Regional REIT Ltd – Q1 2026 Trading Update & Dividend Declaration

REGIONAL REIT Limited

Q1 2026 Trading Update & Dividend Declaration

Regional REIT Limited (LSE: RGL), the regional commercial property specialist, announces the following trading update for the period from 1 January 2026 to 31 March 2026 and a dividend declaration for the first quarter of 2025 of 2.0 pence per share.

Stephen Inglis, Head of ESR Europe LSPIM Ltd., Investment Adviser commented:

“Market conditions remain challenging, but we continue to deliver on our repositioning strategy, executing targeted disposals to strengthen the balance sheet while further improving the quality of our portfolio via our capex programme.

During Q1 2026, we undertook six sales generating proceeds of £12.6m, with a further three disposals totalling £2.5m completed post quarter end, all were close to their 31 December 2025 valuations and in aggregate c. 90% vacant. These disposals were largely from the sales segment of the portfolio where refurbishment would not have generated sufficient returns on the capital deployed. The LTV was further reduced at the end of Q1 2026 to 39.4% (2025: 40.4%).

The company completed 26 new lettings and renewals in the quarter, adding £1.1m to the rent roll. These lettings were secured at 9.8% above ERV, building on the 9.0% above ERV delivered in Q4 2025, underscoring rental growth created by continued demand for well-located, high-quality space and the effectiveness of our active asset improvement plan.

The increase in rents being achieved is indicative of our view in respect of the structural supply and demand imbalance in the provision of high quality and well-located regional office space that conform to EPC A and B, and this will become increasingly evident.

Our portfolio is currently well positioned with 61.1% already EPC B or better. Grade A vacancy across key UK regional markets remains tight at c.3-5%, with a constrained development pipeline and best‑in‑class space accounting for the majority of leasing activity*. This dynamic continues to support a broader ‘flight to quality’ and underpins our medium-term outlook.”

* Knight Frank Office Market Annual Review 2025

Portfolio update

·    110 properties, 1,075 units and 653 tenants, totalling c.£543.1m** of gross property assets value (31 December 2025: £555.2m)

·    26 lettings to new tenants and renewals/regears in the period across 113,885 sq ft delivering £1.1m of annualised rental income, an uplift of 9.8% against ERV

·    Rent roll of £49.8m (31 December 2025: £50.4m); ERV £75.0m (31 December 2025: £77.0m)

·    EPRA Occupancy for the Core segment portfolio 87.0% (31 December 2025: 86.5%) – reflecting stable Core occupancy

·    EPRA Occupancy (by ERV) 75.5% (31 December 2025: 75.9%); 31 March 2026 like-for-like 75.6% versus 31 March 2025 78.9%

·    Total rent collection for the quarter as at 15 May 2026 98.5% compared with 97.9% for the equivalent period in 2025

·    Post quarter end a further 7 new lettings and renewals/regears have been achieved across 50,828 sq ft providing £0.9m of annualised rental income, at 3.0% above ERV

Maintaining balance sheet discipline while pursuing updated strategy

·    Disposals in the period amounted to £12.6m (before costs) (2 properties and 4-part sales), reflecting a net initial yield of 4.0%

o Post quarter end, a further 1 disposal and 2-part sales completed totalling £2.5m (before costs).

o The current disposal programme comprises of 36 sales totalling c. £89.5m, though not all are expected to complete in 2026

·    Net capital expenditure £0.8m (Full year 2025: £11.8m) – continued focus upon the capital expenditure programme

·    Cash and cash equivalent balances £40.3m (31 December 2025: £37.7m)

·    Net loan-to-value ratio reduced to c. 39.4%^** (31 December 2025: 40.4%)

·    Gross borrowings £254.5m (31 December 2025: £266.2m)

·    Group cost of debt (incl. hedging) 3.4% pa (31 December 2025: 3.3% pa)

**Gross property assets value based upon Colliers International Property Consultants Ltd. valuations as at 31 December 2025, adjusted for subsequent acquisitions, disposals and capital expenditure in the period.

