05 aug 25   schroder real estate - nav update for the quarter to 30 june 2025 schroder real estate investment trust ltd | srei | 52.6 0 0.0% | mkt cap: 257.5m    rns number : 9180t schroder real estate inv trst ld 05 august 2025   for release 5 august 2025   schroder real estate investment trust limited nav update for the quarter to 30 june 2025 1.6% nav total return supported by earnings growth and active management   schroder real estate investment trust limited ('sreit' or the 'company'), the actively managed reit focused on improving the sustainability performance of buildings to generate higher income and capital growth, announces its 30 june 2025 net asset value ('nav'), an asset management update, and further progress selling smaller non-core assets on completion of business plans.   financial highlights ·    nav total return for the quarter of 1.6% ·    nav increase of 0.2% to £301.9 million or 61.7 pence per share ('pps') ·    annualised dividend yield of 6.8% on 4 august closing share price of 52.5p ·    quarterly epra earnings increased 7.3% to £4.4 million, or 0.9 pps   balance sheet highlights ·    sector-leading debt terms with a weighted average maturity of 8.2 years and interest cost of 3.5% on drawn debt ·    incremental positive fair value benefit of the fixed-rate loan of £18.4 million, which is not reflected in the company's nav ·    net loan to value 36.5% (31 march 2025: 36.9%)   operational highlights ·    quarterly portfolio capital growth of 0.3% ·    strong leasing momentum maintained since the company announced its final results on 11 june 2025, with 10 deals completed across 52,000 sq ft: o  four new lettings of vacant units totalling £321,000 of annualised rent, 1% ahead of 30 june 2025 estimated rental value ('erv') o  five lease renewals generating total rent of £281,000, which is 11% ahead of the previous passing level and 5% ahead of 30 june 2025 erv o  one rent review with a total rent of £100,000 which is 22% ahead of the previous passing level ·    39% reversion to the portfolio's erv of £40.2 million from an annual rent of £29.0 million as at 30 june 2025, which is expected to further drive income and earnings growth   dividend ·    quarterly dividend paid of £4.4 million, or 0.897 pps (31 march 2025: 0.897 pps) ·    quarterly dividend 100% covered by epra earnings (year ended 31 march 2025: 100%) ·    interim dividend of 0.897 pps for the period 1 april 2025 to 30 june 2025 to be paid in august 2025   alastair hughes, chair of the board, commented: "whilst investment and occupational market activity has remained largely subdued due to macro-economic and geopolitical headwinds, the company has delivered another robust quarter of earnings growth, a fully covered dividend and further capital value appreciation in the portfolio. with our differentiated and active strategy, we are confident in our ability to continue driving rents across the portfolio, which is well positioned to benefit from the ongoing recovery of the uk real estate market."   nick montgomery, fund manager, added: "our portfolio's alignment to higher growth sectors combined with an active asset management strategy has enabled us to deliver another period of positive financial and operational performance. we remain highly focused on delivering consistent earnings growth by capturing the portfolio reversion which should support the delivery of risk adjusted returns for shareholders in the long term."   nav a breakdown of the quarterly movement in the nav is set out below:     £m pps comments nav as at 31 march 2025 301.4 61.6 calculation based on 489,110,576 shares unrealised increase in the valuations of the direct real estate portfolio and joint ventures 2.7 0.5 portfolio capital growth of 0.3% capital expenditure (direct portfolio and share of joint ventures) (1.5) (0.3) relating to various projects across the portfolio epra earnings 4.4 0.9 resulting in dividend cover of 100% dividend paid (4.4) (0.9) dividend for the quarter ended 31 march 2025 was paid on 30 june 2025 at 0.897 pps gain on disposal of asset 0.1 0.0 15/16 king street, a retail asset in truro, was sold on 12 may 2025 for a price of £1.25m, compared to the book value of £1.1m, with £0.02m of sale costs unrealised fair value movement on the interest rate collar (0.1) (0.0) relating to the interest rate collar for the rbsi revolving credit facility others (0.7) (0.1) all other items including lease incentives and rounding nav as at 30 june 2025 301.9 61.7 calculation based on 489,110,576 shares   property portfolio as at 30 june 2025, the underlying portfolio comprised 37 properties valued at £481.6 million. it generated annual rent of £29.0 million, reflecting a net initial yield of 5.6% (msci benchmark: 5.1%[1]). note that the university of law, the tenant at store street in bloomsbury, is in a 10-month rent free period ending on 16 october 2025. adding back the company's share of its annual rent, being £2,359,885, would result in a net initial yield of 6.1%. the portfolio's erv is £40.2 million, reflecting a reversionary yield of 8.3% (msci benchmark: 6.2%1).   including the impact of the exchange of unconditional contracts to sell pacific house in marlow with vacant possession, the portfolio void rate has improved to 12.2% as at today (31 march 2025: 12.3%), calculated as a percentage of erv.  in addition: ·    a further 2.3% of this void is currently under offer and in advanced legal negotiations. ·    a further 2.9% is undergoing refurbishment including major sustainability improvement works at millshaw park industrial estate in leeds (representing 1.7%) and st ann's house in manchester (representing 0.6%), both visited by shareholders and analysts on the asset tour in june and expected to generate material increases in rent compared to the previous passing level on completion.   the weighted average unexpired lease term, assuming all tenants vacate at the earliest opportunity, is 5.2 years.   