TIDMRLE
RNS Number : 6385H
Real Estate Investors PLC
31 July 2023
Real Estate Investors Plc
("REI", the "Company" or the "Group")
TRADING UPDATE AND NOTICE OF INTERIM RESULTS
ONGOING SALES, DEBT REPAYMENT & FULLY COVERED DIVIDEND
Real Estate Investors Plc (AIM: RLE), the UK's only
Midlands-focused Real Estate Investment Trust (REIT) with a
portfolio of commercial property across all sectors, is pleased to
provide the following trading update:
DISPOSALS - DELIVERING ON SALES STRATEGY
-- Private investors and owner occupiers have remained active,
allowing us to secure sales - breaking up parades and feeding
demand for smaller assets, despite the challenging macro
environment
-- Year to date disposals of GBP8.7 million (comprising of 11
retail units, 1 mixed retail and office asset and a piece of land
for drive-thru pod development) at an aggregate uplift of 11.7%,
pre-costs, to December 2022 book value
-- Further pipeline of sales in solicitors' hands and we intend
to complete sales to generate receipts to reduce portfolio debt and
execute our strategy
-- We have now achieved total sales of GBP46.55 million from 1 January 2021 to date
DEBT POSITION - INCREASED LIQUIDITY & RETURN ON DEPOSITS
-- Our priority has remained to repay debt with a view to reducing portfolio gearing levels
-- As at 28 July 2023, debt repayment of GBP7.3 million,
reducing total drawn debt to GBP64.2m (FY 2022: GBP71.5
million)
-- Pro-forma loan to value (net of cash) now 34.7% (FY 2022:
36.8%) based on 31 December 2022 valuations
-- Company is maximising returns on cash reserves, with monies
on deposit earning 3.4% at present
-- Average cost of debt maintained at 3.7% (FY 2022: 3.7%)
-- Company's debt is 100% fixed, with a b lended debt profile
term of 17 months. Plans agreed with Royal Bank of Scotland and
Lloyds to begin facility negotiations in Q4 2023
-- As at 30 June 2023, hedge facility had improved by GBP388,000 year-to-date
PORTFOLIO ACTIVITY - HEALTHY PIPELINE OF LETTINGS
-- We have experienced slow occupier decision making since the
year end, however, due to our healthy pipeline of lettings, and
with our further scheduled sales, we anticipate improved contracted
rental income, WAULT and occupancy (over the remainder of the
year), which will further reduce our void costs and support future
covered dividend payments
-- Example key lease event in H1 2023 - AFH Private Wealth, with
18 months left on their lease, took out a new lease for 11.5-years
at the passing rent of GBP396,077 per annum (at ERV) with no break,
now occupying all 25,000 sq ft at Avon House, Bromsgrove
-- Robust rent collection levels for Q2 2023 (March-June) of 99.93%
-- Contracted rental income of GBP12.5 million per annum as at
30 June 2023, due to disposals in line with strategy (FY 2022:
GBP12.6m)
-- Portfolio occupancy of 85.04% as at 30 June 2023 (FY 2022:
84.54%), with potential to rise further as key pipeline lettings
are completed (subject to ongoing sales and ongoing portfolio lease
activity)
ATTRACTIVE, FULLY COVERED DIVIDEND
-- Fully covered dividend for Q1 2023 of 0.625p per share (Q1 2022: 0.8125p per share)
-- GBP47.4 million total declared/paid to shareholders since
commencement of dividend policy in 2012
NOTICE OF INTERIM RESULTS
The Company will release its interim results for the six months
ended 30 June 2023 on 25 September 2023.
PAUL BASSI, CHIEF EXECUTIVE, COMMENTED:
"During H1 we have seen unfavourable and unstable market
conditions for the real estate market, including monthly interest
rate rises, stubbornly high inflation and no end to the war in
Ukraine. Despite these challenges, the REI portfolio remains stable
and we have enjoyed high rent collection, sales of GBP8.7 million,
debt reduction of GBP7.3 million and paid a fully covered Q1
dividend of 0.625p.
Continued interest rate rises, coupled with a poor investment
market have the potential to negatively impact property values,
though our asset management approach should combat some of this
downward pressure. The portfolio is not exposed to large-scale city
centre offices, assets that are particularly at risk.
In the absence of consolidation opportunities that meet the
needs of shareholders and the necessary market conditions to
support portfolio growth, the Company's strategy remains to make
opportunistic and targeted sales and reduce debt further. The
Company will maintain maximum flexibility when considering all
future options, including a return of capital, special dividend to
shareholders or further share buybacks, with the view to maximising
shareholder returns. Alternatively, if the environment for
acquisitions changes and opportunities offering significant value
start to arise, then we may look to make opportunistic
acquisitions, where there is scope to capture material upside
through asset management. The Board evaluates the relative merits
of these options on an ongoing basis."
Certain of the information contained within this announcement is
deemed by the Company to constitute inside information as
stipulated under the UK version of the EU Market Abuse Regulation
(2014/596) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended and supplemented from time to
time.
Enquiries:
Real Estate Investors Plc
Paul Bassi/Marcus Daly +44 (0)121 212 3446
Cenkos Securities (Nominated Adviser)
Katy Birkin/Ben Jeynes +44 (0)20 7397 8900
Liberum (Broker)
Jamie Richards/William King +44 (0)20 3100 2000
About Real Estate Investors Plc
Real Estate Investors Plc is a publicly quoted, internally
managed property investment company and REIT with a portfolio of
mixed-use commercial property, managed by a highly-experienced
property team with over 100 years of combined experience of
operating in the Midlands property market across all sectors. The
Company's strategy is to invest in well located, real estate assets
in the established and proven markets across the Midlands, with
income and capital growth potential, realisable through active
portfolio management, refurbishment, change of use and lettings.
The portfolio has no material reliance on a single asset or
occupier. On 1st January 2015, the Company converted to a REIT.
Real Estate Investment Trusts are listed property investment
companies or groups not liable to corporation tax on their rental
income or capital gains from their qualifying activities. The
Company aims to deliver capital growth and income enhancement from
its assets, supporting its dividend policy. Further information on
the Company can be found at www.reiplc.com .
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END
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July 31, 2023 02:00 ET (06:00 GMT)
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