Schroder REIT has unveiled a proposed new ‘brown to green’ investment strategy.
The REIT intends to implement a sustainability improvement and decarbonisation strategy focused on adapting existing buildings to ensure they are modern and fit for purpose, which will allow the company to achieve a “green premium” and “capitalise on mispricing”.
Schroder REIT said “there is an opportunity to offer investors a genuinely differentiated proposition, whilst also attracting new investors who have specific sustainability objectives which are aligned to the real estate sector’s decarbonisation targets, and improve the liquidity and rating of the company’s shares”.
The REIT has called an extraordinary general meeting for 15 December 2023 during which further details of the new strategy will be unveiled. At the meeting, shareholders will be asked to vote on a resolution to approve the proposed changes to the company’s investment objective and policy.
Earlier today, Schroder REIT published its interim results for the six-month period ended 30 September 2023. Its net asset value declined marginally to £296.0m (31 March 2023: £300.7m), with a rise in real estate yields offset by a high income return and estimated rental value growth of 2.4%.
Alastair Hughes, chair of the board, said: “Although the short-term outlook clearly remains uncertain, prudent steps taken by the manager to secure low cost, long-term debt for the company, and increase exposure to higher growth sectors, means the company is well positioned to continue outperforming the benchmark, deliver on its investment objective and provide a progressive dividend over time.
“As announced separately today, the company has issued a circular proposing to formally include sustainability at the centre of its investment proposition. As sustainability considerations become even more important for investors and occupiers, we have a strong conviction that it will clearly help to differentiate the company and drive more sustainable, risk-adjusted returns.”
