Net asset value per share was down marginally for Schroder Real Estate Investment Trust (SREIT) for the year ended March 2012, falling to 50.6p per share compared with 50.9p the previous year.
The negative value of interest rate swaps continued to eat into SREIT’s NAV, increasing to -£26.4m in March 2012 from -£22.3m in March 2011.
SREIT has focused heavily on risk reduction over the past financial year, paying off £22m of debt in order to bring down its loan-to-value ratio to 38%. The company has sold off its 29% share in City office building Plantation Place, EC3, releasing net proceeds of £11.7m, in a bid to strengthen its balance sheet.
SREIT has appointed Schroders to provide investment management and accounting services following a competitive selection process in January 2012, replacing Invista Real Estate Investment Management. Schroders takes an annual management fee of 1.1% of NAV, resulting in a £1.8m annualised fee saving for SREIT.
Duncan Owen, of Schroder Property Investment Management, said: “Progress has been made in implementing the company’s key objectives. The aims of improving dividend cover and strengthening the balance sheet remain unchanged. Whilst new investment opportunities are being sought and appraised, current market conditions dictate that a greater emphasis will be placed in the near future on reducing debt. In this regard, recent disposals, notably Plantation Place, have provided the company with additional flexibility to lower debt and increase the net income.”
sophia.furber@estatesgazette.com
