Portfolio Activity Reducing Voids

22 December 2015

Schroder Real Estate Investment Trust Limited
(the 'Company')

PORTFOLIO ACTIVITY REDUCING VOIDS

The Company can report progress with a contracted disposal of Technology House in Fleet at a material premium to valuation and lettings activity at The Galaxy in Luton.

Fleet, Technology House

Unconditional contracts have exchanged to sell Technology House in Fleet for £2.2 million compared with the independent valuation as at 30 September 2015 of £1.2 million.  The buyer has paid a non-refundable deposit of £220,000 and completion is due on 12 February 2016.  The office property produces a rent of £72,954 per annum and is 77% vacant as a percentage of rental value.  The disposal is consistent with the strategy of selling smaller properties at premium prices to fund value enhancing asset management initiatives.

The Galaxy, Luton

Two new lettings and a lease variation have completed at The Galaxy in Luton at a combined rent of £489,760 per annum.  This compared to the independent valuation rental value of £360,000 per annum as at 30 September 2015.     

This activity results in the leisure property being fully let and increases the net initial yield, based on the valuation as at 30 September 2015 of £11.85 million, from 5% to 10%.  The lettings also increase the average unexpired lease term, assuming tenants break at the earliest opportunity, from 11.3 years to 13.2 years. 

Nick Montgomery, Head of UK Investment at Schroder Real Estate Investment Management Limited, commented:

“The disposal of Fleet at an 83% premium to the valuation is consistent with the strategy of selling smaller properties at premium prices to fund value enhancing asset management initiatives.  The lettings at Luton improve tenant mix and enhance both income and value.”

For further information:

Schroder Real Estate Investment Management Limited:
Duncan Owen / Nick Montgomery
020 7658 6000
Northern Trust:
David Sauvarin
01481 745529
FTI Consulting:
Dido Laurimore / Ellie Sweeney
020 3727 1000
UK 100