Schroder European Real Estate Investment Trust plc (LSE:SERE) has issued a circular ahead of a general meeting on 3 September, where shareholders will be asked to approve changes to the company’s investment objective, investment policy and articles of association to facilitate a managed wind-down. Under the proposal, the trust intends to dispose of its 14-property portfolio across France, Germany and the Netherlands over the next two to three years, using the proceeds to reduce debt and return capital to shareholders. The board has also outlined the possibility of a voluntary liquidation once the company reaches a size at which maintaining a public listing is no longer considered practical.
Board Supports Revised Fee Structure
Alongside the wind-down plans, the company is proposing amendments to its investment management agreement with Schroder Real Estate Investment Management. The revised terms would retain the existing annual management fee of 0.9% of net asset value, subject to a minimum fee of €500,000, while introducing additional disposal fees linked to property sales. The board believes the revised arrangements are appropriate for the proposed strategy and has unanimously recommended that shareholders vote in favour of all resolutions, citing the benefits of an orderly asset disposal programme, revised fee arrangements and access to Schroders’ European real estate platform during the process. The company also noted that the strategy takes into account the ongoing French tax litigation and the challenging market backdrop.
Outlook Reflects Improving Fundamentals
The company’s outlook is supported by improving financial performance during FY2025 and a balance sheet carrying a moderate level of leverage. These strengths are offset by a history of uneven earnings, inconsistent cash generation and relatively low returns on equity. Technical indicators remain constructive, with the shares trading above key moving averages and supported by positive momentum, while valuation presents a balance between a relatively high price-to-earnings multiple and an attractive dividend yield.
About Schroder European Real Estate Investment Trust
Schroder European Real Estate Investment Trust plc is a listed property investment company focused on commercial real estate across selected markets in France, Germany and the Netherlands. Managed by Schroder Real Estate Investment Management, the trust invests in a diversified portfolio of assets and benefits from Schroders’ broader European property platform for asset acquisition, management and disposals on behalf of shareholders.
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