Schroder Trust sells 50% of London's Minerva House

Schroder Real Estate Investment Trust has exchanged unconditional contracts to sell its 50% interest in Minerva House, London SE1, for £30 mln (EUR 37 mln), reflecting a net initial yield of 5.37%.

The price compares to a value as at 30 September 2012 of £29.25 mln, which represents a premium to valuation. Closing is scheduled for 17 December 2012.

Minerva House comprises a 91,748 sq ft (8,500 m2) office building located on the south bank of the River Thames. The company's 50% share of the rental income is £1.7 mln per annum.

In a statement, Schroder said 'the disposal is consistent with the company’s strategy of selling low yielding property where value created through asset management can be crystallised'. 'In this case, over the seven years of ownership the company has undertaken a number of value enhancing activities including refurbishing the property and restructuring the leases,' it added.

'This disposal has enabled the company to crystallise a very strong performance during the period of ownership. This has arisen following the completion of a series of asset management activities through which we were able to increase length of leases and improve the rental income received by 25%,' noted Duncan Owen of Schroder Property Investment Management Limited.

On completion of the disposal, the company will have cash of £52.6 mln and a net loan to value ratio of 30%, based on the portfolio valuation as at 30 September 2012.