TIDMSERE
RNS Number : 5349C
Schroder Eur Real Est Inv Trust PLC
18 June 2019
18 June 2019
SCHRODER EUROPEAN REAL ESTATE INVESTMENT TRUST PLC
("SEREIT"/ the "Company" / "Group")
HALF YEAR RESULTS FOR THE SIX MONTHSED 31 MARCH 2019
SUCCESSFUL ASSET MANAGEMENT AND INVESTMENT IN LOGISTICS ASSETS
POSITIONS COMPANY TO DELIVER FURTHER PORTFOLIO VALUATION AND INCOME
UPLIFT
Schroder European Real Estate Investment Trust plc, the company
investing in European growth cities and regions, today announces
its half year results for the six months ended 31 March 2019.
Key Highlights
- Agreed conditional heads of terms (post period end) for a new
long-term lease and capex programme at the Boulogne-Billancourt
office investment in Paris, providing future potential capital
value and income upside
- Increased portfolio weighting towards higher growth sectors,
recycling EUR17.3 million of capital into two logistics assets in
France, reflecting an income yield of 5.9%
- Maintained delivery of attractive dividend yield of 5.5% against Net Asset Value ('NAV')
Financial highlights
-- Net Asset Value ('NAV') of EUR182.8 million or 136.7 cps (30
September: EUR182.1 million or 136.2 cps), an increase over the
period of 0.4%
-- NAV total return of 1.7% (31 March 2018: 6.1%)
-- Underlying EPRA earnings of EUR5.4 million (31 March 2018: EUR6.5 million)
-- Profit for the six months of EUR3.2 million (31 March 2018:
EUR10.8 million, which included a number of one-off gains)
-- Total dividends declared relating to the six months of 3.7
cps, in-line with target of 5.5% annualised yield against the euro
IPO issue price
-- Dividend cover of 108% (31 March 2018: 100%)
-- Loan to value ('LTV') of 28% (30 September 2018: 26%) at a
weighted average total interest rate of 1.4%
Operational highlights
-- 100% of the portfolio's 13 institutional grade properties
located in the fastest growing cities and regions of Continental
Europe
-- Improved portfolio diversification, increasing exposure to
higher growth logistics warehouse sector from 13% to 19% (31 March
2018: 0%)
-- Maintained high portfolio occupancy of almost 100%, with a
6.5 years average lease term to expiry
-- Ongoing execution of asset management initiatives across the portfolio:
o Agreed conditional heads of terms (post period end) for a new
long-term lease and capex programme with current tenant Alten, for
6,800 sqm, at the Boulogne-Billancourt office investment in
Paris
o Completion of EUR0.8 million refurbishment program at the
Metromar Shopping Centre in Seville to improve centre vibrancy and
visitor appeal
o Completed two new leases with tenants in the education and IT
sectors for over c. 40% of space in Hamburg, at rents above
business strategy. Detailed discussions ongoing for a further two
floors, representing an additional c. 25% of space
-- Current portfolio valued at EUR240 million(*) reflecting an
uplift of approximately 7.8% on purchase price, with transaction
costs now fully recovered through valuation uplifts since
acquisition
-- Underlying property portfolio total return of 3.5% over six
months (excluding the impact from transaction costs)
* Includes the Group's share of the Seville property
proportionally valued at EUR26.4 million.
Commenting, Sir Julian Berney, Chairman of the Board, said:
"This has been an active six month period for the Company which
has seen us make important progress, improving the long-term income
profile of the Company and increasing our exposure to higher growth
regions and sectors. The Company has an exciting asset management
opportunity to invest into its Paris Boulogne-Billancourt office
investment, potentially delivering growth in rental income and
capital value and improving the quality and defensive
characteristics of the portfolio. This is a good example of how our
investment strategy of targeting assets with strong property
fundamentals in European Winning Cities provides opportunities for
growth."
Jeff O'Dwyer, Fund Manager for Schroder Real Estate Investment
Management Limited, added:
"The recent French logistics acquisition is further evidence of
our focus on assembling a diversified portfolio in winning cities
and regions across continental Europe. The Company now has c. 20%
of its assets in industrial warehousing, up from 0% twelve months
ago. The majority of European real estate markets are performing
well, particularly in Berlin, Frankfurt, Hamburg, Stuttgart and
Paris, those cities where the Company has the majority of its
exposure. We continue to focus on delivering our asset management
programme and the optimal financing structure for this, in order to
strengthen the income and portfolio profile, and support our
ambition to grow the size of the Company."
The Half Year Report is also being published in hard copy format
and an electronic copy of that document will shortly be available
to download from the Company's webpage www.schroders.co.uk/sereit.
Please click on the following link to view the document:
http://www.rns-pdf.londonstockexchange.com/rns/5349C_1-2019-6-17.pdf
The Company has submitted a pdf of the hard copy format of the
Half Year Report to the National Storage Mechanism and it will
shortly be available for inspection at
www.morningstar.co.uk/uk/NSM.
A further announcement will be made shortly to confirm the full
timetable of the second interim dividend.
For further information:
Schroder Real Estate Investment Management
Duncan Owen / Jeff O'Dwyer 020 7658 6000
Ria Vavakis
Schroder Investment Management Limited 01481 745212
--------------
FTI Consulting
Dido Laurimore / Richard Gotla / Methuselah
Tanyanyiwa 020 3727 1000
--------------
A presentation for analysts and investors will be held at 08.45
BST today at Schroders plc, 1 London Wall Place, London, EC2Y 5AU.
If you would like to attend, please contact James Lowe at Schroders
on james.lowe@schroders.com or +44 (0)20 7658 2083.
A webcast presentation will take place at 1100 BST / 1200 SA,
registration for which can be accessed via:
https://www.brighttalk.com/webcast/1184/360254?utm_source=Schroder+Investments+Limited&utm_medium=brighttalk&utm_campaign=360254&utm_source=ExactTarget&utm_medium=Email&utm_campaign=SEREIT+Notice+of+Results-+20190528_114347
Chairman's Statement
Overview
SEREIT had an active six month period to 31 March 2019, with a
continued focus on reinvesting sale proceeds, alongside a programme
of value-enhancing asset management activity. As a result, the
Group is in a strengthened position, with a further diversified
portfolio, increased allocation to higher growth sectors and
improved potential for longer-term income and capital growth.
The acquisition of the Rennes logistics property (comprising two
neighbouring warehouses) in March completed the reinvestment of the
proceeds from the profitable sale of the Casino supermarkets last
year. The overall reinvestment of these proceeds has been at higher
income yields and has increased exposure to the higher growth
logistics and industrial sector. This forms part of the strategy to
have a diversified income-generating portfolio focused on the
Winning Cities and regions of Continental Europe, balanced across
different growth sectors.
The main asset management activity has been agreeing heads of
terms (post-period end) with the tenant at the Boulogne-Billancourt
office investment in Paris for a new long-term lease commitment. As
part of the agreement, SEREIT will plan to undertake a significant
capital expenditure programme to refurbish the building and the
heads of terms are subject to a number of conditions, including
planning and financing. If concluded, it has the potential to
deliver both NAV return upside and improve the longer-term income
and portfolio profile. Progressing this project is a key focus for
the remainder of the year, alongside other asset management
initiatives such as securing further lease agreements for the
remaining vacant space at the Group's Hamburg office and Metromar
shopping centre in Seville.
Results
The Company's NAV at 31 March 2019, excluding non-controlling
interests, was EUR182.8 million or 136.7 euro cents per share
("cps"), representing an increase of EUR0.7 million (0.5 cps /
0.4%) over the six month period. This movement includes property
transactions costs of EUR1 million (0.7 cps) associated with the
Rennes acquisition. Including dividends, the NAV total return over
the period excluding these one-off items was 2.2% and was 1.7%
including the one-off items.
The profit for the six month period ending 31 March 2019 was
EUR3.2 million and EPRA earnings were EUR5.4 million.
The Board also notes that it is working with its advisers to
assess the potential impact of proposed changes to various European
tax laws. Further detail is provided in note 7 of the condensed
consolidated interim financial statements.
Strategy
The Group has a focused investment strategy, investing in good
quality real estate located in Winning Cities and regions across
Continental Europe. Winning Cities and regions are those that are
expected to generate higher and more sustainable levels of economic
growth, underpinned by themes such as urbanisation, demographics,
technology and infrastructure improvements. The portfolio of 13
assets is fully situated in locations with GDP growth forecasts in
the top two quartiles of all European regions (Source: Oxford
Economics).
The portfolio is diversified by location, sector, tenants and
lease expiry. This enables the Group to tactically orientate the
portfolio over time in order to benefit from structural economic
and sociodemographic trends, also influenced by the varying cycles
across different cities and sectors. A recent example of this is
the strategic reduction in the Group's retail exposure and increase
in the allocation to the higher growth logistics sector, which is
now 19% of the portfolio, up from nil 12 months ago. Having this
flexibility and diversification also assists in improving the
defensive characteristics of the asset base and the income profile
over the long run.
The assets are managed by the Investment Manager's local real
estate teams, which total 180 professionals based on the ground
across eight key markets in Europe. This local presence provides a
competitive advantage in being able to identify sub-markets and
assets benefiting from local market trends and building
relationships with tenants to execute asset management initiatives.
