Final Results

REAL ESTATE INVESTORS PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005

Real Estate Investors PLC ("REI" or "the Company"), the commercial property
investment company, today announces its preliminary results for the year ended
31 December 2005.

Highlights:

*Gross property assets up 31% to £19.8m (2004: £15.1m)

*Rental income increased to £1.2m (2004: £0.2m)

*Net assets up 61% to £5.8m (2004: £3.6m), equivalent to 12.83p per share
 (excluding increase in value of trading stock and negative goodwill)

*Pre-tax profit for first full year of trading

*Year end balance sheet cash £1.1m.

*20.3 million new REI shares issued at premium to market price.

*10.5 million new shares placed with investors.

*25 year institutional debt secured.

*Recent acquisition of investment in West Midlands

For further information please contact:

Peter Lewin - Chief Executive                01923 776633
Malcolm Lewin - Finance Director
www.reiplc.com

Christopher Joll - MJ2 Ltd                   0207 491 7776

CHAIRMAN'S STATEMENT

I am very pleased to report again to our shareholders on an active 12 months for
REI.

Our gross property assets increased over the year by 31% from £15.1m to £19.8m.
Rental income for 2005 was £1.2m compared to £0.2m for the six and a half months
to 31 December 2004. Net assets increased by £2.2m from £3.6m to £5.8m, an
increase of 61%. Balance sheet net asset value per share rose by 17% from 9.52p
to 11.10p. This latter figure excludes a significant increase in the value of
our trading stock, which is not revalued in the accounts. After adding back
negative goodwill, the net asset value per share increased by 8% from 11.91p to
12.83p.

I am pleased to report that, following the pre-tax loss of £97,000 for our
initial six month startup period to 31 December 2004, we have now made
sufficient progress to achieve our objective of moving the business into surplus
in 2005, with a pre-tax profit of £20,000, and we aim to make significant
further progress during 2006. We have also started the current year with £1.1m
of cash balances, which provide a base for further expansion.

To say that the UK property markets remain challenging is something of an
understatement, but your directors have experience of tough markets, and the
Company's progress over the past twelve months is evidence of our ability to
achieve our targets.

The present low interest rate structure in the UK and the unprecedented volumes
of money being lent to the property sector have pushed yields down to levels not
seen in modern times. The attractions of well let commercial property are now
widely appreciated, not just by professional property investors but by a range
of investors who have been disappointed with alternative investment
opportunities; business therefore remains highly competitive. Nevertheless,
vendors of suitable properties are prepared to invest in REI and we continue to
acquire the quality investments which meet our strict criteria.

Since flotation in 2004, REI has created the stable and profitable platform that
will allow us to grow and expand the Company. Continued growth will include
corporate investments.  Several such opportunities are under consideration at
the present time and I hope to be able to provide you with further details about
these in the near future.

Our portfolio continues to grow and, with our recent acquisition in West
Bromwich (purchased since the year end), currently stands at £20.9 million.  I
would like to describe in brief the purchases completed over the past 12 months,
several of which I have advised you of in earlier statements.

The purchase of the share capital of 3147398 Limited, the former Bacchus Estates
Limited, which completed in January 2005 for a consideration of £9 million in
respect of the underlying properties, brought 13 commercial properties into the
portfolio and they are performing well.

Similarly, the five property KBR portfolio has extended our activities into new
locations in the UK.

We have purchased a retail investment in Hemel Hempstead town centre, let to
Centrica PLC, and the disposal of our A3 leisure investment in Battersea,
London, generated £360,000 of cash.

All of these purchases involved the issue to the vendors of new REI shares and
this strategy will continue.

Our flexible capital structure has enabled our stockbrokers, Seymour Pierce
Ellis, to satisfy investor demand with two share placings, generating £1.06
million of cash before expenses.

REI started 2006 with the purchase of a town centre office investment in West
Bromwich, which is let on a long lease to a prominent West Midlands firm of
solicitors.  The consideration paid of £1,100,000 included the issue to the
vendors of 1,000,000 new REI ordinary shares at 10 p per share. The investment
is being funded by way of a 25 year, fixed interest, institutional mortgage.

2006 offers us continuing opportunities and I shall look forward to advising you
of our further progress.

At this stage, the directors are not recommending the payment of a dividend.

Please visit our website, www.reiplc.com, where financial information and
announcements of property deals can be viewed. Continuously updated news on REI
can be viewed and Company announcements can be e-mailed directly to you.

As was the case last year, we will not be spending money on an illustrated
annual report. Photographs and much else will be available at our website.

Our active year has been made possible by the application and hard work of our
loyal staff. The constraints of tight overhead control result in staff numbers
being low and I thank them all for their considerable efforts during the year.

I shall look forward to announcing further activity, shortly.



