Schroder banks on Europe’s ‘winning cities’

UK-BASED closed-ended investment company Schroder European Real Estate Investment Trust plc (Sereit) is pinning its hopes on occupier demand and rental growth in “winning cities” of Europe to achieve its next growth phase.

Sereit said yesterday the high quality real estate portfolio across the growth cities of continental Europe provided a strong platform for the company, which maintained it was well positioned for its next phase of growth.

Company board chairperson Sir Julian Berney said their real estate portfolio generated an attractive level of stable income, which covered the dividend and provided opportunities to grow income and values over the long term.

Sereit’s profits for the six months to March increased by 157 percent, from €4.2 million (R65.7m) to €10.8m.

The growth was as a result of an uplift in portfolio values and growth in net income.

It also achieved a 4.9 percent increase in net asset value (NAV) to €187.1m. The company announced its acquisition of a data centre and office premises in The Netherlands, secured on a long lease to a strong tenant, for €19.8m, reflecting a net initial yield of 10 percent.

Berney said: “This has been an active period for the company, during which we have delivered growth in NAV, net income and shareholder dividends.”

Sereit was working on a number of asset management initiatives across the portfolio to grow income and value.

“Coupled with the positive economic backdrop in our target markets, we believe the company is well positioned for the next stage of growth.”

Sereit’s investment manager Jeff O’Dwyer said: “Our portfolio of assets across winning cities such as Berlin, Hamburg, Stuttgart, Frankfurt and Paris continues to benefit from improving occupational demand and strong investment markets.”

This had generated positive performance for the company, whose portfolio was valued at €237.3m.

“As previously stated, our aspirations are to grow the portfolio through a disciplined and consistent approach centred on enhancing income and shareholder returns.”

Sereit shares closed unchanged at R20 on the JSE yesterday.