Schroder REIT shareholders to reap rewards of reduced interest costs
UK-focussed Schroder Real Estate Investment Trust has set the final interest rate and break cost under its new loan with Canada Life Investment, it announced on Wednesday.
The London-listed REIT said the final key loan terms included that the £129.6m fixed rate loan was extended from 8.5 to an average 16.5 years.
It confirmed a reduction in the total interest rate from 4.4% to 2.5% per annum, generating an immediate interest saving of £2.5m per annum.
Schroder also said it had negotiated a break cost of £25.8m, funded by cash realised from disposals.
“[The] interest saving [will] be paid to shareholders as an increased dividend of £16m per annum, equating to an increase of 19%, starting at the period 1 October 2019,” the board said in its statement.