Equity Analysis /
United Kingdom

GB : Real Estate Investors - FY21 in line, delivering a respectable 13% total accounting return

    Chris Spearing
    Chris Spearing

    Analyst - Real Estate

    Contributors
    Hugh Carrow
    Tom Musson
    CGS-CIMB
    25 March 2022
    Published by

    RLE’s FY21 results are in line, with the business delivering a respectable 13% accounting return in the period. NTAps increased 6.5% y/y to 59p, driven by +2.7% LfL valuation increase. Diluted EPRA EPS fell 17% y/y to 3.6p, but this is in line and an increased final dividend is announced which is c.2% ahead. LTV is 7ppts lower at 42% due to net disposals and revaluation gains. There remains c.£7.5m in legals to be sold and we lower FY22-23 EPS 4-9% and DPS 4-5% to reflect these sales, but pricing is robust and we leave our NTAps forecasts broadly unchanged. There remain structural tailwinds for the West Midlands region. As voids are filled, we think the market will gain confidence in RLE’s ability to increase dividends and will begin to re-price the attractive 8.4% DPS yield. Our 49p TP is based on EVA.