Schroder European REIT acquires Dutch warehouse freehold

20th Mar 2023 12:15

(Sharecast News) - Schroder European REIT announced the acquisition of a freehold industrial warehouse in Alkmaar, the Netherlands on Monday, for €11m.

The London-listed real estate investment trust said the purchase, made under a sale-and-leaseback arrangement, reflected a net initial yield of 5.6%.

It said the 9,115 square metre property was fully leased to W.A. Schuurman Beheer, a century-old electrical engineering and renewable energy specialist company.

The warehouse serves as both the company's headquarters and its main distribution centre, with the triple net lease agreement spanning 20 years with a break clause at 15 years, and including annual indexation.

Schroder European said the Alkmaar facility had received a number of architectural awards for its design, with significant sustainability features.#

Constructed to high standards, the property is equipped with on-site renewable energy and holds an EPC rating of A+.

It added that the acquisition aligned with Schroder European's 'Winning Cities' strategy, as the warehouse is situated in the rapidly-growing Randstad region, around 40 kilometres north of Amsterdam.

The firm described Alkmaar as an established hub for light industrial and distribution businesses, with the property's strategic location offering good connectivity, with close proximity to the A9 motorway and direct access to Amsterdam.

Additionally, the warehouse is well-connected to the A1, A2, and A4 motorways, linking it to the wider Dutch transportation network.

"Whilst we continue to be patient in our investment strategy, this was a rare opportunity to acquire a highly sustainable asset with a strong and visible income profile that enhances the company's sector weighting, average unexpired lease term and credit strength," said Jeff O'Dwyer, fund manager at Schroder Capital Real Estate.

"We continue to seek ways to further diversify by both number of assets and tenants, as well as increasing our allocation to high growth pockets of the industrial sector via selective acquisitions.

"As well as increasing the portfolio industrial weighting from 25% to 29%, this investment deploys a portion of the proceeds from the sale of Paris Boulogne Billancourt in 2022 as part of our strategy to improve dividend cover."

At 0939 GMT, shares in Schroder European Real Estate Investment Trust were down 1.94% at 81p.

Reporting by Josh White for Sharecast.com.