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Schroder’s independent property portfolio valuation sits at €268.6m

Schroder European REIT's Boulogne-Billancourt office asset in Paris.
Schroder European REIT's Boulogne-Billancourt office asset in Paris.

Schroder European Real Estate Investment Trust has provided an update on rent collection alongside a quarterly independent valuation of the property portfolio as of the 30th of September 2020.

Approximately 88% of rent due as of the 21st of October 2020 has been collected which is ahead of the amount collected in the previous quarters.

As of the 30th of September 2020, the company’s property portfolio was independently valued at €268.6 million, an increase of 9.8% or, €23.9 million, on the 30th of June 2020 valuation of €244.7 million.

The valuation increase during the quarter was driven by numerous successful asset management initiatives across the portfolio which included exchanged contracts to sell its Boulogne-Billancourt office asset in Paris for approximately €104 million. The sale is structured as a forward funding with the building being handed over to the purchaser in H1 2022, following completion of a comprehensive refurbishment which is being undertaken by Schroder.

The refurbishment and sale follow the agreement of a new ten-year pre-let contract with existing tenant Alten in June this year at a rent 39% higher than the previous rent paid. As of the 30th of September 2020, the property is held at a valuation of €65.2 million which reflects the sale price, less an adjustment for the costs, risk, and process of the refurbishment. The asset was valued at €41.6 million as of the 30th of June 2020.

A new five-year lease agreement for a further floor at its Hamburg office investment represents c.10% of the lettable area. This resulted in a valuation increase of over €0.6 million. The company’s 50% interest in the Seville shopping centre witnessed a valuation decline of €350 000 or 1.6% over the quarter, resulting in a total valuation decline of 8.6% since the 30th of December 2019’s valuation (the last quarter was not impacted by Covid-19). Recent successful asset management initiatives, including the expansion of the supermarket, was helpful in defending further valuation declines.

Schroder remains prudently geared with a Loan to Value (LTV), net of cash, of approximately 25% as of the 30th of September 2020 with no debt maturity before 2023.

In line with previous years, the 30th September 2020 NAV will be included in the company’s full year results for the year ending on the 30th of September 2020 which will be announced on the 9th of December 2020.