Q1 2026 Dividend Declaration

The Company declares that it will pay a dividend of 2.0 pence per share (“pps”) for the period 1 January 2026 to 31 March 2026, (1 January 2025 to 31 March 2025: 2.50pps). The entire dividend will be paid as a REIT property income distribution (“PID”).

Shareholders have the option to invest their dividend in a Dividend Reinvestment Plan (“DRIP”), and more details can be found on the Company’s website.

The key dates relating to this dividend are:

Ex-dividend date	28 May 2026
Record date	29 May 2026
Last day for DRIP election	19 June 2026
Payment date	10 July 2026

The level of future payments of dividends will be determined by the Board having regard to, among other factors, the financial position and performance of the Group at the relevant time, UK REIT requirements, the interest of shareholders and the long-term future of the Company.

Forthcoming Events

19 May 2026	Annual General Meeting
8 September 2026	Interim Results Announcement
12 November 2026	Q3 2026 Trading Update

Note: All dates are provisional and subject to change.

Too Good to Be True? No Way. This 9.4% Dividend Is 15% Off

Michael Foster, Investment Strategist
Updated: May 18, 2026

Stocks are up, and the media is finally coming around to what we’ve been saying at my CEF Insider service for months now.

Last week, The Economist wrote a breathless piece about how the US economy is firing on all cylinders—and fears that a recession will sideswipe stocks are just plain wrong.

We’re happy to see a leading publication like The Economist come around on this point, of course. Even better, we now we have the data to prove it:

Across the board, the S&P 500 saw a 27.7% earnings gain in the first quarter. That’s shocking when, historically, profits have risen in the 5% to 8% range.

So it should come as no surprise that the S&P 500 benchmark  State Street SPDR S&P 500 ETF Trust (SPY) has gained nearly 9% this year, as of this writing. It should also be no surprise that the tech-focused NASDAQ, as tracked by the Invesco QQQ Trust (QQQ), is up around 15%. The numbers tech firms are putting up are nothing short of jaw-dropping:

Take IT, where earnings are up 50% from a year ago, while sales (shown in the chart above) have spiked 29%. Communication services, which includes companies like Alphabet (GOOGL) and Meta Platforms (META), has also seen profits pop 48.8% on 15% higher revenue.

These big gains should put an end to bubble fears: They clearly show that the market’s strength is backed by profit and sales growth. And that’s before we talk about stock valuations, which give us one of the clearest indications this market is not in a bubble:

Earnings Pop, Valuations Drop

Here are the price-to-earnings (P/E) ratios of three of the biggest public companies in the AI world over the last five years: NVIDIA (NVDA), in purple; Amazon.com (AMZN), in blue; and Microsoft (MSFT), in orange.

While these stocks have what might be considered “high” P/E ratios compared to the market average, those ratios aren’t skyrocketing. Indeed, they’re falling as earnings rise and investors take a more rational view of these companies.

In fact, the chart above shows us that the “bubble” really occurred in 2023, and it didn’t pop. It slowly deflated, thanks to earnings rising, rather than prices falling.

Too Late? No Way. This Run Is Just Getting Started

Of course, looking at stocks’ gains lately, you might feel it’s too late to buy. That’s understandable. But let’s take a closer look at what’s happened in the last five years, with SPY again in purple and QQQ in orange:

Big Gains, Most of Them Recent

The recent jump in stocks is partly due to fresh AI-driven productivity gains—that’s the spike on the right side of the chart. But if we strip out that pop, what we really see is a rational recovery from the irrational 2022 selloff, not a bubble.

The 9.4%-paying closed-end fund (CEF) we’re going to talk about next is the perfect way to take advantage of this situation. It comes our way at a discount that should go a long way toward easing any bubble fears you may have. But there’s more to this high-yielding investment vehicle than just that.

The 9.4% Dividend Play

I’m talking about a CEF called the Neuberger Berman Next Generation Connectivity Fund (NBXG).