John J Jack
Chairman


GROUP PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2005

                                                 Note        2005        2004
                                                             £000        £000

Turnover                                                    1,181         214
Administration expenses                                      (441)       (218)
Other operating income                                         35           -
                                                            ------      ------
Operating profit/(loss)                                       775          (4)
Surplus on disposal of investment property                     45           -
                                                            ------      ------
Profit/(loss) on ordinary activities before
Interest                                                      820          (4)

Net interest payable and similar charges                     (800)        (93)
                                                            ------       ------
Profit/(loss) on ordinary activities before taxation                                                       20
(97)

Tax (charge)/credit on profit/(loss)  on ordinary              (6)         30
activities
                                                             -----        -----
Profit/(loss) on ordinary activities after taxation                                                        14
(67)

Dividends                                                        -           -

Profit/(loss) retained                                          14          (67)
                                                             ------       -------
Basic earnings/(loss) per share                     2         0.03p       (0.36p)
                                                             ======       =======
Diluted earnings per share                                    0.03p
                                                             ======

There is no difference between the profit on ordinary activities and the
retained profit for the period stated above and their historical cost
equivalents.



STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

For the year ended 31 December 2005
                                                    2005    2004
                                                    £000    £000

Profit/(loss) on ordinary activities after            14     (67)
taxation
Unrealised surplus on revaluation of                 708       -
investment properties
                                                    ----    -----
Total recognised gains and losses for the            722     (67)
year
                                                    ====    =====


GROUP BALANCE SHEET AT 31 DECEMBER 2005

                                            Note     2005      2004
                                                     £000      £000
Fixed assets
Intangible assets   - goodwill                        117       148
                    - negative goodwill              (903)     (906)
                                                   -------    ------
                                                     (786)     (758)

Tangible assets                                     10,216    5,574
                                                   -------   -------
                                                     9,430    4,816

Current assets
Stock                                                9,703    9,655
Debtors                                                189      334
Investments                                          1,282        -
Cash at bank                                         1,065    2,028
                                                    -------  -------
                                                    12,239   12,017

Creditors: amounts falling due              3       (1,840)  (9,279)
within one year
                                                     ------  -------
Net current assets                                   10,399   2,738

                                                     ------  -------
Total assets less current                            19,829   7,554
liabilities
Creditors: amounts falling due
after more than one year
Convertible debt                                       (325)    (325)
Other                                               (13,695)  (3,628)
                                                    --------  -------
                                            3       (14,020)  (3,953)
                                                    --------  -------
Net assets                                            5,809    3,601
                                                    ========  =======

Capital and reserves
Called up share capital                     4           523      320
Share premium account                                 4,586    2,703
Capital redemption reserve                               45       45
Shares to be issued                                       -      600
Revaluation reserve                                     708        -
Profit and loss account                                 (53)     (67)
                                                     -------  -------
Shareholders' funds                                   5,809    3,601
                                                     =======  =======


GROUP CASH FLOW STATEMENT

For the year ended 31 December 2005

                                                    2005     2004
                                                    £000     £000

Net cash inflow from operating activities            921       84
                                                  -------  -------
Returns on investments and servicing of
finance
Interest received                                     36       21
Interest paid                                       (657)     (95)
                                                  -------  -------
Net cash outflow from returns on                    (621)     (74)
investments and servicing of finance

Taxation                                            (186)     (20)

Capital expenditure and financial
investment
Purchase of tangible fixed assets                 (4,596)  (1,205)
Sale of investment properties                      1,170        -
                                                  -------  -------
Net cash outflow from capital expenditure         (3,426)  (1,205)
and financial investment

Acquisitions and disposals
Purchase of subsidiary undertakings               (2,254)    (218)
Payment of exchange deposit for 3147398                -     (300)
Limited acquisition
Payment of amounts owed by subsidiaries to           (66)    (837)
vendors
Net cash from purchase of subsidiaries                 -      763
                                                  -------   ------
Net cash outflow from acquisitions and            (2,320)    (592)
disposals

Financing
Proceeds from issue of shares                      1,061    2,819
Expenses of issue of shares                          (37)    (256)
Receipts from borrowing                           11,207    3,000
Repayments of borrowing                           (6,305)  (1,728)
Funds deposited with lenders                      (1,263)       -
Finance lease                                          7        -
Net cash inflow from financing                     4,670    3,835
                                                  -------  -------
(Decrease)/increase in cash                         (962)   2,028
                                                  =======  =======


NOTES TO THE PRELIMINARY ANNOUNCEMENT
For the year ended 31 December 2005

1. Basis of preparation

The preliminary results of the group set out in this preliminary announcement
do not constitute statutory accounts as defined in Section 240 of the
Companies Act 1985.

