Good morning. Thank you for joining us this morning for the Schroder European Real Estate Investment Trust half-year results for the period ending 31 March 2025. I'm Jeff O'Dwyer. I'm the fund manager of the trust. I'm joined by Rick Murphy, who's the finance manager. Just a bit of housekeeping first. You'll note there's an opportunity to submit questions through the button that you can see on your screen, so feel free to pop any questions in, and we'll deal with those at the end of the presentation. Equally, there's an opportunity for you to download the results, whether it be the RNS or this presentation, so feel free to do that. Finally, if you get a chance, there is a little sort of feedback at the end, so welcome any comments or feedback that you have.
Just sort of dealing with sort of where we are and what's happened over the period. Obviously, we started the period with a very different market perspective, and we were very much quite positive about where things were going. There was a sense of optimism that was really underpinned by reducing inflation, which is flowing through to sort of falling stance on interest rates, and obviously sentiment was improving on the back of that. This sort of translated into some pretty strong and more liquidity from an occupation point of view and certainly from an investment point of view. Obviously, this momentum across a lot of markets was halted and obviously impacted by not only the U.S. trade decisions, but sort of more recently some of the geopolitical risks that we've all been dealing with.
Now, obviously, while this has been occurring, all we can do and all we have focused on is really the things that we can control, and that is delivering on the asset management initiatives that really optimize not only occupancy, but income value and then fundamentally the liquidity of these assets. What I often do with these presentations is just sort of do a bit of a sort of where we are now and why this trust is compelling, and we are conscious of the discount that we are continuing to trade at. It is a unique proposition. It is the only U.K.-listed vehicle that gives investors exposure to a diversified portfolio in continental Europe, and that is with teams on the ground, and that is specialist teams where we can provide our operational expertise in country where we have those assets.
Very different to the U.K., the assets are supported by inflationary increases, so typically that's 100% in terms of annual indexation. In Germany, it's slightly different. Obviously, the balance sheet, which Rick will talk on a little bit in more detail in a minute, but we've deliberately kept a very conservative approach from a balance sheet perspective, putting us in a really strong position as to where we can pivot going forward. Share prices, I touched on trading at that discount, is a compelling entry point for investors where you can buy in today and delivering a covered dividend and a yield of 7.3% and circa 30% discount. As I touched on, you're benefiting from a broader Schroder platform that not only has over 250 specialists in country, but is managing north of EUR 30 billion of funds under management. I'll now hand over to Rick to focus a little bit more on the financials.
Thanks, Jeff, and good morning, everybody. Turning to the financial highlights for this six months to 31st March 2025, and beginning first of all with dividend cover, really pleasing to be able to say that we can announce dividend cover of 100% for this interim period, and just a reminder, it is 103% for the prior financial year. As we can see on screen, that's been underpinned by not only the inflation-linked income of the company together with its high occupancy around 95%, but also pleasing to be able to say another strong period of rent collection at 100%. As Jeff touched upon, we feel that the company's got a strong balance sheet as we move into the second half of this calendar year, and as at the end of March, we had around EUR 25 million of available cash, which provides us significant operational flexibility.
Just a reminder that in January this year, the company announced its first share buyback program, and between January and the end of March, we had invested EUR 1.2 million as part of that buyback program, buying in the company shares at an average price of just under GBP 0.66, and in NAV terms, those shares were worth GBP 1.01, so buying in at around a third discount. From a gearing perspective, again, we think it's very positive to be able to say that we've got such a modest LTV net of cash of around 18%. That 18% includes the sale of the Frankfurt assets and repayment of some of that debt in the spring of this year. From a performance perspective, a NAV total return of 0.3%, in part driven by the accretive nature of our share buyback, and that compares favorably to minus 1.3% for the prior interim period.
Finally, just a reminder here that we continue to disclose a tax contingent liability relating to a French audit, and the range of those values is nil to EUR 14.4 million, and as of today, we've not provided for that sum. Turning to the next slide here, we can see the NAV movement. As at the end of September, our NAV was EUR 164.1 million or EUR 122.7 per share, and as at the end of March, we've moved to EUR 158.9 million or EUR 120.1 per share, and that's a fall of around 2.1%. Of that 2.1% fall, we can see that much of that, around two-thirds, is unrealized falls in the valuation of assets, so that's 1.4% of that 2.1%.
