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RDI REIT PLC (RDI)

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Thursday 13 September, 2018

RDI REIT PLC

Forward Funding of £26m Distribution Development

RNS Number : 5371A
RDI REIT PLC
13 September 2018
 

RDI REIT P.L.C.

("RDI" or the "Company" or the "Group")

(Registration number 010534V)

LSE share code: RDI

JSE share code: RPL

ISIN: IM00B8BV8G91

LEI: 2138006NHZUMMRYQ1745

 

RDI COMPLETES £26.0 MILLION DISTRIBUTION FORWARD FUNDING OPPORTUNITY IN BICESTER

AND DISPOSES OF LOCHSIDE EDINBURGH FOR £13.1 MILLION

RDI, the income focused UK-REIT, today announces that it has completed a forward funding agreement to acquire two high quality distribution units in Bicester totalling 288,000 sqft (26,800 sqm) as well as completing the disposal of the Lochside office in Edinburgh. These transactions are in line with RDI's strategy of recycling capital out of mature assets and into new growth opportunities.

Increasing exposure to logistics

RDI has acquired approximately 13.5 acres of land in Bicester as part of a £26.0 million forward funding opportunity with Albion Land to acquire two high quality distribution units of 120,000 sqft and 168,000 sqft respectively. The site is part of the successful Link 9 industrial and distribution development with good access to the M40 and backed by a strong occupier market.

Construction of phase 1 will commence immediately with an approximate eight-month development programme with phase 2 anticipated to commence before May 2019 with completion in late 2019. Both units will be developed on a speculative basis, however early stage discussions have already commenced with potential occupiers. The transaction provides an opportunity to increase RDI's exposure to well-located modern distribution units at an anticipated yield on cost of 6.5% once let.   

Continued progress in recycling low growth assets at a premium

RDI completed the disposal of the 60,177 sqft (5,591 sqm) Lochside Edinburgh office on 31 August 2018 for £13.1 million representing a net initial yield of 5.9% and a 13.7% premium to the last reported market value.

The asset was originally acquired as part of the Company's AUK Portfolio acquisition in March 2016 for £11.0 million at which point it was 18% vacant. Through active asset management the property has been fully let which has supported the sales price and premium to book value.

Mike Watters, Chief Executive, commented:

"This acquisition once again highlights our disciplined approach to improving the quality of our income focused portfolio, with disposal proceeds being promptly redeployed into growth opportunities. The acquisition of high quality distribution assets in Bicester, through a forward funding agreement, presents a clear opportunity to increase our exposure to a sector with strong structural support and rental growth prospects, at an attractive entry price."

We look forward to providing further details on our progress against strategic priorities at our year end results presentation on Thursday, 25 October 2018, following the release of the year end results."

For further information, please contact:

RDI REIT P.L.C.


Mike Watters, Stephen Oakenfull, Janine Ackermann

Tel: +44 (0) 20 7811 0100

FTI Consulting


UK Public Relations Adviser


Dido Laurimore, Claire Turvey, Ellie Sweeney

Tel: +44 (0) 20 3727 1000

Instinctif Partners


SA Public Relations Adviser


Frederic Cornet

Tel: +27 (0) 11 447 3030

JSE Sponsor


Java Capital

Tel: + 27 (0) 11 722 3050

 

About RDI

RDI is a UK Real Estate Investment Trust (UK-REIT) committed to becoming the UK's leading income focused REIT. The Company's income-led business model and strategic priorities are designed to offer shareholders superior, sustainable and growing income returns, with a target growth in underlying earnings per share of 3%-5% across the medium term.

Income sustainability is underpinned by a diversified portfolio and tenant base, with no overreliance on any one sector or tenant, together with an efficient capital structure. The secure and growing income stream is 25.9% indexed and has a WAULT of 6.8 years to first break (8.2 years to expiry).  This is complemented by an average debt maturity of 7.0 years of which over 90% of interest costs are either fixed or capped. The Company is focused on all aspects impacting shareholder distributions and reports one of the lowest cost ratios in the industry whilst maintaining a low cost of debt. 

The Company owns properties independently valued at £1.6bn in the United Kingdom and Germany, Europe's two largest, liquid and transparent property markets. RDI invests in assets with strong property fundamentals spread across UK offices (including London serviced offices), UK logistics, UK shopping centres, UK retail parks, UK hotels and German retail. RDI is well placed to take advantage of the increasing occupier requirement for real estate owners to become high quality service providers, given its scalable operational platforms and nearly a third of the portfolio invested in hotels and London serviced offices.

RDI holds a primary listing on the London Stock Exchange and a secondary listing on the JSE and is included within the FTSE All Share, EPRA, GPR, JSE All Property and JSE Tradeable Property indices. 

For more information on RDI, please refer to the Company's website www.rdireit.com

All figures as at 28 February 2018


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