19th Mar 2020 09:30
(Alliance News) - RDI REIT PLC on Thursday reported further disposals in its ongoing strategic sale programme.
The London and Johannesburg-listed trust has sold its German DIY retail warehouse portfolio for EUR34.2 million and the Omnibus office building in Reigate, south-east England, for GBP14.9 million.
RDI noted the German warehouse portfolio was sold at a 3.5% discount to its August 31 market value, but, given the transaction structure, RDI said, the purchaser has taken on the inherent tax liabilities associated with the portfolio.
"Two of the properties, Herzogenrath and Schwandorf, were 75% held by RDI with a minority partner holding the residual 25% interest. A third property, in Huckelhoven, was held in joint venture with Menora Mivtachim. The portfolio has been sold by way of a corporate sale of various special purpose vehicle interests and includes the transfer of existing debt facilities with outstanding balances of EUR19.5 million," RDI explained.
Following the disposal of the German DIY retail warehouse portfolio, RDI has disposed of EUR164.9 million of German assets, which represents about 55% of the total German retail portfolio.
RDI said: "The disposals programme remains focused on delivering the strategic priorities of reducing retail exposure to approximately 20% of the portfolio and strengthening the balance sheet with a revised loan-to-value target of between 30% and 40%."
Chief Executive Mike Watters added: "We are pleased with the progress made to date in addition to our active sales pipeline, although remain cognisant of the unprecedented macro-economic backdrop that has emerged.
"While it is too early to determine the longer term impact of these exceptional circumstances, we have a highly diversified portfolio and occupier base alongside a healthy cash position, and continue to closely monitor developments."
Turning to the Covid-19 outbreak, RDI said it is too early to provide "any meaningful estimate" of the effect on earnings for the current financial year given the duration and impact of the virus remains "highly uncertain".
The company added: "RDI has been closely monitoring the impact of Covid-19 on travel patterns and specifically hotel bookings. As has been widely reported in the media and by industry benchmark reports over recent weeks, there has been significantly reduced demand for travel which has resulted in a material reduction in occupancy and future bookings across the group's 13 managed hotels."
RDI said occupancy across its London serviced office portfolio remains largely unchanged, above 90%, with clients on a 12-month licence.
The trust is aware of the likely enforced retail store closures in Germany for all but essential retailers such as food stores and chemists.
"Should this come into effect, our shopping centres and other retail assets will remain open to support these essential retailers, however, overall footfall and trading are expected to be impacted by the anticipated store closures of units occupied by discretionary retailers," RDI said.
Given its recent disposal programme, RDI has cash balances of about GBP55.0 million, with an undrawn facility of GBP25.0 million.
RDI also noted its "relatively" limited debt maturities over the next 12 months, with two facilities maturing over this period worth a total of GBP16.1 million.
Shares in RDI REIT were down 2.4% in London on Thursday at 58.10 pence. In Johannesburg, the shares were 0.2% higher at ZAR11.74 each.
By Paul McGowan; [email protected]
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