Here we have just itemized out for the audience where those changes in valuations have come through over the six-month period, and we can see the larger falls were in Berlin, the retail asset at EUR 1.7 million, and the Hamburg office investment at EUR 1.7 million as well. The company has invested a small amount of CapEx in the six-month period, EUR 0.3 million. There were some small disposal costs with regards to the conditional exchange of the Frankfurt assets. Just a reminder of Paris BB, this was a forward sale a few years ago now, and as at today's date, the company is due EUR 1.3 million, and should all that be received, there will be around EUR 0.7 million of pre-tax development profits to still come through the NAV in future. EPRA earnings, including exceptional items, are EUR 3.7 million, EUR 0.9 million of non-cash capital items.
This is our deferred taxes, capital taxes movements in our interest rate cap at Saint-Cloud Paris. Dividends paid of EUR 4 million, that's two dividend payments paid to investors at EUR 1.48 per share in the period. Finally, we can see our share buyback, so the EUR 1.2 million invested, and we can see in the cents per share column and a percentage column how that's been accretive to our performance in NAV. Moving next to our summary income statement slide, here we can see our change in EPRA earnings excluding exceptional items, and we've just got a footnote there around what those two exceptional items are with some historic service charges in Germany and some French professional legal and tax advice we're receiving around our audit. All in all, EPRA earnings have fallen around 10%, so EUR 4.3 million for the prior interim period to EUR 3.9 million now.
We can see in that third line down that the biggest driver of that has been our property operating expenses. In this six-month period, we've had certain non-capital repairs and maintenance and a slight increase in our service charge as a vacancy rate at Saint-Cloud has changed over the period. All in all, that's fed into EPRA earnings of EUR 3.9 million, as I say, excluding exceptional items and a dividend cover of that 100% against 109% for the prior financial period. Just finally, with regard to the dividends, we just set out again for the audience how we can see the trajectory of the dividends has moved over recent financial years.
We can see that there was that fall with the forward sale of Paris BB a couple of years ago, and then 89% dividend cover as some of those proceeds were reinvested, 103% dividend cover for our last financial year, and 100% dividend cover for this interim period. I am pleased to be able to announce to the market today that the next dividend for this quarter is also at that EUR 1.48 per share. With that, I'll pass back to Jeff.
Thanks, Rick. Just on the dividend, I'm just trying to sort of compare with a select peer group. You can see here that in terms of the strength of the balance sheet, we're one of the lowest levered vehicles and delivering one of the better dividends that's fully covered. Really sort of positive position to be in when relatively compared to that peer group. What have we done just from an operational point of view over the period and how we're sort of looking at sort of dealing with earnings and trying to strengthen that dividend profile?
Despite the fact we probably haven't done an enormous lot in terms of new leases and re-gears, what we have done is actually progressed a number of discussions, and you note here probably one of the biggest ones was the successful re-gearing of Hornbach, which is the second largest tenant in the portfolio. We did that just post-period end. We signed a new 12-year lease with them. We came out with an RNS. We're slightly disappointed in terms of the market didn't really reflect that from a pricing point of view, and I think that's a really good example of where we can add value and improve not only the quality of the income, but also increasing the unexpired lease term and moving on rents a little bit more. I think that's a really successful piece of asset management.
The same sort of process we're putting in place with some of the other re-gears that we're working through here, whether that be Stellantis in Cannes, whether it be Hachette in Nantes, Nestlé in Rueil-Malmaison, and then the state of Baden-Württemberg are the biggest occupier in our office asset in Stuttgart, and then KPN, which is the biggest tenant that we have. We're trying to work through with them.
The evidence that we have now is it's more likely than not that they will leave at the end of December next year, so we've got 18 months to try and work through a solution there, whether that be trying to look at ways to find a replacement tenant or secondly trying to look at alternate use, and that's one of the angles that we're getting some support from the local authority about in terms of trying to convert this site and get planning for residential. Obviously, occupationally we're holding up really well. We're at 95%. I can see the biggest vacancy there is the Saint-Cloud office building. We've had some recent success with a couple of new leasing of two floors there.
