Demand for commercial property in the Midlands served Real Estate Investors (RLE) well in the year to December 2017, with record underlying profits of £6.2m and a decent valuation uplift on the portfolio pushing adjusted net asset value ahead by 4.1per cent to 68.9p a share.
A total of £18.4m was spent on new property, sponsored in part by sales of £13.5m. Demand for quality assets in the Midlands has increased markedly as investors look for a better return outside the London and South East. However, the company still managed to identify and purchase assets at a very attractive average net initial yield of 8.7 per cent.
With most of its assets in and around the Birmingham area, the company has benefited from solid demand ahead of several key developments, notably the HS2 rail link and the forthcoming Commonwealth Games. And with supply still lagging behind demand, occupancy levels remained high at 94 per cent, with further rental growth expected.
Prior to these numbers, Liberum was forecasting adjusted net asset value of 71.4p a share at 31 December 2018.
| REAL ESTATE INVESTORS (RLE) | ||||
| ORD PRICE: | 55.5p | MARKET VALUE: | £ 103m | |
| TOUCH: | 53-58p | 12-MONTH HIGH: | 64p | LOW: 52p |
| DIVIDEND YIELD: | 5.6% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 19% | |||
| INVESTMENT PROPERTIES: | £209m | NET DEBT: | 63% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 58.6 | 5.0 | 5.0 | 1 |
| 2014 | 57.9 | 6.0 | 4.1 | 1.5 |
| 2015 | 63.1 | 12.2 | 7.5 | 2 |
| 2016 | 65.0 | 8.2 | 4.3 | 2.625 |
| 2017 | 68.2 | 11.3 | 6.0 | 3.125 |
| % change | +5 | +38 | +38 | +19 |
| Ex-div: | 29 Mar | |||
| Payment: | 27 Apr |
