Real Estate Investors (REI), the UK’s only Midlands-focused Real Estate Investment Trust, is continuing with its sales programme while reducing debt.
Birmingham-based REI reported completed sales of £18.9 million to 31 December 2024, with an additional £1.6 million of completed and contracted sales since its year end.
On an aggregate basis, the 2024 sales figure were at 6.95% above December 2023 valuations, with the sales agreed since delivering 7.47%.
The disposal proceeds have been used to pay down £15.2 million of debt, reducing REI’s total debt to £39.2 million – down from £54.4 million at the end of 2023. A further £1 million has been paid since the year end.
Paul Bassi, chief executive of REI, said: “We are on track with our three year orderly sales programme announced in January 2024, to repay our debt and return capital back to shareholders.
He said that, despite the early general election in 2024 and the negative impact of the Autumn budget on the property market and economic sentiment, REI completed £18.9 million of targeted sales aimed at the private investor market.
The company reported an underlying profit before tax of 3.4 million (full year 2023: £4.5 million), and a loss before tax of £2.4 million (2023: loss of £9.4 million), primarily as a result of a revaluation deficit of £6.3 million on investment properties , a non-cash item.
A final quarterly divided for 2024 of 0.4p per share will be paid in April and the total fully covered dividend for 2024 of 1.9p per share reflects a yield of 6.7% based on a mid-market opening price of 28.5p on 24 March 2025.
A total of £53.9 million has been declared and paid to shareholders since commencement of dividend policy in 2012
Mr Bassi said the level of dividend for 2025 would be subject to the pace of further disposals.
He added: “There are signs that the property investment market is bottoming out and we anticipate stable and improving values ahead.
“We are optimistic that, with the anticipated improvements to the property market and against a backdrop of gradually reducing interest rates, planned sales to private investors in the first half of 2025 and larger asset sales in the second half of the year, along with further debt reduction, will be achieved.”
He said that REI had prepared a number of sub-£2 million private investor assets for sale in the first half of 2025, and that larger assets were “oven-ready” for sale in the second half of 2025 and into 2026.
Contracted rental income continues to reduce, in line with continuing asset sales, from £10.9 million in 2023 to £9 million at year end 2024, but there is a healthy pipeline of new income to the portfolio of £230,110 per annum currently in legals.
The team at REI in the Colmore Row head office in Birmingham completed 47 lease events during the year.
Mr Bassi said: “The pace of the sales strategy will be dependent on further interest rate reductions and no major adverse events.
“We will commence our capital repayment programme in due course, while continuing to pay a covered dividend and we remain committed to maximising value for our shareholders.”
