Picture: ISTOCK
Picture: ISTOCK

Europe-focused and JSE-listed property company Schroder is on track to deliver on its targeted 5.5% dividend yield.

On Wednesday, the group released financial results for the year to September 30, saying its investment strategy would continue under its newly appointed CEO and lead manager, Jeff O’Dwyer.

O’Dwyer said the company continued to deliver on its asset management initiatives in the period, supported by a strong performance in the eurozone.

"We achieved a net asset value increase of 13% over the period, including a gross equity raise of €16.7m and a net asset value total return of 6.0%," he said.

The group’s portfolio was valued at €211.7m, which reflected growth of about 7.1% on the overall purchase price of the assets.

The portfolio was almost 100% occupied, with a 6.8 year average lease term and a net property income yield of about 6%

Schroder has contracted rental income of €14.3m per year. The company declared a dividend for the quarter to September of 1.5c per share, representing an annualised rate of 4.4%, based on €1.37 being the euro equivalent of the issue price as at admission.

Based on the euro-pound exchange rate as at September 30 2017, this dividend represents an annualised increase of 5.3% against an initial £1 invested at the initial public offering.

"Our near-term priority is to deploy the remaining investment capacity, which totals circa €30m including leverage, which will be invested in a manner consistent with the existing portfolio, in conurbations and regions that will grow faster than their domestic economies.," said O’Dwyer.

He added: "We have identified a range of potential investment opportunities that would be accretive to the company’s earnings, which we believe provides a strong platform to grow the company to benefit shareholders. Once fully invested we will assess our next steps, which may include a further equity raise, as we continue to see interesting investment opportunities in the market with returns accretive to earnings and performance," he said.

Based on the euro-pound exchange rate as at September 30 2017, this dividend represents an annualised increase of 5.3% against an initial £1 invested at the initial public offering.

"Our near-term priority is to deploy the remaining investment capacity, which totals circa €30m including leverage, which will be invested in a manner consistent with the existing portfolio, in conurbations and regions that will grow faster than their domestic economies.," said O’Dwyer.

He added: "We have identified a range of potential investment opportunities that would be accretive to the company’s earnings, which we believe provides a strong platform to grow the company to benefit shareholders. Once fully invested we will assess our next steps, which may include a further equity raise, as we continue to see interesting investment opportunities in the market with returns accretive to earnings and performance," he said.

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