Real Estate Investors has ‘healthy pipeline of sales’ as disposal strategy gathers pace

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Real Estate Investors (REI) has “a healthy pipeline of sales” which it expects to complete in the next three months as part of its disposal plans.

In January the Birmingham-based property group put its entire portfolio up for sale, giving itself a three-year window to sell its properties.

However REI’s chief executive Paul Bassi said the company would be keeping hold of its larger assets “for income until corporate and institutional buyers return to the market”.

He said: “Our priority is to continue disposing of assets and maximising returns to shareholders, within the stated timeframe.

“We have a healthy pipeline of sales in legal proceedings with completions anticipated in H1 2024 and we will continue to capitalise on ongoing demand for smaller lot sizes from private investors and special purchasers.”

REI made an underlying pre-tax profit of £4.5m in 2023, fractionally below the previous year. However revalutations of its properties resulted in a statutory pre-tax loss of £9.4m.

It completed £18m sales in the year, which was mostly used to pay down debt, and has added £1m of sales so far this year.

In March, the group extended its £20m facility with Lloyds to May 2025, and its £28m facility with NatWest and £7m facility with Barclays to June 2025. The group’s average cost of debt is now 6.5% and it will continue to “prioritise the repayment of debt from property sales proceeds”.

Bassi added: “We are committed to maximising shareholder returns, whilst remaining open to a corporate transaction that is in the best interest of shareholders. In the meantime, we are focused on further sales and a full repayment of our debt, with the board’s intention to continue paying a fully covered quarterly dividend.”

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