TIDMRDI
RNS Number : 3745M
RDI REIT PLC
21 January 2021
RDI REIT P.L.C.
("RDI" or the "Company")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00BH3JLY32
LEI: 2138006NHZUMMRYQ1745
TRADING UPDATE AND ANNUAL GENERAL MEETING
RDI, the income focused UK Real Estate Investment Trust
("UK-REIT"), is pleased to provide an operational and rent
collection update for the December 2020 quarter. The Company also
announces further details regarding its Annual General Meeting
("AGM") to be held on 28 January 2021.
TRADING UPDATE
Operational update
Portfolio occupancy, excluding RBH managed hotels and London
Serviced Offices, remains high at 98.8 per cent. Asset management
activity across the Office, Distribution and Industrial portfolios
has been largely unaffected by the market backdrop, with a number
of positive lease re-gears being completed since 31 August 2020.
With UK retail exposure now limited to 5.7 per cent of the Group's
portfolio on a pro-forma basis, the impact of COVID-19 related
restrictions in that sector has been modest.
The restrictions imposed in November have deferred the
anticipated recovery in the Group's operating assets which has
impacted earnings in the first quarter. Revenue from operating
assets is expected to remain under pressure while strict travel
restrictions remain in place. However, the roll-out of a vaccine
provides greater visibility on a progressive recovery in occupancy
in the second half of the year. We remain confident that our
operating assets are well positioned to benefit from the
anticipated recovery.
Hotels
Trading across the hotel portfolio has been set back as a result
of the renewed restrictions. Of the Group's 13 RBH managed hotels,
five have been closed to reduce operating costs. However, this is
being constantly reviewed against local demand, particularly for
NHS related requirements as well as construction contracts.
Occupancy is anticipated to remain limited during the current
lockdown, but experience from the first lockdown has shown a fairly
sharp improvement in occupancy and profitability once restrictions
are lifted.
Rent demands for the RBH managed hotels have been deferred to
the second half of the financial year to support operational
cashflows during this period.
Rental income based on the CVA terms with Travelodge continues
to be paid in full. The aggregate annual rent increased to GBP1.5
million from GBP1.1 million in January and will revert to the full
pre CVA rent of GBP2.5 million in January 2022.
Distribution and Industrial
A number of key leasing deals were completed during the
period:
A lease re-gear and a new lease has been completed with an
existing tenant at Kingsthorne Park, Kettering for an unexpired
term of 15 years. The new rent of GBP0.2 million p.a. reflects an
increase of 20.4 per cent above the previous passing rent and 1.7
per cent above ERV.
On the Kwik Fit portfolio, 24 leases were regeared to new
20-year unexpired terms, with no rent free incentives and five
yearly rent reviews to the higher of open market rent and 1%
compounded annually. All the leases were placed in the name of ETEL
(European Tyre Enterprise Limited), the parent company, further
strengthening the covenant. The leases on two units, with a total
rent of GBP60,275 p.a., were surrendered as part of the transaction
and the units are in the process of being sold with vacant
possession.
Offices
Occupancy across the London Serviced Office portfolio reduced to
72.8 per cent (31 August 2020: 76.0%) with sales and renewal
activity impacted by COVID-19 related restrictions. Following a
positive increase in enquiries subsequent to the initial lockdown,
activity is expected to remain subdued until restrictions are
relaxed. Clients have been offered a 33 per cent licence fee
discount from January to March to provide support while the
Government's work from home guidance remains in place.
Encouragingly, a number of clients who have not renewed licence
fees have maintained virtual office contracts and have indicated an
intention to return once restrictions are eased.
The remaining office portfolio has been largely unaffected with
rent collection now over 85 per cent for all periods since March
2020.
Retail
Rent collection levels across both the UK and German retail
portfolios have remained broadly unchanged when compared to the
September quarter at 57.4 per cent and 93.5 per cent respectively.
Collection rates for the UK retail portfolio, now limited to 5.7
per cent of the Group's portfolio on a pro-forma basis, have
typically been delayed but are improving steadily and now averaging
77.6 per cent for the period from March 2020.
A limited number of rental concessions have been agreed in
Germany, but these have typically taken the form of rent free
periods in return for lease extensions.
Rent collection
Approximately 86.4 per cent of gross rental income or income due
and demanded was collected for either the December quarter or the
month of December where rents are billed monthly. This compares to
81.5 per cent for the September 2020 quarter at approximately the
equivalent time. These figures exclude the RBH managed hotel
portfolio where rents have been deferred to the second half of the
financial year.