In addition, Schroders' in-house economic and real estate research
platform assists the Group with identifying and capitalising on
broader macro and micro trends.
The Group is now fully invested, with the strategy for the
remainder of the year being focused on supporting NAV and income
returns through current and planned active asset management.
Delivering this strategy will underpin our ambition to grow the
Group in a disciplined way that will improve long-term shareholder
returns. The delivery of these asset management initiatives is also
important to provide downside protection in a scenario where income
and values come under pressure as a result of a deterioration in
the economic or real estate market backdrop.
Balance sheet and debt
During the period the Group completed a new EUR8.6 million debt
facility secured against the Rennes industrial acquisition. This
loan takes the Group's total third party debt as at 31 March 2019
to EUR73.0million[*], representing a Loan to Value ('LTV') of
approximately 28% against the overall gross asset value of the
Group.
The Group has a strategy of maintaining a robust balance sheet
and overall leverage is capped at 35% at the time of borrowing the
debt. The Group has six debt facilities in place, with an average
weighted total interest rate of 1.40% per annum. All interest rates
are either fixed or capped to mitigate the risk of rising interest
rates.
There is various asset management activity, such as the lease
regear and refurbishment at the Boulogne-Billancourt office in
Paris, that will require capital investment and has the potential
to provide attractive property returns. The Group has some
additional debt capacity and regularly reviews other means of
growing its available capital, such as raising equity or asset
sales, in order to seek to optimise the overall capital structure
for the Group's strategy.
Dividend
The Group has declared a second interim dividend in respect of
the year ending 30 September 2019 of 1.85 euro cents per share
payable on 22 July 2019 to shareholders on the register at 5 July
2019. The first and second interim dividends in respect of the year
ending 30 September 2019 amount to 3.70 euro cents per share.
The dividends for the six month period are 108% covered from net
income from the portfolio. This includes a positive net impact of
EUR1.26 million from the receipt of the final payment for the
Hamburg lease surrender, which contributes towards covering the
void at that property whilst we complete the re-leasing. Excluding
the Hamburg surrender premium receipt, the dividend cover is
78%.
The latest declared dividend represents an annualised rate of
5.5% based on the euro equivalent of the issue price at admission,
again achieving the target dividend stated at IPO. Based on the
Euro:GBP exchange rate as at 31 March 2019, this equates to an
annualised rate of 6.5% on the GBP issue price at IPO of 100 pence
per share.
Asset management activity such as the lease regear at the
Boulogne-Billancourt office investment will improve the longer-term
income profile of the Group, but will reduce dividend cover in the
short term. In implementing the dividend strategy, the Board will
consider the shorter term cash generation of the Company, alongside
the longer term sustainable rental income from the portfolio.
Outlook
The global economic and political backdrop remains fragile. The
Winning Cities we are invested in across Europe are better placed
than many in respect of these risks, as they have higher levels of
economic activity and are positioned to benefit from structural
mega-themes such as urbanisation and infrastructure improvements.
There are a number of opportunities to generate attractive returns
from asset management and outperformance of certain markets, but
also pockets of caution where income and value may come under
pressure.
The Group has a high-quality, diverse portfolio. Execution of
the asset management initiatives across the portfolio will both
strengthen the defensive characteristics of the Group and improve
the long-term capital and income returns for shareholders.
Sir Julian Berney Bt.
Chairman
18 June 2019
Investment Manager's Review
Results
The Group's NAV as at 31 March 2019 stood at EUR182.8 million
(GBP157.3m), or 136.7 euro cents (118.0 pence) per share, achieving
a NAV total return of 1.7% over the six months to 31 March
2019.
The table below provides an analysis of the movement in NAV
during the reporting period as well as a corresponding
reconciliation in the movement in the NAV cents per share:
NAV movement EURmillion(1) Cps(2) % change per cps(3)
Brought forward as at 1 October 2018 182.1 136.2 -
-------------- ------- --------------------
Transaction costs of investments made during the period (1.0) (0.7) (0.5)
-------------- ------- --------------------
Capital expenditure (1.5) (1.1) (0.8)
-------------- ------- --------------------
Unrealised gain in valuation of the real estate portfolio 0.7 0.5 0.4
-------------- ------- --------------------
EPRA earnings(4) 5.4 4.0 2.9
-------------- ------- --------------------
Non-cash/capital items (0.4) (0.3) (0.2)
-------------- ------- --------------------
Dividends paid (2.5) (1.9) (1.4)
-------------- ------- --------------------
Carried forward as at 31 March 2019 182.8 136.7 0.4
-------------- ------- --------------------
(1) Management reviews the performance of the Group principally
on a proportionally consolidated basis. As a result, figures quoted
in this table include the Group's share of the Seville joint
venture on a line-by-line basis.
(2) Based on 133,734,686 shares.
(3) Percentage change based on the starting NAV as at 1 October
2018.
(4) EPRA earnings as reconciled in note 8 of the condensed
consolidated financial statements
Market overview
Economic growth forecasts have been revised down over the last
3-6 months and Schroders forecasts now that Eurozone economic
growth will slow from 1.8% in 2018 to 1.25-1.5% p.a. through
2019-2020. While short-term growth was impacted by political
turmoil and uncertainty over the new Italian government, Brexit and
the protests in France, the main weak spot is manufacturing,
reflecting slower growth in China and the US. Particularly Germany,
with its big exposure to manufacturing, has seen forecasts revised
down sharply. By contrast, consumer spending remains stable,
supported by very healthy labour markets, higher pay awards, low
inflation of around 1.5% p.a. and some softening in austerity
measures combined with higher public sector spending. The benign
outlook for inflation means that the European Central Bank is
likely to wait until 2020 before raising the refinancing interest
rate. The main upside risk is that consumer spending is stronger
than forecast. The main downside risks are continued lack of
clarity on Brexit, an escalation of the US-China trade dispute and
the threat of US-imposed tariffs on EU exports.
Offices
Most major European cities experienced a rise in office rents
over the year to 31 March 2019. This widespread upswing reflects
the sustained increase in employment, particularly in technology
and professional services over the last five years and low volumes
of completions. As a result, vacancy rates in Amsterdam, Brussels,
the major German cities, Paris and Stockholm are at their lowest
level in fifteen years and there is a particular shortage of new
and modern office space suitable for new workplace configurations.
At the same time, there remains a low level of new development.
Consequently, while rental growth will probably start to slow, we
expect the increase in office rents to continue through
2019-2020.
Logistics/industrial
The industrial and logistics sector is also seeing strong demand
and rising rents, driven by the cyclical improvement in the economy
and by the structural growth in online retailing. However, the
increase in rents is less ubiquitous than in the office market and
big cities (e.g. Berlin, Madrid, Munich, Paris) are generally
seeing faster rental growth than ports or other distribution hubs.
The difference is largely due to the greater availability of land
for new building in the main logistics hubs of Benelux and the
Ruhr, but development in big cities is also being held back by low
unemployment and a shortage of warehouse staff. This is encouraging
greater automation and, combined with the transition to electric
vehicles, means that warehouses increasingly need to have a good
power supply.
Retail
Despite the growth in consumer spending, demand for retail space
in continental Europe remains in structural decline. The key
challenge is the switch to online retail. The market is also being
disrupted by discount retailers who are taking market share from
mid-market retailers and are unwilling to pay the same level of
rent. The average vacancy rate in shopping centres has risen to 8%
and shopping centre rents fell in most countries in 2018 (source:
PMA). We believe that the most defensive retail types will be shops
in big city centres and tourist destinations, convenience stores,
mid-sized supermarkets and out-of-town retail warehouses selling
bulky goods. We expect that department stores, shopping centres
with a heavy reliance on clothing and footwear, shops in smaller
cities and hypermarkets will suffer a sustained fall in rents
Strategy
The strategy over the period has focused on the following key
objectives:
- Maintaining the annualised target dividend yield of 5.5%;
- Further strengthening of the portfolio's diversification
qualities from a city, sector and income perspective;
- Achieving full investment through targeting Winning Cities and
regions that experience higher levels of GDP, employment and
population growth than national averages;
- Execute asset management initiatives to improve both the
long-term income profile and individual asset value; and
- Manage portfolio risk in order to enhance the portfolio's defensive qualities
Progress has been made in executing the strategy and activity
over the period which has delivered the following:
- Acquisition of an industrial property in Rennes, France
(comprising two neighbouring warehouses) increasing the Company's
industrial warehousing weighting to 19% and improving the portfolio
diversification from a sector, tenancy, age profile and unexpired
lease term perspective;
- Agreeing conditional heads of terms (post-period end) with
Alten regarding their longer term occupation in the Company's
largest asset in Boulogne Billancourt, Paris and refurbishment of
this asset;
- Securing new lease agreements with two tenants over c.40% of
the Hamburg space, achieved at rents above business plan and in
detailed discussions for a further two floors;
- 100% of the portfolio now located in higher growth cities and regions;
- Concluded three new leases and re-gears, generating a 9%
increase in annualised income relative to previous rent at a
weighted lease term of 3 years
- Completion of a EUR0.8 million asset management initiative
centred on improving the vibrancy, lighting, wayfaring and signage
for the Metromar Shopping Centre, Seville;
- Maintained the high occupancy level of 96%, with an average
portfolio unexpired lease term of 6.5 years and 5.1 years to break;
and
- A prudent Loan to Value of 28%
Our focus continues to be on driving income and total returns
for the existing portfolio, managing risks and continuing to seek
new investments to accelerate income growth. The specific next
steps therefore include:
1. Conclusion of key asset management initiatives;
a) Advancing the formal lease pre-commitment for the office
investment in Boulogne Billancourt, Paris and progression of the
redevelopment licences, construction contract and programme;
b) Leasing the remaining c. 60% of vacant space in Hamburg;
c) The opening of leisure specialist Urban Planet in Metromar,
Seville which is expected in Q3 2019, which will add a further
point of difference to the scheme, enhancing its appeal in a
competitive local market; and
2. Continue to actively engage with existing shareholders and
potential new investors; and
3. Consider opportunities to grow the Group, taking a
disciplined approach in a way that will improve long-term
shareholder returns.