That's probably from an asset management point of view, the biggest focus from myself and the teams and delivering and the more success that we can have there that will flow through to improving earnings and obviously strengthening the liquidity of that asset as well. As Rick touched on, I think one of the big pluses that we did over the period was the sale of Frankfurt and we did that at valuation. I think it's important to reinforce that point where we were conscious that if we could liquidate or sell at NAV or what was being carried in book value and then turn some of that capital into doing a share buyback at a 30% discount, you can see why that's been so accretive and hence why our NAV total return has been positive despite the IFRS being negative.
That's a really good example of using capital in the best manner to enhance shareholder value. Just on the portfolio, most of you have seen this slide before. I won't go into detail, but obviously being diversified, we're in some really strong cities including obviously Paris, Berlin, Hamburg, and obviously some of the logistics assets in really strong industrial locations through the Netherlands and France. One of the big attractions is the lot sizes, so we're dealing with lot sizes here that are sort of sub EUR 30 million, and I'll come on to that point and why that's important in terms of where we're seeing liquidity. Obviously through the 15 assets, obviously now 14 assets with the sale of Frankfurt, we're getting a combined value of just north of EUR 200 million, and then on top of that we've got that cash position of about EUR 25 million.
From a weighting point of view, we've got about 32% in offices, 32% in industrial, and then now with Berlin's just sub 10% in terms of retail, and then alternatives pretty similar in that cash at around 10% as well. Just on liquidity, you can see the left-hand side here where we've seen a very clear movement to more liquidity from an investment point of view with asset sizes less than EUR 30 million. It's certainly the bigger institutional size products that are remaining a little bit sticky, and I think that point probably sits more clearly with offices and some of the challenges that certain offices have. Thankfully, we're sitting in submarkets where there is low vacancy and there is fairly tight supply, and therefore we're seeing sort of rental growth.
From an office point of view, if you're in the right location where there is competing demand for use or where there is limited vacancy, you are seeing some success, and that's what we're delivering here. Now, you've seen with this graph that actually sub EUR 30 million has really dominated the total sort of liquidity here. We've moved from circa mid-2000s where the bigger assets were really transacting, whereas now it's sort of flipped where you're now at sort of 65%-70% with asset sizes being sub EUR 30 million where we're seeing the best liquidity, and that's consistent with the strategy that we've set out for this particular vehicle. On the right-hand side, it's just a graph sort of comparing where valuations are relative to, say, where the risk-free rate is.
Now, obviously the industrial portfolio is in a sector where there is some strong demand, and that's certainly flavour of the month. That together with the living sector is where we're seeing the bulk of liquidity. Our portfolio average valuation is about a 6.4% net initial yield, and when you compare that to say the blended risk-free rate, you're getting a 3.5% premium against that rate. Quite an attractive, obviously at these sort of yields, debt is accretive, and typically you can get financing against this portfolio with margins at sort of high 100 basis points, circa 200 basis points, and with the five-year fixed rate at the moment at early twos, your all-in cost of debt is around a 4. You can understand buying in at a 6.4% net initial yield, that's highly accretive.
Similarly with the office, again we're focused in Stuttgart, Hamburg, and Paris, again showing a decent premium there relative to the risk-free rate, and obviously retail here is the two assets. If you were to remove the Frankfurt asset now that we've sold, we're left with the Berlin DOI asset, which is valued at sort of high fives, again debt accretive to that.
Taking out the data centre, obviously the value is sort of look at this as an obsolete asset, so an asset that is depreciating, and therefore the correct approach has been carried out here where the valuers are saying, well, look, let's only take the remaining income stream, which is to the end of next year, and then add in the present value of the land, and that's why the net initial yield profile here is so high at sort of 20%-22% because of that depreciating value. Then we have got the car showroom. Overall, really comfortable in terms of how values have played out.
We are starting to see, and like the U.K., where the U.K. has probably moved a bit quicker than Europe, we will start to see some valuation increases coming forward, particularly for the industrial and certainly the Berlin asset driven by some of the asset management that we are delivering. Just on that asset management, we are conscious that we have got sort of a number of things in terms of shorter term, medium term, and longer term of how we can create value. Obviously, shorter term is working through that vacancy in Saint-Cloud. I touched on that we have just done two successful signings, level two, level seven that are not in current EPRA earnings. That is about EUR 250,000 of income. That is a really positive result that we have delivered there.
