TIDMRLE
RNS Number : 8423V
Real Estate Investors PLC
08 November 2017
Real Estate Investors Plc
("REI" or the "Company" or the "Group")
Trading Update
Acquisitions, Sales and Fixed Rate Debt Facility
Increase in Overall Occupancy and Contracted Rent
Real Estate Investors Plc (AIM: RLE) the Birmingham based
property group and UK listed Real Estate Investment Trust, is
pleased to announce a trading update and confirm the completion of
a fixed rate debt facility.
Summary
-- Contracted rent has risen to a record GBP16.5 million per
annum, up 10.6% since 31 December 2016.
-- Overall occupancy has increased to 95.1% (December 2016: 92.6%).
-- Successfully completed property acquisitions totalling GBP9.5
million, providing a combined initial yield of 9.86%.
-- Recent sales of GBP1.2 million bringing total sales to date in 2017 to GBP13.6 million.
-- GBP41 million RBS facility fixed at 2.75% until 20 January
2021. The Company is also in discussions to restructure its
existing GBP20 million Lloyds facility.
Acquisitions
Through our long standing regional network and against a stock
starved market place, we are pleased to have secured GBP9.5 million
of property acquisitions providing a combined initial yield of
9.86%. The investment properties acquired are as follows:
-- Market Place, Nuneaton was acquired for GBP2 million
reflecting a net initial yield of 9.03% and comprises a 100% prime
retail investment on the pedestrianised section of Market Place.
The property comprises 29,051 square feet of flexible retail
accommodation and is let to Poundland until August 2022.
-- Venture Court, Wolverhampton was acquired for GBP2.5 million
at a net initial yield of 8.37% producing GBP222,565 per annum. The
property comprises a modern office on a busy business park and is
let to Santander and Persimmon Homes with 1,952 square feet of
vacant offices to let and a WAULT of 4.0 years.
-- 1-11 Park Street & 82-87 Bradford Street, Walsall was
acquired for GBP5.0 million at a net initial yield of 10.93%. The
property comprises a prominent, unbroken retail parade on the prime
pedestrianised retail pitch in Walsall town centre. Approximately
85% of income is secured against multiple national tenants, with a
WAULT of 6.1 years to expiry. The investment is fully let with a
current passing rent of GBP582,720 per annum. New tenants include
Thomas Cook, Smart Ideas, Game Retail, Luda Bingo (guaranteed by
Mecca Bingo), Shoe Zone, Robsco Solutions (Cash Converters), Paddy
Power and Toni & Guy.
The above are criteria compliant acquisitions that provide REI
with the opportunity to add rental and capital value from rent
reviews, lease renewals and letting opportunities.
Sales
The Company is also pleased to confirm the following sales:
-- 1 Dutton Road, Coventry to Coventry City Council for a total
consideration of GBP944,000 at a net initial yield of 8%. We
recently completed a five year lease extension with the
occupational tenant (Personal Hygiene Services). The property was
held on a long leasehold basis to Coventry City Council with 69
years remaining.
-- 46 High Street, Bromsgrove - sold for the sum of GBP300,000.
REI has additional properties under offer and anticipates
completing further sales by the year end at book value or
above.
After allowing for GBP13.6 million sales in 2017 and with the
benefit of new acquisitions and lettings from within its existing
portfolio, the Company's contracted rent has risen to a record
GBP16.5 million per annum, up 10.6% since 31 December 2016. Overall
occupancy is up at 95.1%, which compares favourably with 92.6% as
at December 2016.
Fixed Rate Debt Facility
REI has fixed its existing variable GBP41 million RBS facility
at 2.75% until 20 January 2021, secured against a portfolio of
property. This provides REI with stability of cost, and 87% of its
debt is now fixed. The Company is also in discussions to
restructure its existing GBP20 million Lloyds facility.
Commenting on trading and the vibrant Birmingham and Midlands
economy, Paul Bassi, Chief Executive of REI, said:
"Overall the Company's portfolio is performing well and a
significant part of our portfolio which was acquired during the
downturn has excellent potential to add value from rental growth to
current market levels. Furthermore, the regional investment market
remains strong and we anticipate further sales in Q4 of properties
upon which we have completed our asset management initiatives.
We continue to benefit from our investment strategy of investing
in Birmingham and the Midlands into asset management opportunities
for income and capital growth against the backdrop of a vibrant
Birmingham and Midlands regional economy that is in the process of
rebirth following decades of stagnation.
Inward investment, the relocation of HSBC headquarters, HS2,
HMRC, the Commonwealth Games nomination, significant transport and
infrastructure improvement at Birmingham Airport and Birmingham's
Grand Central Station, together with a growing economy, which is
benefiting from the depreciation of Sterling, all provide a
positive outlook for our strategy and our ability to deliver a
progressive dividend, which has grown year-on-year over the last
five years.
With the benefit of sales, existing cash and bank facilities, we
remain well positioned to capitalise on any market unrest due to
Brexit negotiations and continue to make criteria compliant
property acquisitions in order to grow our portfolio further."
Enquiries:
Real Estate Investors Plc
Paul Bassi +44 (0)121 212 3446
Smith & Williamson Corporate
Finance Limited
Azhic Basirov/David Jones +44 (0)20 7131 4000
Liberum
Jamie Richards/Ben Roberts +44 (0)20 3100 2000
Gable Communications Limited +44 (0)20 7193 7463
John Bick +44 (0)7872 061 007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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