REI accelerates disposal strategy to slash debt
Real Estate Investors (REI) is pushing forward with its sales programme in a bid to repay debt and return capital back to shareholders.
The Midlands-focused real estate investment trust launched a three-year disposal programme in January 2024 to address a disconnect between its portfolio’s value and its market valuation.
The disposal proceeds have been used to pay down £15.2m of debt, reducing REI’s total debt to £39.2m – down from £54.4m at the end of 2023. A further £1m has been paid since the year’s end.
In its latest results, revenue dropped to £10.8m from £11.5m the previous year, attributed to rental losses from asset disposals. Pre-tax losses have also improved, narrowing to £2.4m from £9.4m.
Paul Bassi, CEO of REI said that REI has several sub-£2m 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.
Bassi said: “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.”
It has been exploring several disposal options, including selling assets individually, in smaller portfolios, or as a whole portfolio sale. Larger assets are set to go on the market, but REI is holding back until ‘suitable investors’ return.
Bassi continued: “We are on track with our 3-year orderly sales programme and strategic objective of repaying all our borrowings from targeted sales and will commence our capital repayment programme in due course, whilst continuing to pay a dividend and remaining committed to maximising value for our shareholders.”
