Despite an extremely challenging sales environment, Real Estate Investors plc (REI) has announced progress in its sales and debt repayment programme.
The Birmingham-based real estate investment trust is anticipating that the completion of sales scheduled in the fourth quarter of the year, combined with its legal pipeline of sales will repay the company’s entire debt in full.
In a trading update published ahead of REI’s interim results to 30 June which will be published on 30 September, the company said that despite market conditions REI had continued to make progress.
Chief executive Paul Bassi said: “Since placing assets on the market in April 2026, and despite the challenging backdrop, the diversity of our portfolio has enabled us to place £15.7 million under offer and in legals, of which £10.7 million has unconditionally exchanged or legally completed at 92% of December 2025 book value.
“Asset management initiatives are continuously underway on larger assets, with these sales scheduled to be placed on the market in the fourth quarter of 2026.
“We continue to operate in an extremely challenging sales environment and have seen some sales in the first six months of 2026 despite the USA/Israel/Iran conflict and continued interest rate volatility.
“Despite a tough marketplace, and subject to ongoing market conditions, we anticipate the repayment of our debt from our legal pipeline and scheduled further sales and remain resolutely focused on returning capital to shareholders which will commence immediately after the repayment of the company’s borrowings.”
He added that REI remained open to a corporate transaction that will deliver shareholder value and a more rapid conclusion to the company’s stated strategy.
He said that REI has a strong legal pipeline of new lettings and contracted new lettings of just under £400,000 per annum. Once all of these have completed, portfolio occupancy, subject to further sales, will rise to 82.20% (full year 2025: 78%), with the potential to enhance asset values prior to sale.
The portfolio continues to deliver contracted annual rental income of £7.7 million per annum rising to £8.1million per annum following the completion of pipeline lettings.
Rent collection remains strong, with 99.01% collected year-to-date and 99.33% collected for the current quarter.
In the year to date, REI’s asset management team has completed 15 lease events, including transactions with large occupiers and household names such as Matalan, Argos, Popeyes and McDonalds.
Capital receipts from disposals and existing cash have been directed towards debt repayment of £5 million, reducing total debt to £31 million as at 30 June 2026 and £29.2 million as at 21st August 2026, against 2025’s full year figure of £34.2 million.
This is set to reduce further in mid-October 2026 to £24 million with the legal completion of assets that have unconditionally exchanged with a deferred completion date. In the meantime, REI continues to benefit from the rental income on these assets. Further completion of sales in REI’s legal pipeline or that are under offer will further reduce debt.
Mr Bassi said: “As we have previously stated, we believe that a debt-free portfolio will also attract regional property company buyers to its geographical focus, income generation and asset base that will support acquisition debt.
“We remain open to a corporate event that provides a speedier conclusion to our stated disposal and wind down strategy, conditional upon delivering positive shareholder value.
