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Schroder reports steady NAV

By James Buckley - Wednesday, February 07, 2018 10:53

Schroder Real Estate Investment Trust has reported a 1.4% rise in NAV for the quarter to 31 December 2017, to £345.5m or 66.6 pence per share.

Quarterly dividend cover, ignoring one-off abortive transaction costs, was 97%. Dividend cover was also negatively impacted by 11% as a result of the accounting treatment of the rent free relating to the Sheffield office disposal.

The company has reported an interim dividend of 0.62 pence per share for the period 1 October 2017 to 31 December 2017. The dividend payment will be made on 7 March 2018 to shareholders on the register as at 16 February 2018. The ex-dividend date will be 15 February 2018. The dividend of 0.62 pps will be designated 35 pps as an interim property income distribution and 27 pps as an interim ordinary dividend.

Over the quarter to 31 December 2017 the underlying portfolio produced a total return of 3% compared with the MSCI Index at 3.3%. For calendar 2017 the underlying portfolio produced a total return of 12.9% compared with MSCI of 10.8%.

As at 31 December 2017, the underlying portfolio comprised 44 properties valued at £468.1m. At the same date the portfolio produced a rent of £26.9m per annum reflecting a net initial yield of 5.4%. The portfolio rental value is £33.4m per annum, resulting in a reversionary yield of 7.1%. 

As at 31 December 2017 the void rate was 6.6% and the average unexpired lease term, assuming all tenants vacate at the earliest opportunity, was 6.9 years. 

The company has two loan facilities from Canada Life and Royal Bank of Scotland totalling £150.1m with an average duration of approximately 8.2 years and an average interest cost of 4.4%.  The loans are fully compliant with their covenants. 

In addition to the properties secured against the Canada Life and RBS loan facilities, the company has unsecured properties with a value of £77.3 million and cash of approximately £30.4m. This results in a loan to value ratio, net of cash, of c.25.6%.  

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