NBXG, as the name suggests, holds tech stocks. Its top holdings include Meta, Amazon, Microsoft, Taiwan Semiconductor (TSM) and NVIDIA. That tech lean has resulted in a triple-digit total return in the last three years:

NBXG’s Strong 3-Year Run

This is a much better proposition than buying an index fund like SPY, which yields around 1% now. NBXG, with its 9.4% payout, cuts the need to sell into a downturn if you need to tap your investment for cash. That’s our first reason why we see this fund as attractive now, even if you’re worried you’re late to the party. The second reason is more important, and more subtle.

NBXG Gets Cheaper—Even as It Surges

As we saw with individual tech stocks above, NBXG is getting cheaper, going by its discount to net asset value (NAV—the key valuation measure for CEFs) while it delivers bigger returns. Except here, the effect is more pronounced.

With a 15% discount, we’re getting NBXG’s portfolio for 85 cents on the dollar. That gives us more upside potential and more downside insulation if the market hits a speed bump. It also means the fund’s 9.4% dividend is very sustainable (and positioned to grow).

Here’s why: As I just mentioned, NBXG yields 9.4%. That’s calculated on the CEF’s per-share market price. But remember that this price is discounted 15% from NBXG’s NAV, or its portfolio value.

If you calculate the fund’s yield on NAV, you get a much lower number: around 8%. This means management needs to earn 8%—a much lower bar than 9.4%—to keep the payout steady.

NBXG’s return in the last three years is far more than enough to do that. In fact, its return is so large that it puts another dividend hike on the table (after management already raised the payout 20% with the October 2025 payment).

That potential payout hike caps off a solid package: An investor buying NBXG today gets a portfolio of stocks with rising sales and profits, held in a fund that growth “translates” that into a 9.4% dividend (paid monthly). All of this comes at a discount, to boot.

Company Name	Place change
1	Royal London Short Term Money Mkt Y Acc
2	Scottish Mortgage Ord SMT0.00%
3	Polar Capital Technology Ord PCT1.86%
4	3i Group Ord III5.79%
5	Vanguard FTSE Global All Cp Idx £ Acc
6	Artemis Global Income I Acc
7	HSBC FTSE All-World Index C Acc
8	Vanguard LifeStrategy 80% Equity A Acc
9	L&G Global Technology Index I Acc
10	Seraphim Space Investment Trust Ord SSIT2.88%

Investors are liking the look of troubled private equity behemoth 3i Group Ord 

III after a fresh sell-off, propelling it back into our bestseller list.

The trust’s shares have been on a downward trajectory since late last year thanks to softening sales growth and US expansion plans for its main holding, discount retailer Action.

A trading update last week confirmed continued problems in Action’s main market France and more widely, prompting a fresh sell-off. That lower price, and the trust’s hefty discount, continues to draw in buyers.

We otherwise see a huge amount of continuity in the latest bestseller list.

The top three names, Royal London Short Term Money Mkt Y Acc, Scottish Mortgage Ord  SMT and Polar Capital Technology Ord PCT maintain their positions from last week, while Artemis Global Income I Acc stays in the sixth spot.

A handful of diversified tracker funds and the L&G Global Technology Index I Acc remain in the top 10. Seraphim Space Investment Trust Ord  SSIT

 also stays in the list but drops all the way down to the bottom, while renewables play Greencoat UK Wind drifts out to 11th place.

Funds and trusts section written by Dave Baxter, senior fund content specialist at ii.

Thursday 21 May

JPMorgan Global Growth & Income PLC ex-dividend date
JPMorgan UK Small Cap Growth & Income PLC ex-dividend date
Murray Income Trust PLC ex-dividend date
Scottish American Investment Co PLC ex-dividend date
Town Centre Securities PLC ex-dividend date
Tritax Big Box REIT PLC ex-dividend date

A booked ‘profit’ of £350 with FGEN, remembering a profit is not a profit until the underlying position is sold.