Obviously, Berlin, I touched on with the new lease that we've done, the fixed lease, that will have a positive impact in terms of valuation for June, and then equally a number of the pending re-gearing and discussions that we're trying to move forward, whether it be with Nestlé, Hachette in Nantes, or the state of Baden-Württemberg in Stuttgart or Stellantis in Cannes. That's sort of more, I guess, what I'd call short to medium term. Longer term, it's really benefiting from submarkets where there's competing demands for users. We're starting to see rents increasing, where there's transport infrastructure changes to have a positive impact, and that's the two assets that will probably benefit from that, more likely Saint-Cloud with the train station coming outside the building, and then obviously with Stuttgart with the Stuttgart 21 repositioning of that train station.
They're the things that we're working on, how we can try and implement earnings growth, and obviously at the back of that as well is how we're thinking about sustainability and ways that we can implement initiatives and try and improve the quality of the assets and therefore moving rents on the back of investing in those sustainability initiatives. Just a bit more on the office side, obviously that is a pretty key and still remains a sector where there are questions around, and what I try and focus on here is sort of highlighting that really the two German assets are in very tightly constrained locations, so therefore vacancy rates are very modest, there's no choice or not a lot of choice for occupiers, and we are starting to see sort of rental growth.
When you compare the fundamentals of our profile, and in particular Hamburg, where we're off rents of around EUR 14.50 per sq m per month, you compare that to where prime rents are in the city centre one stop away, which are EUR 36, you can see that as a strong back office location, this is an attractive proposition. It's a decent building, it's a Grade B building, it's not a Grade A building, but notwithstanding that's reflected in the price. Obviously the submarket is considered to be very highly accessible. It's a mixed-use area, a lot of people live in this location, and I have sort of made the comment before that leading into the pandemic we had five vacant office floors. We've leased all of those floors because it's a highly accessible building, leased off affordable rents.
Similarly in Stuttgart, Stuttgart has the lowest level of vacancy in the whole of Europe, so having the government in here, there's not a lot of choice with them. We're in advanced discussions with them about re-gearing this lease on a long-term basis and moving those rents on, and you can see here again a real point of difference in terms of that discount relative to where prime rents are in the city center. Again, this is more of a Grade C building. It's an ideal building that a government organization would want, i.e., they can't afford to be in a Grade A asset, and we're hopeful that we can secure the government longer term. The Saint-Cloud office asset's slightly different. We've got vacancy rates increasing there.
It's probably from a liquidity point of view a more challenging asset, hence why we're working so hard from an asset management perspective. We've had some success, obviously as I touched on with level two and level seven, where at rents that are at low 200s, we're seeing strong rental growth for prime rents in the city centre, with rents now hovering more to EUR 1,100. As a back office location, this will be strengthened with that transport infrastructure change that I mentioned earlier. That is not coming to 2030, so really it's a how do we deal with this asset, how do we try and minimize vacancy, which at the moment sits about 15% for this particular asset, which is pretty consistent with the vacancy for that submarket. Obviously, inflation across the different jurisdictions, we typically get annual indexation. Obviously, Germany is slightly different where we're waiting for a hurdle.
We're trying to move some of these leases to being more annual indexation to be consistent and capture that inflationary pressure each year rather than waiting for the hurdle. This is not a new fundamental to those on the call, but it just really is a real difference or point of difference relative to what happens here in the U.K. where you typically get five-year lease to market and you're waiting a bit longer for that indexation. Just in terms of looking at briefly around some of our sort of top tenants and where we have exposure, obviously KPN is the biggest income provider at about 18%, Hornbach at 11% where we've just re-geared that lease. We have a strong logistics company called C-Log in France who are performing exceptionally well, equally Outscale who are more on the IT side of things are our biggest tenant in Saint-Cloud.
