The team at Schroder REIT have said a flat portfolio valuation over the start of this year is a sign that the real estate market is about to turn a corner.
“Having experienced a significant correction in values, and whilst uncertainty persists regarding the inflation outlook and the timing of interest rate cuts, the real estate sector should benefit from looser monetary policy going into 2025,” said fund manager Nick Montgomery as the REIT announced results for the year to 31 March.
“A nascent recovery is arguably reflected in the portfolio value remaining unchanged over the quarter to March 2024.”
Montgomery added: “Much of the real estate sector is now delivering an income return and nominal rental growth above the long-run average due to the inflationary environment, a resilient occupational market and limited development.
“Alongside recovering industrial values, well-located, fit-for-purpose offices and retail assets are benefiting from a gradual shift back to the office and more consumers switching back to in-store shopping. At the same time, there is increased demand for operational real estate assets such as hotels, self-storage and data centres.”
The REIT posted a 4.4% drop in net asset value for the year at £287.4m, driven by a full-year underlying portfolio value decline of 2.8%.
SREIT made a NAV total return of 1.1%, compared to -15.1% a year ago.
Send feedback to Tim Burke
Follow Estates Gazette
