The Schroders Real Estate Investment Trust (SREI) has announced its first major asset update since merging with Picton earlier this year, now standing at roughly £859m in assets and 450 tenants.
Since the last trading update in August, the trust has completed nine transactions, adding £1.2m per year. These transactions include a further 27,000 square feet of industrial space, as well as transactions in Norwich, Salisbury and Bletchley, among others.
Peter Lowe, fund manager on the trust, said: “These lettings demonstrate the encouraging occupier dynamic we are seeing across the combined portfolio, which is accompanied by a strong focus on extracting cost synergies.
“Alongside continuing to improve the portfolio vacancy, we are also pursuing capital recycling opportunities to enhance shareholder returns further.”
Matthew Read, senior analyst at QuotedData, said: “This is an encouraging start for SREI following the Picton acquisition.”
However, he noted that with a £22m gap between the portfolio’s passing rent and estimated value, there is still much more room to go.
“Assuming SREI can close that gap, while extracting cost savings and recycling capital out of weaker assets, this should provide scope for earnings growth and could help narrow the discount.”
At the time of writing, it is on a 37.4% discount to NAV, according to data from the AIC.
See also: Schroder REIT and LondonMetric reach £404m deal for Picton
