Central London Acquisition

For release 18 December 2014 Schroder Real Estate Investment Trust Limited (the `Company') CENTRAL LONDON ACQUISITION On 20 November 2014, Schroder Real Estate Investment Trust (the `Company') completed a Placing (the `Placing') that raised £27 million from the issuance of 47 million shares at an issue price of 57.5 pence per share. The Placing was completed at a premium to the last reported Net Asset Value. The Company now announces that it has completed the acquisition of a 50% interest in The University of Law campus in Bloomsbury, London WC1, for £34 million. The Company is acquiring the property alongside Schroder UK Property Fund,also managed by Schroder Real Estate Investment Management, for a total price of £68 million. The price reflects a net initial yield of 4%. The property has been acquired from The University of Law which has entered into a new 12 year lease without tenant breaks at a rent of £2.869 million per annum, with the Company's 50% share representing rental income of £1.43 million per annum. The lease benefits from five yearly, upwards only rent reviews to the higherof (i) the movement in the Retail Price Index (`RPI'), with the RPI movement subject to a minimum uplift of 1% per annum compounded and a maximum uplift of 4% per annum compounded; or (ii) the open market rental value without a maximum uplift. The current rent equates to £33.43 per sq ft. The freehold property comprises two parcels of land totalling 0.8 acres on which there are four buildings totalling 85,814 sqftwith a mix of office and D1 (educational) planning use. The property is located approximately 400 metres north of Tottenham Court Road station and one block away from Bedford Square. The acquisition satisfies the Company's investment criteria by offering: - Good fundamentals in a location with sustainable tenant demand, affordable rents and potential for long-term, higher value and alternative uses; - Potential to benefit from increasing occupational demand from the advertising, media and telecommunications sectors; - Low site density that underpins the value for future redevelopment; and the - Potential to benefit from infrastructural improvements, specifically the significant investment into the Tottenham Court Road area including a major Central London Crossrail station. This is the ninth acquisition completed by the Company since the commencement of its growth strategy in December 2013. Over this period, the Company has invested £120 million at an average initial income return of 6.6% with an average unexpired lease term, to the earlier of lease expiry or tenant break options, of 8.7 years. The acquisitions offer a blend of above average yields, attractive income characteristics as well as potential for further income and capital growth through asset management. Following the recent Placing and this acquisition, the Company's dividend will be fully covered by recurring earnings. There is also potential for earnings to increase further following the disposal of non-income producing property and redeployment of proceeds. The most significant of these disposals is Reynards Trading Estate in Brentford which is expected to complete shortly for £20 million,with the intention that proceeds are efficiently redeployed into income producing investments. Following completion of this acquisition the Company has total cash balances of approximately £8 million and a net loan to value, based on the independent valuation as at 30September 2014 and updated for all subsequent transactions, of approximately 30%. The Placing Programme, established through the Company's prospectus dated 20 March 2014 and approved by shareholders in April 2014, enables the Company to issue up to a further 73 million shares over the period to 19 March 2015, with such shares being issued at a premium to the prevailing net asset value (`NAV') in order to cover the costs associated with the issue. The Company's Investment Manager will therefore continue to targetnew acquisitions with a disciplined approach. It will only pursue investments that meet the strategy as well as investment opportunities within the existing portfolio. Commenting on the Placing, Duncan Owen, Head of Real Estate at Schroders commented: "It is the third time this year that placing proceeds have been efficiently deployed in line with the Company's strategy of targeting investments with strong fundamentals in a good location. The acquisition of four buildings on two freehold parcels of land presents both a future opportunity to intensify and change use whilst also benefiting froman inflation linked rental stream." For further information: Schroder Real Estate Investment Management Limited: 020 7658 6000 Duncan Owen / Nick Montgomery Northern Trust: 01481 745529 David Sauvarin FTI Consulting: 020 3727 1000 Dido Laurimore / Ellie Sweeney
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