REG - Real Estate Investrs - Trading Update

Real Estate InvestorsAnnouncement

Yesterday 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250813:nRSM0461Va&default-theme=true

RNS Number : 0461V  Real Estate Investors PLC  13 August 2025

Real Estate Investors Plc

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

 

TRADING UPDATE

 

SALES, DEBT REDUCTION

& PLANNED DISPOSALS

 

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, ahead of the
announcement of its Interim Results for the six months ended 30 June 2025 on
23 September 2025:

 

SUMMARY

 

Our portfolio has performed well year-to-date, including:

 

·      Sales contracted/completed/in legals since the year end totalling
£11.3 million:

o  Completed or contracted 13 sales to private investors for a total of £7.7
million

o  Additional 6 sales of £3.6 million in pipeline legals as REI continues to
target the private investor market and owner occupier demand

·      An additional £14.4 million of portfolio assets currently being
marketed to the private investor audience

·      £54.0 million of larger portfolio assets prepared for sale
(subject to market conditions) in Q4 2025/H1 2026

·      Continued debt reduction from capital receipts from disposals of
£4.3 million year-to-date, with total debt reduced to £34.9 million (FY
2024: £39.2 million) and due to reduce further from deferred contracted sales

·      Improved portfolio occupancy increased to 85.85% (FY 2024:
82.04%)

·      Contracted rental income of £9 million p.a. (FY 2024: £9
million p.a.) excluding turnover rents

·      Rent Collection for H1 2025 99.75%

·      WAULT of 5.54 years to break and 6.84 years to expiry (FY
2024: 5.76 years to break / 6.99 years to expiry)

·      Asset Management team has completed 12 lease events year-to-date

·      Strong new lettings totalling £492,000 p.a. in pipeline legals
(of which £311,000 p.a. is new income to the portfolio).  These lettings
have the ability to improve occupancy, WAULT and rental income, and the
potential to enhance capital values

 

MARKET OVERVIEW & DISPOSALS

 

As anticipated, market sentiment year to date towards larger assets remains
subdued and investment activity in 2025 may be below 2023 and 2024 levels,
with both of those prior years recording the lowest investment activity since
the financial crisis.

 

Whilst UK commercial real estate investment transactions of £21.9 billion for
H1 2025 were 18% lower than H1 2024 (CBRE Research), the wider Midlands region
economy in which our assets are located remains robust with regional office
markets seeing the strongest H1 since 2019 with take-up reaching 3.7m sq ft,
6% ahead of the 10-year average.

 

For this reason, and in light of our commitment to maximise shareholder value
during the sales programme, we have refrained from placing larger assets on
the open market in H1 2025, until such time as activity levels improve.
However, private investor demand remains positive and we have contracted sales
and completions of £7.7 million, plus £3.6 million in legal pipeline,
totalling £11.3 million year-to-date.

 

Some asset classes (particularly the retail sector) are now reporting stronger
investor demand, with occupier demand and rental growth also positive across
most sectors, though the office investment market and valuations remain under
pressure.

 

The portfolio is performing well with stable occupancy, and excellent rent
collection, plus numerous asset management initiatives that have the potential
to improve occupancy,  income and capital values.

 

Subject to improving market conditions following last week's interest rate
reductions, and further anticipated interest rate reductions, we have £54.0
million of planned larger assets ready to bring to the market in Q4 2025/H1
2026, allowing us to repay the Company's outstanding debt.

 

BANKING & DEBT REPAYMENT

 

From the completed sales, we have used £4.3 million to repay debt, reducing
the Company's debt to £34.9 million as at the date of this announcement (FY
2024: £39.2 million).

 

Once contractually deferred sales have completed, the receipts from these
disposals will be used to pay down debt further, with the rental income
received retained until such time, to support our covered dividend.

 

Capital receipts will be initially directed to repay any remaining borrowings,
before we commence the return(s) of capital to our shareholders.

 

In March 2025, the Company closed out the hedge facility at a cost of
£174,000.  This has resulted in all debt now on variable rates, allowing us
to benefit from reducing interest costs.  The average cost of debt looking
forward is now 6% (FY 2024: 6.5%) and the Company remains multi-banked and
compliant with all banking covenants.

 

DIVIDEND

 

We announced a fully covered dividend for Q1 2025 of 0.4p per share (Q1 2024:
0.5p per share) despite the reduction in income associated with disposals
during the period.

 

The Company has now paid/announced a total of £54.6 million in dividends to
shareholders since commencement of the dividend policy in 2012.

 

Management remain committed to paying an uninterrupted fully covered dividend,
subject to the pace of the ongoing disposals programme.

 

NOTICE OF INTERIM RESULTS

 

The Company will release its interim results for the six months to 30 June
2025 on 23 September 2025.

 

Paul Bassi, Chief Executive, commented:

 

"Mindful of the anticipated and subdued market conditions experienced in H1,
which are likely to continue in H2 2025, we are pleased with our planned sales
and debt reduction to date and look forward to larger sales from Q4 2025 and
H1 2026 which should benefit from recent and anticipated future interest rate
reductions and the loosening of borrowing criteria by UK banks.

 

We are halfway through our 3-year orderly sales programme and remain focused
on our strategic objective of repaying all our borrowing from targeted sales
in order to commence our capital repayment programme to our shareholders.  We
will remain open to a corporate sale or a portfolio sale of our remaining
properties.

 

We are committed to maximising shareholder value during the sales programme
whilst continuing to pay a covered dividend, subject to the pace of
disposals."

 

Enquiries

 

Real Estate Investors Plc

Paul Bassi/Marcus
Daly
+44 (0)121 212 3446

 

Cavendish Capital Markets Limited (Nominated Advisor)

Katy Birkin/Ben Jeynes
        +44 (0)20 7220 0500

 

Panmure Liberum (Broker)

Jamies 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 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 announced in January 2024 that it would be
undertaking an orderly strategic sale of the Company's portfolio over three
years, disposing of assets individually or collectively, at or above book
value, to optimise returns to shareholders.  The pace of the disposal
programme will be dictated by market conditions, with an initial focus on
repaying the Company's debt.  In the meantime, it is the Board's intention to
continue paying a fully covered quarterly dividend. Further information on the
Company can be found at www.reiplc.com (http://www.reiplc.com) .

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFLETVIFLIE