The recent downturn in the property market is “at or near the bottom,” the chief executive of Real Estate Investors said today.
Paul Bassi said he was looking forward to “a period of positive activity and the potential for capital and rental growth, supported by lower interest rates and improving investor and occupier demand.”
“A normalising market backdrop will contribute to more rapid sales and debt repayment, allowing us to execute our strategy and return capital to shareholders, whilst continuing to pay a covered dividend,” he said.
The property market has been hammered by the increase in interest rates since the end of the pandemic, which has made new construction more expensive and reduced demand.
The first half of 2024 was still impacted by political and monetary uncertainty, meaning transaction activity was 40 per cent below the five-year average.
However, the Bank of England cut interest rates for the first time since 2020 in August, and markets expect further rate cuts this year, which should help support the market.
Bassi’s comments came as Real Estate Investors reported falling revenue and profit figures in the first six months of the year.
Revenue fell to £5.6m in the six months to June, down from £6.1m in the same period last year, largely due to the loss of income after selling assets in late 2023 and early 2024.
The firm’s pretax loss widened to £3.2m from £800,000 previously. It said this was “primarily driven by a £4.9m non-cash loss on property revaluations, undertaken prior to the election and interest rate reduction in August.”
The firm reported an EPRA net tangible asset value of 52p per share, down from 54.9p at the end of its previous financial year.