REI tops £20 million in property sales so far in 2022

Real Estate Investors plc (REI), the only quoted Midlands-focused property investor, has announced property sales of over £20 million in 2022 to date and confirms a fully covered quarterdividend of 0.4375p per share for the third quarter of 2022.

A final dividend is to be announced in March 2023 and is expected to represent a minimum annual dividend payment of 2.5p per share for the financial year 2022 and an expected yield of 7.87% (based on a closing mid-market price of 31.75p on 12 December 2022).

The disposal proceeds of £20.1 million have been used to pay down £17 million of debt so far in 2022, and the company’s loan to value, net of cash, is now 38.3%, down from 40.2% on 30 June 2022.

Chief executive Paul Bassi said: “We have seen an accelerated sales rate from our planned disposals that has allowed us to reduce our debt by over £17 million and fund a share buyback of £2 million.

“Continued sales to capitalise on private and overseas investor demand will allow us to reduce our borrowings further and consider additional share buyback programmes – subject to market conditions.

“We anticipate improved occupancy which will reduce our void costs and improve our revenue, supporting our covered dividend payments, whilst growing our net tangible assets per share.”

Some £14.4 million of the sales have come since 30 June 2022, reflecting accelerating demand for REI’s Midlands-focused portfolio.

Bassi added: “In addition to sales in our legal pipeline, we intend to make further sales to generate receipts to reduce portfolio debt and execute our strategy.”

Other highlights announced include:

  • £5.8 million cash at bank as at 30 November 2022
  • Average cost of debt increased slightly to 3.7% (30 June 2022: 3.5%) as a result of paying down debt
  • 100% of portfolio debt fixed and a weighted average debt maturity of two years
  • As at 30 November 2022, hedge facility has improved by £2.2 million year to date.

REI also revealed that, as well as reducing debt, the board has identified that certain services will no longer be needed or required in line with the reduction in portfolio size and the Company is looking to target up to £300,000 of savings in the financial year 2023.

Mr Bassi added: “While we are mindful of overheads, the board is aware of inflationary pressures and has agreed a 5% wage increase for all full-time staff.  The Company’s CEO and financial director have declined to receive any increase.”

He reported that despite widespread economic instability and negative market sentiment, private investor and overseas investors have remained active in the property market throughout H2 2022 to date.

“In line with our previously stated strategy, we have continued to dispose of assets and, since 30 June 2022, we have sold an additional £14.4 million of portfolio assets to satisfy investor demand, taking total sales year to date to £20.1 million, achieving an aggregate uplift of 11.4% to our December 2021 valuations.

REI will release its final results for the year ended 31 December 2022 on 28 March 2023.  At the half year, REI announced pre-tax profits to 30 June 2022 of £8.3 million, including a £3.1 million gain on property revaluations.

Ends (528 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

Prepared and issued by Andy Skinner at ASAP, 01608 651203, mobile, 07990 978257

About Real Estate Investors Plc

Real Estate Investors Plc (REI Plc) is a publicly quoted, internally managed property investment company and REIT with a portfolio of 1.59 million sq ft of 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 of central Birmingham and 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.