Acquisition update
The Group has continued to focus on acquiring properties that
increase its allocation to the high growth industrial and logistics
sector and further diversify the portfolio.
In March 2019, the Group completed the acquisition of two
neighbouring industrial warehouses near Rennes, in Brittany,
France, for EUR17.3 million, reflecting a net initial yield of
5.9%.
Providing 23,852 sq.m of institutional quality space across two
adjacent buildings, the property is let on a 12 year lease to
C-Log, the logistics subsidiary of Groupe Beaumanoir, the
international fashion retailer, which has invested significant
capex in equipping the building with automated technology.
The property is located at the junction of two major arterial
routes and benefits from excellent sea, high speed rail and air
connectivity. In line with Schroders' Winning Cities strategy,
Brittany is one of France's fastest growing regions in terms of GDP
and population growth.
Asset management update
Key asset management over the period has centred on Metromar
(Seville) and Boulogne-Billancourt (Paris).
Metromar, Seville (retail shopping Boulogne-Billancourt, Paris (office)
centre)
Asset overview Asset overview
-------------------------------------------
23,500 sq.m urban shopping centre 6,800 sq.m office building located
with a tenancy mix centred on grocery, in an established market in Paris'
fashion and leisure that services Western Crescent
a local, growing catchment
-------------------------------------------
Asset strategy Asset strategy
-------------------------------------------
Light refurbishment and strengthening Repositioning opportunity regarding
of entertainment point of difference an office investment let off modest
to improve occupancy and local rents and located in a supply constrained
retail dominance location with competing demands
for uses
-------------------------------------------
Key activity Key activity
-------------------------------------------
Dual strategy involving an EUR800,000 Advancement of feasibility analysis
investment to improve vibrancy, regarding redevelopment options.
lighting, signage and wayfinding In conjunction we have agreed conditional
(completed April 2019) whilst adding heads of terms (post-period end)
an additional leisure anchor, trampoline with the sitting tenant regarding
specialist Urban Planet (due to their pre-commitment to a new longer
open in August 2019). Defensive term lease, in return for us refurbishing
measures to increase property's the building to grade A specification
appeal to visitors and tenants
and protect against new competition.
Reviewed the centre's BREEAM in-use
certification. The centre achieved
a rating of four stars (very good)
for building performance and five
stars (excellent) for management.
-------------------------------------------
Other key asset management included signing two new leases in
the Group's Hamburg investment:
1. First floor totalling c. 927 sq.m leased to IT services
specialist, Sentinel Systemlösungen GmbH for a 7 year term with an
option for another 3 year term.
2. Fifth floor totalling c. 646 sq.m leased to education and
training specialist Grone Wirtschaftsakademie GmbH for a 5 year
term with an option for another 5 year term.
The combined annual rental terms have been concluded above
target.
We are also in detailed discussions for leasing a further two
floors.
Real Estate Portfolio
Following the latest Rennes acquisition, the Group now owns a
portfolio of thirteen institutional grade properties valued at
EUR240 million[ ] as at 31 March 2019. The properties are 96% let
and located across those Winning Cities and regions in France,
Germany, Spain and the Netherlands. All investments are 100% owned
except for the Metromar shopping centre, Seville, where the Group
holds a 50% interest.
The top 10 properties comprise 92% of the portfolio value:
Rank Property Country Sector Value
EURm % of total
------ -----------
1 Paris (B-B)[++] France Office 41.6 17%
--------------------------- ------------------- ----------- ------ -----------
2 Paris (SC)[--] France Office 35.6 15%
--------------------------- ------------------- ----------- ------ -----------
3 Berlin Germany Retail 26.9 11%
--------------------------- ------------------- ----------- ------ -----------
4 Seville Spain Retail 26.4 11%
--------------------------- ------------------- ----------- ------ -----------
5 Apeldoorn Netherlands Mixed 20.0 8%
--------------------------- ------------------- ----------- ------ -----------
6 Rennes France Industrial 17.6 7%
--------------------------- ------------------- ----------- ------ -----------
7 Stuttgart Germany Office 16.4 7%
--------------------------- ------------------- ----------- ------ -----------
8 Hamburg Germany Office 15.3 7%
--------------------------- ------------------- ----------- ------ -----------
9 Frankfurt Germany Retail 11.5 5%
--------------------------- ------------------- ----------- ------ -----------
10 Venray Netherlands Industrial 9.6 4%
--------------------------- ------------------- ----------- ------ -----------
Top 10 properties 220.9 92%
------------------------------------------------------------- ------ -----------
11-13 Remaining three properties Netherlands/France Industrial 19.0 8%
--------------------------- ------------------- ----------- ------ -----------
Total 239.9 100%
------------------------------------------------------------- ------ -----------
The table below sets out the top ten tenants which are from a
diverse range of industry segments and represent 67% of the
portfolio:
Rank Tenant Property Contracted rent Wault break (yrs) Wault expiry
(yrs)
EURm % of total
----- -----------
1 KPN Apeldoorn 2.4 14% 7.8 7.8
----------------------- ------------ ----- ----------- ------------------ -------------
2 Alten Paris (B-B) 2.4 14% 2.0 2.0
----------------------- ------------ ----- ----------- ------------------ -------------
3 Hornbach Berlin 1.6 9% 6.8 6.8
----------------------- ------------ ----- ----------- ------------------ -------------
4 C-Log Rennes 1.1 7% 11.9 11.9
----------------------- ------------ ----- ----------- ------------------ -------------
5 Filassistance Paris (SC) 0.9 5% 2.8 7.8
----------------------- ------------ ----- ----------- ------------------ -------------
6 Cereal Partners France Rumilly 0.7 4% 6.1 7.1
----------------------- ------------ ----- ----------- ------------------ -------------
7 DKL Venray 0.7 4% 9.5 9.5
----------------------- ------------ ----- ----------- ------------------ -------------
8 Land BW Stuttgart 0.7 4% 6.9 7.3
----------------------- ------------ ----- ----------- ------------------ -------------
9 Thesee Paris (SC) 0.6 3% 0.4 0.4
----------------------- ------------ ----- ----------- ------------------ -------------
10 Inventum Industrial Houten 0.6 3% 7.2 7.2
----------------------- ------------ ----- ----------- ------------------ -------------
Total top ten tenants 11.7 67% 6.0 6.5
----- ----------- ------------------ -------------
Remaining tenants 5.5 33% 3.2 6.5
------------------------------------- ----- ----------- ------------------ -------------
Total 17.2 100% 5.1 6.5
----- ----------- ------------------ -------------
The portfolio generates EUR17.2 million p.a. in contracted
income. The average unexpired lease term is 5.1 years to first
break and 6.5 years to expiry.
The lease expiry profile to earliest break is shown on page 17
of the condensed consolidated interim financial statements. The
near-term lease expiries provide asset management opportunities to
renegotiate leases, extend weighted average unexpired lease terms,
improve income security and generate rental growth. In turn, this
activity benefits NAV total return.
Portfolio performance
The current portfolio value of EUR240 million[**] reflects an
increase of 7.8% (EUR17.4 million) compared to the combined
purchase price. Transaction costs have been fully recovered through
valuation uplifts since acquisition.
Overall, external valuations remained fairly flat over the six
months to the end of March 2019. A notable exception was the
Hamburg property where the reduction in valuation was more than
compensated for by the payment of the second tranche of the lease
surrender premium by former tenant, City BKK.
Over the last six months, the underlying property portfolio
generated a total property return of 3.5% (non-annualised/3.1% when
including the impact from transaction costs for the newly-acquired
property in Rennes). Hereof, portfolio income return amounted to
3.8% and portfolio capital return to -0.3% (net of capex).
Sustainable investment
Our approach to responsible investment has been continually
upgraded over the last few years and we are increasingly seeking to
assess and improve the positive impact of our investments. This
involves incorporation of environmental, social and governance
issues as well as, importantly, the impact of our investments on
the built environment and climate change risks and opportunities.
The Investment Manager is aware of the importance of the impact its
activities have on local environments and the performance of this
area is being continually measured. It was a founding member of the
UK Green Building Council in 2007 and in 2017 became a member of
the Better Buildings Partnership and a Fund Manager Member of
GRESB.
Over the period, the Company had the Metromar shopping centre,
Seville, reviewed from a BREEAM in-use perspective. The centre
achieved a rating of four stars (very good) for building
performance and five stars (excellent) for management. Both these
ratings are expected to improve the portfolio's GRESB
classification.
