Regional E-Warehouse REIT dividend halves as cost of debt rises

M7 has warned that dividends from its Regional E-Warehouse REIT will be half the level they were last year. The REIT, which marginally increased in value over Q1 to £106.11m, from £106.05m in December, was able to pay out dividends of 8% in 2022. Non-executive chair James Max said: “It is unlikely that this level of dividend will be maintained during 2023 in view of the anticipated increased costs of debt post-refinancing in August 2023. We now expect that the dividend for the year ending 31 December 2023 will be in the order of 4.2 pence per share, or around 4% with reference to the issue price of 100 pence per share.” Net asset value per share fell by 1.37% over the first quarter to 86.08p. Max added that the slight valuation lift was “an encouraging outcome when commercial property values in some sectors are still falling, albeit at a significantly slower rate than in the final quarter of last year”. “Hopefully this stabilisation will mark the green shoots of a recovery.” But he was not overly optimistic. “While the outlook does look brighter than it did at the start of the year, we remain alert to the fact that there is still much uncertainty and the economy remains vulnerable to shocks from a number of different sources. “Nonetheless, we expect the portfolio to continue to deliver a strong income return and cash flow and, with this in mind, the board intends to restore the dividend to at least its original level as soon as it is prudent and responsible to do so.”   To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo © Pixabay/Pexels