RDI set back by new restrictions


RDI set back by new restrictions

Published Date: 2021-01-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

RDI set back by new restrictions

The real estate investment trust says new lockdown measures will delay the expected recovery in its operating assets.

RDI REIT says UK Covid-19 restrictions imposed in November have deferred the anticipated recovery in its operating assets, impacting first-quarter earnings. It expects revenue from operating assets to remain under pressure as long as strict travel restrictions remain in place.

In a trading update, the real estate investment trust said excluding RBH managed hotels and its London Serviced Offices, portfolio occupancy for the three months to end-November remained high at 98.8%. Asset management activity across its Office, Distribution and Industrial portfolios had been largely unaffected by the market backdrop, with a number of positive lease re-gears being completed since the end of August. With UK retail exposure now limited to 5.7% of its portfolio on a pro-forma basis, it said the impact of latest Covid-19 related restrictions in that sector had been modest.

Trading across the RETI's hotel portfolio had been set back as a result of the renewed restrictions. Of its 13 RBH managed hotels, five had been closed to reduce operating costs. However, this was being constantly reviewed against local demand, particularly for NHS related requirements as well as construction contracts. While occupancy was anticipated to remain limited during the current lockdown, it said experience from the first lockdown had shown a fairly sharp improvement in occupancy and profitability once restrictions were lifted. Rent demands for the RBH managed hotels had been deferred to the second half of the financial year to support operational cash flows during this period.

Occupancy across RDI's London Serviced Office portfolio reduced to 72.8% from 76% in August, with sales and renewal activity impacted by restrictions. The remaining office portfolio had been largely unaffected with rent collection now over 85% for all periods since March.

RDI said it collected about 86.4% of gross rental income or income due for either the December quarter or the month of December where rents were billed monthly. That's up from 81.5% in September.

RDI's shares fell 9.5% to R16.75 yesterday.

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