Cash to re-invest £689.00

I have bought 55 shares in XSTR Xtrackers II GBP Overnight Rate Swap UCITS ETF (XSTR) Share Price for £9,981.00

Future dividends as they are earned will now be re-invested into higher yielding shares. XSTR’s yield is around 4%, it’s a hold for when the market turns down so there is cash to buy a couple of coveted Trusts.

His first book Security Analysis, which he co-authored with David Dodd, was published in 1934. In Security Analysis, he proposed a clear definition of investment that was distinguished from what he deemed speculation. It read, “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”

Warren Buffett describes The Intelligent Investor (1949) as “the best book about investing ever written.”^[6] Graham exhorted the stock market participant to first draw a fundamental distinction between investment and speculation.

Graham wrote that the owner of stocks should regard them first and foremost as conferring part ownership in a business. With that perspective in mind, the stock owner should be unconcerned with erratic fluctuations in stock prices, since in the short term the stock market behaves like a voting machine, but in the long term it acts like a weighing machine (i.e. its true value will be reflected in its stock price in the long run).

Graham distinguished between defensive and enterprising investors. The defensive investor seeks to minimize the time and effort — and, above all, the worry — of investing. So the defensive investor seldom trades, renouncing the attempt to forecast market behavior and security prices, instead holding for the long term. The enterprising investor, in contrast, is one who has more time, interest, and can devote the effort to original analysis seeking exceptional buys in the market.  Graham recommended that enterprising investors devote substantial time and effort to analyze the financial state of companies. When a company is available at a discount to its intrinsic value, a “margin of safety” exists, which makes it suitable for investment.

Graham wrote that “investment is most intelligent when it is most businesslike.” By that he meant that investing, like running a business, is a systematic effort to maximize the likelihood of earning a reasonable return and to minimize the probability of suffering a severe loss. Thinking for yourself is vital: “You are neither right nor wrong because the crowd disagrees with you,” Graham wrote. “You are right because your data and reasoning are right.”

Graham’s favorite metaphor is that of Mr. Market, a fellow who turns up every day at the investor’s door offering to buy or sell his shares at a different price. Usually, the price quoted by Mr. Market seems plausible, but occasionally it is ridiculous. The investor is free either to agree with his quoted price and trade with him, or to ignore him completely. Mr. Market doesn’t mind this, and will be back the following day to quote another price. The investor should not regard the whims of Mr. Market as determining the value of the shares that the investor owns. The investor should profit from market folly rather than participate in it. The investor is best off concentrating on how the underlying businesses perform, not on how Mr. Market behaves.

I’ve sold TRIG for a profit of £476.43. Total profit from TRIG £1,6417.

I may buyback the share, especially if Mr. Market gives me the chance.

Features

An income story that’s built to last

Quality real estate provides income resilience.

David Brenchley

Updated 17 May 2026

Disclaimer

This is a non-independent marketing communication commissioned by Schroder Investment Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

The buildings blocks of a well-diversified and balanced portfolio have often consisted of equities and bonds, split according to one’s risk tolerance but, mostly 60/40 in favour of stocks, to the detriment of many other diversifiers.

This make-up remains the gold standard for many, but some have started to question its efficacy after bonds failed to play their customary safe-haven role through 2022’s inflationary spike.

There are certainly merits to it: it’s simple and cost-effective to both put together and to understand, yet, in our view, it missed some key asset classes that can help to add both diversification, capital growth and income generation, particularly for SIPP investors looking to draw down a natural income.

For income seekers, we certainly think that there’s a place for real estate investment trusts (REITs) within portfolios – provided the assets owned by your chosen REIT are high quality and biased towards higher-growth sectors. For example, Schroder Real Estate (SREI) has a 65% allocation to multi-let industrial estates and retail warehouses.

Not only do REITs bring tangible, real assets into your portfolio’s fold, the primary attraction for investing in property is the income produced. Today, that income eclipses the yields available in government bonds, and there is a strong case for further growth in that income over time, in contrast to fixed income investments.

