Real Estate Investors, the only real estate investment trust focused exclusively on the Midlands in the UK, is optimistic about the future of the property market. The company’s CEO, Paul Bassi, believes the recent downturn is “at or near the bottom” and anticipates a resurgence in market activity.
Bassi expressed confidence in a forthcoming period of growth, driven by anticipated lower interest rates and an uptick in both investor and tenant demand. He noted, “A stabilizing market environment will facilitate quicker sales and debt reduction, enabling us to advance our strategic objectives and return capital to shareholders while maintaining a covered dividend.”
The property sector has been significantly affected by rising interest rates since the end of the pandemic, which have increased construction costs and dampened demand. The first half of 2024 continued to feel the effects of political and economic uncertainty, resulting in transaction volumes that were 40 percent below the five-year average.
However, the Bank of England’s decision to cut interest rates for the first time since 2020 in August, coupled with expectations of further reductions, is expected to support the market’s recovery.
In a recent report, Real Estate Investors disclosed a decline in both revenue and profits for the first half of the year. Revenue dropped to £5.6 million, down from £6.1 million during the same period last year, primarily due to income loss following asset sales in late 2023 and early 2024.
The company also reported an increase in its pretax loss, widening to £3.2 million from £800,000 in the previous year. This loss was largely attributed to a £4.9 million non-cash hit from property revaluations conducted before the recent election and August’s interest rate cut.
The firm’s EPRA net tangible asset value decreased to 52p per share, down from 54.9p at the end of the last financial year.
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