Property firm slips into the red amid ‘extremely challenging’ conditions

Birmingham-based Real Estate Investors has slipped to a pre-tax loss of £3.8m for the first six months of the year.

The firm says that although revenue was up by 1.2% to £8.2m, failure to collect rent arrears from as far back as March, coupled with a depreciation in property values, has seen it slump into the red for the period.

REI says there remain a “handful” of larger, corporate tenants, who are “not engaging in discussions and continue to hide behind the government’s ‘shield'” on the enforcement of bad debts. The firm says these debts will be collected “in due course” and represent the majority of the uncollected rent to date.

An upbeat Paul Bassi, CEO of Real Estate Investors, said: “Against extremely challenging circumstances, our business model has proved itself to be resilient as shown in our trading performance delivering increases to both revenues and underlying profit before tax. We have worked closely with our tenants throughout this very unusual period and, where needed, we have agreed a way forward that is mutually beneficial.

“There are a small number of established tenants who have not paid since March using the government restrictions on landlords to recover rents to delay their payments to us, however, we are confident we will receive these payments when the restrictions lift.

“Importantly, our confidence in the appeal of our assets is unchanged. We continue to see healthy demand across our portfolio and we are reviewing all our assets in light of the government relaxation of the planning laws, which we believe could result in a number of material value creation opportunities across the portfolio. We have taken a cautious approach to dividend payments in the short term in case of a second lockdown, however, we remain committed to a progressive dividend policy.”