Schroder intent on growing its portfolio

SCHRODER European Real Estate Investment Trust (Sereit) reported yesterday that it had made its fifth acquisition since listing in December.

The company, which is listed on the London Stock Exchange and the JSE, said contracts had been signed for the purchase of a convenience retail property located in Germany for €11.05 million (R180.23m). It said the asset was a grocery supermarket, multi-let convenience retail centre located in a growing inner urban region of Frankfurt am Main.

Schroder said it was built in 2004 and modernised last year and comprises 4 525 square metres of lettable area and anchored by a 1 600m2 Lidl supermarket with an initial lease term exceeding 10 years.

It said the acquisition was fully in line with its strategy of investing in defensive, income producing assets in major cities with the potential for long-term growth.

Julian Berney, the chairman of Schroder, said the investment took the company’s committed capital deployment to about e110m at a blended net initial yield of about 5.9 percent.

“Acquiring good retail assets in prime German cities is challenging and competitive, hence being able to secure this long let investment within a growing urban area of Germany’s financial capital is a credit to our local sourcing capabilities,” he said.

Tony Smedley, the head of Continental European Investment at Schroder, said convenience retail in growth cities was a key target of the company given its relative resilience in a rapidly changing retail environment.

Change tenant mix

Smedley said Lidl was the key anchor tenant on this scheme and Schroder had plans to change the tenant mix over time to further improve footfall at the centre.

The purchase is subject to the standard land registry notification and, therefore, expected to be completed during June.

The latest acquisition follows Schroder earlier this month confirming that it had concluded the purchase of two office investments located in Stuttgart and Hamburg in Germany for a total price of e28.9m.

Schroder said then the company owned a portfolio of four assets acquired at a total purchase price of €90.7m, but continued to pursue negotiations on a number of other potential transactions.

Schroder raised £13.8m (R289.9m) in February, through a placement of 13.28 million new shares in the company.

Shares in Schroder dropped by 1.32 percent yesterday to close at R23.90 on the JSE. HUAWEI and Vodafone have announced the opening of an Internet of Things (IoT) Lab to work on the development of products and applications relating to narrowband IoT (NB-IoT) technology. According to the companies, the lab will provide a pre-integration testing environment for application developers and device, module and chip manufacturers. Luke Ibbetson, the director of Vodafone Group’s research and development and chairman of the GSMA NB-IoT Forum, said they were delighted that the first lab was up and running. “We’ve made significant progress establishing industry standards for the technology and the new labs will be critical to the next phase of development, which is to build a vibrant NB-IoT ecosystem,” Ibbetson said. – ANA

PUTPROP

PUTPROP, the separately listed former property investment company of delisted bus transport operator Putco, has abandoned plans to delist the company from the JSE. The company said yesterday that due to the discount of Putprop’s share price to net asset value, the board of directors of Putprop had determined that it would be unable to obtain the required support from shareholders for the delisting at a price that was satisfactory to the company. Therefore, it had decided not to continue with the process. The announcement follows Putprop reporting last month that the proposed delisting was close to finalisation and an offer to repurchase those shares affected would be “forthcoming in the near future”. Putprop said in September that it was considering delisting the company from the JSE and envisaged the delisting would be implemented through the repurchase and cancellation of Putprop shares, excluding the shares held by Carleo Enterprises, the company’s largest shareholder. Shares in Putprop dropped 4.35 percent yesterday to close at R6.60. – Roy Cokayne

LAFARGE AFRICA

LAFARGE Africa posted a first-quarter loss as price cuts and a fall in demand weighed on the Nigeria-based unit of the world’s biggest cement maker. The loss after tax was 1.9 billion naira (R136.9 million) in the three months to March, compared with a profit of 5.8 billion naira a year ago, the company said yesterday. Revenue declined 29 percent to 52.4 billion naira. While the unit of LafargeHolcim did not publish commentary of the figures, it said in October that pressure on prices and a market slowdown were hampering its business in Nigeria and other African countries. “The surprising weak performance is most likely due to production issues across its plants”, including flooding, Lanre Buluro, an equity broker and analyst with Primera Africa Securities, said. The price cuts by rival Dangote Cement could also have had an impact, he said. Nigeria, Africa’s biggest economy and largest oil producer, is struggling with a plunge in crude prices. Economic growth slowed to 2.8 percent last year, the lowest in 16 years. The International Monetary Fund forecasts a further slowdown this year. Lafarge Africa shares extended their retreat this year to 27 percent, compared with the 13 percent retreat of the Nigerian Stock Exchange all share index. – Bloomberg