REG - Real Estate Investrs - H1 Trading Update and Capital Return Strategy

Real Estate InvestorsAnnouncement

06/07/2022 07:00

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RNS Number : 4278R  Real Estate Investors PLC  06 July 2022

 

Real Estate Investors Plc

("REI" or the "Company" or the "Group")

 

H1 TRADING UPDATE AND CAPITAL RETURN STRATEGY

 

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 H1 trading update and
capital return strategy for the six months ended 30 June 2022 ("H1 2022"):

 

H1 2022 TRADING UPDATE

 

·      Disposed of 11 assets during H1 2022 totalling £5.7 million - an
aggregate uplift of 27.9% on December 2021 valuations

·      2021 and 2022 asset sales to date of £23.2 million

·      Further pipeline disposals in legals totalling approximately £10
million

·      Disposal proceeds used to pay down £5.7 million of debt in H1
2022

·      Average cost of debt of 3.5% with 94.5% of debt fixed (as at 30
June 2022)

·      As at 1 July 2022, hedge facility has improved by £1.2 million
for H1 2022

·      Covered dividend for Q1 2022 of 0.8125p per share (Q1 2021: 0.75p
per share)

·      Contracted rental income of £14 million p.a.

·      Normalised rent collection levels of 95.16% (for current quarter)

·      Portfolio occupancy of 85.88%

 

DISPOSALS UPDATE

 

As stated in our year end results published in March 2022, we saw a high level
of private investor demand for our assets in 2021 and this continued during H1
2022.  As such, we have successfully completed a further £5.7 million of
disposals, at an aggregate uplift of 27.9% above the December 2021 valuation.
Total sales for 2021 and 2022 to date total £23.2 million, with further sales
in legals of approximately £10 million.

 

No acquisitions were made during H1 2022 due to the lack of suitably priced
assets. Management will continue to monitor the market place for attractive
acquisition opportunities.

 

CAPITAL RETURN STRATEGY AND NOTICE OF INTERIM RESULTS

 

We remain focused on delivering maximum value to our shareholders and the
Board believes the share price discount to the net tangible assets ("NTA") is
unwarranted and that it is in the best interests of all shareholders to take
steps to reduce this discount.

 

Therefore, we have continued with our opportunistic sales programme to satisfy
high private investor demand at prevailing prices and advantageous yields and,
subject to the completion of property sales, we intend to continue to repay
debt.  If the significant share price discount to NTA persists, we will
consider a special dividend, share buyback or other form of capital return to
shareholders, the structure and timing of which is yet to be decided.  The
quantum of any return of capital will be set to ensure that we maintain a
prudent loan-to-value ratio, whilst also being mindful of the overall
liquidity in the Company's shares.  The Board recognises the need for market
consolidation within the real estate and REIT market and remain alert to
options that align with the interests of our shareholders..

 

We expect to update the market further on any return of capital at the interim
results expected to be released on 29 September 2022.

 

DIVIDEND

 

As announced on 20 June 2022, a fully covered dividend payment in respect of
Q1 2022 of 0.8125p per share (Q1 2021: 0.75p per share) will be paid on 22
July 2022 as a Property Income Distribution (PID), to all shareholders on the
register as at 1 July 2022.  The ex-dividend date is 30 June 2022.  The
Board remains committed to paying a covered dividend, throughout the period of
our sales programme, subject to business performance.

 

Paul Bassi, Chief Executive, commented:

 

"Following 2 years of pandemic disruption, we are pleased to report
significantly improved occupier and investor activity during Q2 2022 and have
a healthy pipeline of new lettings in our void space.  We expect ongoing
activity to improve our occupancy levels and portfolio WAULT.  There remains
a strong private investor market and we intend to continue to make sales to
satisfy this investor demand.  We intend to repay existing debt and reduce
gearing levels with disposal proceeds and consider a special dividend, share
buyback or other form of capital return to shareholders."

 

 

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)   +44 (0)20 7397 8900

 Katy Birkin/Ben Jeynes

 Liberum (Broker)                        +44 (0)20 3100 2000

 Jamie Richards/William King

 Novella Communications                  +44 (0)20 3151 7008

 Tim Robertson/Safia Colebrook

 

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 progressive dividend policy.  Further information on the Company can be
found at www.reiplc.com (http://www.reiplc.com/) .

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