Schroder European Real Estate Investment Trust (SERE) H1 2025 earnings summary

Executive summary

• Portfolio of 15 commercial real estate assets in France, Germany, and the Netherlands valued at up to €230.2m, with 95% occupancy, 50 tenants, and a focus on high-growth cities and regions.

• Maintained a strong balance sheet with €25m cash, 18% net LTV, and all leases nearly fully index-linked, providing an inflation hedge.

• Dividend yield of 7.3% fully covered by earnings, with shares trading at a 30–35% discount to NAV, and €1.2m invested in share buybacks.

• Active asset management, including new leases, re-gears (notably Hornbach), and disposals (Frankfurt, Seville, Metromar JV) to reduce gearing and support capital returns.

• Key risk to dividend sustainability is the KPN lease expiry in December 2026, representing 18% of portfolio rent.

Financial highlights

• EPRA earnings (excluding exceptional items) were €3.9m for the six months ended 31 March 2025, with a fully covered dividend of 2.96cps (100% cover).

• NAV total return was 0.3% for the six-month period, compared to -1.3% for the prior year, aided by accretive share buybacks.

• NAV fell 2.1% to €158.9m (120.1cps), mainly due to unrealized valuation declines in Berlin and Hamburg.

• IFRS loss for the period was €0.1m, compared to a €2.2m loss in the same period last year.

• Cash balance of €25m–€26.9m at period end.

Outlook and guidance

• Focus on re-gearing key leases (Nestlé, Baden-Württemberg, Stellantis, Hachette) and improving portfolio sustainability and energy credentials.

• Board reviewing strategy to maximize shareholder value, including further buybacks and sector focus.

• Targeting growth through asset management, investment of cash, and broadening the investor base.

• Considering selective acquisitions or recycling capital post-French tax resolution.