Schroder European Real Estate Investment Trust (SERE) H2 2025 earnings summary

Executive summary

• Focused on asset management, securing 10 new leases and re-gears totaling over €2 million in annual rent, extending average lease term to 11 years, and raising Paris occupancy to 97% post-period.

• Sold Frankfurt retail asset at value, reducing retail exposure and using proceeds for debt reduction and a share buyback.

• Facing key risks: KPN's intention to terminate Apeldoorn lease in 2026 and ongoing French tax dispute with €14.2 million ring-fenced.

• Appointed Phil Redding as incoming board chair to help reshape strategy and maximize shareholder value.

• Focused on protecting earnings, improving asset value, and maintaining liquidity through active asset management and selective asset rotation.

Financial highlights

• €28 million cash on balance sheet at year-end, providing flexibility.

• Net LTV at 25% (29% gross), with next refinancing due summer 2026.

• Dividend cover at 94% for FY25, down from 103% prior year, mainly due to Frankfurt asset sale.

• IFRS profit increased to €2.2 million from €0.6 million year-over-year.

• NAV per share at year-end: GBP 1.04; share buyback at GBP 0.66.

• EPRA earnings €7.3 million pre-exceptional items, €6.7 million post-exceptional, with EPS of 4.9 cents.

• Property assets valued at €194 million, with net asset value (NAV) of €156.7 million, down 4.5% year-over-year.

Outlook and guidance

• Actively working to secure replacement tenant or alternative use for Apeldoorn asset; dividend likely to be impacted depending on outcome.

• Positive market sentiment with improving investment volumes, especially in sub-€30 million lot sizes.

• Focus on re-gearing leases representing 20% of income, with expected positive rental increases.

• Ongoing efforts to broaden investor base, targeting retail investors.

• Management prioritizes asset quality improvement and resolving French tax dispute.