Schroder European Real Estate Investment Trust

Launched on 9 December 2015, the Schroder European Real Estate Investment Trust targets growth regions in Continental Europe and aims to provide a regular and attractive level of income together with the potential for long-term income and capital growth.  The Trust is managed by Tony Smedley, an experienced real estate investment manager, who is supported by nearly 100 real estate professionals located in key hubs across Europe, including London, Paris, Frankfurt and Zurich. 

The Trust targets specific cities across the region with large, liquid real estate markets that offer superior growth potential. It invests in a range of real estate assets including offices and retail and leisure developments.

The Trust is listed on the market of the London Stock Exchange, with a secondary listing in South Africa.

Key reasons to invest:

  • Attractive income distribution with potential for long-term income and capital growth - Focus on investing in high quality, income producing real estate, targeting a dividend yield to investors of 5.5% p.a. and the potential for long term income and capital growth. Please note the dividend yield is a target yield and is not guaranteed.
  • Focus on the growth cities and regions of Continental Europe – Targeting the most liquid markets in continental Europe, such as Paris and Berlin for example, where GDP is expected to outperform national averages and where rental growth is forecast
  • Attractive market outlook - Eurozone economic data is positive, with private business surveys pointing to further growth this year.  Occupier and investment activity in our target winning cities remains strong, which is expected to drive real estate performance
  • Investment sourcing and active asset management – Bottom up approach via local Schroder teams to identify undervalued locations that benefit from supply constraints, infrastructure changes, sustainable rents and competing demands for different uses. Local Schroder teams directly responsible for actively manage all assets to grow rents, extend leases and improve buildings to add value.
  • Investment Expertise – Schroders has been managing real estate for over 40 years and currently has €14.2 billion of real estate assets under management (at 31 March 2017), with over 100 specialist real estate staff including investment, research and financing specialists based on the ground in the key European markets
  • Accretive debt finance and robust balance sheet – Positive yield gap between real estate yields and borrowing rates in Europe means modest borrowing can boost returns from the property portfolio. Gearing does also introduce risk in to the portfolio and gearing is capped at 35% of the gross assets of the company to mitigate this risk
  • Liquid structure to own real estate - Closed ended fund structure with daily liquidity via listing on the main market of the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange

Current Portfolio:

Key Portfolio Facts 

 

Number of Properties

Nine

Property Portfolio Value

€208.9 million

Vacancy

0.5%

Weighted Average Unexpired Lease Term (to earliest expiry)

4.8 years

Gearing

26% of gross assets

NAV

€176.9 million

*Source: Schroders as at 31 March 2016.

 

What are the risks?

  • Past performance is not a guide to future performance and may not be repeated.
  • The value of investments, and the income from them, can rise and fall and investors may not get back the amount originally invested.
  • Companies which invest in a smaller number of assets carry more risk than those spread across a larger number of assets.
  • The Company may invest solely in property located in one country or region. This can carry more risk than investments spread over a number of countries or regions.
  • The Company may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the assets purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.
  • The fund holds investments denominated in currencies other than sterling, changes in exchange rates will cause the value of these investments, and the income from them, to rise or fall.
  • The dividend yield is an estimate and is not guaranteed.
  • Collective investment schemes are generally medium to long-term investments.
  • Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending.
  • A schedule of fees and charges and maximum commissions is available on request from the manager.
  • A detailed description of how performance fees (where applicable) are calculated and applied.
  • A statement that the manager does not provide any guarantee either with respect to the capital or the return of a portfolio.
  • A statement that the manager has a right to close the portfolio to new investors in order to manage it more efficiently in accourdance with its mandate.

For more information, please contact:

Stephanie Carbonneil
Investment Trust Business Development Manager
Schroders
Email: stephanie.carbonneil@schroders.com
Phone: +44 (0) 207 658 7352

Katherine Miller
Director, Investment Company Sales
Numis
Email: k.miller@numis.com
Phone: +44 (0) 207 260 1380