UK real estate no longer bothered by uncertainty

UK real estate no longer bothered by uncertainty
Written by:
Damian Wood
9th January, 09:07
  • A real estate investment trust yesterday reported that despite the economic and political instability in the region, UK rental rates have risen over the past year.
  • Real Estate Investors PLC said that contracted rents increased to £17.7 million or by 3.9% in 2019.
  • The investment firm is confident that this year holds greater tidings for the UK real estate.
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A real estate investment trust yesterday reported that despite the economic and political instability in the region, UK rental rates have risen over the past year. Real Estate Investors PLC said that contracted rents increased to £17.7 million or by 3.9% in 2019.

The trust, which boasts of a portfolio of about 1.6 million square feet of commercial property, renewed nine leases in the past year and closed 44 new lettings.

“Despite high levels of economic and political uncertainty creating a relatively static market in 2019, we have increased our revenue and covered our dividend payments, “ Paul Bass, the firm’s CEO stated.

Real Estate Investor also focuses on maintaining a highly-diversified portfolio to avoid over-relying on a single occupier or industry.

In the retail space, the investment firm ventures in neighbourhood and convenience shopping, instead of indoor and department shopping units. Last year, only 0.6% of Real Estate Investor’s income (represented by two units) was affected by insolvency issues.

Company voluntary agreements affected some retail landlords last year. Such contracts are meant to ensure tenants pay only small amounts to clear their tenancy debts. Around November last year, Intu Properties, which is a shopping centre owner, claimed such agreements made at Topshop-owner Arcadia Group Ltd and UK-based Monsoon Accessorize had negative impacts on it.

Real Estate Investors last year also added to its portfolio several multipurpose investment properties in Leamington Spa, Warwickshire costing about £9.3 million. Today, the units are occupied by renowned firms such as McDonald’s Corp, Telefonica SA’s 02, salon chain Toni & Guy, among others.

The future seems bright for the real estate trust as it looks to announce a jump in its periodic dividend. Its last year’s interim dividend payout was 1.875 pence for each share held in the company while its third quarter dividend was 0.9375p per share.

The firm’s CEO is confident that this new year holds better tidings for the UK real estate.

“Looking ahead into 2020, we anticipate the pent-up requirement to trade that has been accumulating over the last 12 months being released which is likely to stimulate our markets and create further opportunities for Real Estate Investors,” Bassi noted.

As of this morning, the firm’s shares were trading at £53.50 at the London Securities Exchange, after a 0.9% gain earlier this week.

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