Rental incomes down as REI posts £1.6m loss

BIRMINGHAM-based property and redevelopment company Real Estate Investors has posted a pre-tax loss of £1.6m for the first half of 2010, it reports today.

The AIM listed group, of which local entrepreneur Paul Bassi is the chief executive, has seen the numbers tumble from a pre-tax profit of £1.3m for the same period last year.

The £1.6m includes the loss on valuation of interest rate swaps of £1.5m compared with a £1.2m gain in 2009.

REI’s profit before tax, revaluations and loss or gain on valuation of interest rate swaps is £50,000, down from £100,000 last year, but it did have cash and cash equivalents of £19m at June 30, 2010, up year-on-year from £14m.

Rental income for the six months ended June 30 was down 5% to £1.66m from £1.74m and a new share issue in February raised £9.8m net of costs.

Since the end of June REI has acquired 75-77 Colmore Row, in Birmingham, for £4.5m in cash, and moved its HQ from West Bromwich into central Birmingham.

Mr Bassi said: “We continue to establish a business of substance that will benefit significantly when market valuations recover, and we will also benefit from new lettings achieved and trading properties that we have already acquired.

“Our results are in accordance with expectations at the half year. Our trading position is positive and should improve over the second half of 2010, benefitting from new rental income, which should correspondingly support upward valuations.

“A number of new lettings are in legals which the directors believe will result in the expected increase in new rental income by the year end.”