29th Apr 2016 10:22
LONDON (Alliance News) - Schroder Global Real Estate Securities Ltd on Friday said it delivered a "strong performance" in 2015, with a net asset value total return of 7.3% and a share price total return of 11.6%, as the company nears the end of its life.
The company put forward proposals for the reconstruction and voluntary winding-up of the company earlier this year. Shareholders were given the opportunity to receive cash or to keep their exposure to the same asset class through open-ended vehicles managed by Schroder Real Estate Investment Management Ltd or its affiliates
Chairman Crispian Collins said the scheme for liquidation was put forward after recognising the difficulties of attracting long-term demand for a "closed-ended vehicle perceived to lack sufficient critical mass". That results in lower liquidity in the trading of its shares and a discount to net asset value.
Schroder Real Estate Investment Management Ltd, the company's investment manager said the "prototype" real estate company must show an ability to grow revenue, a strong balance sheet and a strong management team.
"We have exposure to real estate markets with exceptionally high barriers where rental growth is evident. This acts as a powerful driver of growth," Schroder Real Estate Investment Management said.
"Ally an ability to grow revenues with low financial leverage, a management team with a quantifiable track record and we see the probability of strong financial returns to shareholders markedly increasing. The reliability of balance sheet and management is paramount. Over-levered balance sheets cause huge instability and can be value destructive," it said.
"Similarly, management teams that move away from their area of expertise or operate in conflicted structures can also weigh on long-term performance," Schroder Real Estate Investment Management said.
Schroder Real Estate Investment Management said the investment philosophy of the two alternative funds, into which shareholders can transfer, is exactly the same as that of Schroder Global Real Estate Securities.
"Our strategy remains the same today as it was yesterday, and we believe that this will benefit investors over the long term," Schroder Real Estate Investment Management said.
Shares in Schroder Global Real Estate Securities were untraded on Friday at 137.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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