Revaluations hit property investor – but boss remain upbeat

Commercial property landlord Real Estate Investors has slipped to a pre-tax loss of £20.2m for 2020 after suffering from downward revaluations of its portfolio.

Despite this, bosses at the company remain upbeat on the back of underlying profits of £8.1m and stable turnover of £16.1m.

Paul Bassi, chief executive of REI, said: “In spite of everything the economy and Brexit could throw at us, we have delivered a solid performance, reflecting the strength of the business in its diversity and mix of assets throughout the Midlands.

“This was a resilient operational performance under uniquely difficult circumstances which has produced stable underlying profits of £8.1 million, up 1.2% from last year. This has only been possible due to the diversity of our portfolio, resulting in a covered dividend of 3p for the year.”

“Valuation declines are symptomatic of market uncertainty and sentiment, caused on this occasion by the impact of a global pandemic.

“They are understandable and we expect them to reverse as investment activity recommences. We can already see from the prices achieved in the marketplace, that confidence in the Midlands property market is returning, alongside the Government’s timetable for the lifting of lockdown restrictions.

“Our management team is currently focused on certain sales to satisfy investor demand, which will further assist in reducing the company’s gearing, leaving existing cash and bank facilities available to make strategic and opportunistic acquisitions.”

He added: “We also carried out a share buyback costing £2 million during the year, and have retained our dividend policy, while others have withheld, paying a total dividend per share of 3p for 2020 – making a total of £36.4 million paid out since we commenced paying dividends.”

Earlier this month, REI announced it had renewed part of its banking facilities of £51m with NatWest on “favourable” terms.