Schroder Real Estate Investment Trust (SREI) H1 2025 earnings summary

Executive summary

• NAV per share increased 1.0% to 59.4p, with a NAV total return of 4.0% for the six months ended 30 September 2024, and portfolio value at £290.7m.

• Portfolio is focused on high-growth sectors, with 62% exposure to multi-let industrial and retail warehousing, driving strong income and capital growth.

• Dividend yield stands at 6.9–7%, with dividends 102% covered by earnings and a further 3% increase announced post-period end.

• Sustainability is central to strategy, with formalised KPIs, proprietary ESG Scorecard, and major upgrades delivering a green premium.

• Share price at a 14% discount to NAV, offering an attractive entry point amid market recovery.

Financial highlights

• IFRS profit for the period was £11.7m, up 234% year-over-year; EPRA earnings rose 1% to £8.5m.

• Portfolio income (rental and JV share) increased 6% year-over-year to £15.1m, with rental income from the direct portfolio up 4% to £13.2m and JV income up 29% to £1.8m.

• Net initial yield is 6.1% and reversionary yield 8.5%, both above the MSCI Benchmark.

• Net asset value at £290.7m, down 2% from the prior year; property valuation stable at £465.5m.

• Net loan to value (LTV) at 37.3%, slightly above the long-term target range.

Outlook and guidance

• Market conditions are stabilizing, with expectations for continued rental growth and above-average returns in coming years.

• Anticipated sector returns of 7–10% over the next few years, driven by income and rental growth rather than yield compression.

• Targeting sustainable and progressive dividend policy, with further growth expected from rental reversion and asset management.

• Five-year average total return for UK property forecast at 8.3% p.a., with industrial and 'other' sectors expected to outperform.

• Focus remains on driving earnings growth, progressive dividend policy, and potential portfolio rotation to enhance returns.