Schroder European Real Estate Investment Trust PLC reported on Wednesday it swung to an annual loss due in part to negative fair value adjustment.

The London and Johannesburg-listed property investor said its pretax loss was €10.0 million for the financial year that ended September 30, flipped from a profit of €16.6 million a year earlier.

Net loss from fair value adjustment on investment property amounted to €19.7 million, from a gain of €6.4 million. Development revenue plummeted to €405,000 from €17.9 million.

For the full-year, net rental income rose 13% to €14.3 million from €12.6 million.

Schroder European Real Estate maintained high portfolio occupancy level of 97%, with an average portfolio lease term to break of 3.9 years. It said 100% of rent due had been collected.

The company declared a dividend of 1.48 euro cents in the fourth quarter. The total payout for the 2023 financial year was 6.66 cents, down 10% from 7.40 cents.

As at September 30, net asset value per share dropped to 128.2 cents, 8.9% lower than 140.8 cents at the same time last year.

‘The attractive portfolio income characteristics, exposure to high growth sectors and pipeline of asset management activity should contribute to further earnings growth and enable us to progress the dividend over time,’ Julian Berney said.

Schroder European Real Estate said it is starting to see transaction evidence that supports valuations and provides confidence in its net asset value.

It said strong occupancy, income indexation and recent re-financing support the dividend, and should underpin earnings growth for this financial year and beyond.

Schroder European Real Estate shares were 0.8% higher at 67.51 pence each on Wednesday morning in London. In Johannesburg, they were flat at R 15.50 each.

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