The team at Schroder REIT says demand for space is outstripping supply across multiple sectors, giving “favourable momentum” to its portfolio.
For the six months to 30 September, the REIT recorded a 4% total net asset value return compared with 1.1% a year ago, with NAV up by 1% to £290.7m, driven by estimated rental value growth of 1.7%. It made a profit of £11.7m, more than three times that for the same period in 2023.
Chair Alastair Hughes said: “We have witnessed some yield compression for the first time since June 2022 and, perhaps more importantly, tenant demand outstripping available supply in several sectors, driving rental growth and overall returns. This favourable momentum, combined with our quality portfolio, strategic asset management, cost discipline and low cost of debt, should provide the opportunity for sustained and growing income.”
Fund manager Nick Montgomery added: “This has been another period of positive financial and operational performance, which has enabled us to again increase the dividend [by 0.879p per share], rewarding shareholders for their continued support. Our programme of sustainability-led, value-enhancing investments into the existing portfolio has delivered earnings growth and underpinned our highest six-month portfolio total return performance since June 2022, with a significant near-term rent reversion to capture which should maintain this trajectory.”
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