Upbeat REI continues to buck market trends in positive start to 2024

Real Estate Investors plc (REI) will reveal a strong performance in a sluggish property market at its AGM in Birmingham today (Thursday 23 May 2024).

Shareholders will hear that 2024 for REI is proving a year of strong lettings activity, with further sales completing and debt repayment.

Significant lettings include Birch House in Oldbury where DHU Health Care CIC has taken the entire 35,749 sq ft on a ten year lease at £625,608 per annum. Practical completion and lease completion has now taken place following refurbishment of the space by REI.

REI has signed further agreements for leases awaiting completion at Jasper Park, Tunstall, where McDonald’s has signed an agreement for a 20 year lease at £55,000 per annum on a previously vacant unit.

At Market Centre, Crewe, British Heart Foundation has agreed a ten year lease at £57,500 per annum to take the ground floor and part first floor of the former Argos unit.

Costa signed a lease agreement for £89,000 per annum in 2023 at Topaz Business Park, Bromsgrove, and the forward sale of the lease has now been exchanged for £1.6 million. Construction of the Costa unit is due for completion in September 2024.

And at The Maypole, south Birmingham, InHealth Ltd, the UK’s largest specialist provider of diagnostic and healthcare solutions, has taken the old Halfords unit of 4,500 sq ft on a 15 year lease at £65,000 per annum.

REI chief executive Paul Bassi said: “Despite widespread market inertia and a lack of transactional activity, REI is fortunate to have a diversified portfolio that has allowed us to complete further sales since the year-end to private investors and owner occupiers at prices at or better than our year-end book values, totalling  £5.442 million, with the loss of income associated with these sales equating to £360,000 per annum.

“We also have an additional number of properties that have exchanged and are set to complete subject to deferred completions, vacant possession and change of use/planning consents.

“We have a further strong pipeline of sales in legals, which is pleasing, though transactions are typically taking months from conception to completion.”

He said that REI will be retaining larger assets for income.

“We will look to sell these once we see a likely improvement in pricing and investor appetite for these assets, which we anticipate will be triggered by a reduction in interest rates and a clearer picture post the General Election.”

The proceeds from recently completed disposals, combined with existing cash, have been used to reduce REI’s debt by a further £3 million, taking the total debt repaid since the year end to £5.7 million.

This has resulted in total drawn debt reducing to £48.7 million against the full year 2023 figure of £54.4 million.

Mr Bassi added: “We remain focused on debt reduction as a priority, using sales proceeds to accelerate our debt reduction objectives.

“In a challenging market, we are pleased to report the ongoing lettings progress across our portfolio, which will maximise our rental income and occupancy levels, supporting our ongoing dividend commitment. The portfolio is continuously subject to active asset management which provides quality assets for disposal as part of our strategic sales programme and increases occupancy, revenue and capital values

“Although private investors and special purchasers continue to invest, we anticipate that the market for larger property investment transactions will pick up once interest rates decrease, and this year’s General Election concludes. We remain focused on sales and debt reduction and have a strong sales pipeline in legals.  The key objective of REI’s board is to deliver on the stated strategy of an orderly sales programme to maximise the return of capital to shareholders.”

Ends (611 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 Andy Skinner at 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 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.