The financial information for the year ended 31 December 2005 has been
extracted from the group's statutory financial statements to that date, upon
which the auditors' opinion is unqualified and does not include any statement
under Section 237 of the Companies Act 1985. The statutory financial
statements have not yet been filed with the Registrar of Companies.

The financial information has been prepared under the historical cost
convention as modified by the revaluation of investment properties and in
accordance with applicable United Kingdom accounting standards, and is
consistent with the policies set out in the group's statutory accounts for the
period ended 31 December 2004.

2. Earnings per share

The calculation of earnings per share is based on the profit retained for the
year and on the weighted average number of shares in issue during the year.  The
calculation of diluted earnings per share is based on the basic earnings per
share adjusted for the issue of shares on the assumed conversion of the
convertible loan notes.

In accordance with FRS 14, the Company has not disclosed a diluted loss per
share figure for the period ended 31 December 2004 as the calculation results in
a decrease in the net loss per share.

Reconciliations of the earnings/(loss) and the weighted average numbers of
shares used in the calculations are set out below.


                                   2005                                   2004
                               Weighted                               Weighted
                                average    Earnings                    average        Loss
                  Earnings       number   per share      Earnings       number   per share
                      £000    of shares      amount          £000    of shares      amount

Basic
earnings/(loss)
per share              14    44,477,097      0.03p           (67)   18,927,814     (0.36p)
                                                          =======   ==========     =======
Dilutive effect
of conversion
of convertible
loan notes              -     2,954,545         -
                   -------   ----------     ------
Diluted earnings
per share              14    47,431,642      0.03p
                   =======   ==========     ======


3. Financial instruments

Maturity of financial liabilities

The group financial liabilities analysis at 31 December 2005 was as follows:



                                      Group            Group
                                       2005             2004
                                       £000                £000

In less than one year:
Bank borrowings                       1,127            6,272
In more than one year but
less than two years:
Bank borrowings                         382              176
In more than two years but
less than five years:
Bank borrowings                       1,172              557
In more than five years:
Bank borrowings                      12,377            2,956
                                     ------           -------
                                     15,058            9,961
Deferred arrangement costs             (236)             (61)
                                     -------          -------
                                     14,822            9,900
                                     =======          =======

Borrowing facilities

The group has no undrawn committed borrowing facilities at 31 December 2005.


4. Share capital

                                               2005            2004        2005      2004
                                             Number          Number        £000      £000
                                          of shares       of shares

Authorised:
Ordinary shares of 1p each            1,000,000,000    1,000,000,000     10,000    10,000
                                      =============    =============     ======    ======
Allotted, called up and fully paid
Ordinary shares of 1p each               52,316,197       31,984,615        523       320
                                      =============    =============     ======    ======

The excess of the total consideration for shares issued of £2,123,000 over the nominal value of £203,000 has been
credited to the share premium account.

On 7 January 2005, 5,853,658 ordinary shares of 1p each were issued for £600,000 as part consideration for the
acquisition of the share capital of 3147398 Limited.

On 9 March 2005, 1,450,980 ordinary shares of 1p each were issued for £185,000 as part consideration for the acquisition
of 158 The Marlowes, Hemel Hempstead.

On 18 March 2005, 98,039 ordinary shares of 1p each were issued for £12,500 as part consideration for services in
connection with the acquisition of 3147398 Limited.

On 18 March 2005, 42,549 ordinary shares of 1p each were issued for £5,425 as part consideration for services in
connection with the acquisition of 158 The Marlowes, Hemel Hempstead.

On 27 May 2005, 1,999,400 ordinary shares of 1p each were issued for £214,936 as part consideration for the acquisition
of the KBR portfolio of five commercial properties in Newport, Portsmouth, Wakefield, Ilfracombe and Manchester.

On 4 July 2005, 6,000,000 ordinary shares of 1p each were issued for £600,000 in cash.

On 1 August 2005, 230,093 ordinary shares of 1p each were issued for £24,735 as part deferred consideration in
connection with the acquisition of 19-21 Kirkgate, Wakefield.

On 4 August 2005, 156,863 ordinary shares of 1p each were issued for £20,000 as consideration for services in connection
with the acquisition of the KBR portfolio.

On 29 September 2005, 4,500,000 ordinary shares of 1p each were issued for £461,250 in cash.

5. Post balance sheet events

On 9 February 2006, the Company exchanged unconditional contracts to purchase a freehold property in West Bromwich for a
consideration of £1,100,000, to be satisfied as to £1,000,000 in cash and £100,000 by the issue of 1,000,000 ordinary
shares of 1p on completion.

6. Copies of announcement

Copies of this announcement are available from the Company's business premises at REI House, Bury Lane, Rickmansworth,
Hertfordshire WD3 1ED.


28 February 2006