Working with them about trying to see how we can remove their break that they have for 2029, and then we have a really good logistics asset or company in the case of DKL in Venray who are performing well. Again, this is an asset that is under-rented, so that expiry does not happen until 2028, but just working with a covenant that has improved and a logistics company that has strengthened since we have owned that building is a positive stance for when we do have that renegotiation with them. Obviously, just on debt, we have continued to be conservative, and I touched on earlier that we have one of the lowest LTVs relative to the peer group. Obviously, with the sale of Frankfurt, we have repaid some of the debt because that debt was linked to Berlin, so our gearing falls to about EUR 64 million.
Obviously, from an LTV point of view, that's about 18%, so a really strong position to now spring forward from. We don't have any other expiry until next year, and that's really the Berlin asset, and given the LTV on that asset's about 30%, we see no issue in terms of refinancing risk moving forward. A really healthy position now to spring forward, and actually we're thinking more about now, well, how do we utilise the balance sheet to maybe look at new acquisitions, try and move that gearing on and try and strengthen the income profile that we have.
Just to sort of think about priorities going forward, obviously really it's focused on re-gearing these leases that I touched on and really tapping into the success that we had with Hornbach, trying to really move that forward in whether it be Nestlé, and I'm hopeful that over the next couple of months we can come out with some positive news with an RNS, and hopefully that will resonate with share price and really trying to show how we're moving rents on and capturing some of the ERV that we have, and particularly Nestlé, state of Baden-Württemberg, Stellantis and Hachette. These are the examples that we have, and these are discussions that we have had in plan for probably six to nine months now. They're taking a little bit longer, but certainly looking to deliver those over the next couple of months and come out positively.
KPN I touched on, they haven't given any formal indication of what they're doing. That lease is expiring at the end of next year, but certainly our evidence is suggesting that they will probably leave the asset. Now we've got 18 months to try and find a replacement for them. Equally, we're thinking through, is there angles to create value through alternate use and trying to work with the municipality around rezoning. It's a big site, it's 3.5 hectares. There is an opportunity to get planning and rezoning to cater for medium density residential. We're starting to get some interest from developers, which is positive, and we're really working with the teams about, how can we create value through that planning.
It's an asset that is valued at circa EUR 12 million, obviously with the remaining income, but how can we sort of think through, look, can we create more floor space here from a residential point of view and that sort of flow through to enhancing land value. Obviously, energy and carbon and sustainability, these are angles that we have been working through. We've done audits across the portfolio and have identified ways that we can invest to improve the quality.
Obviously, we'll only do that if it makes sense financially and really trying to work with the tenants, and this is an angle that we have as a point of difference in terms of our operational expertise around sustainability where we can deliver a solution to the tenants and have them stay. I think that's becoming increasingly more important in terms of landlord-tenant relationships is that delivery of sustainability and how we can manage that process and provide a solution to the tenants to have them stay. Obviously, in the investor base, trying to look at broadening that investor base.
We're conscious that it is a relatively small trust, and a lot of institutions are not typically looking at these sort of vehicles because they want and appreciate bigger vehicles providing better liquidity, both in terms of share price, in terms of their ability to get in and out, but equally better diversification and cost economies. What we have here is an opportunity to work with retail investors, working with whether it be smaller wealth managers because it is a really attractive going concern given the points that I touched on and the fact that you are getting a really strong dividend yield, which obviously is highly appealing to retail and wealth managers.
Then finally, I should say, obviously the board continues to be conscious of the discount and obviously is continuing to work through different angles on this and different options that they have before them, and we're doing that together. We're conscious of that as well, and we sort of seem to be swimming in a pool where no matter what we do from an asset management point of view, that's not resonating with equity markets, and I think that we sort of seem to be in a bucket here, certainly where you're sub EUR 150 million in size, we're not really getting the credit in terms of what we're delivering on the asset side.
We will continue to obviously focus on the things that we can control, and as I said, coming out with some positive news around those re-gearings and hopefully that resonates in share price, but obviously at the same time working with the board about these different options that we have to try and maximize value to shareholders, and that is something that the board have made clear, and we have made some comments in the results announcement today, and then we will come back to the market with a very, very firm recommendation in due course. I will not go into this detail. This is really just a summary of what I have really talked about, so I am happy to sort of stop there. I think that is quite neat in terms of just under a half an hour. Happy to answer questions that we have, and Rick, I am not sure if any have come in.
