TIDMRGL
RNS Number : 2220B
Regional REIT Limited
29 January 2020
29 January 2020
REGIONAL REIT Limited
("Regional REIT", the "Group" or the "Company")
2019 Portfolio Valuation Increase
and
Positive 2020 Asset Management Update
Regional REIT (LSE: RGL), the regional real estate investment
specialist focused on building a diverse portfolio of income
producing regional UK core and core plus office and industrial
property assets, is pleased to announce the valuation of the
Group's 2019 property portfolio, and asset management update.
As at 31 December 2019 the portfolio valuation increased by 9.7%
from the prior year. The like-for-like value of the Group's core
office and industrial segment (93.6% by value) also increased in
2019 by 1.4%, after adjusting for capital expenditure and disposals
during the period. Overall, on a like-for-like basis it was broadly
unchanged with a 0.1% decrease. The overall valuation was GBP787.9m
(31 December 2018: GBP718.4m), consisting of 160 properties (31
December 2018: 150), an increase of 7% and 904 tenants (31 December
2018: 874) an increase of 3%. These increases were achieved
following the deployment in the period of the successful GBP62.5m
equity raise.
The Group's net loan-to-value ratio was c.38.9% as at 31
December 2019 (31 December 2018: 38.3%).
2019 Calendar Year - Highlights and Outperformance
-- Total shareholder return* during the year of 32.5%
significantly outperforming the FTSE EPRA NAREIT UK Index which was
at 30.6%
-- Dividends paid of 8.20p, a dividend yield of 7.2%, based on
the price of 113.2pps as at 31 December 2019
-- The successful capital raise of GBP62.5m in July, was
followed by the acquisition of 11 attractive office assets for
GBP63.9m, with a combined net initial yield of 8.7%, and transacted
on target by the end of December 2019
*Source: Datastream: Includes dividends reinvested
2020 Asset Management Update - Continued positive momentum
Disposals
-- Dysart Way, Leicester: The sale of a petrol filling station
on Dysart Way, Leicester, for GBP1.8m, was 38.5% above the previous
valuation of the asset, as at 30 June 2019. This follows the
re-gearing of the asset's tenancy agreement to Rontec Service
Station 1A Limited on a 20-year lease from October. The sale
represents a net initial yield of 5.5%.
-- St. Brendan's Court, Bristow Broadway, Avonmouth, Bristol:
This office disposal for GBP3.0m, represents a 7.7% uplift on 30
June 2019 valuation, which follows the successful execution of its
asset management plan to remove the June 2020 break option, with
Highways England Company Limited remaining until at least June
2025.
Lettings Update
-- Power House, Ashby Business Park, Ashby-de-la-Zouch: A
successful asset management initiative by London & Scottish
Property Asset Management on behalf of Regional REIT has seen
Alstom Power Limited surrender their lease with a back to back
letting to Brush Electrical Machines Limited on a new 10 year lease
at an improved annual rent of GBP300,000 (GBP14.09/sq. ft.)
representing an improvement of 8.4% in the previous rent and is
12.7% above the ERV of the asset as at June 2019.
-- Unit 130, Heathall Industrial Estate, Dumfries: Plastic
Recycling Technology Limited have taken a 10 year lease of this
industrial unit of 59,737 sq. ft. at a rent of GBP125,000 per
annum. This lease allows for three yearly reviews with the tenant
having the ability to break on the fifth anniversary.
-- Trident Retail Park, Westley Street, Birmingham: City
Electrical Factors Limited have taken a 20 year lease of this
industrial unit of 4,931 sq. ft. at a rent of GBP43,100 per annum
(GBP8.74/sq. ft.).
Stephen Inglis, CEO of London and Scottish Property Investment
Management, the Asset Manager, commented:
"We are delighted with the positive progress achieved during
2019, continuing our risk averse approach, whereby we have
continued to exploit the huge potential of our assets and increase
the number of tenants, properties and geographic spread and thereby
increasing the diversity of our income and assets.
Significantly, Regional REIT outperformed the FTSE EPRA NAREIT
UK Index in 2019, with our core office and industrial portfolio
increasing by 1.4% on a like for like basis.
Our asset management initiatives and strong letting performance
were maintained. We continued with our strategic acquisitions
resulting in a 9.7% increase in the 2019 portfolio valuation.
Excluding retail, which only represents 5.0% of our portfolio, our
like for like valuation increases were strong, and are likely to
increase still further, due to the uplift the markets have
witnessed following the general election result.
We expect industrial assets to continue to perform well and we
also expect a substantial increase in enquiries during 2020/2021
for regional offices, given the positive supply/demand dynamics,
attractive yields and positive rental growth story. We expect this
to drive strong returns in this sector.
Our portfolio of quality office and logistics assets in key
economic centres of the UK outside of London, is ideally positioned
to benefit from increasing interest and commitments in investment
in the regions by the new Government, and we remain confident of
securing further attractive investment opportunities.
We look forward to updating our shareholders further as we
continue our programme of value accretive asset management
initiatives across our national portfolio."
- ENDS -
Enquiries:
Regional REIT Limited
Toscafund Asset Management Tel: +44 (0) 20 7845
6100
Investment Manager to the Group
Adam Dickinson, Investor Relations, Regional
REIT Limited
London & Scottish Property Investment Management Tel: +44 (0) 141
248 4155
Asset Manager to the Group
Stephen Inglis
Buchanan Communications Tel: +44 (0) 20 7466
5000
Financial PR regional@buchanan.uk.com
Charles Ryland / Victoria Hayns / Henry
Wilson
About Regional REIT
Regional REIT Limited ("Regional REIT" or the "Company") and its
subsidiaries (the "Group") is a United Kingdom ("UK") based real
estate investment trust that launched in November 2015. It is
managed by London & Scottish Property Investment Management
Limited, the Asset Manager, and Toscafund Asset Management LLP, the
Investment Manager.
Regional REIT's commercial property portfolio is comprised
wholly of income producing UK assets and comprises, predominantly,
offices and industrial units located in the regional centres
outside of the M25 motorway. The portfolio is highly diversified,
with 149 properties, 1,178 units and 828 tenants as at 30 June
2019, with a valuation of GBP721.7m.
Regional REIT pursues its investment objective by investing in,
actively managing and disposing of regional core and core plus
property assets. It aims to deliver an attractive total return to
its Shareholders, targeting greater than 10% per annum, with a
strong focus on income supported by additional capital growth
prospects.
The Company's shares were admitted to the Official List of the
UK's Financial Conduct Authority and to trading on the London Stock
Exchange on 6 November 2015. For more information, please visit the
Group's website at www.regionalreit.com.
Cautionary Statement
This document has been prepared solely to provide additional
information to Shareholders to assess the Group's performance in
relation to its operations and growth potential. The document
should not be relied upon by any other party or for any other
reason. Any forward looking statements made in this document are
done so by the Directors in good faith based on the information
available to them up to the time of their approval of this
document. However, such statements should be treated with caution
due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking
information.
ESMA Legal Entity Identifier ("LEI"): (549300D8G4NKLRIKBX73)
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END
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