RDI cuts retail exposure amid rise in e-commerce and Brexit uncertainty

London and JSE-listed landlord RDI said on Thursday 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 10% 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 reweighting 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 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 subsectors and stronger economic locations,” Tipper said.

RDI’s share price was unchanged at R23.59 on Thursday morning.