REI reports strong sales in 2021

The UK’s only Midlands-focused real estate investment trust, completed 15 disposals during the year and has a further £2.33 million in the pipeline in legals.

Despite operating in a trading environment dominated by Covid, chief executive Paul Bassi also reported near normal rent collection levels in 2021 of 97.81 per cent, adjusted for monthly and deferred agreements.

Occupancy levels of 85.75 per cent are expected to rise to 86.73 per cent in the near future as pipeline lettings and disposals work through.

The AIM-listed business has used the disposal proceeds to pay down £11.9 million of debt. Average cost of debt is 3.5 per cent with 90 per cent of debt fixed, as at January 1. Cash at the bank at year end was £9.8m..

Mr Bassi said: “Following a hiatus in office occupier decisions due to government ‘work from home’ advice, and the uncertainty around the Omicron variant, there is now a revival of interest in office space, particularly our out-of-town stock and we have a healthy pipeline of new lettings in our void space.

“We expect this activity, combined with portfolio lease renewals, to translate into enhanced occupancy levels in 2022.

“We expect a sharp increase in market activity over the next few months as our region is showcased on the global stage in 2022 during the hosting of the highly anticipated Commonwealth Games. The business is well positioned to benefit from the increased activity and opportunities that this event will generate.”

Following competitive bidding at West Plaza in West Bromwich, the former Premier Inn, Vine Hotels signed up to a 15-year lease over six floors, at a rental level above valuer ERV. This represents almost two thirds of the building, and the remainder is fully occupied.

After a refurbishment programme, the hotel has been opened as a Best Western.

New tenants to the portfolio in 2021 also include The Trustees of Association of School and College Leaders, Merkur Slots UK, JD Sports Gyms, Comex 2000, Bennetts Motorcycling Services, Community Health and Eyecare, YMCA and the Department for Levelling Up, Housing and Communities.

Mr Bassi added: “Demand for our neighbourhood and convenience assets remains very strong. We are also experiencing high demand for roadside/fast food and drive-thru locations, and, in response, we have identified suitable unoccupied sites/redundant land and are negotiating competitive terms to strong covenants in this space.”

REI has paid dividends of 2.25p per share in respect of 2021, with a final dividend to be announced in March, making a minimum annual payment of 3p.

The company will release its final results for 2021 on March 22.