London and JSE-listed landlord RDI said on Thursday that it intends to cut its exposure to retail assets even further, after seeing a 4.6% decline in net rental income in its year to end-August.
The landlord cut its dividend per share 25.9% to 10p for the period, with net rental income from continuing operations — which excludes disposals — falling to £80.8m from the prior period’s £84.7m.
European retailers have been contending with a surge in online shopping, slowing sales and weak consumer confidence amid continued uncertainty over Brexit.
The company cut its exposure to retail to 35.3% during the period from 45.6% previously, and ultimately wants this figure down to 20%.
The company is selling its German assets to shift focus to the UK, selling the Bahnhof Altona centre in Hamburg for a 25.5% premium to its purchasing price, though this happened after year-end.
“A significant amount of work has been undertaken over the past 12 months, and particularly since we set out our intentions at the half-year to further reduce leverage and accelerate the re-weighting of the portfolio through the disposal of certain retail assets,” RDI chair Gavin Tipper said in a statement.
“I am pleased to report that important steps have been taken towards reaching these goals, with our retail holdings as at the date of this report having been reduced by approximately 15%, and that, despite the difficult market backdrop, operational results across the business remain robust, reflecting the portfolio’s increasing exposure towards growth sub-sectors and stronger economic locations,” Tipper said.
RDI’s share price was unchanged at R23.59 on Thursday morning.
Correction: October 24 2019
An earlier version of this article incorrectly stated that the Bahnhof Altona Centre was sold at a premium of 10% to its purchasing price; it was, in fact, 25.5%.
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