Schroder Real Estate Investment Trust (SREIT) is the latest REIT to report a sharp fall in the value of its portfolio.
The company said that in the final quarter of last year net asset value (NAV) decreased to £303.3m, compared with a NAV of £366m at the end of September – a -16% fall.
SREIT said it had experienced a like-for-like portfolio valuation movement of -11.8% over the quarter caused by upward yield movement across all sectors, versus the MSCI UK monthly property index capital growth average of -15%.
It announced an interim dividend of 0.819 pps for the period, reflecting a 2% increase on the prior quarter.
During Q4 last year, SREIT completed 22 new lettings (including a circa 9,000 sq ft leasing deal with the University of Law at City Tower, Manchester – pictured), renewals and rent reviews, generating £2.6m in annualised rent, including £0.6m per annum of additional rent above the previous months received.
Alastair Hughes, chairman of SREIT, said: “The correction in real estate valuations through the quarter was in line with our guidance in the interim report. The relative outperformance of the portfolio through this period, and a further increase in the fully covered dividend, is testament to the progress made with asset management across the portfolio and the company’s long term, fixed rate debt.”
Nick Montgomery, fund manager of SREIT, added: “Sustainability led, value add investments into the existing portfolio have partly offset the negative impact on valuations caused by rising yields. We have a robust and diverse tenant base that we expect to be resilient through a recessionary period and the strength of the underlying portfolio should enable us to continue delivering an attractive and growing income return.”
