REI Regulatory News (RLE)

19 September 2012

Real Estate Investors PLC

("REI" or the "Company" or the "Group")

Half Year Results for the six months to 30 June 2012 - Maiden Dividend

Real Estate Investors PLC (AIM:RLE) the West Midlands based property group, today announces its half year results for the six month period ended 30 June 2012.

FINANCIAL HIGHLIGHTS

·; Maiden dividend payment of 0.5 pence in respect of the 2012 financial year

·; Rental income up 48% to £2.67 million (H1 2011: £1.81 million)

·; Profit before tax, revaluations and loss on valuation of interest rate swaps of £363,000 (H1 2011: loss of £68,000)

·; Pre- tax profit of £556,000 (H1 2011: loss of £1.88 million)

‐ includes loss on valuation of interest rate swaps of £74,000 (H1 2011: loss of £71,000) and revaluation surplus of £267,000 (H1 2011: deficit of £1.74 million), both non cash items

·; Gross property assets up 3% to £73.5 million (31 December 2011: £71.2 million)

‐ Investment property assets up 4% to £65.8 million (31 December 2011: £63.4 million)

‐ Net assets of £39.4 million (31 December 2011: £39 million)

‐ NAV per share of 55p (31 December 2011: 54.6p)

‐ NNNAV per share 55.6p (31 December 2011: 54.7p)

·; Cash and cash equivalents of £6.0 million (H1 2011: £8.0 million)

·; Loan to value of 52.5% (44.8% net of cash) (31 December 2011: 52.4% (46.2%))

OPERATIONAL HIGHLIGHTS

·; Refinance of £10.4million with Aviva providing a 15 year financing on fixed terms at 5.16%

·; £2.4 million of acquisitions in first half year

·; Further selective acquisitions in the second half with a stable regional property market backdrop

DIVIDEND TIMETABLE

Paul Bassi, CEO of Real Estate Investors, commented: "We are pleased to report a positive first half of the year, and the announcement of our maiden dividend. We remain well positioned to capitalise on unstable market conditions while our existing portfolio remains stable and secure but with significant capital upside potential."

Enquiries:

Chief Executive's Statement

RESULTS

I am delighted to report excellent progress during the first half of 2012. Whilst the economic backdrop remains fragile, we are able to announce our inaugural dividend of 0.5p, payable to all shareholders on the register on 26 September 2012. The Board is committed to paying a dividend annually in October and will consider other payouts depending on activity.

The six month period to 30 June 2012 saw rental income increase by 48% to £2.67 million (H1 2011: £1.81 million) and gross property assets increase by 3% to £73.5 million from £71.2 million at the December 2011 year end.

Contracted rental income has risen to £6.3 million. Valuations across the property market remain under pressure. However, through careful asset management and improving rental income, we are able to combat these pressures and have seen a modest increase in the value of the portfolio, with further growth potential.

Commercial property activity in the West Midlands doubled in Q2 2012 to £317 million from £167 million in Q1 2012. This is due to improving lending conditions and growing appetite for regional assets that provide significantly better yields and capital growth potential than in London, which has been the focus of the market for some time.

The loss on financial liabilities held at fair value of £74,000 is a revaluation of interest rate swaps. This is a non-cash item, which we expect to improve in due course and the total provision of £5.1 million will be recovered from rising interest rates or on maturity of the financial instruments in 2018 and 2019.

PROPERTY PORTFOLIO

Purchases during the first half included 'Apex' in Edgbaston, for the sum of £1.7 million, let to Lombard North Central (Natwest) and Royal London Life, producing £353,000 per annum on leases expiring in December 2015 and producing an initial yield of 20%. The properties were acquired from the receivers acting for the mortgagees, Capital Asset Services (London) Ltd. The vendors acquired these properties in March 2005 for the sum of £4.5 million. Additionally, we acquired a part-vacant freehold property at High Street, West Bromwich (a former Allied Carpets retail store, with offices above) for £475,000. This property will be refurbished and re-let, with potential income of £150,000 per annum. The vendor paid £1.6 million in May 2006. During this period we also sold land in Birmingham, with planning consent, to Bromford Housing Association for £350,000, £53,000 above the book value.

Our portfolio remains stable and secure, with significant asset management opportunities that will enhance the income and capital values. New tenants include AFH Financial Group Plc at Avon House in Bromsgrove. The letting is for a term of 11 years, with a tenant break in September 2018, at a commencing rent of £173,000 per annum, rising to £202,000 per annum at the first review.

Additionally, following positive discussions with planning consultants, we are submitting a planning application for a 45,000 sq ft food store in Southgate Retail Park, Derby. Planning consent will provide significant capital upside on this asset.

BANKING

We have noticed an improved level of credit available to the marketplace, some of which may be supporting the significantly improved activity from Q1 to Q2 as outlined above, as evidenced at auction sales, where volumes have increased substantially.

We continue to have excellent support, and further availability of debt, should we require it, from our longstanding banking relationships at Lloyds Banking Group, Handelsbanken and Aviva. In March, we completed a refinancing of £10.4 million with Aviva for a term of 15 years, fixed at 5.16% inclusive.

