Schroder Real Estate Investment Trust (SREI) investor relations material

Executive summary

• Achieved a 7.8% dividend yield, with a 4% increase in dividends paid year-over-year and a 38% rise in dividends since 2019.

• Maintained a progressive dividend policy and strong income return, supported by a low fixed debt cost (75% at 2.5% for 10 years).

• Announced board succession, with Priscilla Davies becoming Chair and Richard Dakin joining as non-exec director.

• Proposed earnings-accretive acquisition of Picton, expected to deliver scale, diversification, and further balance sheet strength.

• Portfolio is diversified, with 66% exposure to higher growth multi-let industrial and retail warehouse sectors.

Financial highlights

• Portfolio value declined 0.1% in H2, with annual NAV down 1.1%; NAV total return just under 5% for the year.

• Rental income from the direct portfolio increased 3% year-over-year to £32.7 million, despite asset sales.

• Income return of 5.5% outperformed the benchmark (4.8%), though total portfolio return (5.4%) was slightly below benchmark (5.7%).

• Ongoing charges ratio at 1.31% for the year, with further cost savings expected from management fee changes.

• EPRA earnings were £16.5 million, down 3% from the prior year.

Outlook and guidance

• Confident in further dividend growth, supported by reversionary rent potential and fixed debt costs.

• Expect continued reduction in vacancy rates and realization of reversionary income, with GBP 8.1 million uplift potential.

• Market recovery anticipated to be protracted but underpinned by resilient occupational demand and limited new supply.

• Proposed Picton transaction expected to be earnings and dividend accretive, with enhanced scale and diversification.

• Platform for accelerated growth supported by high income, low debt cost, and robust balance sheet.