Schroder Real Estate Capital Partners June 2017 For professional investors only. Not suitable for retail clients.
Schroder real estate highlights 12.4 billion ( 14.1bn / US$ 16.1bn) of gross real estate assets under management * 79% of assets outperforming over 3 years ** Broad range of investment strategies Independent fund manager Active management from Schroders Over 120 people globally managing real estate 45 years experience of managing real estate Award-winning performance *Source: Schroders, as at 30 June 2017. **Direct real estate returns, net of fees as at 30 June 2017. Performance measured against its official benchmark. 2 Schroder Real Estate Capital Partners
Schroder Real Estate Capital Partners (SRECaP) is a specialist division within Schroder Real Estate. With 20 years of experience and global expertise, SRECaP has an established track record in managing real estate for institutional investors and has investments totalling 3.6 billion. 1 Over the past 10 years, the team has been at the forefront of developing unique private real asset strategies, through original thinking and an unrivalled network of market contacts. 1 Source: Schroders, as at 30 June 2017. Schroder Real Estate Capital Partners 3
The business offers three services to clients: 1. Portfolio Management For investors seeking to outsource the management of their real estate portfolio, SRECaP can advise on and execute a customised strategy in line with specific requirements. The team s insightful research in identifying winning sectors and geographies, its broad network of market contacts as well as detailed due diligence, provides clients with unrivaled access to real estate investment opportunities and portfolio management expertise. Indicative Portfolio Portfolios combine best-in-class third party portfolios and exclusive partnership strategies 2.5% 1.6% 7.6% 15.1% 0.3% 48.6% 2. Partnership Funds SRECaP has been active in identifying unique investment opportunities in uncrowded market sectors which are expected to outperform. The business has successfully developed a range of private opportunities spanning value add, thematic and incomebased strategies. These bespoke partnerships are exclusive to clients of Schroders. They may be incorporated in diversified portfolios or held as stand-alone investments. Investments range from diversified core funds to specialist portfolios in motor retail, convenience retail and regional offices. By the end of June 2017, the six partnership strategies created to date had invested over 950 million and generated strong returns. 24.3% Core UK (Third Party) Core UK (Partnership) International Listed Source: Schroders, June 2017. Specialist UK (Third Party) Specialist UK (Partnership) Cash 3. Transition Management SRECaP is an experienced and expert manager of real estate transitions. When restructuring a portfolio of real estate pooled funds, whether changing its management or its investment strategy, Schroders can minimize the costs of change and optimize outcomes for clients. Schroders provides insightful strategic advice, sources liquidity and manages risk, tailoring investment solutions to meet clients specific requirements. 4 Schroder Real Estate Capital Partners
Case studies: Metro Property Unit Trust Launched in 2013 in partnership with a premier fund management team Strategy to target smaller lot sizes of 5 10 million with a focus on office and industrial assets To June 2017, Schroders has invested over 230 million. The Trust has an excellent record of outperformance over all time periods since inception. Local Retail Fund Launched in 2012 in partnership with a specialist advisor Strategy to target convenience retail - one of the areas of expansion in retail market and largely immune from online spending Assets offer affordable rents typically with fixed or inflation linked reviews Fund now valued at 138 million as at June 2017. Strong performance underpinned by distribution yield of 5.2%. Multi-Let Industrial Property Unit Trust ȂȂ ȂȂ ȂȂ ȂȂ Launched in June 2014 in partnership with a specialist advisor Strategy to target multi-let industrial properties - a sector seeing strong demand from the rise of online and convenience retail Performance objective to deliver an ungeared return of 8% p.a. To June 2017, Schroders has invested over 95 million. The trust has an excellent outperformance track record. Source: Schroders June 2017. Schroder Real Estate Capital Partners 5
Separate account service: We tailor separate accounts for clients with more than 50 million to invest, taking into consideration their particular requirements. These can be managed through single country, regional or global portfolios. Close collaboration with Schroders Global Real Estate Securities team provides an international real estate capability across public and private markets. 6 Schroder Real Estate Capital Partners
Pooled funds For clients who want low-cost access to our best investment ideas, we offer three pooled products: Residential Land Partnership (RLP) is a closed-ended unit trust investing in residential land in the UK. It offers a unique opportunity to capitalise on the significant undersupply of UK residential land and to help deliver thousands of new homes in the UK. It is currently open for investment. The strategy will target returns of 12 15% IRR, net of fees over the five year life of the fund.* Schroder Indirect Real Estate Fund (SIRE) is an open-ended unit trust investing across sectors and styles in the UK. SIRE performance is underpinned by a distribution yield of 3.5%.** Schroder Real Estate Real Income Fund (RIF) is an income-orientated open-ended unit trust that aims to generate inflationbeating returns through investment in UK real estate. RIF s distribution yield is 4.5%. Since inception it has delivered total returns of 9.7% p.a., outperforming its benchmark of 7.6% p.a.** The launch of a real estate debt fund is targeted for the second half of 2017. The strategy will be a partnership with a differentiated approach, targeting attractive income-based returns. *Target only and not guaranteed. **Performance and distribution information as at 30 June 2017. Source: Schroders, June 2017. Performance net of fees. Schroder Real Estate Capital Partners 7
About Schroders 418.2 billion ( 476.3bn / $543.3bn) assets under management and administration. An extensive global network of 4,100+ employees. 41 offices in 27 countries across Europe, the Americas, Asia, Middle East and Africa. Over 200 years experience of investment markets. Source: Schroders, as at 30 June 2017 Further information Olivia Docker Product Manager +44 (0)20 7658 3552 olivia.docker@schroders.com Schroder Real Estate Capital Partners 31 Gresham Street London EC2V 7QA +44 (0)20 7658 6000 realestate@schroders.com www.schroders.com/realestate Important information: For professional investors only. Not suitable for retail clients. The views and opinions contained herein are those of Schroder Real Estate Product Team, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. The risks associated with investments in securities of companies principally engaged in the real estate industry include: the cyclical nature of real estate values; risks related to general and local economic conditions; overbuilding and increased competition; increases in property taxes and operating expenses; demographic trends and variations in rental income; changes in zoning laws; casualty or condemnation losses; environmental risks; regulatory limitations on rents; changes in neighbourhood values; related party risks; changes in the appeal of properties to tenants; increases in interest rates; and other influences of capital markets on real estate. Generally, increases in interest rates will increase the costs of obtaining financing, which could directly and indirectly decrease the value of the Fund s investments. The real estate market has, at certain times, not performed in the same manner as equity and bond markets. As the real estate market frequently performs, positively or negatively and without any correlation to the equity or bond markets, these investments may affect the performance of the Fund either in a positive or a negative manner. Issued by Schroder Real Estate Investment Management Limited, 31 Gresham Street, London EC2V 7QA. Registration No. 1188240 England. Authorised and regulated by the Financial Conduct Authority. For your security, calls may be recorded or monitored. RC62133.