This refinancing, with existing cash and agreed bank facilities, provides us with cash that can and will be invested when we identify assets that meet our investment criteria.

REGIONAL OVERVIEW

As our business has a very strong West Midlands and central England focus, I feel that I should comment on some of the regional economic influences that impact positively on our business and locality, particularly when so much of the national and global news is so negative.

Ø Doubling of commercial property activity from Q1 £167million to Q2 £317million

Ø £120 billion of exports

Ø Direct foreign investment increased by 206% (best performance of any UK region)

Ø West Midlands is the largest regional exporter to non-Euro countries

Ø Best performing High Street in the UK (PWC)

Ø Record residential rents in the West Midlands

Ø Jaguar Land Rover creating 1,000 supply chain jobs

Ø New £250 million investment by BMW

Ø Expansion of Birmingham International Airport

Ø Commencement of £640 million New Street Station project

Ø West Midlands rental growth is the largest in England

Ø Year-on-year house price growth

The above demonstrates the activity in the region, that will positively impact upon our portfolio, and why we are seeing improving demand and occupancy.

OUTLOOK AND OPPORTUNITIES FOR 2012-2013

We have now established REI as a highly respected regional property investment company that has a portfolio that will deliver strong cash flow and subsequent capital growth through asset management, improving market conditions, rising rental income and lending growth from the banks. We have already witnessed the doubling of property activity from Q1 to Q2 in the West Midlands, and improving interest from investors and occupiers in regional property assets.

The existing portfolio remains stable and we will seek to add to this, and take advantage of our market reputation, and preferred buyer status, but only when we identify opportunities that meet our criteria. We believe that these are most likely to be derived from institutional funds wishing to exit non criteria assets and distressed sales from banks and receivers.

Market conditions remain fragile and unpredictable, providing opportunities to the investor. We will continue to run our business prudently, with a view to growing income and enhancing capital values.

PAUL BASSI

CHIEF EXECUTIVE

18 SEPTEMBER 2012

NOTES TO THE INTERIM REPORT

for the 6 months ended 30 June 2012

1. BASIS OF PREPARATION

Real Estate Investors PLC, a Public Limited Company, is incorporated and domiciled in the United Kingdom.

The interim financial statements for the period ended 30 June 2012 (including the comparatives for the year ended 31 December 2011 and the period ended 30 June 2011) were approved by the board of directors on 18 September 2012. Under the Security Regulations Act of the EU, amendments to the financial statements are not permitted after they have been approved.

It should be noted that accounting estimates and assumptions are used in preparation of the interim financial information. Although these estimates are based on management's best knowledge and judgement of current events and action, actual results may ultimately differ from these estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the interim financial information are set out in note 3 to the interim financial information.

The interim financial information contained within this report does not constitute statutory accounts within the meaning of the Companies Act 2006. The full accounts for the year ended 31 December 2011 received an unqualified report from the auditors and did not contain a statement under Section 498 of the Companies Act 2006.

2. ACCOUNTING POLICIES

The interim financial report has been prepared under the historical cost convention.

The principal accounting policies and methods of computation adopted to prepare the interim financial information are consistent with those detailed in the 2011 financial statements published by the Company on 23 March 2012.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting year are as follows:

Investment property revaluation

The Group uses the valuations performed by its independent valuers or the directors as the fair value of its investment properties. The valuation is based upon assumptions including future rental income, anticipated maintenance costs, anticipated purchaser costs and the appropriate discount rate. The valuer and the directors also make reference to market evidence of transaction prices for similar properties.

Interest rate swap valuation

The Group carries the interest rate swap as a liability at fair value through the profit or loss at a valuation. This valuation has been provided by the Group's bankers.

Critical judgements in applying the Group's accounting policies

The Group makes judgements in applying the accounting policies. The critical judgement that has been made is as follows:

Categorisation of trading properties

Properties held by the subsidiary 3147398 Limited are classified as inventories, being properties held for resale. These properties generate rental income but are actively marketed for sale and are therefore categorised as properties held for resale and carried at the lower of cost and net realisable value.

4. SEGMENTAL REPORTING

Primary reporting - business segment

The only material business that the Group has is that of investment in and trading of commercial properties. Revenue relates entirely to rental income from investment properties and sale of trading properties within the UK.

5. INVESTMENT PROPERTIES

The carrying amount of investment properties for the periods presented in the interim financial information is reconciled as follows:

6. PROFIT/(LOSS) PER SHARE

The calculation of the profit/(loss) per share is based on the profit/(loss) attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The calculation of the diluted earnings per share is based on the basic earnings per share adjusted to allow for all dilutive potential ordinary shares.

The basic profit/(loss) per share has been calculated on the profit for the period of £406,000 (31 December 2011: loss of £5,029,000 and 30 June 2011: loss of £1,373,000) and on 71,420,598 (31 December 2011: 59,525,206 and 30 June 2011: 49,602,416) ordinary shares, being the weighted average number of shares in issue during the period.

The diluted profit/(loss) or share has been calculated on the profit for the period of £406,000 and on 72,721,848 ordinary shares, to include the effect on the ordinary shares of the exercise of the share warrants. The impact of the share warrants for the six months ended 30 June 2011 and the year ended 31 December 2011 is anti-dilutive.