The Reit says its portfolio’s income profile remains robust, benefiting from rental growth, indexation and high occupancy
11 July 2024 - 09:50
by Jacqueline Mackenzie
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Schroder European real estate investment trust (Reit), which invests in real estate in European growth cities, says its direct property portfolio was independently valued at €208.3m at the end of June, reflecting a marginal increase of 0.1%.
“This signals a stabilisation in values, particularly for the industrial and retail sectors, which offset the continued outward yield movement for offices,” the company said in a statement on Thursday.
The company said the portfolio’s income profile remained robust, benefiting from rental growth, indexation and high occupancy (96%), which is diversified across about 50 tenants.
The retail assets portfolio witnessed a valuation increase of €0.8m, or 1.9%, attributed to the Frankfurt grocery asset after the completion of a new 15-year lease extension with anchor tenant Lidl, while the Berlin DIY store valuation remained unchanged.
The industrial portfolio valuation increased €0.6m, or 0.8%, driven by estimated rental value growth in Houten (4%) and Venray II (5.3%), the Netherlands and index-linked income growth in Nantes (1.7%), France.
The office portfolio valuation declined by €0.7m, or 0.8%, predominantly due to the 10 basis points of outward yield shift in Germany, as well as the valuers adjusting their letting assumptions in Paris.
The alternative assets portfolio valuation comprised a €0.5m, or 3.1%, decline for the mixed-used data centre in Apeldoorn due to the declining remaining lease term, while the Cannes car room valuation remained unchanged.
Based on end-June values, the portfolio loan-to-value was about 33% based on gross asset value and 24% net of cash providing significant flexibility, it said,
In June, the company announced it had grown underlying earnings from operational activities 3% to €4.3m for the six months to end-March.
“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,” chair Julian Berney said at the time of the results announcement.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Schroder expects property values to stabilise
The Reit says its portfolio’s income profile remains robust, benefiting from rental growth, indexation and high occupancy
Schroder European real estate investment trust (Reit), which invests in real estate in European growth cities, says its direct property portfolio was independently valued at €208.3m at the end of June, reflecting a marginal increase of 0.1%.
“This signals a stabilisation in values, particularly for the industrial and retail sectors, which offset the continued outward yield movement for offices,” the company said in a statement on Thursday.
The company said the portfolio’s income profile remained robust, benefiting from rental growth, indexation and high occupancy (96%), which is diversified across about 50 tenants.
The retail assets portfolio witnessed a valuation increase of €0.8m, or 1.9%, attributed to the Frankfurt grocery asset after the completion of a new 15-year lease extension with anchor tenant Lidl, while the Berlin DIY store valuation remained unchanged.
The industrial portfolio valuation increased €0.6m, or 0.8%, driven by estimated rental value growth in Houten (4%) and Venray II (5.3%), the Netherlands and index-linked income growth in Nantes (1.7%), France.
The office portfolio valuation declined by €0.7m, or 0.8%, predominantly due to the 10 basis points of outward yield shift in Germany, as well as the valuers adjusting their letting assumptions in Paris.
The alternative assets portfolio valuation comprised a €0.5m, or 3.1%, decline for the mixed-used data centre in Apeldoorn due to the declining remaining lease term, while the Cannes car room valuation remained unchanged.
Based on end-June values, the portfolio loan-to-value was about 33% based on gross asset value and 24% net of cash providing significant flexibility, it said,
In June, the company announced it had grown underlying earnings from operational activities 3% to €4.3m for the six months to end-March.
“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,” chair Julian Berney said at the time of the results announcement.
mackenziej@arena.africa
Schroder delivers rental growth in first half of financial year
Schroder property values decline 1% in March quarter
Schroder refinances Rennes logistics investment loan
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.