Property Flash


Schroder European real estate investment trust (Sereit) collected 100% of the rent due to it in the six months to end-March 2022, a signal that western Europe’s largest markets have recovered from the Covid-19 pandemic.  

Sereit owns 13 properties valued at a combined €247.9m (R4.2bn); located in premium fast-growing cities across France, Germany, the Netherlands and Spain. Its assets tend to include mainly offices and retail centres but also industrial space.

The company was secondary listed on the JSE as a hedge against the volatile Rand. Its market capitalisation is valued at R2.7bn, making it one of the smaller listed property companies on the JSE.

Sereit’s lead fund manager Jeff O’Dwyer said the fund had used various methods to get tenants to extend their leases or to sign up, as trends had changed to a large degree in the wake of the pandemic.

“We collected all of our rent and believe that active fund management has been very successful for us,” said O’Dwyer.

He said a shift to more hybrid working had led to a “polarised market” with occupiers wanting to rent top quality space with state-of-the-art technology in Europe’s most advanced cities, strong environmental, social and governance credentials, and a focus on employee wellbeing to tempt employees back into offices. Sereit’s vacant space tended to be secondary grade and the fund’s management team would convert some of this space into hybrid uses such as co-working space or serviced retail like salons and yoga studios.

Sereit’s property portfolio’s value climbed 4% on a like-for-like valuation basis, net of capex. The 100% collection rate excluded a joint-venture in Seville, Spain. Offices accounted about a third of the group’s portfolio with industrial accounting for 25% and retail for 17%.

O’Dwyer said even though western Europe was tenacious, it was facing macroeconomic challenges partly because of the war in Ukraine and stagflation.

“Whilst remaining alert to the challenging macroeconomic backdrop, the company is well placed to continue outperforming. The portfolio is modestly leveraged, has a high level of occupancy and is leased off affordable rents,” he said.

Shareholders would receive a combined interim dividend to 6.6 euro cents per share, which would include a 4.75 euro cent special dividend. In the prior comparative six month period to end-March 2021, the group declared a 3.4 euro cent per share ordinary dividend. The special dividend for March 2022 period followed the €69.8m sale of an office asset in Paris.

Alistair Anderson

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