Finance
As at 31 March 2019, the Group's total external debt was EUR73.0
million[ ], across six loan facilities. This represents a
conservative loan to value of 28% against the Group's gross asset
value.
During the first six months of the financial year the Group
completed one new debt facility with the newly acquired industrial
property in Rennes (comprising two neighbouring warehouses) being
part financed with a EUR8.6 million loan.
The current blended all-in interest rate is 1.4%, significantly
below the portfolio yield of 6.2% p.a, providing a favourable yield
gap. The average unexpired loan term is 5.5 years.
Lender Property Maturity Outstanding Interest rate
date principal(1)
Deutsche Pfandbriefbank Berlin/Frankfurt 30/06/2026 EUR16,500,000 1.31%
------------------------ ------------ -------------- --------------
Stuttgart/Hamburg 30/06/2023 EUR14,000,000 0.85%
------------------------ -------------------------------------------- -------------- --------------
BRED Banque Populaire Paris (SC) 15/12/2024 EUR13,000,000 3M Euribor +
1.30%
------------------------ ------------ -------------- --------------
Münchener Hypothekenbank
(1) Seville (50%) 22/05/2024 EUR11,678,750 1.76%
------------------------ ------------ -------------- --------------
HSBC Netherlands industrial 27/09/2023 EUR9,250,000 3M Euribor +
2.15%
------------------------ ------------ -------------- --------------
Saar LB Rennes 28/03/2024 EUR8,600,000 3M Euribor +
1.40%
------------------------ ------------ -------------- --------------
Total EUR73,028,750
-------------- --------------
(1) All statistics in the Investment Manager's report reflect a
50% ownership share of Seville. As a result, debt allocations for
those investments in the table above are similarly
proportioned.
The German and Spanish loans are fixed rate for the duration of
the loan term.
The French and Netherlands loans are based on a margin above 3
month Euribor. The Group has acquired interest rate caps to limit
future potential interest costs if Euribor were to increase. The
strike rate on the Paris loan interest rate cap is 1.25% p.a., on
the Rennes loan cap is 1% p.a. and for the Netherlands loan is 1%
p.a..
Outlook
GDP growth has slowed in Europe over the last six months,
impacted by economic and political uncertainty. The majority of the
major real estate markets continue to perform well. Occupational
demand in leading European cities such as Paris, Berlin, Hamburg,
Frankfurt and Amsterdam remains strong. In conjunction with this,
the supply side remains balanced with disciplined bank lending
reducing speculative development. These are all characteristics for
positive rental growth and investment demand.
Our immediate priority is centred on successfully executing our
asset management programme. Successful conclusion of these asset
management initiatives will improve the portfolio's income profile.
This should enhance value and better support our continued ambition
for the disciplined growth of the Company.
Schroder Real Estate Investment Management Limited
18 June 2019
Directors' Report
Principal risks and uncertainties
The principal risks and uncertainties with the Company's
business fall into the following risk categories: investment policy
and strategic; economic and property market; investment management;
custody; gearing and leverage; accounting, legal and regulatory;
valuation; and service provider. A detailed explanation of the
risks and uncertainties in each of these categories can be found on
pages 27 to 30 of the Company's published Annual Report and
Consolidated Financial Statements for the year ended 30 September
2018. The Company is aware of potential changes to tax legislation,
one retrospective, which, if implemented, may impact the Company.
The Company is monitoring these matters closely. Otherwise, these
risks and uncertainties have not materially changed during the six
months ended 31 March 2019 and are not expected to change during
the remaining six months of the financial year.
Going concern
The Directors have examined significant areas of possible
financial risk and have reviewed cash flow forecasts and compliance
with the debt covenants, in particular the loan to value covenants
and interest cover ratios. They have not identified any material
uncertainties which would cast significant doubt on the Group's
ability to continue as a going concern for a period of not less
than twelve months from the date of the approval of the condensed
consolidated interim financial statements. The Directors have
satisfied themselves that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Having assessed the principal risks and uncertainties, and the
other matters discussed in connection with
the viability statement as set out on page 30 of the published
Annual Report and Consolidated Financial Statements for the year
ended 30 September 2018, the Directors consider it appropriate to
adopt the going concern basis in preparing
the accounts.
Related party transactions
There have been no transactions with related parties that have
materially affected the financial position or the performance of
the Company during the six months ended 31 March 2019. Related
party transactions are disclosed in note 13 of the condensed
consolidated interim financial statements.
Statement of Directors' responsibilities
The Directors confirm that to the best of their knowledge:
- The half year report and condensed consolidated interim
financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union;
and
- The Interim Management Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
Sir Julian Berney Bt.
Chairman
18 June 2019
Condensed Consolidated Interim Statement of Comprehensive
Income
For the period ended 31 March 2019
Note Six months to Six months to Year to
31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Rental and service charge income 2 8,945 10,347 19,900
------ -------------- -------------- --------------
Other income 3 1,500 2,400 2,400
------ -------------- -------------- --------------
Property operating expenses (2,423) (3,899) (6,458)
------ -------------- -------------- --------------
Net rental and related income 8,022 8,848 15,842
------ -------------- -------------- --------------
Loss on disposal - - (29)
------ -------------- -------------- --------------
Net (loss)/gain from fair value adjustment on investment
property 4 (1,566) 6,359 4,939
------ -------------- -------------- --------------
Realised gain on foreign exchange 4 1 1
------ -------------- -------------- --------------
Net change in fair value of financial instruments at fair
value through profit or loss 5 (200) (39) (155)
------ -------------- -------------- --------------
Dividends received from joint venture 6 - - 150
------ -------------- -------------- --------------
Expenses
------ -------------- -------------- --------------
Investment management fee 13 (947) (849) (1,958)
------ -------------- -------------- --------------
Valuers' and other professional fees (494) (309) (687)
------ -------------- -------------- --------------
Administrator's and accounting fees (165) (147) (330)
------ -------------- -------------- --------------
Auditors' remuneration (191) (134) (269)
------ -------------- -------------- --------------
Directors' fees 13 (72) (62) (115)
------ -------------- -------------- --------------
Other expenses (129) (119) (206)
------ -------------- -------------- --------------
Total expenses (1,998) (1,620) (3,565)
------ -------------- -------------- --------------
Operating profit 4,262 13,549 17,183
------ -------------- -------------- --------------
Finance income 226 378 456
------ -------------- -------------- --------------
Finance costs (402) (502) (962)
------ -------------- -------------- --------------
Net finance costs (176) (124) (506)
------ -------------- -------------- --------------
Share of (loss)/profit of joint venture 6 (71) 292 407
------ -------------- -------------- --------------
Profit before taxation 4,015 13,717 17,084
------ -------------- -------------- --------------
Taxation 7 (818) (815) (1,517)
------ -------------- -------------- --------------
Profit after taxation 3,197 12,902 15,567
------ -------------- -------------- --------------
Attributable to:
------ -------------- -------------- --------------
Owners of the parent 3,197 10,798 13,175
------ -------------- -------------- --------------
Non-controlling interests - 2,104 2,392
------ -------------- -------------- --------------
3,197 12,902 15,567
------ -------------- -------------- --------------
Basic and diluted earnings per share attributable to owners
of the parent 8 2.4c 8.1c 9.9c
------ -------------- -------------- --------------
Profit for the period/year 3,197 12,902 15,567
------ -------------- -------------- --------------
Other comprehensive income:
Other comprehensive loss items that may be reclassified to
profit or loss:
------ -------------- -------------- --------------
Currency translation differences (6) - (4)
------ -------------- -------------- --------------
Total other comprehensive loss (6) - (4)
------ -------------- -------------- --------------
Total comprehensive income for the period/year 3,191 12,902 15,563
------ -------------- -------------- --------------
Attributable to:
------ -------------- -------------- --------------
Owners of the parent 3,191 10,798 13,171
------ -------------- -------------- --------------
Non-controlling interests - 2,104 2,392
------ -------------- -------------- --------------
3,191 12,902 15,563
------ -------------- -------------- --------------
All items in the above statement are derived from continuing
operations. The accompanying notes 1 to 16 form an integral part of
the condensed consolidated interim financial statements.
