SREIT reports encouraging leasing activity across all sectors
Schroder Real Estate Investment Trust has completed 25 new lettings, renewals and rent reviews in the quarter to 30 June, worth £1.5m per annum.
The deals across 131,599 sq ft of space reflect an uplift of 4% compared with the estimated rental value at the end of March, the company said in quarterly results issued today (27 July).
Net asset value increased to £301.1m, or 61.6p per share (31 March 2023: £300.7m, or 61.5p per share), which, together with dividends paid, resulted in a NAV total return for the quarter of 1.5%.
Schroder Real Estate Investment Trust has completed 25 new lettings, renewals and rent reviews in the quarter to 30 June, worth £1.5m per annum.
The deals across 131,599 sq ft of space reflect an uplift of 4% compared with the estimated rental value at the end of March, the company said in quarterly results issued today (27 July).
Net asset value increased to £301.1m, or 61.6p per share (31 March 2023: £300.7m, or 61.5p per share), which, together with dividends paid, resulted in a NAV total return for the quarter of 1.5%.
The dividend paid during the quarter of 0.836p per share, 103% covered by EPRA earnings, represents an annualised yield of 7.6% on the REIT’s 26 July closing share price of 43.8p.
The company’s net loan to value is 35.7%, with an average interest cost of 3.4%, an average loan duration of 10.5 years and no debt maturities until 2027.
Alastair Hughes, chair of the board (pictured), said: “Despite continuing real estate market uncertainty due to elevated interest rates, the company remains well placed with an above-average rental income profile and the longest-duration, fixed-rate debt in the peer group. These factors enable us to continue paying an attractive dividend with good visibility on future earnings.”
The company reported good progress with ongoing letting activity, which could generate a further £1m per annum of rent. It also disposed of an office asset, Morgan Sindall House in Rugby, during the quarter for £4m, in line with the independent valuation as at 31 March 2023.
Nick Montgomery, fund manager, added: “Notwithstanding market volatility, leasing activity remains encouraging across all sectors, with a high volume of deals done and under offer above the prevailing valuation rental value assumptions. We are working up a number of new asset management initiatives to further grow earnings, with a focus on delivering development and refurbishment projects to a high sustainability specification.”
The company continues to outperform the MSCI UK Balanced Portfolios Quarterly Property Index. On a like-for-like basis, the underlying portfolio value declined by 0.1% over the quarter, compared with a fall of 0.4% for the MSCI UK Monthly Property Index (a proxy for the company’s formal benchmark that will be released shortly).
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