Yeah, we do. No, thank you, Jeff. Please say we've got a few questions, and thank you to those who submitted them. Jeff, just one around KPN, you touched upon, obviously that's such a key item for the company in the sort of near term. Just a question around how the valuation might change if residential planning was granted.
Yeah, I mean value's obviously heavily linked to how much floor space one can get on a site, and I think that's quite key and why we're working initially with the municipality, we're at early stages with them. We know that they're supportive of trying to develop this area into a residential-focused location, so that's positive.
At the moment, the valuers are valuing this, as I touched on, based on the remaining income, so the income through to the end of next year from KPN, and then the present value of a residual land analysis. At the moment, the land is from a, it's been valued by Savills, is valued at circa high single-digit millions. Obviously, it's up to us how can we create value and liquidity around that, and that really is linked to what planning we can get in place. It's too early to say in terms of our discussions that we're having, but we are, as sort of real estate investment professionals, very mindful that we can create value here based on how much floor space we can deliver and get approved from a municipality point of view.
Great, thanks, Jeff. With regards to sort of transactions, you sort of talked through the sale of Frankfurt at Book Value and proving that out to the markets. Is there any other disposals potentially under consideration, and if there were to be, where might that capital potentially be redeployed?
Yeah, I think like we did with Frankfurt, where we've maximized and completed our asset management. I mean, if you look at Stuttgart, it's a good example where if we do the re-gear with the state of Baden-Württemberg, there's probably not a lot more that we can do. Therefore, that is an asset where we might come out and say, okay, if we can get full value in terms of on the back of that lease re-gear, let's offer that to the market. That's probably one asset.
Obviously, we haven't got formal approval from the board to do that, but just to answer that question, that's the type of thing that we would think through, and therefore that capital that we get back. We may look at doing something similar where we might continue to manage the balance sheet prudently, but equally, if there's a bit of money and we're trading at this discount, it becomes even more and more positive to look at a share buyback. That type of thing, and these are the discussions that we have with the board, but that would be the best use of capital in that particular regard. Similarly, I mean, if you look at the logistics asset that we have in Rumilly with Nestlé, if we re-gear that lease, there's not a lot more asset management that we can do there.
If we can capitalize on where we're seeing sort of strong demand for logistics, there might be a way that we can recycle that capital and move into maybe another logistics asset where there's a shorter wall where we can use our operational expertise and create value that way. That's how we're thinking about sort of real estate and really creating shareholder value going forward.
Great, thank you, Jeff. We've both touched upon, I think, the sort of success of the buyback and obviously entering a close period, that cease, but just maybe any sort of direction around, obviously depending on share price and certain factors, whether that's something that maybe the board investment manager might have under consideration to maybe sort of continue that into the second half of the year.
Yeah, I don't think that's changed. I think you have summarised that really well, Rick, and if it continues to trade at this discount, obviously coming out with the results, there is an opportunity to create that further value. As you presented, net total return is positive, driven by that share buyback and how accretive that has been. Given we have got a bit of cash, obviously we are conscious of the French tax situation, but if we get resolution of that, that puts us into a stronger position to also utilise that cash. If we are continuing to trade at this deep discount, it is very hard not to look at that share buyback as it is very difficult to make a real estate investment stack up against that.
Yeah, no, thank you, Jeff. We have had a couple of questions as well. You've touched on it as well around the resolution of the French tax piece and what we're doing and sort of priority and timeframes. I think it's probably worthwhile saying that it's a process that's now been going for almost a year. We got the initial assessment back in early September. We've come out to the market a few times with announcements around that French tax piece. The company has advisors in France, both tax and legally, and those advisors are supporting the company at the moment. The advice we've had is not to provide, and we're working with the board and the auditor and key stakeholders on that. As I say, that's a process that's been worked through at the moment over current quarters. I don't know if you had anything to add, Jeff?
No, it's good.
Yeah.
Probably a clear summary.
Yeah, yeah. As I say, when we hear more, we'll absolutely continue to announce and provide that transparency, but it's not a quick process. It's not one that we're fully in control of. It's one that we're working constructively with our advisors in France and the French tax authorities and we'll provide further updates as soon as we can. Jeff, just a question around, we sort of both touched upon the strength of the balance sheet and the EUR 25 million and maybe some of the optionality that might be for the company, maybe in the next 6-12 months.