We have continued to experience improved collection rates for
past periods following negotiations and the receipt of delayed
payments. Average collection rates for rents due and demanded
(excluding RBH managed hotels) for all prior periods impacted by
COVID-19 up to the September 2020 quarter now stands at 96.8 per
cent.
Annualised gross rental % of rent collected - adjusted(2)
Rent collection summary income 31 December 2020
June quarter GBPm(1)
------------------------------------ ------------------------ ----------------------------------
Offices 7.1 89.2
Distribution and Industrial 15.3 88.4
Retail 6.3 57.4
UK total (excl. UK Hotels and LSO) 28.7 88.7
Europe 7.3 93.5
------------------------------------ ------------------------ ----------------------------------
Total (excl. UK Hotels and LSO) 36.0 85.9
RBH Managed Hotels 8.9 -
Travelodge portfolio 1.5 100.0
London Serviced Offices 8.5 90.7
------------------------------------ ------------------------ ----------------------------------
Total 54.9 86.4
------------------------------------ ------------------------ ----------------------------------
(1) Annualised gross rental income as at 31 December 2020. RBH
Managed Hotels and London Serviced Offices annualised gross rental
income is based on prior year EBITDA.
(2) Rent collections adjusted for certain tenants which have
indicated they are paying monthly and have paid one third of
quarterly rent demanded
Financing and liquidity
The Group's financial and liquidity position remains
exceptionally strong with access to approximately GBP220 million of
cash and available facility headroom. Capex commitments across the
Group remain limited to GBP1.5 million. LTV on a pro-forma basis
remains broadly unchanged at 32.3 per cent.
Stephen Oakenfull, CEO at RDI, commented:
"Despite the latest national lockdown impacting our operating
assets, we anticipate a clearer path to recovery with the UK
vaccination programme well underway. Our balance sheet strength and
significant levels of liquidity place RDI in a strong position to
manage the operating assets through a period of recovery and to
capitalise on any market dislocation. Our high-quality distribution
and industrial portfolio, which makes up 26.6 per cent of our
portfolio on a pro-forma basis, continues to benefit from strong
occupational demand and a very competitive investment market."
ANNUAL GENERAL MEETING
As previously announced, the Company will hold its Annual
General Meeting on 28 January 2021 at 11.00am GMT. A webcast and
conference call facility will be provided for shareholders to
access the AGM remotely and follow the business of the meeting.
These details are now available on the website at
www.rdireit.com/investors/shareholder-information .
Shareholders are encouraged to submit questions on the business
of the meeting in advance, by writing to the Company Secretary via
LHibberd@rdireit.com , or by submitting a question when voting
online (UK only).
A facility will also be available during the meeting for
shareholders to submit questions via the webcast platform. The
Board will endeavour to answer shareholder questions received in
advance of the meeting before the proxy cut-off date on 26 January
2021.
To date, we have received a number of queries regarding the
amendment to the RDI Articles of Association. The amendments are
being sought in light of the current restrictions and would allow
the Company to hold physical, virtual or hybrid meetings. It is
intended that virtual meetings be held in exceptional circumstances
only, with physical meetings held whenever possible.
For further information:
RDI REIT P.L.C.
Stephen Oakenfull, Donald Grant Tel: +44 (0) 20 7811 0100
FTI Consulting
UK Public Relations Adviser
Dido Laurimore, Claire Turvey Tel: +44 (0) 20 3727 1000
rdireit@fticonsulting.com
Instinctif Partners
SA Public Relations Adviser
Frederic Cornet Tel: +27 (0) 11 447 3030
RDI@instinctif.com
JSE Sponsor
Java Capital Tel: + 27 (0) 11 722 3050
Note to editors:
About RDI
RDI is an income focused UK Real Estate Investment Trust
(UK-REIT) with a diversified portfolio invested principally in the
UK. The investment approach is driven by an in depth understanding
of occupational demand including the impact of technology,
transport and infrastructure investment. The portfolio has been
repositioned in recent years to increase its weighting to London
and the South East and to provide greater exposure to our leading
hotel and serviced office operating platforms.
RDI is committed to delivering attractive income led total
returns across the real estate cycle. The current strategic
objectives of a lower leverage capital structure and more focused
allocation of capital are targeted at delivering an industry
leading and sustainable income return.
RDI holds a primary listing on the London Stock Exchange and a
secondary listing on the JSE. The Company is included within the
EPRA, GPR, JSE All Property and JSE Tradeable Property indices.
For more information on RDI, please refer to the Company's website www.rdireit.com
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