Condensed Consolidated Interim Statement of Financial
Position
As at 31 March 2019
Assets Notes 31 Mar 2019 30 Sep 2018 31 Mar 2018
Non-current assets EUR'000 EUR'000 EUR'000
(unaudited) (audited) (unaudited)
Investment property 4 213,174 195,644 166,173
------ -------------- ------------ --------------
Investment in joint venture 6 6,626 6,697 6,582
------ -------------- ------------ --------------
Loans to joint venture 10,035 10,035 10,035
------ -------------- ------------ --------------
Non-current assets 229,835 212,376 182,790
------ -------------- ------------ --------------
Trade and other receivables 5,773 12,537 850
------ -------------- ------------ --------------
Interest rate derivative contracts 5 121 188 232
------ -------------- ------------ --------------
Cash and cash equivalents 15,166 15,738 21,268
------ -------------- ------------ --------------
Current assets 21,060 28,463 22,350
------ -------------- ------------ --------------
Assets of disposal group held for sale - - 70,389
------ -------------- ------------ --------------
Total assets 250,895 240,839 275,529
------ -------------- ------------ --------------
Equity
------ -------------- ------------ --------------
Share capital 15,540 15,015 15,215
Share premium 30,959 29,912 30,310
Retained earnings 5,120 4,397 9,442
Other reserves 131,167 132,745 132,151
------ -------------- ------------ --------------
Equity attributable to owners of the parent 182,786 182,069 187,118
------ -------------- ------------ --------------
Non-controlling interest - - 9,795
------ -------------- ------------ --------------
Total equity 182,786 182,069 196,913
------ -------------- ------------ --------------
Liabilities
Non-current liabilities
------ -------------- ------------ --------------
Interest-bearing loans and borrowings 9 60,506 52,150 43,079
------ -------------- ------------ --------------
Deferred tax liability 7 1,061 912 883
------ -------------- ------------ --------------
Non-current liabilities 61,567 53,062 43,962
------ -------------- ------------ --------------
Current liabilities
------ -------------- ------------ --------------
Trade and other payables 7 5,619 5,081 3,980
Current tax liabilities 923 627 114
------ -------------- ------------ --------------
Current liabilities 6,542 5,708 4,094
------ -------------- ------------ --------------
Liabilities of disposal group held for sale - - 30,560
------ -------------- ------------ --------------
Total liabilities 68,109 58,770 78,616
------ -------------- ------------ --------------
Total equity and liabilities 250,895 240,839 275,529
------ -------------- ------------ --------------
Net Asset Value per ordinary share 11 136.7c 136.2c 139.9c
------ -------------- ------------ --------------
The accompanying notes 1 to 16 form an integral part of the
condensed consolidated interim financial statements.
Condensed Consolidated Interim Statement of Changes in
Equity
For the period ended 31 March 2019
Note Share Share Retained Other Owners of Non-controlling Total
capital premium earnings reserves the parent interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance as at
1 October
2018 15,015 29,912 4,397 132,745 182,069 - 182,069
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Profit for the
period - - 3,197 - 3,197 - 3,197
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Other
comprehensive
loss for the
year - - - (6) (6) - (6)
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Dividends paid 12 - - (2,474) - (2,474) - (2,474)
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Unrealised
foreign
exchange 525 1,047 - (1,572) - - -
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Balance as at
31 March 2019
(unaudited) 15,540 30,959 5,120 131,167 182,786 - 182,786
----- ------------ ------------ ---------- ------------ ----------- ---------------- ---------
Note Share Share Retained Other Owners of Non-controlling Total
capital premium earnings reserves the parent interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance as at 1
October 2017 15,167 30,215 650 132,294 178,326 7,691 186,017
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Profit for the
year - - 13,175 - 13,175 2,392 15,567
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Other
comprehensive
loss for the
year - - - (4) (4) - (4)
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Dividends paid 12 - - (9,428) - (9,428) - (9,428)
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Share premium
distribution - - - - - (1,510) (1,510)
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Divestment of
non-controlling
interests - - - - - (8,573) (8,573)
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Unrealised
foreign
exchange (152) (303) - 455 - - -
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Balance as at 30
September 2018
(audited) 15,015 29,912 4,397 132,745 182,069 - 182,069
----- ----------- ------------ ---------- ----------- ----------- ---------------- ---------
Note Share Share Retained Other Owners of Non-controlling Total
capital premium earnings reserves the parent interests equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance as
at 1
October
2017 15,167 30,215 650 132,294 178,326 7,691 186,017
----- ------------ ------------- ---------- ------------ ------------ ---------------- ---------
Profit for
the period - - 10,798 - 10,798 2,104 12,902
----- ------------ ------------- ---------- ------------ ------------ ---------------- ---------
Dividends
paid 12 - - (2,006) - (2,006) - (2,006)
----- ------------ ------------- ---------- ------------ ------------ ---------------- ---------
Unrealised
foreign
exchange 48 95 - (143) - - -
----- ------------ ------------- ---------- ------------ ------------ ---------------- ---------
Balance as
at 31 March
2018
(unaudited) 15,215 30,310 9,442 132,151 187,118 9,795 196,913
----- ------------ ------------- ---------- ------------ ------------ ---------------- ---------
The accompanying notes 1 to 16 form an integral part of the
condensed consolidated interim financial statements.
Condensed Consolidated Interim Statement of Cash Flows
For the period ended 31 March 2019
Note Six months to Six months to Year to
31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Operating activities
----- -------------- -------------- --------------
Profit before tax for the period/year 4,015 13,717 17,084
----- -------------- -------------- --------------
Adjustments for:
----- -------------- -------------- --------------
Loss on disposal - - 29
----- -------------- -------------- --------------
Net loss/(gain) from fair value adjustment on investment
property 4 1,566 (6,359) (4,939)
----- -------------- -------------- --------------
Share of loss/(profit) of joint venture 6 71 (292) (407)
----- -------------- -------------- --------------
Realised foreign exchange gains (4) (1) (1)
----- -------------- -------------- --------------
Finance income (226) (378) (456)
----- -------------- -------------- --------------
Finance costs 402 502 962
----- -------------- -------------- --------------
Net change in fair value of financial instruments at fair
value through profit or loss 5 200 39 155
----- -------------- -------------- --------------
Dividends received from joint venture 6 - - (150)
----- -------------- -------------- --------------
Operating cash generated before changes in
working capital 6,024 7,228 12,277
----- -------------- -------------- --------------
Decrease/(Increase) in trade and other receivables 6,761 (113) (3,122)
----- -------------- -------------- --------------
Increase in trade and other payables 259 816 2,300
----- -------------- -------------- --------------
Cash generated from operations 13,044 7,931 11,455
----- -------------- -------------- --------------
Finance costs paid (569) (664) (1,255)
----- -------------- -------------- --------------
Finance income received 226 381 456
----- -------------- -------------- --------------
Tax paid 7 (373) (224) (384)
----- -------------- -------------- --------------
Net cash generated from operating activities 12,328 7,424 10,272
----- -------------- -------------- --------------
Investing activities
----- -------------- -------------- --------------
Acquisition of investment property (18,013) (21,070) (51,992)
----- -------------- -------------- --------------
Additions to investment property (878) (123) -
----- -------------- -------------- --------------
Proceeds from disposal of investment property - - 19,740
----- -------------- -------------- --------------
Receipt of loan repayment - - 7,215
----- -------------- -------------- --------------
Dividends received from joint venture 6 - - 150
----- -------------- -------------- --------------
Net cash used in investing activities (18,891) (21,193) (24,887)
----- -------------- -------------- --------------
Financing activities
----- -------------- -------------- --------------
Proceeds from borrowings 9 8,600 13,000 13,000
----- -------------- -------------- --------------
Interest rate cap purchased 5 (133) (227) (227)
----- -------------- -------------- --------------
Dividends paid 12 (2,474) (2,006) (9,428)
----- -------------- -------------- --------------
Share premium distribution - - (1,510)
----- -------------- -------------- --------------
Net cash generated from financing activities 5,993 10,767 1,835
----- -------------- -------------- --------------
Net decrease in cash and cash equivalents for the period/year (570) (3,002) (12,780)
----- -------------- -------------- --------------
Opening cash and cash equivalents 15,738 28,521 28,521
----- -------------- -------------- --------------
Effects of exchange rate change on cash (2) 1 (3)
----- -------------- -------------- --------------
Transfer to disposal group held for sale - (4,252) -
----- -------------- -------------- --------------
Closing cash and cash equivalents 15,166 21,268 15,738
----- -------------- -------------- --------------
The accompanying notes 1 to 16 form an integral part of the
condensed consolidated financial statements
Notes to the Condensed Consolidated Interim Financial
Statements
1. Significant accounting policies
The Company is a closed-ended investment company incorporated in
England and Wales. The condensed consolidated interim financial
statements of the Company for the period ended 31 March 2019
comprise those of the Company and its subsidiaries (together
referred to as the 'Group'). The shares of the Company are listed
on the London Stock Exchange (Primary listing) and the Johannesburg
Stock Exchange (Secondary listing). The registered office of the
Company is 1 London Wall Place, London EC2Y 5AU.
These condensed consolidated interim financial statements do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 30
September 2018 were approved by the Board of Directors on 30
November 2018 and were delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006.
These condensed consolidated interim financial statements have
been reviewed and not audited.
Statement of compliance
The condensed consolidated interim financial statements have
been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom Financial Conduct
Authority and IAS 34 Interim Financial Reporting as adopted by the
European Union ("EU"). They do not include all of the information
required for the full annual financial statements and should be
read in conjunction with the consolidated financial statements of
the Group as at and for the year ended 30 September 2018. The
condensed consolidated interim financial statements have been
prepared on the basis of the accounting policies set out in the
Group's consolidated financial statements for the year ended 30
September 2018. The consolidated financial statements for the year
ended 30 September 2018 have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the EU. The Group's annual financial statements refer to new
Standards and Interpretations none of which had a material impact
on the financial statements.
Basis of preparation
The condensed consolidated interim financial statements are
presented in euros rounded to the nearest thousand. They are
prepared on a going concern basis, applying the historical cost
convention except for the measurement of investment property and
derivative financial instruments that have been measured at fair
value.
The accounting policies have been consistently applied to the
results, assets, liabilities and cash flow of the entities included
in the condensed consolidated interim financial statements and are
consistent with those of the year end financial report.
During the period the Group adopted the following standards:
IFRS 9 - Financial instruments
The new standard results in changes in the classification of all
financial assets excluding derivatives. This reclassification does
not have an impact on the financial statements.
