13th Jan 2020 08:20
(Alliance News) - RDI REIT PLC on Monday said portfolio occupancy stayed high in its first financial quarter, and it has made progress on its strategic disposals programme to reduce exposure to the retail market.
The income-focused UK real estate investment trust said occupancy across its portfolio, with the exception of RBH managed hotels and London services offices, was 97% as at November 30. This compares to 96% at the end of August.
Average occupancy for the RBH managed portfolio over the three months ended November 30 remained stable at 86% while revenue per available room fell slightly to GBP83.9 - about ZAR1,563 - from GP84.9.
Within the London serviced office portfolio, average occupancy at November 30 was 90%, down from 94% on August 31.
New leasing activity since August 31 includes a new 15-year lease in Bicester, England with Arrival Automotive Ltd for a unit in a newly developed distribution warehouse. The annual rent is GBP980,000 and is subject to a review every five years.
A rent review was agreed in a distribution unit in Crawley, England with Parcelforce. This has raised the annual gross rental income by 58% to GBP600,000 from GBP380,000.
In addition, three new lease extensions were agreed with DSG Ltd for an aggregate annual gross rent of GBP960,000 and a lease in Harrow, England with Vue Cinemas was extended for a 20-year term at the same rent of GBP770,000 per annum.
RDI said it disposals programme has progressed further with the sale of an office building in Leeds for GBP6.5 million, a 37% premium to its market value on August 31, and completion of previously announced disposals.
Another GBP212.8 million worth of disposals are planned, of which GBP128.1 million is under offer and in negotiation. The goal of the disposals plan is to cut retail exposure to around 20% of the RDI portfolio and meet a revised loan-to-value target of 30% to 40%.
Chief Executive Mike Watters said: "Our asset management team has delivered a number of letting successes, reflecting our ongoing focus on maximising the potential of our core portfolio. Within our non-core portfolio, we are making good progress in disposing of those assets identified for sale in order to reduce leverage and reweight our portfolio. This will ensure it is more streamlined, structurally resilient and well positioned for the long term. Sales in both the UK and Germany have been completed at premiums to the 31 August 2019 valuations."
Shares in RDI were up 1.8% in London on Monday morning at 133.80 pence. They were up 0.8% in Johannesburg at ZAR24.74.
By Anna Farley; [email protected]
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