TIDMRDI
RNS Number : 4980Z
RDI REIT PLC
13 January 2020
RDI REIT P.L.C.
("RDI" or the "Company")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00BH3JLY32
LEI: 2138006NHZUMMRYQ1745
Update on lettings progress and strategic disposals
RDI, the income focused UK Real Estate Investment Trust
("UK-REIT"), is pleased to announce positive letting activity and
continued progress on its strategic disposal programme.
Mike Watters, CEO at RDI, commented: "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."
Leasing update
Portfolio occupancy has remained high with a number of
successful lettings in the first quarter of the new financial year.
At 30 November 2019, occupancy across the portfolio (excluding the
RBH managed hotels and London serviced offices) stood at 96.9 per
cent (31 August 2019: 95.9 per cent).
Key leasing activity since 31 August 2019 includes:
Link 9, Bicester
A new 15 year lease has been signed with Arrival Automotive Ltd
for unit 1A (120,599 sq ft) of the newly developed distribution
warehouse. The annual rent of GBP0.98 million is subject to review
every five years including capped and collared RPI escalation
provisions.
Unit 1B, comprising 168,154 sq ft, was completed in December
2019. The unit is being marketed and has attracted healthy levels
of interest supported by the limited supply of modern distribution
units along the M40 corridor.
Camino Park, Crawley
A rent review was agreed with Parcelforce on a 53,214 sq ft
distribution unit. The previous annual gross rental income of
GBP0.38 million has been increased by 60.0 per cent to GBP0.60
million.
Retail parks
Three new lease extensions have been agreed with DSG Retail Ltd
across the portfolio, totalling 42,558 sq ft and an aggregate
annual gross rent of GBP0.96 million. In all cases the leases have
been extended to new ten year terms with the rent remaining
unchanged from the previous passing rent in return for an average
rent free period of 15 months. The new terms reflect an average 1.7
per cent premium to the valuer's 31 August 2019 ERV.
St George's, Harrow
The lease with Vue Cinemas, a key anchor tenant at St George's,
has been extended for a new 20 year term with the rent remaining
unchanged at GBP0.77 million per annum and subject to review every
five years with capped and collared RPI escalation provisions. The
new lease agreement included a GBP2.0 million capital contribution
to refitting the cinema.
RBH managed hotels and London serviced office portfolios
The London market for limited service hotels has traded in line
with expectations with RevPARs broadly flat year-on-year, However,
certain regional markets, including Edinburgh, have seen occupancy
and rates come under pressure. A similar trend has been experienced
across the Group's managed hotel portfolio with London hotels
typically experiencing stable trading conditions and a limited
number of regional hotels experiencing tougher market
conditions.
Average occupancy for the RBH managed portfolio for the first
quarter to 30 November 2019 was stable at 86.1 per cent (31 August
2019: 86.1 per cent) with revenue per available room marginally
lower at GBP83.9 (31 August 2019: GBP84.9).
The London serviced office portfolio continues to perform in
line with expectations. Average occupancy at 30 November 2019
remained high at 90.1 per cent (31 August 2019: 93.6 per cent) and
has remained stable to the end of December 2019. EBITDA performance
for the first quarter of the financial year is line with
expectations.
Disposals programme update
Further progress on our strategic disposals programme has been
achieved following the sale of an office building at Waterside,
Leeds at a significant premium to its 31 August 2019 market value
whilst certain disposals previously announced have now
completed.
A further GBP212.8 million of disposals, not already sold or
exchanged for sale, form part of the strategic disposals plan of
which GBP128.1 million are under offer and at various stages of
negotiation. The disposals programme remains focused on delivering
the strategic priorities of reducing retail exposure to
approximately 20 per cent of the portfolio and strengthening the
balance sheet with a revised LTV target of between 30 and 40 per
cent.
Waterside, Leeds
Waterside, Leeds has been sold for GBP6.5 million reflecting a
topped-up net initial yield of 5.8 per cent and a 37.2 per cent
premium to the 31 August 2019 market value. The 35,966 sq ft office
is fully let to the Secretary of State until July 2029 following a
lease regear completed in July 2019. Waterside, Leeds is one of the
UK mature assets previously identified for disposal.
Kaiserslautern and Waldkraiburg
As previously announced, two retail warehouse assets held in
joint venture were exchanged for sale on 4 October 2019. The
disposal has now completed for EUR20.4 million (Group share EUR10.6
million), a 9.1 per cent premium to the 31 August 2019 market
value.
Bahnhof Center, Altona, Hamburg
As previously announced, contracts were exchanged for the sale
of the Bahnhof Center for EUR91.0 million, reflecting a 2.5 per
cent premium to the 31 August 2019 market value. The disposal was
originally anticipated to complete on 31 December 2019, however the
City of Hamburg has exercised a statutory right of pre-emption to
acquire the asset. There are ongoing discussions between the
original purchaser and the City of Hamburg to determine whether an
alternative contractual solution to exercising the pre-emption
right can be reached. Regardless of this, the terms of the original
sales contract remain binding whether the asset is acquired by the
original purchaser or the City of Hamburg. RDI will continue to
benefit from the income returns while the pre-emption position is
resolved and until the disposal is completed.
For further information:
RDI REIT P.L.C.
Mike Watters, Stephen Oakenfull Tel: +44 (0) 20 7811 0100
FTI Consulting
UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Tel: +44 (0) 20 3727 1000
Ellie Sweeney
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-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 is a UK Real Estate Investment Trust (UK-REIT) and 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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