Schroder European REIT has published its half year results for the six months ended March 2024, reporting that its portfolio indexation underpinned its earnings growth with 109% covered dividend, supported by its low-cost, fixed rate debt profile.
The Group’s underlying EPRA earnings increased by 3% to €4.3 million on the prior six month’s €4.2 million (31st March 2023: €3.8 million) primarily due to rental growth offsetting the impact of higher interest rate costs.
“Despite macroeconomic headwinds, the resilience of the portfolio together with local sector specialist teams, has delivered rental growth, largely offsetting the impact of higher interest rates. Management has successfully completed the recent refinancings which, combined with significant cash reserves, has further strengthened the balance sheet. The Company provides a compelling and differentiated investment proposition compared to our UK-listed peers. We have the flexibility to grow earnings through exposure to strongly performing assets in higher growth European cities, as well as executing on value-enhancing asset management opportunities,” comments Chairman, Sir Julian Berney Bt.
Schroder declared two quarterly dividends of 1.48 Euro cents per share, bringing its total dividends during the period to 2.96 Euro cents per share, 109% covered by EPRA earnings.
Its net asset value (NAV) of €165.3 million, or 123.6 cents per share (30th September 2023: €171.4 million or 128.2 cents per share), was largely driven by continued outward yield movement of its underlying portfolio. A NAV total return of -1.3% was based, in part, on an IFRS loss of €2.2 million (31st March 2023: -4.7% total return, €8.7 million IFRS loss).
Schroder’s direct property portfolio independent valuation declined 3.1% to €208.1 million (€6.6 million net of capex). It concluded eleven new leases with re-gearing totalling c.6 340m2 and generating €1.2 million of contracted rent, at a weighted lease term of eight years.
Its portfolio, diversified across c.50 tenants, holds a 96% occupancy rate with 100% of rental due collected.
Its low loan-to-value (LTV) ratio currently sits at 24% (net of cash) with €26 million of available cash.