The new standard introduces an expected credit loss model,
requiring expected credit losses to be recognised on all financial
assets held at amortised cost.
This new IFRS 9 impairment model requires impairment allowances
for all exposures from the time a loan is originated, based on the
deterioration of credit risk since initial recognition. If the
credit risk has not increased significantly (Stage 1), IFRS 9
requires allowances based on twelve month expected losses. If the
credit risk has increased significantly (Stage 2) and if the loan
is 'credit impaired' (Stage 3), the standard requires allowances
based on lifetime expected losses. The assessment of whether a loan
has experienced a significant increase in credit risk varies by
product and risk segment. It requires use of quantitative criteria
and experienced credit risk judgement.
The expected credit risk model has been applied to the joint
venture loan and trade receivables. IFRS 9 does not apply to any
other assets held by the Group.
There is no material quantitative impact for the period ended 31
March 2019 upon application of this new accounting policy for
assessing asset impairment. The Group will continue to assess the
financial assets periodically using the credit loss model and
recognise an expected credit loss if required.
IFRS 15 - Revenue from contracts with customers
The new standard sets out a five-step model for the recognition
of revenue and establishes principles for reporting useful
information to users of financial statements about the nature,
timing and uncertainty of revenues and cash flows arising from an
entity's contracts with customers. The new standard does not apply
to rental income which is in the scope of IAS 17, but does apply to
service charge income, management and performance fees and trading
property disposals. Adoption of IFRS 15 has not had a quantitative
impact upon the Group's financial statements. It has resulted in
some minor qualitative disclosure in relation to some revenue
items, as detailed in Note 2 to the condensed consolidated interim
financial statements, the service charge income has been separated
from rental income.
IFRS 16 - Leases
The new standard requires recognition on the balance sheet for
the head rent payable by a lessee over the lease term. For lessees,
it will result in almost all leases being recognised on the balance
sheet, as the distinction between operating and finance leases will
be removed. The accounting for lessors will not significantly
change. These changes are not expected to have any impact on the
consolidated financial statements of the Group as it does not hold
any leasehold properties.
IFRS 16 was effective from 1 January 2019 but has not been early
adopted by the Group.
Going concern
The Directors have examined significant areas of possible
financial risk including cash and cash requirements and compliance
with the debt covenants. The Directors have not identified any
material uncertainties which would cast significant doubt on the
Group's ability to continue as a going concern for a period of not
less than twelve months from the date of the approval of the
condensed consolidated interim financial statements. The Directors
have satisfied themselves that the Group has adequate resources to
continue in operational existence for the foreseeable future.
Use of estimates and judgements
The preparation of financial statements in conformity with IFRS,
as adopted by the EU, requires management to make judgements,
estimates and assumptions that affect the application of policies
and the reported amounts of assets and liabilities, income and
expenses. These estimates and associated assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making judgements about the carrying values of assets
and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
The most significant estimates made in preparing the condensed
consolidated interim financial statements relate to the carrying
value of investment properties (as disclosed in note 4, including
those within joint ventures) which are stated at fair value. Fair
value is inherently subjective because the valuer makes assumptions
which may not prove to be accurate. The Group uses external
professional valuers to determine the relevant amounts.
A key area of judgement is accounting for transactions. These
include judgements on whether the criteria for assets and
liabilities held for sale have been met for transactions not yet
completed; and accounting for transaction costs and contingent
consideration. Management use the most appropriate accounting
treatment for each transaction and seek independent advice where
necessary.
Another key area of judgement is tax provisioning and
disclosure. Management use external tax advisers to monitor changes
to tax laws in countries the Group has operations. New tax laws
that have been substantively enacted are recognised in the Group's
financial statements. Where changes to tax laws give rise to a
contingent liability the Group discloses these appropriately within
the notes to the financial statements.
Segmental reporting
The Directors are of the opinion that the Group is engaged in a
single segment of business, being property investment, and in one
geographical area, Continental Europe. The chief operating
decision-maker is considered to be the Board of Directors who are
provided with consolidated IFRS information on a
quarterly basis.
Financial risk factors
The Directors are not aware of significant changes to the
financial risk profile of the Group since the end of the last
annual financial reporting period for the year ended 30 September
2018.
The main risks arising from the Group's financial instruments
and investment properties are: market price risk, currency risk,
credit risk, liquidity risk and interest rate risk. The Board
regularly reviews and agrees policies for managing each of these
risks.
2. Rental and service charge income
Six months to Six months to Year to
31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Rental income 6,976 6,688 13,708
Service charge income 1,969 3,659 6,192
Total 8,945 10,347 19,900
--------------------------- -------------- -------------- --------------
3. Other income
Other income relates to a lease surrender premium agreement
pursuant to the Company's Hamburg office asset in Germany. EUR1.5m
was received in the six months ended 31 March 2019 and EUR2.4m was
received during the year ended 30 September 2018.
4. Investment property
Freehold
EUR'000
Fair value at 30 September 2017 (audited) 202,563
---------
Property acquisitions 21,127
---------
Additions 124
---------
Net valuation gain on investment property 6,359
---------
Sub-total 230,173
---------
Transfer to disposal group held for sale (64,000)
---------
Fair value as at 31 March 2018 (unaudited) 166,173
---------
Property acquisitions 27,042
---------
Acquisition costs 3,849
---------
Net valuation loss on investment property (1,420)
---------
Fair value as at 30 September 2018 (audited) 195,644
---------
Property acquisitions 18,211
---------
Additions 885
---------
Net valuation loss on investment property (1,566)
---------
Fair value as at 31 March 2019 (unaudited) 213,174
---------
The fair value of investment properties, as determined by the
valuer, totals EUR213,530,000 (30 September 2018: EUR195,950,000)
with the valuation amount relating to a 100% ownership share for
all the assets in the portfolio.
None of this amount is attributable to trade or other
receivables in connection with lease incentives. The fair value of
investment properties per the condensed consolidated interim
financial statements of EUR213,174,000 includes a tenant incentive
adjustment of EUR356,000 (30 September 2018: EUR306,000).
The fair value of investment property has been determined by
Knight Frank LLP, a firm of independent chartered surveyors, who
are registered independent appraisers. The valuation has been
undertaken in accordance with the RICS Valuation - Global Standards
2017, incorporating the International Valuations Standards, and
RICS Professional Standards UK January 2014 (revised April
2015).
The properties have been valued on the basis of 'fair value' in
accordance with the RICS Valuation - Professional Standards VPS4
(1.5) Fair Value and VPGA1 Valuations for Inclusion in Financial
Statements which adopt the definition of fair value used by the
International Accounting Standards Board.
The valuation has been undertaken using appropriate valuation
methodology and the Valuer's professional judgement. The Valuer's
opinion of fair value was primarily derived using recent comparable
market transactions on arm's length terms, where available, and
appropriate valuation techniques ('the investment method').
The properties have been valued individually and not as part of
a portfolio.
All investment properties are categorised as Level 3 fair values
as they use significant unobservable inputs. There have not been
any transfers between levels during the period. Investment
properties have been classed according to their real estate sector.
Information on these significant unobservable inputs per class of
investment property is disclosed below:
Quantitative information about fair value measurement using
unobservable inputs (Level 3) as at 31 March 2019 (unaudited)
Industrial Retail (including Office Total
retail warehouse)
Fair value (EUR'000) EUR46,280 EUR91,150 EUR128,900 EUR266,330(3)
------------ ---------------------- ------------- --------------
Area ('000 sq.m) 68,806 44,365 60,429 173,600
------------ ---------------------- ------------- --------------
Net passing rent Range 39.78-99.84 94.73-140.72 47.46-350.03 39.78-350.03
EUR per sq.m per annum Weighted average (2) 48.29 114.02 209.39 148.76
----------------------- ------------ ---------------------- ------------- --------------
Gross ERV EUR per sq.m Range 38.00-89.40 101.58-187.50 79.76-419.91 38.00-419.91
per annum
Weighted average (2) 48.44 158.43 239.77 178.69
------------------------------------------------ ------------ ---------------------- ------------- --------------
Net initial yield(1) Range 5.64-7.43 4.79-5.38 1.79-11.40 1.79-11.40
Weighted average (2) 6.38 4.99 6.70 6.06
------------------------------------------------ ------------ ---------------------- ------------- --------------
Equivalent yield Range 5.50-7.00 5.10-5.98 4.23-10.44 4.23-10.44
Weighted average (2) 6.25 5.76 6.17 6.04
------------------------------------------------ ------------ ---------------------- ------------- --------------
Notes:
(1) Yields based on rents receivable after deduction of head
rents and non-recoverables.
(2) Weighted by market value.
(3) This table includes the joint venture investment property
valued at EUR52.8 million which is disclosed within the summarised
information within note 6 as part of total assets.
Quantitative information about fair value measurement using
unobservable inputs (Level 3) as at 30 September 2018
(audited).