Yeah, I think it's a nice position to be in, having that conservative balance sheet and cash. Obviously, we're conscious of the French point that Rick just touched on. I think really we get resolution of that.
There are definitely angles here to try and think about, well, how do we move earnings on, whether it be through maybe a compelling acquisition, whether it be through, if we were to say, recycle Apeldoorn or recycle one of the other assets that I touched on. Obviously, we have teams on the ground that are seeing opportunities as well, and if there is something that is compelling that certainly stacks up against, say, buying your own shares, that is something that I obviously would take to the board and try and move on. We are not just going, and we have said this before, we actually made the comment probably 18 months ago where we made the decision of when we sold the successful repositioning of Paris Boulogne-Billancourt and delivered EUR 13 million back to shareholders through the special dividend, we were uncovered at that point.
We made the decision, look, let's just not run out there and buy assets for the sake of it to move that earnings on and get back to a full dividend cover. Let's be prudent and actually be conservative. That is why we cut the dividend sort of 18 months to two years ago. We are in a pretty similar position now. We are not just going to go out there and just buy something for the sake of buying something. We are prudent investment managers, and if there is an investment that stacks up that can create further diversification, create opportunities where we can create value and use our asset management expertise, we will do that. I think for now, it is probably prudent to remain with that EUR 25 million until we have resolved the French tax.
We may do a bit more of the share buyback that we touched on, and then it is sort of how, and obviously working with the board as part of these options, well, how can we reposition the company going forward to try and move the share price back to NAV? Because what we have at the moment is, I think, a fundamentally really strong portfolio that has a decent level of diversification for the size that we have. As I have touched on, there is a number of sort of more shorter-term asset management initiatives that we are working on that can grow earnings.
Great, thank you, Jeff. Thank you everyone for the questions. Been really helpful. Just a final question, Jeff, on Apeldoorn and KPN again, just around what its current book value is and maybe that trajectory of value given the KPN lease coming up end of next year, how that might sort of move through. We sort of touched upon the residential piece, but on the current basis around the value of Apeldoorn.
Yeah, you would have noticed the results over the last, I do not know, three, four years that it has been the alternatives which the Apeldoorn asset sits within where we have seen values falling because the valuers' approach is to say, okay, it is a depreciating asset. It is becoming or heading to obsolescence. Therefore, we are only going to value the remaining income.
Literally each quarter, we see a valuation fall of around EUR 300,000-EUR 400,000, and that will continue to happen as we move closer to that lease. Now, there could be an angle, we do not think this is the case, but there could be an angle where KPN turn around and say, actually, we are going to stay. We think it is a low probability of that happening. That is more likely than not that they will go. If they were to say, turn around and say, well, actually, we are going to stay, obviously the valuers have then changed their approach and take a longer period of income. Certainly the trajectory will be that the value, which obviously today sits at EUR 12.6 million, will continue to trend down to land value, which is that high single-digit millions.
Our role here is to sort of turn this more from an income asset to a value-accretive asset by getting planning, working with the municipality, trying to see how we can create value on that side and trying to enhance that residual land value.
Great, no, thank you, Jeff. I think that brings us maybe nicely to time and say that's all the questions that we've got in.
That's great. Thank you, everyone. Thanks, Rick. Feel free to fill out and give some feedback to us. Feel free to drop any other emails. Always available to answer questions, but thank you for your time this morning and have a good day. I need to send a recording, don't I?
Yeah, we will send it to the email to the guy. Oh, can you do that? Yeah. Also, the page of the.
Thank you for joining us. Right. Have you got me here? Testing one, two, one, two. I'm just going to give this a bit of a wiggle. How's that? Nothing? It was interference. Okay. Yeah.
Basically, the RF signal was fine, so it did not drop. That means coverage is fine, but maybe some interference in that radio frequency. Can you change the frequency or something? Yeah. I mean, while we are live, I cannot obviously, because I need to change the frequency on the kit as well. Yeah. Guys... Yeah? Yep. If I.