The chief executive of Midlands-focused property trust Real Estate Investors is eyeing “significant mis-priced opportunities” in the investment market as retail funds sell assets – and expects M&A activity in the industry.
Announcing the REIT’s 2019 results, Paul Bassi said the company will remain “extremely selective” with purchases but added that further capital would let the business acquire assets that have been underpriced, “driven by the distress and uncertainty caused by Brexit discussions and forced sellers at open-ended funds”.
He said: “We also remain alert to corporate opportunities and we anticipate a period of consolidation in the real estate sector.”
Revenue last year rose by 6.4% from 2018 to reach £16.6m, but profit more than halved to £3.7m. The company said that figure was affected by property revaluation and hedging costs. EPRA earnings per share were up by 12.2% at 4.3p.
The company said that the government’s decision to push ahead with HS2 has “renewed the investment appeal of Birmingham and surrounding markets”.
Bassi said: “Certainty on HS2, the Commonwealth Games in 2022 and Coventry City of Culture next year all represent a significant boost for the region and will underpin an increase in investment and acceleration on decision making.
“Relocation of people and corporate offices adds fuel to the local economy and we expect these trends to accelerate. Though all these outcomes are subject to the unknown outputs of Covid-19 impact that cannot be predicted at this stage.”
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