Earnings release
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RNS Number : 5707RReal Estate Investors PLC21 August 2026 Real Estate Investors Plc("REI", the "Company" or the "Group") TRADING UPDATE AND NOTICE OF RESULTS SALES, DEBT REPAYMENT & OCCUPANCY UPDATE Real Estate Investors Plc (AIM: RLE), the UK's only Midlands-focused Real Estate Investment Trust (REIT), with a portfolioof commercial property across all sectors, is pleased to provide the following trading update, ahead of the announcement of itsinterim results for the six months ended 30 June 2026, which will be published on 30 September 2026: MARKET OVERVIEW Following a depressed investment market in 2025, largely paralysed by the November 2025 UK budget, we planned to placeassets for sale on the market for March 2026, to coincide with then anticipated interest rate reduction(s). However, due to theMiddle East conflict, upward interest rate pressures and looming market instability, we delayed placing assets in the marketuntil late April 2026. This was subsequently confirmed to be the correct decision as investment in commercial property in thefirst quarter of the year was down almost 40% on the five-year Q1 average, at £9.7bn*. Transaction volumes across allcommercial property have slowed to £13 billion year-to-date, which is around 25% down on the same period last year**. Although retail investment market values are stable and improving, office market transactions are reduced with valuesremaining under pressure. This is evidenced by one of the lowest quarters on record in office take-up in Birmingham Citycentre***. The retail occupier market is now generally positive and improving, supported by falling vacancy rates and limited supply. ASSET SALES Since placing assets on the market in April 2026 and despite the challenging backdrop, the diversity of our portfolio hasenabled us to place £15.7 million under offer and in legals, of which £10.7 million has unconditionally exchanged or legallycompleted at 92% of December 2025 book value. Asset management initiatives are continuously underway on larger assets,with these sales scheduled to be placed on the market in Q4 2026. The completion of scheduled sales in Q4 2026, combined with the conclusion of sales in our legal pipeline will repay theCompany's entire debt in full, allowing us to commence capital returns to our shareholders. PORTFOLIO OCCUPANCY We have a strong legal pipeline of new lettings and contracted new lettings of just under £400,000 p.a. Once all of these havecompleted, portfolio occupancy (subject to further sales) will rise to 82.2% (FY 2025: 78.0%), with the potential to enhanceasset values prior to sale. The portfolio continues to deliver contracted annual rental income of £7.7 million p.a., rising to £8.1million p.a. following thecompletion of pipeline lettings. Rent collection remains strong, with 99.01% collected year-to-date and 99.33% collected forthe current quarter. The portfolio has a WAULT of 4.36 years to break and 5.99 years to expiry, providing a stable incomestream. Year to date, the asset management team has completed 15 lease events, comprising 6 lease renewals, 3 lease break removals,5 new lettings and an Agreement for Lease to B&M, including transactions with large occupiers and household names e.g.Matalan, Argos, Popeyes and McDonalds. DEBT REPAYMENT Capital receipts from asset disposals and existing cash have been directed towards debt repayment of £5 million, reducingtotal debt to £31 million as at 30 June 2026 and £29.2 million as at today (FY 2025: £34.2 million). This is set to reducefurther in mid-October 2026 to £24 million with the legal completion of assets that have unconditionally exchanged with adeferred completion date. In the meantime, we will continue to benefit from the rental income on these assets. Furthercompletion of sales in our legal pipeline or that are under offer will further reduce debt. The Company has fully repaid its borrowings to Barclays. The subsequent average cost of debt is 5.75% and the Companyremains compliant with all banking covenants on its remaining facilities. Our only outstanding borrowings are now withNatWest and Lloyds and we continue to operate with a very conservative LTV. CAPITAL RETURNS
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The conclusion of scheduled Q4 2026 sales, the existing sales pipeline and deferred contracted sales, will repay our debt infull and enable the Company to commence capital repayment to shareholders. As we have previously stated, we believe that a debt-free portfolio will also attract regional property company buyers, whowill be attracted to the portfolio due to its geographical focus, income generation and asset base that will support acquisitiondebt. We remain open to a corporate event that provides a speedier conclusion to our stated disposal and wind down strategy,conditional upon delivering attractive shareholder value. DIVIDEND On 1 July 2026, we announced a fully covered dividend for Q1 2026 of 0.375p per share (Q1 2025: 0.4p per share) despite thereduction in income associated with disposals during the period, and last year. The Company has now paid a total of £57.4 million in dividends to shareholders since commencement of the dividend policy. Management remain committed to paying an uninterrupted fully covered quarterly dividend, subject to the pace of theongoing disposals programme. NOTICE OF INTERIM RESULTS The Company will release its unaudited interim results for the six months to 30 June 2026 on 30 September 2026. PAUL BASSI, CHIEF EXECUTIVE, SAID: "We continue to operate in an extremely challenging sales environment and have seen some sales in H1 2026 despite theUSA/Israel/Iran conflict and interest rate volatility continuation. "Despite a tough marketplace, and subject to ongoing market conditions, we anticipate the repayment of our debt from ourlegal pipeline and scheduled further sales and remain resolutely focused on returning capital to shareholders which willcommence immediately after the repayment of the Company's borrowings. "We remain open to a corporate transaction that will deliver shareholder value and a more rapid conclusion to our statedstrategy." * Source: Real Estate:UK (RE:UK)** Source: Colliers*** Source: BWD Enquiries: Real Estate Investors PlcPaul Bassi/Marcus Daly +44 (0)121 212 3446 Cavendish Capital Markets Limited (Nominated Adviser)Ben Jeynes/George Lawson +44 (0)20 7220 0500 Panmure Liberum (Broker)Jamie Richards/William King +44 (0)20 3100 2000 About Real Estate Investors Plc Real Estate Investors Plc is a publicly quoted, internally managed property investment company and REIT with a portfolio ofmixed-use commercial property, managed by a highly experienced property team with over 100 years of combined experienceof operating in the Midlands property market across all sectors. The portfolio has no material reliance on a single asset or occupier. On 1st January 2015, the Company converted to a REIT. Real Estate Investment Trusts are listed propertyinvestment companies or groups not liable to corporation tax on their rental income or capital gains from their qualifyingactivities. The Company announced in January 2024 that it would be undertaking an orderly strategic sale of the Company'sportfolio over three years, disposing of assets individually or collectively. The pace of the ongoing disposal programme willbe dictated by market conditions, with an initial focus on repaying the Company's debt. In the meantime, it is the Board'sintention to continue paying a fully covered quarterly dividend. Further information on the Company can be foundat www.reiplc.com. END This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authorityto act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this informationmay apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information
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