Property Disposals

11 November 2020

Real Estate Investors Plc

(“REI“ or the “Company“ or the “Group“)

Property Disposals

Real Estate Investors Plc (AIM: RLE), the UK’s only Midlands-focused Real Estate Investment Trust (REIT) with a diversified portfolio of 1.59 million sq ft of investment property across all sectors, announces that it has unconditionally exchanged contracts on a number of properties, at or above book value, for a total consideration of £9.725 million.

Capitalising on the strong private and corporate investor market, REI are pleased to announce the following unconditional exchanges:

·      Aldi supermarket, Bearwood, Edgbaston – due to the strong trading performance of this unit, Aldi have acquired the freehold for £5.350 million, representing a yield of 5.26%.  The sale price reflects an increase of £1.296 million (32% uplift) in value against the December 2019 year end valuation of £4.053 million.  As part of the sale agreement, the Company negotiated an extended completion date of September 2021 and REI will continue to benefit from £300,000 per annum rental income until this date, demonstrating heightened demand for convenience retail.

·      315-317 & 319 High Street, West Bromwich - vacated offices which have become in need of refurbishment, sold for £625,000, which reflects our current valuation and is contracted to complete in January 2021. 

·      Land at Coseley, West Midlands – sold for a minimum of £1.150 million, with a potential additional £350,000, subject to the completion of a local authority grant application by the purchaser, Countryside Properties PLC, with completion contracted to take place in December 2020.

·      City Gate House, Leicester – sold for £2.6 million and due to complete in December 2020, following exchange in 2018 - REI has benefitted from the ongoing rental income during the interim period.

Upon completion, the associated rental reduction from the disposal consideration of £9.725 million is only £457,500 per annum.

Also, taking advantage of the current private and corporate investor appetite, REI have a number of other properties, that are currently in legals and which are anticipated to unconditionally exchange contracts before the year end.

Looking forward, management remains confident of generating additional capital value across the portfolio through individual asset sales at book value or better.

Further announcements, will be made as appropriate.

Paul Bassi, CEO, commented:

“We are delighted to announce these sales at values at or above our December 2019 year end valuation.

On completion, the sale proceeds will be used to reduce the Company’s gearing, allowing us to keep existing cash and bank facilities available to make strategic acquisitions.

We have identified further assets that could be considered for sale and have experienced a rise in investor demand for certain resilient assets within our portfolio, along with increased occupier demand for our out of town office portfolio.”

Enquiries:

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

About Real Estate Investors Plc

Real Estate Investors Plc is a publicly quoted, internally managed property investment company and REIT with a portfolio of 1.59 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, which has enjoyed 7 years of consecutive growth.  Further information on the Company can be found at  www.reiplc.barques.dev.