TIDMRLE
RNS Number : 1208J
Real Estate Investors PLC
08 April 2020
8 April 2020
Real Estate Investors Plc
("REI" or the "Company" or the "Group")
Trading & COVID-19 Update & Dividend Confirmation
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 the following trading update.
The unprecedented and fast changing circumstances surrounding
COVID-19 have created an uncertain environment. However, REI's
conservative gearing, diversified portfolio, controlled overheads
and excellent banking relationships, combined with our experience
of operating in periods of crisis, means we are well positioned to
weather this storm whilst also supporting our occupiers and
stakeholders.
We have taken all the necessary steps in line with government
guidance to ensure the wellbeing of our staff. Our team is working
from home and the business is operating efficiently. Furthermore,
we have received assurances from all third-party providers that
they have contingency measures in place to support REI.
Our strategy to maintain a portfolio that is diversified means
that we have no material reliance on any one sector, asset or
occupier.
As of 31 December 2019, our portfolio consisted of 53 assets and
280 occupiers, with offices being our largest sector at 37.7% of
the Company's rental income (of which government bodies represent
6.4%).
Additionally, 23.8% of our portfolio represents key
worker/essential services, with many of these continuing to trade
during lockdown with government permission.
Nationally, some neighbourhood and convenience stores (the
subsector that underpins the retail element of our portfolio) have
experienced a rise in trade during lockdown as they serve their
communities, in the four weeks to 22 March 2020, sales have seen an
increase of 45% on the same period in 2019 (according to the Sunday
Times).
Rent Collection
REI is a responsible and experienced landlord, who remains in
close contact with all occupiers, and considering the circumstances
the Company confirms a strong rent collection across the portfolio
for the March 2020 quarter and those monthly rents falling due at
the beginning of April 2020.
Rent collection falls into one of the following categories:
-- We have secured a high percentage of rents due at the March
quarter (including those adjusted to monthly payments) and monthly
rents as due and agreed for the start of April
-- Where necessary, we are working with our tenants on a
case-by-case basis to find payment solutions, including rental
payments absorbed from any rental deposits held, or switching rent
to be payable on a monthly basis rather than quarterly in advance.
Rent deposits can be topped up at a future date.
-- Where occupiers have requested a suspension of rent, terms
for them to pay any unpaid rents on receipt of government support
or on a deferred or instalment basis, alongside future due rents,
are being fully discussed and documented.
Generally, occupiers have reacted to the present crisis in a
responsible and cooperative manner. A small proportion have asked
for a rent-free period, despite having strong balance sheets and
being eligible for substantial government funding, to include,
12-month business rates waiver, VAT deferral and salary support. We
will be responding to provide some flexibility in their rental
payments, but we will not be looking to accommodate a full waiver
of rents or a rent-free period.
Gearing & Covenants
Management believe that preserving cash at this time is a
prudent approach and continues to monitor rent collection, control
overheads and keep in close contact with its lenders.
REI is multi banked with 6 lenders providing facilities. At 31
March 2020, the Company had in excess of GBP8.4 million cash at the
bank and significant headroom in our covenants - at 31 December
2019 our LTV was 46.7% and 42.2% net of cash (bank covenants are
between 60% and 65%) and our interest cover was 330% (bank
covenants are at 175% to 225%).
We have a facility with Santander of GBP7 million due to mature
in May 2020 and we are in discussions to extend this for a further
12 months, as well as a new facility of GBP3.5 million with
Barclays which we anticipate drawing down in full this month. In
addition, on 6 April 2020 we fixed our GBP8.5 million loan with
Barclays at an all-in-rate of 2.217% to 29 December 2023. Our
average cost of debt is 3.4% (as at 31 December 2019) with 80% of
the Company's debt now fixed.
New lettings and occupancy
As at 31 December 2019, occupancy was 96.3% and since then we
have concluded GBP779,000 of lease renewals and new lettings, even
during the "lockdown" imposed by the UK Government as a result of
COVID-19. We have completed deals and provided additional
incentives to allow for the existing crisis. Presently occupancy is
at 96.1%.
We accept that there will be significant economic impact as a
result of COVID-19, on a national and global basis, however, we
remain confident that the significant momentum behind the rebirth
of the Midlands region, to include the confirmation of HS2,
Commonwealth Games in 2022, Coventry City of Culture 2021 and
significant business and population relocations to the region, will
result in a positive economic bounce within our investment
geography.
Dividend Payment and Outlook
The Board confirms that the final fully covered dividend for
2019 of 1p per share, as announced on 17 March 2020, will be paid
on 30 April 2020 as a Property Income Distribution.
This uplifted dividend payment provides a total dividend per
share for 2019 of 3.8125p (FY 2018: 3.5625p) representing a 7%
increase on 2018, the 7th consecutive year of dividend growth.
Since the commencement of the dividend policy in 2012, GBP29
million has been paid to our shareholders, with quarterly dividend
payments adopted in 2016.
In accordance with our responsibilities as a REIT, the Board
continue to be committed to a dividend policy, however, in view of
the ongoing circumstances we reserve the right to review future
dividend payments.
Furthermore, given the high level of uncertainty, the Board is
unable to comment further on the outlook for the Company until
there is greater certainty on the full impact of the economic
disruption from the pandemic.
Paul Bassi, CEO of Real Estate Investors Plc, commented:
"During the COVID-19 crisis, our occupancy and rent collection
has been resilient and its foundation is the diversity of our
portfolio, operating in a vibrant economic region. Our occupiers
are committed to returning to their premises, where they have a
significant capital investment, and continue to build their
businesses."
"Our in depth understanding of the region in which we operate
and our close proximity to the assets, plus our unique network
allows us to stay in touch with our occupiers and continue to run
our business prudently."
"I would like thank everyone connected to REI for their hard
work and professionalism, we are living through an extraordinary
period, but I have every faith that if we continue to work
collaboratively, we will come out of this and continue to trade as
a strong and stable business."
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
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 progressive dividend policy, which has enjoyed 7
years of consecutive growth. Further information on the Company can
be found at www.reiplc.com .
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUBVVRRAUSRAR
(END) Dow Jones Newswires
April 08, 2020 02:00 ET (06:00 GMT)
Real Estate Investors (LSE:RLE)
Historical Stock Chart
From Apr 2024 to May 2024
Real Estate Investors (LSE:RLE)
Historical Stock Chart
From May 2023 to May 2024