Real Estate  

Schroders European Reit steers steady course after Brexit

Schroders European Reit steers steady course after Brexit

Continental European markets have broadly remained unchanged following the Brexit vote, the chairman of Schroder’s European Real Estate Investment trust has said.

According to the trust’s annual report for the year ending 30 September, the trust is on target to give investors a 5.5 per cent dividend, having purchased seven commercial property assets in both Germany and France over the year.

This means the total dividend for the 2016 financial year is €1.7 (£1.4) per share.

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The portfolio was valued at €148.2m (£124m) at 30 September, reflecting an uplift on purchase price of approximately 5 per cent.

The trust raised €167m (£122m) through an initial public offering, and a further €16.8m (£15m) was raised through equity placing.

Sir Julian Berney, the trust’s chairman, said: “So far there has been little, if any, evidence of a significant change in occupier or investor behaviour in Continental European markets following the UK's vote to leave the EU.”

However, he said the board is “not complacent” and expect some market tremors as the negotiations between the UK and the European Union continue. 

“We also believe investor interest in Continental Europe may increase as a result of both diversification and occupier interest in those markets, as well as a period of uncertainty for the UK real estate market.”

All of this, he said, should support the Reit’s strategy moving forward.  

“We believe the focus of our strategy on long term growth markets and backing mega trends such as urbanisation, demographic change and infrastructure is now even more appropriate. 

“Such environments are likely to prove more resilient in a downside scenario and have further upside potential in the scenario where additional growth is generated through a progressive shift of occupiers from the UK to EU markets.”