Schroder Real Estate Investment Trust (SREI) Investor update summary

Portfolio and financial performance

• Portfolio valued at approximately £480 million as of December, with a 7.3% dividend yield and strong dividend growth track record.

• Reversionary yield stands at 8.3%, indicating potential for additional rental income of about £9 million.

• Balance sheet remains robust with an average debt cost of 3.4% and average maturity of 7.7 years; 75% of debt fixed at 2.5% for over 10 years.

• NAV per share at December was £0.617, with shares trading at a 20% discount, reflecting market volatility.

• EPRA earnings grew 2% over the quarter, supported by disciplined cost control and asset management.

Strategic focus and M&A activity

• Portfolio is 65% allocated to multi-let industrial and retail warehouse sectors, considered to offer the best risk-adjusted returns.

• Announced a consortium bid proposal for Picton, in partnership with LondonMetric Property, structured as an all-share offer.

• Any M&A activity must be earnings and dividend accretive, align with sector preferences, and not overpay for acquisitions.

• Board maintains independence and prioritizes shareholder interests in all corporate actions.

• Overarching principles for growth include complementary portfolios, earnings growth, and shareholder value.

Asset management and operational highlights

• 18 new lettings since November, totaling £2.1 million in rent, with new deals exceeding December ERV by 0.3%.

• Rent reviews and renewals achieved over 20% uplift versus previous levels.

• Vacancy rate reduced to 9.7%, with further space under offer or refurbishment.

• Recent refurbishments and sustainability upgrades have driven significant rental uplifts, e.g., 54% uplift from Screwfix and 86% uplift at Millshaw Park.

• Long leases secured with strong tenants like McDonald's, Tesco, Lidl, and The Gym Group, often with inflation-linked rent reviews.