Schroder European Real Estate Investment Trust (Sereit) says it has received three-quarters of the rent it is due for April, which is sufficient to cover the running costs of the company.

The property group gives SA investors exposure to West European capital cities and had a portfolio valued at about R5.5bn as of the end of September. It said on Wednesday it expected to receive additional rent as April proceeds, having received 75% as of April 7.

Schroder acts as a currency hedge for SA investors as it pays its dividends in euro.

Most of the group’s portfolio is in the office and industrial sectors.

About 75% of the group’s portfolio is in the office and industrial data centre sectors, in cities including Paris, Berlin, Frankfurt, Hamburg and Stuttgart.

Schroder has spent the past six months focusing its capital on these assets, which promise better growth as opposed to retail assets.

Retail represents 25% of the group’s portfolio, of which 15% is invested in a Lidl supermarket in Frankfurt, which is still trading, and a Hornbach DIY unit in Berlin, leased on five and six year terms respectively. The Metromar Centre in Seville is the only shopping centre in the portfolio and represents 10% of the portfolio value.

The group said it was reviewing future dividend payments.

“In light of the ongoing market uncertainty and the stated objective to pay a dividend based on sustainable rental income, the manager and the board propose to keep the future dividend payments under review,” it said.

“While the company recognises the importance of dividends to shareholders, in the current circumstances it is anticipated a postponement or reduction in dividend may be appropriate,” it said.

The share price of Schroder, which has a market capitalisation of R2.34bn, has fallen 16.4% so far in 2020. Over the same period of time, the all share has lost 37.46%.

About 10% of Schroder is owned by South Africans.

Fund manager Jeff O’Dwyer said while some South Africans had put their investments into eastern European funds, Schroder still offered some of the most attractive returns for South Africans from European real estate. About a third of commercial property owned by South Africans is in central and Eastern Europe.

Before the Covid-19 pandemic broke, the company had been considering investing in Nordic countries when it raised capital in 2020 or 2021.

Meanwhile, Attacq and Sirius have said this week that they managed to collect rent.

Sirius said on Tuesday it had collected 90% of its expected rent by April 9.

Attacq said on Wednesday that it achieved a total rental collection rate of 61.7% by Tuesday.


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