Rent Collection and Trading Update

27th January 2021

RNS Number : 9774M
Real Estate Investors PLC
27 January 2021
 

Real Estate Investors Plc

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

 

Rent Collection & Trading Update 

 

Real Estate Investors Plc (AIM: RLE), the UK’s only Midlands-focused Real Estate Investment Trust (REIT), with a portfolio of 1.59 million sq. ft. of investment property across all sectors, is pleased to provide the following update for 2020. 

 

Rent Collection

 

Rent collection remains the key feature of our business against the backdrop of COVID-19.  Despite the unprecedented challenges faced by businesses over the last 12 months, REI has benefitted from the diverse and ongoing asset management initiatives within the portfolio and we have continued positive dialogue with our occupiers, resulting in a strong overall rental collection performance for 2020 of 95.29%.  This figure is expected to improve over the coming weeks and months as tenants, who have the ability to pay but have previously taken advantage of government legislation on overdue rents, begin to pay and tenants who are currently closed, commence re-trading later in 2021.  Further collections generated will be attributed to the relevant current or historic quarters, resulting in improvements in the overall rental collection for 2020. Rent collection to date for Q1 2021 is promising and currently stands at 89.95%.

 

A summary of each quarter and the overall rent collection for 2020 is shown below: 

 

Rent Collections

Q1 2020

Q2 2020

Q3 2020

Q4 2020

Q1 2021

(to date)

Collected

99.60%

85.54%

87.35%

92.19%

87.81%

Deferred arrangement

0.28%

9.23%

4.29%

1.90%

2.14%

Total

99.88%

94.77%

91.64%

94.09%

89.95%

Debtors

0.12%

5.23%

8.36%

5.91%

10.05%

 

 

Portfolio

 

With 262 occupiers across 53 assets, the Company’s portfolio remains stable and robust with ongoing opportunities being realised via asset management initiatives. The Company’s diversified portfolio, with no material reliance on any single occupier, asset or sector has underpinned the positive rent collection.

 

Occupancy and WAULT

 

Our occupancy at the year-end was 91.60% (2019: 96.3%).  This reduction is almost entirely due to known lease events predominantly in the office sector that, in a normalised marketplace, would provide opportunities to increase lease terms and improve our average lease length (WAULT), along with the potential for capital uplifts within our portfolio. We already have space under offer to the NHS/CO-OP/ Department for Work and Pensions. Against a challenging backdrop, in 2020, REI completed 34 value add lease events (including 7 lease renewals).  As a result of proactive asset management initiatives in 2020, our WAULT has improved to 4.8 years to break and 6.54 years to expiry (YE 2019: 3.82 years to break and 5.79 years to expiry).

 

Whilst we are seeing some delay in tenant occupancy decisions, we note the strength of demand for our convenience and neighbourhood portfolio, with increases in occupier requirements from national c-store and essential services operators.  The pandemic-driven increase in turnover experienced by these businesses has seen many seek to rapidly expand their presence. Our focus on convenience and neighbourhood assets will continue as opportunities emerge.

 

Share Buyback

The Company announced a share buyback on 20 October 2020, to purchase an aggregate market value up to £2 million of the Company’s ordinary shares.  In aggregate, between 20 October 2020 and 27 November 2020, the Company repurchased 7,042,700 ordinary shares at an average purchase price of 28.40 pence per share.

Dividend

 

The Company’s income, despite challenges faced throughout the pandemic, has supported the continuation of our dividend payments which were paid at a level of 0.50p per quarter in 2020.  The level of the final dividend payment will be confirmed within our results for the year ended 31 December 2020 which are expected to be announced in March 2021.

Paul Bassi, Chief Executive Officer, commented:

 

“The diversity of our portfolio and intensive asset management, has resulted in resilient levels of rent collection, and has allowed us to combat much of the impact of COVID-19, which has devastated many other businesses.”

 

“With a growing occupier demand resulting in new/pipeline lettings for our void space, combined with portfolio lease renewals, we believe that we will move forward with a stable and secure property business, to make opportunistic sales and acquisitions that support a continued progressive dividend policy.”

 

 

Enquiries:

 

Real Estate Investors Plc

Paul Bassi/Marcus Daly

 

 

+44 (0)121 212 3446

 

Cenkos Securities

Katy Birkin/Ben Jeynes

 

+44 (0)20 7397 8900

Liberum

Jamie Richards/William Hall

 

 

+44 (0)20 3100 2000

Allenby Capital

Nick Naylor/Asha Chotai

 

 

+44 (0)20 3328 5656

Novella Communications

Tim Robertson/Fergus Young

+44 (0)20 3151 7008

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

 

 

 

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.com.

 

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