Schroder European Real Estate Investment Trust (SERE) H1 2026 earnings summary

Executive summary

• Announced intention, subject to shareholder approval, to commence an orderly wind down and return capital to shareholders due to persistent 40% discount to NAV and structural shifts in investor sentiment favoring larger, more liquid vehicles.

• The wind-down process is expected to take up to three years, with phased asset sales sequenced to maximize value and liquidity.

• Portfolio has performed well since IPO, returning over GBP 80 million to shareholders, but market preference for larger, more liquid vehicles has impacted share price.

• Dividend payments are expected to continue during the wind-down to maintain investment trust status, though cover may fall as major tenants vacate and as assets are sold.

Financial highlights

• Quarterly dividend maintained at EUR 0.0148 per share, totaling EUR 0.0296 for the six months to 31 March 2026, with a dividend cover of 93%.

• NAV at 31 March 2026 was EUR 151.3 million or EUR 1.152 per share, with a NAV total return for the period of 0.7%.

• Dividends declared totaled EUR 3.9 million (2.96 cps), with a yield of approximately 8.6% on the closing share price.

• EPRA earnings before exceptional items were EUR 3.6 million (2.7 cps), down from EUR 3.9 million (2.9 cps) year-over-year.

• Operating expenses decreased due to leasing activity; net financing costs increased due to higher interest rates.

Outlook and guidance

• Asset sales will be gradual, focusing on maximizing price and liquidity, with proceeds used to repay debt and return capital.

• Dividend payments to continue throughout the wind down, but cover may fall as major tenants vacate.

• Shareholder circular and vote on strategy change expected by mid-August.

• Market conditions remain challenging, with heightened geopolitical risk and cautious investor sentiment.