RDI targets more disposals in retail retreat
RDI REIT is pushing ahead with further disposals to drive down its retail exposure and leverage, after what its chief executive described as “a challenging year”.
The London-listed investment trust posted underlying earnings of £49.4m for the year to 31 August, down almost 8% from £53.5m a year earlier. EPRA NAV per share dropped from 213.8p to 185.5p.
Those results include a portfolio of shopping centres that was revalued by lender Aviva, now under a debt standstill arrangement. Excluding the Aviva portfolio, RDI’s earnings were largely flat at £44.8m.
RDI REIT is pushing ahead with further disposals to drive down its retail exposure and leverage, after what its chief executive described as “a challenging year”.
The London-listed investment trust posted underlying earnings of £49.4m for the year to 31 August, down almost 8% from £53.5m a year earlier. EPRA NAV per share dropped from 213.8p to 185.5p.
Those results include a portfolio of shopping centres that was revalued by lender Aviva, now under a debt standstill arrangement. Excluding the Aviva portfolio, RDI’s earnings were largely flat at £44.8m.
Chief executive Mike Watters said it had been “a challenging year for the business, not least due to the uncertainty around the Aviva shopping centre portfolio”.
The firm has been selling assets to lessen its exposure to the retail sector as well as exit investments in Germany, reducing leverage in the process. Its loan-to-value ratio has fallen to 42% from 47.3% a year ago and 50% at the same point of 2017. It aims to reduce that figure further to between 30% and 40%.
“We’re within touching distance of that [medium-term target] and with some additional sales that we have under offer and are busy negotiating, we’ve got good line of sight to being within the 30-40% range hopefully soon within the new year,” deputy chief executive Stephen Oakenfull told EG.
RDI’s retail exposure stood at about 35% at the end of August, but the firm said that figure falls to 31% once deals agreed after the year end were taken into account. In the UK, retail exposure stands at just under 18%, with UK shopping centre exposure at 5.7%, as the firm reweights its portfolio to investment in areas such as hotels, serviced offices and industrials.
Oakenfull said RDI has about £217m of further disposals targeted, with roughly half of that figure under offer or in negotiations, most of which is in Germany.
“Following the disposal of our German assets, we’ll be a single geography business looking to streamline the corporate structure, and make some efficiencies and cost savings as a result,” the deputy chief executive added.
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