Real Estate Credit Investments has entered its new financial year with a portfolio centred on senior secured real estate lending, substantial cash resources and an active pipeline of potential investments across the UK and continental Europe.
The closed-ended investment company originates and invests in debt secured against commercial real estate in Western Europe, with its main geographic focus on the UK, France and Spain. Its portfolio combines predominantly bilateral loans and bonds with a smaller allocation to market-traded real estate debt securities.
At 31 March 2026, RECI held 26 positions with a gross investment portfolio value of £405.1 million and net asset value of £306.6 million. Bilateral loans and bonds accounted for £395.7 million of gross portfolio value, while market bonds represented £9.3 million. Adjusted cash stood at £24.5 million, equivalent to 8.0% of NAV in the portfolio snapshot.
Portfolio construction remains focused on relatively short-duration lending and secured positions. The weighted average current loan-to-value ratio was 66.8%, providing a layer of borrower equity beneath the debt exposure. The portfolio also had a weighted average life of 1.5 years, which gives RECI scope to recycle capital as loans mature and respond to changes in lending conditions.
Capital recycling was a significant feature of the financial year. RECI fully exited four loan investments, generating £105.5 million of proceeds at a weighted average unlevered internal rate of return of 8.4%. The repayments covered lending linked to UK hotels and spas, later-living developments and industrial sites.
The company redeployed capital into eight new loans and one market bond, representing £134.1 million of gross new commitments. The new loan investments were structured as first-position secured real estate loans, placing RECI ahead of equity capital in the repayment hierarchy and helping to contain downside exposure if individual projects encounter difficulties.
Liquidity remains an important part of the positioning. Cash stood at £24.6 million, or 8.1% of NAV, at the financial year end, within the company’s targeted range of 5% to 10% of NAV. Net leverage was 38.7%, compared with a stated leverage limit of 40%. The financing structure includes non-recourse and limited-recourse term facilities used primarily against senior loans.
The dividend was maintained at 3p per share per quarter during the year. Based on the share price at 31 March 2026, this represented an annualised yield of 10.4%. Total NAV return for the year was 5.0%. RECI has sought to maintain regular quarterly distributions from distributable profits, with quarterly dividends having been paid since August 2011.
Real Estate Credit Investments Limited (LON:RECI) is a closed-end investment company that specialises in European real estate credit markets. Their primary objective is to provide attractive and stable returns to their shareholders, mainly in the form of quarterly dividends, by exposing them to a diversified portfolio of real estate credit investments.
