Acquisition and Disposal

RNS Number : 5590Z
Schroder Real Estate Inv Trst Ld
07 February 2014

7 February 2014


Schroder Real Estate Investment Trust Limited




Schroder Real Estate Investment Trust Limited (the 'Company') has acquired Morgan Sindall House in Rugby for £3.95 million, reflecting a net initial yield of 8%. 


The property comprises a 36,016 sq ft office building together with 95 car parking spaces and is let to Morgan Sindall Plc as their regional headquarters for 15 years without tenant breaks at £335,000 per annum or an overall rate of £9.30 per sq ft, with a guarantee from Morgan Sindall Group Plc.  The lease benefits from five yearly upwards only rent reviews linked to the Retail Price Index, subject to a minimum uplift of 2% per annum compound and a maximum uplift of 4% per annum compound.  


In addition, the Company has also completed the disposal of its 19.5% interest in Merchant Property Unit Trust ('MPUT'), generating net proceeds of approximately £3.25 million, in line with the Net Asset Value as at 31 December 2013.  MPUT owns a portfolio of 35 builders merchant units located throughout the UK let to Travis Perkins.


Following completion of these two transactions the Company has cash of £14.2 million. 


Commenting on the transactions, Nick Montgomery, Head of UK Investment at Schroder Property Investment Management said:


"These two transactions provide a good example of our ability to realise value and reinvest the proceeds into higher yielding assets to support our strategy of growing net income and dividend cover.  The property in Rugby complements the Company's current portfolio by offering a long lease to an established tenant at an above average initial yield with inflation-linked rental uplifts.


"We are continuing to focus on unlocking value in our portfolio and enhancing income by disposing of low or non-income producing properties and redeploying capital into higher income producing investments. As such, we have identified further transactions that are aligned with our strategic objectives and hope to make further announcements in this regard in due course."




For further information:


Schroder Property Investment Management Limited:
Duncan Owen / Nick Montgomery

020 7658 6000

Northern Trust:

David Sauvarin

01481 745529

FTI Consulting:

Dido Laurimore / Nina Legge

020 7831 3113




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