Schroder European Real Estate Investment Trust saw its net asset value (NAV) fall by 4.7% to €220.2m in the six-month period ending 31 March 2023.
The REIT said the fall was “predominantly driven by market wide outward yield shift as a result of interest rate increases”. Its underlying EPRA earnings in the reporting period increased to €3.8m from €2.5m (31 March 2022).
The REIT said it was rebasing its dividend and declared a total dividend for the half year of 3.7 euro cents per share.
Sir Julian Berney Bt, chairman of Schroder European Real Estate Investment Trust, said: “Notwithstanding the economic headwinds, the board is pleased by the portfolio’s sector and winning city allocations, strong rent collection and indexation characteristics, which together with management’s asset management expertise has enhanced valuation resilience versus the UK-focused listed peer group.
“The board, however, is clear in its intention to be prudent in deploying the remaining investment capacity, retaining capital in the short term and rebasing the dividend to a quarterly minimum dividend of 80% of the current level.
“Whilst the current wider market uncertainty persists, this is a proactive move that we are convinced will protect shareholder value over the long term, providing significant flexibility and enabling us to pay a covered dividend that can be grown over time.”
Jeff O’Dwyer, fund manager for Schroder Real Estate Investment Management, added: “Whilst we continue to operate in an environment where the pricing of risk, value and liquidity is challenging, the company is well positioned, with a strong balance sheet and an ability to refinance on the best available terms as and when required.
“Recognising evolving occupier trends, our near-term capital deployment will be focused on select sustainability-led capex initiatives in the current portfolio, which we believe will best optimise earnings growth and asset liquidity, thereby driving longer term returns.”
