Regional REIT Limited Acquisition and portfolio update (4371O)
February 09 2016 - 2:00AM
UK Regulatory
TIDMRGL
RNS Number : 4371O
Regional REIT Limited
09 February 2016
9 February 2016
Regional REIT Limited
Acquisition of GBP80 million of commercial property assets and
portfolio update
Regional REIT Limited (LSE: RGL) ("Regional REIT" or the
"Company"), the recently listed regional commercial property
company, today announces that it has exchanged contracts to buy the
Rainbow Portfolio for GBP80m from Northwood Investors.
The portfolio produces a net yield of 8.2% at a capital rate of
only GBP70 per sq.ft., well below replacement cost.
The portfolio comprises 12 assets, five offices and seven
industrial sites totalling 1.15m sq.ft. and geographically spread
throughout the UK in major regional urban areas including Bristol,
Manchester, Cardiff, Sheffield and the West Midlands. Tenants
include Clerical Medical, Equitable Life, Invensys, Vanguard
Logistics, Schenker, Veolia and FMC Technologies.
Approximately 45% of the income is derived from the industrial
assets with offices accounting for the remaining 55%. 86% of the
income is from assets in England (North East 17%, South West 14%,
South East 49%), 8% in Scotland and 6% in Wales.
This acquisition further bolsters Regional REIT's assets and has
good rental income, will be earnings enhancing and offers strong
capital growth prospects through the implementation of the
Company's intensive asset management initiatives.
The Company also announces a number of sales:
-- Churchill Plaza, Basingstoke sold for GBP12m, the property
having been acquired in August 2014 for GBP7.5m. The sale price
represents a 52% increase on the June 2015 value and a 10% increase
on the December 2015 valuation.
-- Five retail assets sold for a total consideration of GBP4.8m,
marginally ahead of the December 2015 valuation.
-- An office building in Kirkcaldy has also been sold for
GBP0.9m, 50% ahead of the June 2015 valuation and in line with the
December 2015 valuation, and an office building in Glasgow sold
just before the December 2015 valuation for GBP1.5m, in line with
valuation.
These sales are consistent with the Company's policy of selling
where real value has been created and reducing Regional REIT's
risk, specifically to development and retail properties where good
value can be achieved.
Following completion of the transactions announced today the
investment portfolio will amount to approximately GBP511m (31
December 2015: GBP405.4m), and the Company expects its net
loan-to-value ratio to increase to approximately 41%.
Commenting, Stephen Inglis, Chief Investment Officer and
Property Director of the Asset Manager, said:
"The acquisition of the Rainbow portfolio is another step in the
evolution of Regional REIT taking assets to over GBP500m. Since
listing in November 2015 we have acquired GBP120.5m of assets,
offering a good balance of income and asset management
opportunities. We remain acquisitive as we continue to re-balance
the portfolio and re-invest proceeds from the sale of non-core
holdings in quality income and capital enhancing assets to create
further value for our investors."
- ENDS -
Enquiries:
Regional REIT Limited
Press enquiries through Headland
London & Scottish Investments Tel: +44 (0) 141 248 4155
Asset Manager to the Company
Stephen Inglis
Derek McDonald
Toscafund Asset Management Tel: +44 (0) 20 7845 6100
Investment Manager to the Company
Nigel Gliksten
Headland Tel: +44 (0)20 7367 5222
Financial PR
Francesca Tuckett
About Regional REIT
Regional REIT Limited (LSE: RGL) is a London Stock Exchange Main
Market listed specialist real estate investment company focused on
office and industrial property interests in the principal regional
locations of the United Kingdom outside of the Greater London
area.
Regional REIT is managed by London & Scottish Investments
and Toscafund Asset Management, and was formed by the merger of two
existing funds created by the managers to achieve a differentiated
play on recovery in UK regional property to deliver an attractive
total return to shareholders, with a strong focus on income.
The Company's investment portfolio, as at 31 December 2015, is
spread across more than 130 regional properties consisting of
around 720 individual units, with over 500 tenants. As at 31
December 2015, the investment portfolio had a value of GBP405.4m
and an overall income yield of 8.3%. The weighted average unexpired
lease term is just under six years.
The Company's shares were admitted to the Main Market of the
London Stock Exchange on 6 November 2015. For more information,
please visit www.regionalreit.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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