UK property group in talks to renew facility with AIB

Real Estate Investors specialises in Birmingham and other Midlands properties in the UK. Photo: Jason Alden/Bloomberg

John Mulligan Twitter Email

March 31 2021 02:00 AM

Listed UK property investment group Real Estate Investors is still in talks with AIB to renew a £4.2m (€4.9m) facility after successfully refinancing a £51m facility with National Westminster Bank.

The company has also accused some of its tenants of “hiding behind” UK government legislation on overdue rents despite having the ability to pay their rents.

Real Estate Investors bills itself as the only real estate investment trust focused on property in England’s Midlands, swung to a £20.2m loss last year as it cut the value of its assets by more than £28m due to the impact of the pandemic.

It had gross property assets of £201.3m (€235.7m) at the end of 2020.

Its underlying pre-tax profit edged slightly higher to £8.1m last year, from £8m the previous year. Its revenue dipped slightly, to £16.4m from £16.6m.

It completed seven lease renewals during 2020, and ended the year with 262 occupiers across 53 assets. Its portfolio extends across a number of sectors.

“We continue to remain within our covenants with our bankers and in March 2021 we successfully concluded the refinance of our £51m facility with National Westminster Bank and are in negotiations to renew our £4.2m facility with Allied Irish Bank (GB) for five years,” the company noted.

“The bank covenants are measured against the LTV of the loans to property values and the interest cover measured against rental income,” it added. “On average, property values would have to fall a further 10pc and rental income by 40pc to breach the covenants.”

The company said it has £11m worth of unencumbered properties, which could be provided as further security.

“The company’s portfolio has 262 occupiers across 53 assets, which offers multi-sector diversification with no material reliance on any single sector, asset or occupier and this is the foundation of our stability and rent collection,” according to Real Estate Investors’ CEO Paul Bassi.

The company added that despite challenges it faced last year, its rent collection stood at 96.35pc for the year.

“We anticipate a further improvement in this overall figure as tenants who (despite having the ability to pay) have chosen to hide behind or take advantage of Government legislation on overdue rents, begin to pay their historic and current rents, and tenants who are currently closed, recommence trading in 2021,” it added.

It owns assets in towns and cities including Birmingham, Coventry and Leamington Spa.