Industrial Retail (incl. Office Total
retail
warehouse)
Fair value (EUR'000) 28,600 89,650 129,700 247,950(3)
------------ -------------- ------------- -------------
Area
('000 sq.m) 43,666 44,336 60,423 148,425
------------ -------------- ------------- -------------
Net passing Range 39.84-97.94 94.73-140.01 63.24-349.98 39.84-349.98
rent
EUR per sq.m Weighted average 51.48 115.88 210.84 158.12
per annum (2)
-------------------- ------------ -------------- ------------- -------------
Gross ERV EUR Range 38.00-89.43 101.58-189.45 76.76-419.91 38.00-419.91
per sq.m per
annum
Weighted average 51.61 159.74 239.88 189.19
(2)
------------------------------------------- ------------ -------------- ------------- -------------
Net initial Range 6.04-7.33 4.90-5.52 2.46-11.00 2.46-11.00
yield(1)
Weighted average 6.75 5.10 6.69 6.12
(2)
------------------------------------------- ------------ -------------- ------------- -------------
Equivalent yield Range 6.01-7.00 5.10-5.95 4.43-10.10 4.43-10.10
Weighted average 6.62 5.78 6.15 6.07
(2)
------------------------------------------- ------------ -------------- ------------- -------------
Notes:
(1) Yields based on rents receivable after deduction of head
rents and non-recoverables.
(2) Weighted by market value.
(3) This table includes the joint venture investment property
valued at EUR52.0 million which is disclosed within the summarised
information within note 6 as part of total assets.
Sensitivity of measurement to variations in the significant
unobservable inputs
The significant unobservable inputs used in the fair value
measurement (categorised within Level 3 of the fair value hierarchy
of the Group's property portfolio), together with the impact of
significant movements in these inputs on the fair value
measurement, are shown below:
Unobservable input Impact on fair value measurement of Impact on fair value measurement of significant
significant increase in input decrease in input
Passing rent Increase Decrease
----------------------------------------------- ------------------------------------------------
Gross ERV Increase Decrease
----------------------------------------------- ------------------------------------------------
Net initial yield Decrease Increase
----------------------------------------------- ------------------------------------------------
Equivalent yield Decrease Increase
----------------------------------------------- ------------------------------------------------
There are interrelationships between the yields and rental
values as they are partially determined by market rate conditions.
The sensitivity of the valuation to changes in the most significant
inputs per class of investment property is shown below:
Estimated movement in fair value of investment properties at 31 March Industrial Retail Office Total
2019 (unaudited) EUR'000 EUR'000 EUR'000 EUR'000
Increase in ERV by 5% 1,350 3,550 2,000 6,900
----------- --------- --------- ---------
Decrease in ERV by 5% -1,350 -3,550 -2,000 -6,900
----------- --------- --------- ---------
Increase in net initial yield by 0.25% -1,850 -4,000 -6,400 -12,250
----------- --------- --------- ---------
Decrease in net initial yield by 0.25% 2,050 4,400 7,100 13,550
----------- --------- --------- ---------
Estimated movement in fair value of investment properties at 30 Industrial Retail Office Total
September 2018 (audited) EUR'000 EUR'000 EUR'000 EUR'000
Increase in ERV by 5% 800 3,500 5,700 10,000
----------- --------- --------- ---------
Decrease in ERV by 5% -900 -3,500 -5,550 -9,950
----------- --------- --------- ---------
Increase in net initial yield by 0.25% -1,150 -4,000 -6,000 -11,150
----------- --------- --------- ---------
Decrease in net initial yield by 0.25% 1,100 4,350 6,700 12,150
----------- --------- --------- ---------
5. Derivative financial instruments
The Group has an interest rate cap in place which was purchased
for EUR227,000 from BRED Banque Populaire on 15 December 2017 in
connection to a EUR13.0m loan facility drawn from the same bank
with a maturity date of 15 December 2024. The interest rate cap is
1.25% with a floating rate option being Euribor 3 months. In line
with IFRS 9, this derivative is reported in the condensed
consolidated interim financial statements at its fair value. As at
30 September 2018 the fair value of the interest rate cap was
EUR188,000. The notional value of the instrument is EUR13.0
million. As at 31 March 2019 the fair value of the interest rate
cap was EUR58,000, giving a valuation decrease as shown within the
Statement of Comprehensive Income of EUR130,000.
During the period the group entered into an interest rate cap
purchased for EUR87,000 from HSBC Bank Plc on 31 October 2018 in
connection to a EUR9.25 million loan facility drawn from the same
bank with a maturity date of 27 September 2023. The cap interest
rate is 1.0% with a floating rate option being Euribor 3 months. In
line with IFRS 9, this derivative is reported in the condensed
consolidated interim financial statements at its fair value. As at
31 March 2019 the fair value of the interest rate cap was
EUR17,000, giving a valuation decrease as shown in the Statement of
Comprehensive Income of EUR70,000.
During the period the Group entered into an interest rate cap
purchased for EUR46,000 from Landesbank Saar on 27 March 2019 in
connection with an EUR8.6 million loan facility drawn from the same
bank with a maturity date of 27 March 2024. The interest rate cap
is 1.0% with a floating rate option being Euribor 3 months. In line
with IFRS 9, this derivative is reported in the condensed
consolidated interim financial statements at its fair value. As at
31 March 2019 the fair value of the interest rate cap was
EUR46,000. There was no movement in the fair value of the interest
rate cap as at 31 March 2019.
Transaction costs incurred in obtaining the instruments are
amortised over the extended period of the above-mentioned
loans.
6. Investment in joint ventures
The Group has a 50% interest in a joint venture called Urban
SEREIT Holdings Spain S.L. The principal place of business of the
joint venture is Calle Velazquez 3, 4th Madrid 28001 Spain.
31 Mar 2019
EUR'000
Balance as at 1 October 2018 (audited) 6,697
------------
Share of loss for the period (71)
------------
Balance as at 31 March 2019 (unaudited) 6,626
------------
31 Mar 2018
EUR'000
Balance as at 1 October 2017 (audited) 6,290
------------
Share of profit for the year 442
------------
Dividends (150)
------------
Balance as at 31 March 2018 (unaudited) 6,582
------------
30 Sep 2018
EUR'000
Balance as at 1 October 2017 (audited) 6,290
------------
Share of profit for the year 557
------------
Dividends (150)
------------
Balance as at 30 September 2018 (audited) 6,697
------------
Summarised joint venture financial information: 31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
Total assets 58,861 59,586 58,444
------------ ------------ ------------
Total liabilities (45,609) (46,422) (45,050)
------------ ------------ ------------
Net assets 13,252 13,164 13,394
------------ ------------ ------------
Net asset value attributable to the Group 6,626 6,582 6,697
------------ ------------ ------------
Six months to 31 Mar 2019 Six months to 31 Mar 2018 Year to 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Revenues 2,826 2,838 5,464
-------------------------- -------------------------- --------------------
Total comprehensive (loss)/profit (142) 884 1,114
-------------------------- -------------------------- --------------------
Total comprehensive (loss)/profit
attributable to the Group (71) 442 557
-------------------------- -------------------------- --------------------
7. Taxation
Six months to 31 Mar 2019 Six months to 31 Mar 2018 Year to 30 Sep 2018
EUR'000 EUR'000 EUR'000 (audited)
(unaudited) (unaudited)
-------------------------- -------------------------- --------------------
Current tax charge 669 405 1,078
-------------------------- -------------------------- --------------------
Deferred tax charge 149 410 439
-------------------------- -------------------------- --------------------
Tax expense in period/year 818 815 1,517
-------------------------- -------------------------- --------------------
Current tax liability Deferred tax liability
EUR'000 EUR'000
----------------------------------------- ---------------------- -----------------------
As at 1 October 2018 (audited) 627 912
---------------------- -----------------------
Tax charge for the period 669 149
---------------------- -----------------------
Tax paid during the period (373) -
---------------------- -----------------------
Balance as at 31 March 2019 (unaudited) 923 1,061
---------------------- -----------------------
Current tax liability Deferred tax liability
EUR'000 EUR'000
----------------------------------------- ---------------------- -----------------------
As at 1 October 2017 (audited) (67) 473
---------------------- -----------------------
Tax charge for the period 405 410
---------------------- -----------------------
Tax paid during the period (224) -
---------------------- -----------------------
Balance as at 31 March 2018 (unaudited) 114 883
---------------------- -----------------------
Current tax liability Deferred tax liability
EUR'000 EUR'000
------------------------------------------- ---------------------- -----------------------
As at 1 October 2017 (audited) (67) 473
---------------------- -----------------------
Tax charge for the period 1,078 439
---------------------- -----------------------
Tax paid during the period (384) -
---------------------- -----------------------
Balance as at 30 September 2018 (audited) 627 912
---------------------- -----------------------
Under the current Double Taxation Treaty between France and
Luxembourg, dividends paid by OPPCI SEREIT France to SEREIT
Holdings are subject to withholding tax at a rate of 5% and are
exempt from further taxation in Luxembourg. However, this Treaty
has been in the process of renegotiation. Proposed changes to the
Treaty mean, amongst other things, that dividends paid by OPPCI
SEREIT France to SEREIT Holdings could be subject to 30%
withholding tax and may incur further tax charges in
Luxembourg.
The new Double Taxation Treaty will come in to force on 1
January 2020, subject to the completion of the ratification process
by both governments. As at 31 March 2019 the Treaty had not been
fully ratified. It is expected that the company will recognise an
additional deferred tax liability of EUR1.4m upon completion of the
ratification process, reflecting the potential tax liability
relating to unrealised gains arising within OPPCI SEREIT
France.
