PROPERTY: REAL ESTATE HAS BRIGHT PROSPECTS

REAL Estate Investors has been a pretty disappointing investment, even before the Covid-19 catastrophe. Midas recommended the Midlands-based property firm in 2014 at 52p. At the beginning of the year, it was 55p and last week, it closed at 34p.

The business was buffeted by Brexit-related worries in 2016 and the shares have clearly been hit hard in recent weeks, too. The response seems overdone.

Real Estate Investors is a highly conservative business, led by Paul Bassi, a veteran of the property market. The company’s tenants are deliberately spread across sectors, with NHS offices leading the pack, as well as other government bodies.

There are retailers, restaurants and hotels in the mix, too, but most tenants are responsible for a fraction of the group’s total revenues. Reassuringly, Bassi’s portfolio is 96 per cent let and when quarterly rents fell due last week, no one defaulted or even suggested that they might.

Real Estate’ s 2019 results, released this month, showed solid progress and a total dividend of 3.8p was proposed.

Once that is paid, shareholders will have received more than 15p worth of dividend payments per share over the past five years, some compensation for the poor share price performance.

MIDAS VERDICT: Real Estate tenants may struggle if the effects of coronavirus intensify over the coming months. But the company is financially strong, the Midlands has been forging ahead and long-term prospects are bright. At 34p, this stock is cheap – and it offers a yield of more than 10 per cent.