RDI REIT’s strategic portfolio objectives remain strong in latest interim results

Mike Watters, CEO of Redefine International.
Mike Watters, CEO of RDI REIT.

RDI REIT has released the Company’s interim results for the six months ended 29th of February 2020.

Robust operational and asset management performance during the period under review has left the business well placed to face challenges posed by the unprecedented COVID-19 pandemic.

  • Strategic objectives of further improving the quality and focus of the portfolio and strengthening the balance sheet remain unchanged, with significant progress made to date.
  • £156m of disposals completed at an average premium of 1.7% to market value (including transactions post period end), with further disposals underway as the Group continues its withdrawal from Germany and non-core UK assets.
  • 69 leasing events completed during the period at 6.1% above ERV
  • Streamlined portfolio weighted towards sectors and locations with long-term positive structural demand characteristics, further reinforced by high occupancy (96.5%) and a diversified tenant base
  • Responding to current environment with disciplined measures to reduce operating costs and limit capital expenditure, while significant cash reserves (c. £85m) provide the Group with good levels of liquidity
  • Government enforced closures have impacted a number of assets or units – in particular, non-essential retail stores and hotels. RDI is actively engaging with tenants across the portfolio and providing assistance to those occupiers most in need during this challenging period.
  • March rent collection stands at 83.1%, excluding income from operational assets. Overall income collection including the managed hotel portfolio and London serviced offices was 59.0%
  • Longer term, the Group remains confident in the quality of its recently disrupted operational assets, which have a strong track record of income resilience.

Chairman, Gavin Tipper commented: 

We are releasing interim results in unprecedented times, but are pleased to report that the strategic actions taken over the last 12 months, including our disposal programme and proactive balance sheet management, have put the Company in a position to weather the extraordinary conditions we face. Our focus during this time has been on the welfare, safety and security of our stakeholders, and on ensuring that asset values are protected, revenues are carefully managed and costs are minimised. In order to preserve liquidity, we have not declared an interim dividend, and will revisit distributions based on the results for the full financial year.

Chief Executive, Mike Watters commented:

Over the last few weeks, we have been focused on actively engaging with our tenants and taking necessary pragmatic actions across the business to ensure that we are best equipped to withstand this challenging period. The ongoing implementation of our consistent strategy means that the underlying portfolio is well positioned to resume activity as government restrictions begin to be lifted and, we hope, the onset of strengthening economic conditions. Our assets are focused on sectors and locations with long term positive structural demand characteristics, further reinforced by high portfolio occupancy, a diversified tenant base and a balance sheet that provides access to significant cash reserves.”