H1 Trading Update and Capital Return Strategy

Real Estate Investors Plc

("REI" or the "Company" or the "Group")

H1 TRADING UPDATE AND CAPITAL RETURN STRATEGY

Real Estate Investors Plc (AIM:RLE), the UK's only Midlands-focused Real Estate Investment Trust (REIT), with a portfolio of commercial property across all sectors, is pleased to provide the following H1 trading update and capital return strategy for the six months ended 30 June 2022 ("H1 2022"):

H1 2022 TRADING UPDATE

·      Disposed of 11 assets during H1 2022 totalling £5.7 million - an aggregate uplift of 27.9% on December 2021 valuations

·      2021 and 2022 asset sales to date of £23.2 million

·      Further pipeline disposals in legals totalling approximately £10 million

·      Disposal proceeds used to pay down £5.7 million of debt in H1 2022

·      Average cost of debt of 3.5% with 94.5% of debt fixed (as at 30 June 2022)

·      As at 1 July 2022, hedge facility has improved by £1.2 million for H1 2022

·      Covered dividend for Q1 2022 of 0.8125p per share (Q1 2021: 0.75p per share)

·      Contracted rental income of £14 million p.a.

·      Normalised rent collection levels of 95.16% (for current quarter)

·      Portfolio occupancy of 85.88%

DISPOSALS UPDATE

As stated in our year end results published in March 2022, we saw a high level of private investor demand for our assets in 2021 and this continued during H1 2022.  As such, we have successfully completed a further £5.7 million of disposals, at an aggregate uplift of 27.9% above the December 2021 valuation. Total sales for 2021 and 2022 to date total £23.2 million, with further sales in legals of approximately £10 million.

No acquisitions were made during H1 2022 due to the lack of suitably priced assets. Management will continue to monitor the market place for attractive acquisition opportunities.

CAPITAL RETURN STRATEGY AND NOTICE OF INTERIM RESULTS

We remain focused on delivering maximum value to our shareholders and the Board believes the share price discount to the net tangible assets ("NTA") is unwarranted and that it is in the best interests of all shareholders to take steps to reduce this discount.

Therefore, we have continued with our opportunistic sales programme to satisfy high private investor demand at prevailing prices and advantageous yields and, subject to the completion of property sales, we intend to continue to repay debt.  If the significant share price discount to NTA persists, we will consider a special dividend, share buyback or other form of capital return to shareholders, the structure and timing of which is yet to be decided.  The quantum of any return of capital will be set to ensure that we maintain a prudent loan-to-value ratio, whilst also being mindful of the overall liquidity in the Company's shares.  The Board recognises the need for market consolidation within the real estate and REIT market and remain alert to options that align with the interests of our shareholders..

We expect to update the market further on any return of capital at the interim results expected to be released on 29 September 2022.

DIVIDEND

As announced on 20 June 2022, a fully covered dividend payment in respect of Q1 2022 of 0.8125p per share (Q1 2021: 0.75p per share) will be paid on 22 July 2022 as a Property Income Distribution (PID), to all shareholders on the register as at 1 July 2022.  The ex-dividend date is 30 June 2022.  The Board remains committed to paying a covered dividend, throughout the period of our sales programme, subject to business performance.

Paul Bassi, Chief Executive, commented:

"Following 2 years of pandemic disruption, we are pleased to report significantly improved occupier and investor activity during Q2 2022 and have a healthy pipeline of new lettings in our void space.  We expect ongoing activity to improve our occupancy levels and portfolio WAULT.  There remains a strong private investor market and we intend to continue to make sales to satisfy this investor demand.  We intend to repay existing debt and reduce gearing levels with disposal proceeds and consider a special dividend, share buyback or other form of capital return to shareholders."

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

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About Real Estate Investors Plc

Real Estate Investors Plc is a publicly quoted, internally managed property investment company and REIT with a portfolio of mixed-use commercial property, managed by a highly-experienced property team with over 100 years of combined experience of operating in the Midlands property market across all sectors.  The Company's strategy is to invest in well located, real estate assets in the established and proven markets across the Midlands, with income and capital growth potential, realisable through active portfolio management, refurbishment, change of use and lettings.  The portfolio has no material reliance on a single asset or occupier.  On 1st January 2015, the Company converted to a REIT.  Real Estate Investment Trusts are listed property investment companies or groups not liable to corporation tax on their rental income or capital gains from their qualifying activities.  The Company aims to deliver capital growth and income enhancement from its assets, supporting its progressive dividend policy.  Further information on the Company can be found at www.reiplc.com.