Real Estate Credit Investments: New faces, same resilience

Hardman & Co
[shareaholic app="share_buttons" id_name="post_below_content"]

In previous notes, we have repeatedly outlined why we believe Real Estate Credit Investments Ltd (LON:RECI) shows resilience against inflation, interest rate increases and inflation risk (inter alia, see Experience shows resilience of the model, Experience shows resilience of the model (2) and Why rising rates should not hurt RECI). In this note, we highlight how the recent deals have added to the portfolio, and, as outlined in RECI’s recent quarterly presentation, how they have re-confirmed this protection. We also detail the other key themes from this report, noting the sector and geographical diversity (important when considering exposure to UK rate rises), strong loan to value (LTV) metric, conservative leverage and good counterparty quality.

  • Other quarterly update key themes are: i) attractive returns from low LTV credit exposure to UK and European commercial real estate assets, ii) quarterly dividends delivering consistently since October 2013, iii) a highly granular book, iv) transparent and conservative leverage, and v) access to strong pipeline.
  • April Factsheet update: Recurring interest income added 1p to NAV. There was a modest 0.3p mark-to-market (MTM) loss on the bond portfolio, with the corporate yield widening. Real Estate Credit Investments had cash of £66m and gross leverage of £101m. The book has 63 positions (35 loans, 28 bonds), with a weighted average LTV of 62% and a yield of 9.9%.
  • Valuation: RECI trades at a small premium to NAV, a little below pre-pandemic, average levels. With a 2022E 12p dividend, the 7.9% dividend yield is the highest of its immediate peers, and is covered by income. RECI’s defensive qualities mean that the dividend has been held throughout the COVID-19 crisis.
  • Risks: Any lender is exposed to the credit cycle and individual loans going wrong. Security is currently hard to value and to crystallise. We believe RECI has appropriate policies to reduce the probability of default, and loss in the event of default. Some assets are illiquid, and repo financing has a short duration.
  • Investment summary: Real Estate Credit Investments generates an above-average dividend yield from well-managed credit assets. Bond pricing includes a slight discount, reflecting uncertainty, which should unwind when conditions normalise. Market-wide credit risk is currently above-average, but RECI’s strong liquidity and debt restructuring expertise should allow it time to manage problem accounts. Borrowers, to date, have injected further equity into deals.

DOWNLOAD THE FULL REPORT

Share on:
Find more news, interviews, share price & company profile here for:

When real estate credit becomes core capital allocation

Real estate credit is quietly stepping into the spotlight, reshaping how institutions build real assets exposure.

Real Estate Credit Investments extends share buybacks up to £10 million

Real Estate Credit Investments has extended its share buyback programme to 31 March 2026 with a limit of up to £10 million. Since the launch of its first programme in 2023, the Company has repurchased over 7.6 million shares for £9.4 million.

Private credit finds new footing as property values edge upward

Commercial property prices are stirring just as private credit broadens into more complex and flexible strategies, creating a moment of recalibration for investors.

Real Estate Credit Investments maintains quarterly 3p dividend for 8 years (LON:RECI)

Real Estate Credit Investments has declared a first interim dividend of 3.0 pence per Ordinary Share for the year ending 31 March 2026, payable on 17 October 2025 to shareholders on the register as of 26 September 2025.

Real Estate Credit Investments: What RECI brings to investors

Real Estate Credit Investments offers a near 10% dividend yield backed by recurring interest income, with a track record of stability through various market cycles.

Search

Search