Schroder European REIT has returned to profit for the first half of the year.
The European growth city REIT announced a NAV total return of 5.5%, up from -0.4% for the same period last year. IFRS profit was €10.9m (£9.4m), up from a €700,000 loss for the six months to end of March 2021, primarily driven by yield compression and ERV growth across the industrial and DIY portfolio.
The portfolio value in total increased to €248m over the last six months, up from €215.7m.
SEREIT said it was well-placed to weather rising inflation, as 100% of its leases benefit from inflation-linked rent reviews.
The performance was a marked improvement on its year-end figures, which were dented by the REIT having to write down its Seville shopping centre.
The REIT’s report said that in an otherwise strong-performing half “the main detractor from portfolio performance was Seville with a -7% total property return”.
It added: “The negative return for the Seville property was a result of rent discounts, increased vacancy and weakening investor demand for shopping centres. However, from a fund performance perspective, Seville did not have any impact as the NAV exposure to this investment had already been fully written off since early 2021.”
SEREIT has been looking for a buyer for the shopping centre, but has so far had no takers.
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