Regional REIT Limited Edison issues initiation on Regional REIT
July 29 2016 - 6:25AM
RNS Non-Regulatory
TIDMRGL
Regional REIT Limited
29 July 2016
London, UK, 29 July 2016
Edison issues initiation on Regional REIT (RGL)
Regional REIT (RGL) provides a focused exposure to UK regional
commercial real estate, predominantly secondary assets. The
regional property recovery began later than in London and we
believe RGL offers the potential for above average late-cycle
income and capital growth. It has an established and diversified
high-yielding portfolio that already supports the attractive 8.1%
prospective yield. RGL's focus on underexploited properties
provides additional internally driven potential from asset
management initiatives, with potential for accretive asset growth.
Brexit has raised uncertainty about the pace of UK economic growth,
investor appetite and future occupier demand, but particularly for
City of London offices, while sterling's devaluation may provide a
boost to regionally focused industry. Meanwhile, interest rates
show no sign of increasing.
RGL's prospective dividend yield of 8.1% is the highest among UK
REIT sector constituents and it is also fully covered. As we show
in the financial section on page 11, we believe there is scope for
accretive acquisition activity to further increase DPS above our
forecasts. The shares are at a c 13% discount to our 2016e EPRA
NAV, which assumes no valuation yield tightening.
Click here to view the full report
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investment advice. Edison's reports are not solicitations to buy or
sell any securities.
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