Exposure of Real Estate Credit Investments (RECI) in France and Germany: an Perspective

Hardman & Co Research recently published an analysis on Real Estate Credit Investments (RECI) operations in France and Germany, updating investment performance in these regions. Following the publication of the December 2023 factsheet, which revealed an unrealized loss of 1.6p in net asset value (NAV) relating to an investment in a Grade A office in Paris, and a further loss of 1.1p NAV reported in November for an inherited mezzanine position on an asset in Berlin, the company wanted to reassess its position. These unexpected losses prompted exploration of RECI's conservative accounting approach and the resilience of its portfolio.

Although the French exposure represents 25% of the most recent portfolio and the German exposure is minimal, the implications of these financial impacts on NAV require careful analysis. Hardman & Co asserts that, despite these setbacks, RECI's core strategy remains unchanged since their last review in the "Vive la difference" note published on February 15, 2022.