Picture: ISTOCK
Picture: ISTOCK

Schroder European Real Estate Investment Trust said on Wednesday it was in exclusive talks to acquire assets that would position it to deliver a 5.5% dividend yield target.

Listed on the London Stock Exchange and the JSE, Schroder invests in continental Europe, which the company believes offers growth potential in the commercial real estate.

The company owned nine properties in the year to end-September, valued at €211.7m, which was up 3.6% from the same period a year ago.

Schroder’s net asset value was up 13% to €178.3m, or 133.3 euro cents per share.

The total dividend rose to 5.2 euro cents per share, up from 1.7c a year ago.

The largest property valuation uplift came from the newly acquired asset in Saint-Cloud, Paris, as well as office buildings in Hamburg, Germany.

Chairman Julian Berney said the company would invest the remaining €30m for acquisitions in the western region of continental Europe.

"Economic growth in these target markets is advancing and this is having a positive impact on occupier demand and rental levels," Berney said.

He said while there remained much uncertainty around events such as Britain’s exit from the EU, "our strategic focus on winning cities and regions means the company is well-placed in changing market circumstances and may potentially benefit if the outcome of the negotiations leads to more businesses locating and expanding in continental Europe".

mahlangua@bdlive.co.za

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