SREI : Schroder Real Estate may become a REIT
Schroder Real Estate has published its interims figures for the six months ended on 30 September 2014. Over that period the net asset value rose by 13.4% to 55.1p on the back of a 12.7% increase in the value of the property portfolio (by contrast the IPD index returned 9.2%). With the dividend (1.24p) this translates into a total return on net assets of 16.2%. The strong performance was driven in part by the disposals Schroder Real Estate made over the period including the property near Wembley stadium.
The £40m that they raised in April has now been deployed. Some of it went to reduce the loan to value ratio to 26.8% (from 37.8% at the end of March). they are now looking to raise about £25m in a placing of shares at 57.5p. £15m of that they are thinking about using for refurbishment and partial redevelopments over 2015 and 2016. The issue is only open to professional investors and subject to the usual restrictions about which county those investors are in.
The board are thinking about whether it would make sense to convert the fund into a REIT.