In April 2019 the European Commission ("EC") issued a ruling
that a UK group financing exemption within the UK Controlled
Foreign Company rules was partially in breach of the European Union
State aid rules. The Group has made claims to apply this exemption
in respect of SEREIT (Jersey) Limited which provides financing to
other group companies, and this ruling may result in additional tax
liabilities becoming payable. The UK government has not yet
indicated whether it intends to appeal against the ruling, and nor
has it published the mechanism for calculating the tax due.
Accordingly the sum potentially payable cannot be accurately
measured at this time.
8. Basic and diluted earnings per share
The basic and diluted earnings per share for the Group is based
on the net profit for the period, excluding non-controlling
interests and currency translation differences, of EUR3,197,000
(six months to 31 March 2018: EUR10,798,000, for year ended 30
September 2018: EUR13,175,000) and the weighted average number of
ordinary shares in issue during the period of 133,734,686 (six
months to 31 March 2018: 133,734,686, year to 30 September 2018:
133,734,686).
EPRA[++++] earnings reconciliation
Six months to Six months to Year to
31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Total IFRS comprehensive income 3,191 12,902 15,563
-------------- -------------- --------------
Adjustments to calculate EPRA Earnings:
-------------- -------------- --------------
Net loss/(gain) from fair value adjustment on investment property 1,566 (6,359) (4,939)
-------------- -------------- --------------
Currency translation differences (unrealised) 6 - 4
-------------- -------------- --------------
Loss on disposal of investment properties, development properties
held for investment and
other interests - - 29
-------------- -------------- --------------
Withholding tax on profits on disposal - - 279
-------------- -------------- --------------
Share of joint venture loss/(gain) on investment property 264 (156) (8)
-------------- -------------- --------------
Non-controlling interest's net revenue - (378) (692)
-------------- -------------- --------------
Deferred tax 149 410 439
-------------- -------------- --------------
Net change in fair value of financial instruments 200 39 155
-------------- -------------- --------------
EPRA Earnings 5,376 6,458 10,830
-------------- -------------- --------------
Weighted average number of ordinary shares 133,734,686 133,734,686 133,734,686
-------------- -------------- --------------
IFRS Earnings per share (cents per share) 2.4 8.1 9.9
-------------- -------------- --------------
EPRA Earnings per share (cents per share) 4.0 4.8 8.1
-------------- -------------- --------------
Headline[----] earnings reconciliation
Six months to Six months to Year to
31 Mar 2019 31 Mar 2018 30 Sep 2018
EUR'000 EUR'000 EUR'000
(unaudited) (unaudited) (audited)
Total IFRS comprehensive income 3,191 12,902 15,563
-------------- -------------- --------------
Adjustments to calculate headline earnings exclude:
-------------- -------------- --------------
Net valuation (loss)/profit on investment property 1,566 (6,359) (4,939)
-------------- -------------- --------------
Profits on disposal of investment properties, development properties
held for investment and
other interests - - 29
-------------- -------------- --------------
Withholding tax on profits on disposal - - 279
-------------- -------------- --------------
Share of joint venture (loss)/gain on investment property 264 (156) (8)
-------------- -------------- --------------
Non-controlling interest's net revenue - (378) (692)
-------------- -------------- --------------
Deferred tax 149 410 439
-------------- -------------- --------------
Net change in fair value of financial instruments 200 39 155
-------------- -------------- --------------
Headline earnings 5,370 6,458 10,826
-------------- -------------- --------------
Weighted average number of ordinary shares 133,734,686 133,734,686 133,734,686
-------------- -------------- --------------
Headline Earnings per share (cents per share) 4.0 4.8 8.1
-------------- -------------- --------------
9. Interest-bearing loans and borrowings
Six months to
31 Mar 2019
EUR'000
As at 1 October 2018 (audited) 52,150
--------------
Drawdown of borrowings 8,600
--------------
Capitalisation of finance costs (299)
--------------
Amortisation of finance costs 55
--------------
As at 31 March 2019 (unaudited) 60,506
--------------
Year ended 30 Sep 2018
EUR'000
As at 1 October 2017 (audited) 58,772
-----------------------
Receipt of borrowings 22,250
-----------------------
Disposal - loans (29,064)
-----------------------
Disposal - finance costs 472
-----------------------
Capitalisation of finance costs (416)
-----------------------
Amortisation of finance costs 136
-----------------------
As at 30 September 2018 (audited) 52,150
-----------------------
Six months to 31 Mar 2018
EUR'000
As at 1 October 2017 (audited) 58,772
--------------------------
Drawdown of borrowings 13,000
--------------------------
Capitalisation of finance costs (204)
--------------------------
Amortisation of finance costs 72
--------------------------
71,640
--------------------------
Transfer to disposal group held for sale (28,561)
--------------------------
As at 31 March 2018 (unaudited) 43,079
--------------------------
Bank loan - Landesbank Saar
The Group entered into a loan facility of EUR8.6 million with
Landesbank Saar on 27 March 2019.
The loan matures on 27 March 2024 and carries an interest rate
of 1.40% plus EURIBOR 3 months per annum payable quarterly. An
additional 25bps is applied to the margin if the LTV is between 56%
and 60% or 50bps if the LTV is above 60%. The facility was subject
to a EUR56,000 arrangement fee which is amortised over the period
of the loan. The debt has an LTV covenant of 64% and the HIC and
PIC should each be above 220% each.
A pledge of all shares in the borrowing Group company is in
place.
10. Issued capital and reserves
As at 31 March 2019, the Company has 133,734,686 ordinary shares
in issue with a par value of 10.00 pence (no shares are held in
Treasury). The total number of voting rights in the Company is
133,734,686.
11. NAV per ordinary share
The NAV per ordinary share is based on the net assets excluding
non-controlling interests at 31 March 2019 of EUR182,786,000 (30
September 2018: EUR182,069,000; 31 March 2018: EUR187,118,000) and
133,734,686 ordinary shares in issue at 31 March 2019 (30 September
2018: 133,734,686; 31 March 2018: 133,734,686).
12. Dividends paid
Number of Rate
Six months ended 31 March 2019 (unaudited) ordinary shares (cents) EUR'000
Interim dividend paid 25 January 2019 133,734,686 1.85 2,474
----------------- --------- ---------
Number of Rate
Six months ended 31 March 2018 (unaudited) ordinary shares (cents) EUR'000
Interim dividend paid 19 January 2018 133,734,686 1.50 2,006
----------------- --------- ---------
Number of Rate
Year ended 30 September 2018 (audited) ordinary shares (cents) EUR'000
Interim dividend paid on 19 January 2018 133,734,686 1.50 2,006
----------------- --------- ---------
Interim dividend paid on 13 April 2018 133,734,686 1.85 2,474
----------------- --------- ---------
Interim dividend paid on 20 July 2018 133,734,686 1.85 2,474
----------------- --------- ---------
Interim dividend paid on 14 September 2018 133,734,686 1.85 2,474
----------------- --------- ---------
Total interim dividends paid 9,428
----------------- --------- ---------
13. Related party transactions
Schroder Real Estate Investment Management Limited is the
Group's Investment Manager.
The Investment Manager is entitled to a fee, together with
reasonable expenses, incurred in the performance of its duties. The
fee is payable monthly in arrears and shall be an amount equal to
one twelfth of the aggregate of 1.1% of the EPRA NAV of the
Company. The Investment Management Agreement can be terminated by
either party on not less than twelve months written notice, such
notice not to expire earlier than the third anniversary of
admission, or on immediate notice in the event of certain breaches
of its terms or the insolvency of either party. The total charge to
profit and loss during the period was EUR947,000 (six months ended
31 March 2018: EUR849,000, year ended 30 September 2018:
EUR1,958,000). At 31 March 2019, EUR140,000 was outstanding (six
months ended 31 March 2018: EUR881,000, year ended 30 September
2018: EUR318,000).
Directors are the only officers of the Company and there are no
other key personnel. The Directors' remuneration for services to
the Group for the six months ended 31 March 2019 was EUR72,000 (six
months ended 31 March 2018: EUR62,000, year ended 30 September
2018: EUR105,325) equivalent to GBP61,962. Each of the three
directors owns 10,000 shares in the Company.
14. Contingent liability
There are no contingent liabilities other than those disclosed
in note 7.
15. Capital commitments
At 31 March 2019 the Group had capital commitments of EUR821,000
(30 September 2018: EUR293,590,
31 March 2018: EUR400,000).
16. Post balance sheet events
There were no post balance sheet events.
[*] Includes the Group's 50% share of external debt in the joint
venture of EUR11.4m and excludes unamortised
finance costs of EUR1.1m
[ ] Includes the Group's 50% share in the Seville property
proportionally valued at EUR26.4m
[++] B-B refers to Boulogne-Billancourt
[--] SC refers to Saint-Cloud
[**] Includes the Group's 50% share in the Seville property
proportionally valued at EUR26.4m
[ ] Includes the Group's 50% share of external debt in the joint
venture of EUR11.4m and excludes unamortised
finance costs of EUR1.1m
[++++] European Public Real Estate Association ('EPRA') earnings
per share reflects the underlying performance of the company
calculated in accordance with the EPRA guidelines.
[----] Headline earnings per share reflects the underlying
performance of the company calculated in accordance
with the Johannesburg Stock Exchange listing requirements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFLDRAIDLIA
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