of the pandemic and as banks possibly look to non-performing loans and try to move some assets on,” O’Dwyer said. “They have been reluctant to create any distress so far, so we think we might see some more of that. And we could see some owner-occupiers who want to free up some capital, so may see more product through that as well.”
Schroders’ European real estate trust is gearing up for post-pandemic acquisitions.
Jeff O’Dwyer, fund manager for Schroder European Real Estate Investment Trust, said the London-listed REIT has €60m (£51m) looking for a home in new deals.
“We expect to see more deal flow as we come out of the pandemic and as banks possibly look to non-performing loans and try to move some assets on,” O’Dwyer said. “They have been reluctant to create any distress so far, so we think we might see some more of that. And we could see some owner-occupiers who want to free up some capital, so may see more product through that as well.”
Some of that firepower has come from the REIT’s sale of an office block in the Boulogne-Billancourt district of Paris to AEW, struck last October for €104m.
The profit from that deal has also allowed the REIT to declare two special dividends of 4.75 cents each over the next 12 months, in addition to reinstating a pre-Covid dividend of 1.85 cents per share.
New deals are likely to be in France and Germany and in alternatives or logistics. Last month the REIT exchanged contracts to buy a freehold logistics property in Nantes, western France, for €6.15m.
Disposals are also on the cards. The REIT has written down the value of its 50% exposure to a shopping centre in Seville to nil, a move that pushed net asset value for the six months to 31 March down to €197.1m, a drop of €4.6m over the half-year. That asset is now likely to be offloaded, O’Dwyer said.
“That centre needs a bit more capital and we are working with the bank to say there is probably another investor in a better position to invest in that and take that forward,” he added. “It really is a sub-sector of retail that has been hit pretty hard by the pandemic.”
Over the half-year, the REIT posted a loss of €700,000. Chairman Julian Berney said the portfolio “remained resilient over the period, underpinned by uplifts across the industrial portfolio, a number of asset management successes and improving and strong rent collection”.
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