TIDMRGL
RNS Number : 1353V
Regional REIT Limited
05 August 2020
5 August 2020
REGIONAL REIT Limited
("Regional REIT", the "Group" or the "Company")
Positive Trading Update
and
Appointment of Joint Broker
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, today announces its Group property portfolio
valuation as at 30 June 2020 which again demonstrates the strength
of the portfolio in the face of Covid-19, and an asset management
update.
Additionally, the Group announces that Panmure Gordon (UK) Ltd.
has been appointed as joint corporate broker and joint financial
adviser, alongside Peel Hunt, with immediate effect.
30 June 2020 valuation - Highly diversified portfolio
The overall valuation was GBP742.3m* (31 December 2019:
GBP787.9m), only a 3.7% portfolio decrease from 31 December 2019.
Very encouragingly, after adjusting for capital expenditure of
GBP4.5m and disposals of GBP15.1m during the period, the portfolio
only decreased 4.3% on a like-for-like basis from the 31 December
2019 valuation, and the Group's core office and industrial segment
(94.2% by value) only decreased by 3.6% on a like-for-like
basis.
The highly diversified and extensive portfolio, the
diversification of which has long been an integral part of the
Group's strategy to mitigate any risk, contains 151 properties (31
December 2019: 160).
The Group's net loan-to-value ratio is below the Company's
stated target of 40% at c.39.7% as at 30 June 2020 (31 December
2019: 38.9%).
Rent Collection Update - Remains strong in the current economic
climate
As at 31 July 2020 Q1 rent collection has continued to increase
to c. 98%. This comprises of 96% of Q1 rent paid and agreed
collections with occupiers amounting to 2%, which is ahead of
management expectations at this point in time given the current
backdrop. We anticipate collecting additional Q1 rent in due
course.
Further to the 27 July 2020 Q2 rent collection announcement,
further good progress has been achieved with an increase to c. 93%.
This comprises of 84% of Q2 rent paid, 4% who have agreed to pay
monthly and collection plans agreed with occupiers amounting to a
further 5%. The Group anticipates collecting the vast majority of
the balance of outstanding Q2 rent in due course as usual.
*As at the valuation date, the Cushman & Wakefield portfolio
valuation is subject to "material valuation uncertainty" as set out
in VPS 3 and VPGA 10 of the RICS Red Book Valuation - Global
Standards, due to the unprecedented circumstances surrounding
COVID-19. The industrial and logistics properties are not subject
to material valuation uncertainty within the Cushman &
Wakefield portfolio valuation as at the valuation date. This set of
circumstances is not unique to the Company and the material
valuation uncertainty reported within the Cushman & Wakefield
portfolio valuation is in line with the RICS material valuation
uncertainty recommendation to all RICS registered property valuers
as at the valuation date.
Asset Management Update - Further Good Progress Achieved
The Company's Asset Manager, London & Scottish Property
Investment Management, has continued to successfully manage the
assets proactively through this period, and the Company provides
the following update:
9 Portland Street, Manchester: A new rent of GBP251,679
(GBP21.50/sq.ft.) with Darwin Loan Solutions has been agreed,
representing an uplift of 59.7% against the previous rent.
Leo House, Wallington: A new rental of GBP132,000
(GBP17.00/sq.ft.) with Crimestoppers Trust, an uplift of 19.7%
against the previous rent.
30-34 Hounds Gate, Nottingham: A new letting agreement has been
signed with Ensek Ltd. for a 10-year lease (subject to break option
at year five) at a rent of GBP270,865 (GBP17.50/ sq. ft.).
Ashby Business Park, Ashby De La Zouch : An agreement for lease
has been signed with Ceva Logistics Ltd. to renew an existing lease
at a rent of GBP405,132 (GBP13.17/ sq. ft.) an uplift of 13.5%
against the previous rent.
Templeton Business Centre, Glasgow: An agreement has been signed
with the Trustees of Mental Health Network (Greater Glasgow) to
extend the lease for four years until 2024 at a rent of GBP13,768
(GBP8.00/sq. ft.).
Minton Place, Station Road, Swindon: A new rent of GBP20,790
(GBP13.50/sq.ft.) has been agreed with Optical Express Ltd until
April 2025.
Milburn House, Dean Street, Newcastle: Two leases have been
signed with Newcastle NE1 Ltd. at a combined rent of GBP25,503
(GBP9.26/sq. ft.) an uplift of 21.7% against the previous rent.
Stephen Inglis, Chief Executive Officer of London & Scottish
Property Investment Management Limited, the Asset Manager
commented:
"Regional REIT is performing well and our highly diversified
portfolio continues to demonstrate its resilience. In July, we
announced positive rent collection for Q2 which has continued to
grow and is now at 93%. With Q1 now at 98% we continue to
demonstrate the effectiveness of the unique management platform
that has been developed. Given the current economic and political
backdrop, these are exceptional collection rates and the management
team continues to work with our occupiers on the outstanding sums
due. We will be announcing further updates in due course.
On a general note I would comment that demand remains strong for
the Group's core office and industrial properties with regional
office and industrial availability reported as being at record low
levels. This shortage, partly caused by a lack of new product
coming to market, coupled with some major organisations considering
moving to a "hub and spoke" model, comprising a large city centre
presence supported by smaller multiple regional offices, leaves
Regional REIT very well positioned for the long term.
We are now increasingly confident that our consistently strong
performance during this difficult period, resulting in sector
leading income maintenance and generation, will see the portfolio
valuation (valuers are currently adjusting down based largely on
sentiment rather than transactional evidence) rewarded in the
long-term as we return to a more normal operating investment
environment.
I would also like to take this opportunity to welcome Panmure
Gordon as Regional REIT's appointed joint corporate broker."
- 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
Peel Hunt Tel: +44 (0)20 7418
8900
Joint Corporate Broker and Financial Adviser
Capel Irwin, Carl Gough and Harry Nicholas
(Corporate)
Panmure Gordon (UK) Limited Tel: +44 (0)20 7886 2500
Joint Corporate Broker and Financial Adviser
Chloe Ponsonby (Corporate Broking) / Sapna
Shah (Corporate Finance)
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 151 properties, as at 30 June 2020, with a valuation of
GBP742.3m.
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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