Property income fund RECI Q3: 9% yield, low LTV exposure

Real Estate Credit Investments Limited (LON:RECI) has announced that the Investment Manager’s Q3 Investor Presentation is now available:

An extract from the Summary section of the presentation is set out for investors in the Appendix to this announcement.

Appendix: Q3 Investor Presentation Extract

Key Quarter Updates

•     Portfolio

–    1 new deal completed (£45.2m of commitments) since 30 September 2022

–    No defaults in the portfolio

–    Continued migration of portfolio to senior lending

–    During December, three French loans fully repaid, lowering the WA LTV of the overall portfolio,and providing headroom to invest in new deals at enhanced IRRs

•     Cash

–    Cash reserves remain targeted at between 5% to 10% of NAV

•     Dividend

–    Dividends maintained at 3p per quarter, 9.0% yield, based on share price, as at 31 December 2022

•     Financing

–    A mix of flexible, short-dated financing employed, alongside term-matched structured financing on selected high-quality senior loan deals

•     Opportunities

–    The present crisis is set to continue through 2023, resulting in further constraints in bank lending and alternative sources of capital. The opportunity to provide senior loans at low risk points, for higher margins, is increasingly compelling

–    The core European CMBS markets are experiencing market price declines due to increasing indiscriminate selling, presenting opportunities in the market

–    The Company expects to deploy its currently available cash resources to its near term commitments and to build cash resources towards a very compelling emerging opportunity set in both senior loans and bonds

– Attractive returns from defensive , Senior, low LTV credit exposure to UK and European commercial real estate assets

•     A focus on senior, 1st lien loans:

– Senior, 1st lien loans now account for 89% of the book by value

– Mezzanine loans have reduced to 11%

– Top 10 positions are 100% Senior Loans

– New origination is 100% Senior

•     Weighted Average LTV on underlying investments of 56.3% as at 31 December 2022

•     Predominantly large, well capitalised, and experienced institutional borrowers

•     Minimal exposure to shopping centres (<2% of GAV), secondary offices (0% of GAV) and logistics (3% of GAV)

•     RECI retains absolute governance, covenants and control, afforded by senior ranking and bilateral singular lending relationships

•     Portfolio has withstood COVID19 and is well place to withstand the current revaluations in real estate

Quarterly dividends delivered consistently since October 2013

•     The Company has consistently sought to pay a stable quarterly dividend from its distributable profits

•     This has led to a stable annualised dividend of around 7% of NAV

Highly granular book

•     60 positions

Transparent and conservative leverage

•     Net leverage 25.0% (with £24.0m cash) as at 31 December 2022 versus a leverage limit of 40%

•     Non-recourse and limited-recourse, term, structured finance provides returns optimisation and financial flexibility on senior loans

Access to established real estate investment team at Cheyne, which manages c$5bn AUM

– Access to pipeline of enhanced return investment opportunities identified by Cheyne

– Robust mitigation against a rising rates environment

•     A high yielding portfolio, combined with a short weighted average life of 2 years, ensures minimal exposure to yield widening and the ability to redeploy quickly at higher rates

•     Pipeline is 100% floating rate senior loans

Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

More articles like this

UK mortgage approvals rise in sign of stability returning

UK mortgage approvals rose more than forecast in February, adding to signs that the housing market is starting to stabilize following the blow inflicted by the autumn’s market turmoil. Lenders authorized 43,500 home loans compared with 39,600 in

UK housing market stabilises

The average price of homes coming on the market in Britain stabilised in March and activity is picking up towards more normal pre-pandemic levels after last year’s “mini-budget” upheaval, a survey showed on Monday. Property portal Rightmove said

How the pandemic reshaped the UK housing market

It’s now almost three years since the onset of the pandemic, when the UK was thrust into lockdown for the first time. One of its many impacts was to transform the UK’s property market almost overnight – prompting

UK house prices rise as mortgage rate cuts lift confidence

UK house prices picked up in February from the previous month as recent reductions in mortgage rates helped to stabilise the market, according to the lender Halifax. The average house price rose 1.1% to £285,476 last month compared

RECI high dividend perfect fit for property ISA investments

Real Estate Credit Investments Ltd (LON:RECI) announced on Thursday 23rd February that it has declared a third interim dividend of 3.0 pence per Ordinary Share (a total amount of GBP 6,879,974.34) for the year ending 31 March 2023.

Hopes high for level UK property market in 2023

UK property markets will hopefully flatten out in 2023, according to a property expert as the country left behind an unsteady year in which prices went up and down. In the last year, rising mortgage rates and costs

The housing market has started to recover

The housing market has begun to recover after hitting a low point in the second week of November. We’re not out of the woods yet, but homebuyers are coming off the sidelines: The number of Redfin customers requesting

House prices see biggest New Year bounce in three years

Many home-movers have already been putting their 2023 moving plans into action, with average asking prices seeing the biggest New Year bounce in three years.   Our monthly House Price Index has the most up-to-date monthly data on asking prices in

Majority of property investors set to further invest in 2023

The uncertainty of the UK’s economic stability is now becoming an increasingly prominent factor for those operating in the real estate market, despite this, 50.45% of the over 1,000 property investors polled indicated that they are looking to

No more posts to show