Schroder Real Estate Investment Trust (SREI) H2 2025 earnings summary

Executive summary

• Delivered an 11.0% NAV total return for the year, with NAV per share up 4.8% and share price rising 25% year-over-year.

• Achieved a 7.3% increase in dividend, maintaining 100% dividend cover and a 6.8% yield.

• Portfolio focused on higher growth sectors, with 63% exposure to multi-let industrial and retail warehouse assets.

• Strategic focus on sustainability, with a 5% improvement in landlord energy and GHG intensity and active asset management driving higher earnings growth.

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

Financial highlights

• Rental income rose 6% to £27.2m; total rental and related income up 4% to £31.3m year-over-year.

• EPRA earnings increased 4% to £17.0m, fully covering dividends paid.

• Portfolio return of 9.1% versus benchmark index of 6.2% for the year; 460 basis points outperformance over three years.

• Net initial yield at 5.6% (benchmark: 5.1%), reversionary yield at 8.4% (benchmark: 6.2%).

• Ongoing charges at 1.25% per AIC methodology.

Outlook and guidance

• Cautiously optimistic outlook for the next 18-24 months, supported by supply shortages, cost-push inflation, and recovering UK real estate values.

• Forecasting UK all property total returns of 8-10% per annum over the next four years.

• Expectation of continued NAV and earnings growth through active management, sustainability initiatives, and high portfolio reversion.

• Anticipate further rental growth, especially in industrial and retail warehouse sectors.