the tables below summarise portfolio information as at 30 june 2025:   sector weighting  sector as a % of total value  sreit msci benchmark (as at 31 march 25) industrial 51.1 32.6 office 23.3 22.2 retail warehouse 12.7 9.8 retail 7.2 9.6 retail ancillary to main use 4.8 - retail single use 2.4 - other 5.7 20.3 shopping centres - 2.0 unattributable - 3.5   region weighting  region as a % of total value  sreit[2] msci benchmark (as at 31 march 25) central london 8.0 17.2 south east excluding central london 16.7 36.3 rest of south 11.2 6.6 midlands and wales 21.5 22.6 north 40.3 13.1 scotland 2.4 4.0 northern ireland - 0.2   balance sheet and debt the weighted average interest rate for total debt drawn at the quarter end was 3.5%, with an average maturity of 8.2 years, with 87% either fixed or hedged against movements in interest rates. the company has significant headroom on all covenants. a summary of the key terms as at 30 june 2025 is in the table below:   lender drawn loan (£m) maturity total interest rate   canada life 129.6 50%: 15/10/32 50%: 15/10/39 2.5% fixed rate loan rbsi 54.5 06/06/27 5.9% £75 million revolving credit facility ('rcf'), of which £54.5 million is drawn. loan margin is 1.65% over sonia. £30.5 million benefits from an interest rate collar to maturity, with a cap at 4.25% and a floor at 3.25%. the balance of the loan is floating. the rcf is a 'green loan', with criteria linked to reduced energy consumption, future improvements in the gresb rating and certification linked to building improvements. total 184.1 weighted average 8.2 years 3.5%     as at 30 june 2025, the company had cash, including cash held in joint ventures, of £8.1 million and a net loan to value ratio of 36.5%, slightly above the long-term strategic target range of 25% to 35%. the company is taking steps to reduce the net loan to value ratio back in line with the target range, including two post quarter end disposals, and others in progress or planned.   asset management the company continues to deliver on its asset management programme, with key activity since 11 june 2025 including:   retail ·    at churchill way west, a retail warehouse scheme in salisbury, wiltshire council has granted planning permission for the unit reconfiguration required to bring lidl great britain limited ('lidl') to the scheme. as previously reported, an agreement for lease exchanged with lidl to occupy unit 1 and part of unit 2, totalling 22,400 sq ft, on a new 25-year lease (break at year 20) at £440,000 per annum or £19.81 per sq ft. this is 67% higher than the previous passing level on a per sq ft basis. lidl will receive nine months of rent free and the lease will be subject to five yearly, inflation-linked reviews with a collar of 1% per annum and a cap of 3% per annum. lease completion is subject to the company delivering a unit split and refurbishment at an estimated cost of £1.5 million inclusive of consultant and legal fees. lidl is required to install photovoltaic panels on the roof which will enable the overall project to achieve an epc rating of 'a'.   net zero carbon pathway ·    in the latest annual report, we reported 5% year-on-year reductions in both landlord energy consumption and associated scope 1 and 2 greenhouse gas ('ghg') emissions on a like-for-like basis, demonstrating progress against our target to reduce these to net zero by 2030. in addition, the company is pleased to now report positive progress towards its target for operational whole building ghg emissions to be aligned to a 1.5°c global warming pathway by 2030. independent assessment has determined a reduction in operational whole building ghg emissions intensity of 14% in calendar year 2024 compared to the 2023 baseline[3]. this has been supported by reductions in landlord energy consumption, continued tenant (scope 3) data collection efforts, which supports our continual improvement in understanding actual building energy and energy-related ghg performance, and reducing reliance on the use of benchmarks.   disposals as noted in the annual report, during the quarter the company completed the sale of 15/16 king street, a grade ii listed freehold asset comprising two ground floor retail units in truro, for £1.25 million. the price was 14% ahead of the 31 march 2025 independent valuation of £1.1 million. this follows the lettings of the ground floor retail units, with the price reflecting a net initial yield of 8.0%.   post quarter end, the sale of 12/14 east gates in leicester, a grade ii listed freehold single let retail asset, completed on 23 july 2025 for £1.0 million. the price is 11% ahead of the 31 march 2025 independent valuation of £0.9 million and equal to the valuation as at 30 june 2025. the lease expires in 4.25 years, and the price reflects a net initial yield of 9.4%.   also post quarter end, unconditional contracts have been exchanged to sell pacific house in marlow, a vacant freehold office asset, for £1.665 million. the price is 11% ahead of the 31 march 2025 independent valuation of £1.5 million and equal to the valuation as at 30 june 2025. the price reflects a capital value of £108 per sq ft.   as noted in the annual report, further disposals are under consideration. -ends-   for further information: schroder real estate investment management limited: nick montgomery / bradley biggins / katherine fyfe   020 7658 6000 fti consulting: dido laurimore / richard gotla / oliver parsons   020 3727 1000     [1] latest available msci data is as at 31 march 2025. [2] column does not sum due to rounding. [3] the whole building operational greenhouse gas intensity analysis has been prepared by verco global, an independent third-party consultant, and is based on analysis of the underlying real estate assets' 2023 and 2024 calendar year energy and energy-related greenhouse gas emissions performance. 56% of actual emissions data has been used for the analysis of ghg intensity performance for the 2024 period, improved from 23% for the 2023 period. the results have been established by applying a methodology determined for schroders capital. whilst every effort has been made to ensure the accuracy and reliability of the information, it should be considered as indicative and is subject to numerous assumptions and limitations. this information is provided by rns, the news service of the london stock exchange. rns is approved by the financial conduct authority to act as a primary information provider in the united kingdom. terms and conditions relating to the use and distribution of this information may apply. for further information, please contact rns@lseg.com or visit www.rns.com.  rns may use your ip address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. for further information about how rns and the london stock exchange use the personal data you provide us, please see our privacy policy.   end   strpkqbqabkddfk return to news summary

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