Real Estate Investors plc (REI) is boxing clever in an increasingly inactive commercial marketplace, according to the Birmingham-based REIT’s chief executive.

Delivering a trading update, Paul Bassi said that while there was institutional inertia, private investors and owner occupiers remain active with strong demand for REI assets.

He said: “We are seeing strong demand from private investors and owner occupiers, and this is allowing us to secure sales as we adopt a strategy of breaking up retail parades and feed the demand for smaller assets, despite the challenging macro environment.”

He reported year-to-date disposals of £8.7 million, including the sale of 11 retail units, one mixed retail and office asset and an area of land for drive-thru pod development at an aggregate uplift of 11.7%, pre-costs, on the December 2022 book value.

“We have now achieved total sales of £46.55 million from 1 January 2021 to date and have a further pipeline of sales in solicitors’ hands.

“We intend to complete these sales to generate receipts to reduce portfolio debt and execute our strategy.”

The company paid a fully covered dividend for the first quarter of 2023 of 0.625p per share, giving a total of £47.4 million declared/paid to shareholders since the commencement of the current dividend policy in 2012.

He added: “During the first half of 2023, 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 £8.7 million, debt reduction of £7.3 million and paid a fully covered first quarter 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, REI’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.”

He said that further sales and lettings in the legal pipeline would further enhance results in the second half of the year.

REI will release its interim results for the six months ended 30 June 2023 on 25 September 2023.

Ends (484 words)

For further information, please contact:

Paul Bassi, Chief Executive,

Real Estate Investors plc, 2nd Floor, 75/77 Colmore Row, Birmingham B3 2AP

0121 265 6406 or 0121 212 3446

www.reiplc.com

Prepared and issued by ASAP – mobile, 07990 978257

About Real Estate Investors Plc

Real Estate Investors Plc is a publicly quoted, internally managed property investment company and REIT with a portfolio of 1.37 million sq ft 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.