We expect Real Estate Investors to return to growth in FY21 (+6% total accounting return), barring any major disruption to the roadmap out of lockdown. The majority of returns will be delivered by dividend income, underpinned by solid rent collection >90%. Vacancy may increase further near term, but any confidence returning to the West Midlands property market could see 2021 become a tale of two halves. Net LTV should reduce for completing sales, also helped by better sentiment and filling voids. A 31% discount to spot NAV looks attractive given the relative security of income that supports an 8% prospective dividend yield for FY21, and a business returning to TAR growth.
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