Schroder European Real Estate Investment Trust plans to spend €50m (£43m) over the coming year as more investment opportunities emerge across Europe’s fastest growing cities.
Fund manager for continental Europe Jeff O’Dwyer said the REIT expects “to see an improving pipeline of opportunities over the next six to 12 months that will enable the company to further diversify, grow income and strengthen its exposure to growth cities, regions and sectors”.
The €50m figure is based on cash reserves and additional debt.
Announcing its results for the year to 30 September, the company also said that it is in “positive” talks with lenders about €27m of debt due to expire next year.
This represents a third of the company’s debt and it expects increased financing costs to be offset by rental indexation. It also pointed out that its approach to gearing had kept its loan to value ratio at 29%, considerably below its 35% target.
The London and Johannesburg-listed company said that it will pay a special dividend totalling €12.8m (reflecting 9.60 € cents per share) for the 2022 financial year due to exceptional asset management profits from the forward-funded sale of its Paris Boulogne-Billancourt office property.
Pre-tax profit climbed 77% to €16.6m for the financial year to September 30 (2021: €9.4m).
However, income fell 3.1% to €12.6m (2021: €13m). The group achieved 100% rent collection.
A quarterly dividend of 1.85 € cents lifts the total for the year to 7.4 € cents, in line with its target.
The special dividend of 9.60 € cents is up from 4.75 € cents the previous year.
Net asset value per share dropped to 140.8 € cents from 149.2 € cents as of 30 September, reflecting the payment of the special dividend.
Schroder chair Julian Berney said: “We are well aware of the ongoing challenges facing global markets but real estate continues to remain attractive relative to other asset classes.
“By having real asset exposure that is diversified, indexed linked and located in strong, liquid cities like Berlin, Hamburg, Stuttgart and Paris, the company is well positioned to deliver on its strategy longer term.”
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