Schroder Real Estate Investment Trust Reports Resilient Full-Year Results Amid Market Volatility and Progresses Picton Offer

Schroder Real Estate Investment Trust full-year results 2026: steady income, better occupancy, softer asset values

Schroder Real Estate Investment Trust Limited has put out a fairly solid set of full-year results for the year ended 31 March 2026. This is not a blow-the-doors-off update, but it does show a business that is managing its properties actively, keeping the balance sheet under control, and still nudging the dividend higher despite a shaky property market.

The big picture is pretty simple. Rental performance improved, empty space came down, and the trust says there is more income to come through from its portfolio. Against that, net asset value, or NAV, slipped a touch and earnings were broadly flat, which shows the market backdrop is still doing some of the heavy lifting in the wrong direction.

Key Schroder Real Estate Investment Trust numbers investors should focus on

Metric | FY 2026 | FY 2025
NAV | £297.9 million | £301.4 million
NAV per share | 60.9 pence | 61.6 pence
Portfolio value | £474.6 million | Not disclosed in this announcement
Dividend paid | £17.6 million | £17.0 million
Dividend per share | 3.6 pence | 3.5 pence
NAV total return | 4.8% | 11.0%
EPRA earnings per share | 3.4 pence | 3.5 pence
IFRS profit | £14.1 million | £31.1 million
Loan to value | 36.8% | 36.9%
Void rate | 9.8% | Not disclosed in this announcement

Why the dividend increase matters more than the small NAV decline

The trust increased dividends paid by 4% to £17.6 million, or 3.6 pence per share. For income investors, that is the headline positive. In listed property, a rising dividend usually tells you management is comfortable with rent collection, cash flow and financing.

NAV fell slightly to £297.9 million, or 60.9 pence per share, from £301.4 million, or 61.6 pence per share. That is not ideal, but it is hardly dramatic. The company says the marginal decline was driven by a -0.1% change in the underlying portfolio value after adjusting for capital expenditure, with geopolitical volatility in the second half hurting investor sentiment and valuation assumptions.

In plain English, the buildings themselves held up reasonably well, but the market became a bit more cautious about what those buildings are worth. That is a very different problem from tenants leaving in droves, and much easier to live with if rents are still moving higher.

Property letting activity and lower void rate point to future earnings growth

This is where the update gets more interesting. SREIT completed 71 new lettings, rent reviews and renewals across 596,000 sq ft since 1 April 2025, generating £6.3 million of additional annualised rent. That is serious asset management work, not passive ownership.

The portfolio void fell to 9.8% as a percentage of estimated rental value, or ERV, which is the valuer’s estimate of the market rent the space could achieve. That is the lowest level since 2022. Lower voids matter because empty buildings do not pay rent, and filling them tends to support both earnings and valuations.

31 new lettings of vacant units were completed 2% ahead of 31 March 2025 ERV

25 lease renewals were completed 24% ahead of the previous passing level

15 rent reviews were settled 23% ahead of the previous passing level

The phrase “passing level” just means the rent being paid before the reset. So when renewals and reviews are landing well above that, it suggests the portfolio has embedded rental upside. That is exactly what investors want to see in a market where capital values are still under pressure.

SREIT portfolio yield and benchmark outperformance show the income case is intact

The trust says its net initial yield is 6.1% versus the MSCI Benchmark at 5.1%, while its reversionary yield is 8.3% versus 6.2%. Net initial yield is the income return based on current rents, while reversionary yield shows the potential return if rents move up to market levels.

That gap is important. It suggests SREIT is already yielding more than the benchmark, and also has more scope to grow income as leases are renewed or reviewed. In other words, the trust is not just paying investors for today, it is trying to build tomorrow’s rent roll too.

Performance over the medium term also looks respectable. The portfolio delivered a total return of 5.9% per annum over the three years to 31 March 2026, ahead of the MSCI Benchmark at 3.4% per annum. The manager also highlighted 2.3% of annual relative outperformance on a rolling three-year basis.

Debt profile is one of the strongest parts of the Schroder Real Estate story

If there is one area where this RNS sounds especially confident, it is the balance sheet. The trust has a long debt maturity profile of 7.4 years, a low average interest cost of 3.4%, and 86% of debt is either fixed or hedged against interest-rate movements.

That matters because debt has punished plenty of property companies in recent years. SREIT looks better placed than many peers here, which is why the company calls it a peer-group leading debt profile. I think that is one of the stronger claims in the statement.

There is one mild catch. Loan to value, net of cash, was 36.8%, versus 36.9% last year, and the company says its strategy is to reduce this into the 25-35% target range. So leverage is stable, but still a little above the top end of management’s preferred range.

Costs, sustainability and post year-end valuation update add useful support

The ongoing charges ratio was 1.31%, helped by an amendment to the investment management agreement, with 50% of the manager’s fee linked to market capitalisation. Tight cost control is never the most exciting line in a results release, but it does matter when income growth is being hard-won.

On sustainability, the group reported a 19% reduction in operational whole building greenhouse gas emissions intensity in calendar year 2024 compared with the 2023 baseline. It also improved its 2025 GRESB score to 80 out of 100, ranking first in a peer group of six Northern European diversified listed real estate companies.

That will not be the main reason most retail investors buy the shares, but it does support the trust’s strategy of improving buildings to attract tenants and drive rents. Better sustainability credentials can translate into better occupancy and pricing power, especially in modern industrial and retail warehousing stock.

Post year-end, the portfolio valuation increased to an unaudited £476.6 million at 30 June 2026 from £474.6 million at 31 March 2026. But on a like-for-like quarterly basis, after adjusting for capital expenditure and costs relating to an adjoining ownership acquisition, the valuation declined by -0.3%. So the direction is stable rather than clearly improving.

Picton Property Income offer could be a bigger long-term catalyst

Alongside the results, SREIT gave another update on the proposed consortium offer for Picton Property Income Limited with LondonMetric Property Plc. The Picton board has reaffirmed its support for the revised non-binding, indicative all-share offer and is minded to recommend it, subject to remaining due diligence and final transaction documentation.

This is worth watching. Management says the deal would be earnings accretive, strengthen the balance sheet and deliver increased scale. Those are meaningful potential benefits, although at this stage it is still not a firm offer under Rule 2.7, so investors should treat it as promising rather than done.

My take on the Schroder Real Estate Investment Trust RNS

I read this as a good operational update wrapped inside a fairly average valuation backdrop. The positives are real: dividend growth, lower voids, higher rents on renewals and reviews, and strong debt terms. Those are the fundamentals that usually matter most over time.

The negatives are also real, just less alarming. NAV dipped, IFRS profit fell sharply to £14.1 million from £31.1 million because revaluation gains were lower, and leverage remains slightly above the target range. None of that is fatal, but it does show the trust is not operating in a booming property market.

Overall, this looks like a resilient set of results rather than a spectacular one. If SREIT can keep converting its reversionary potential into actual rent, while protecting its financing advantage and possibly landing the Picton deal, there is a sensible case here for gradual earnings and dividend growth.