In addition, while the capital gains story in real estate is less pronounced than its income, current valuation levels provide scope for a modest re-rating – something that can generally not be said for bonds.

We think that the investment case for UK REITs looks as attractive as it has for a while now. There are a few reasons for this, which we’ll detail below.

Resilient rents

I’m sure you’ll know the score when it comes to investing in property, be that commercial or residential: you buy a building, do some renovations and improvements, then rent it out in exchange for regular income for however long the lease runs.

One interesting development we’ve noticed in the commercial property market is the divergence between the valuations of the actual buildings and the rents owners have been able to charge.

The period since interest rates started climbing in 2022 has been a tough backdrop for the sector, and capital values have corrected, as one would expect. Indeed, between June 2022 and around March 2024, the MSCI UK Monthly Property Index fell c. 25%.

Yet rents remained resilient. Since June 2022, for instance, the UK All Industrial rental growth index has risen c. 24% itself. This is in stark contrast to previous periods of falling capital values such as those starting end of 1989 and mid-2007, where rents fell by c. 12% and c. 7% over the same period respectively.

To us, this suggests that the fall in capital values was heavily influenced by rising interest rates during the period. Of course, some areas of the commercial property market have their sector-specific headwinds, but the fact that rents are rising shows that there is demand for (good-quality) assets.

At the same time, construction costs continue to rise, making it ever-more expensive to build new properties and meaning the pipeline of new developments remains thin. In addition, businesses are demanding higher sustainability specifications on their properties, crimping demand for ‘brown’ buildings. Yet, there’s a clear lack of supply of high-quality, high-ESG spec space.

This positive supply-demand dynamic has helped landlords of existing properties to successfully drive through rent increases.

Income

This trend of rising rents has a direct read-across to the ability of real estate investment trusts (REITs) to provide shareholders with an income stream upon which they can rely. It’s those rents that ultimately feed through to the dividend payout, after all.

That provides REITs such as SREI, for instance, with an attractive income profile. The portfolio’s net initial yield is 6.0%, translating into a dividend yield at the current share price (as at 30/03/2026) of c. 7.3%. That’s a 235 basis-point premium to the 10-year gilt yield.

Add in SREI’s 8.3% reversionary yield, a proxy for its underlying yield potential, and a sensible dividend policy and SREI looks attractive for income seekers.

That dividend policy is to only raise the dividend when the board and management think it can be maintained over the long term, and to do so as often as possible. This has translated to growth in the quarterly dividend of 38% since 2019.

Recovery potential

Up to now, we’ve mainly dealt with the income story for REITs, as over the long term this is the largest component of total return. However, there’s also a capital growth story unfolding in the sector that can help to underpin the investment thesis.

Since September 2024, we’ve seen some green shoots in terms of a bounce in capital values, however, the MSCI UK Monthly Property Index has only risen modestly (c. 3%) since then, with recent weakness also due to the current Middle East conflict. We’ve therefore got a long way still to go to get to the level of values we saw pre-pandemic.

As we’ve noted before, real estate is one sector where active asset management is crucial: portfolio managers need to be able to ensure properties are of the highest quality to lure and retain the best possible tenants.

Ahead of the curve

SREI is a real leader in this respect. Its ‘brown to green’ investment strategy focuses its asset management on both real estate fundamentals and improving the energy credentials of its portfolio of assets. This allows it to harness the growing evidence we’re seeing of a green premium: the higher rents and stronger valuations commanded by more energy efficient properties.

We can observe that this strategy is paying off: the £1.9m refurbishment of a warehouse unit at SREI’s second largest holding, Millshaw Park Industrial Estate, located just south of Leeds city centre and close to the motorway, enhanced its sustainability credentials, taking the unit from an EPC ‘C’ rating to an ‘A’ rating. A lease was agreed, subject to completion, with Slazenger Padel Club for a 15-year term without breaks at a rent of £9 per square foot – an increase of 86% on the previous passing rent.

SREI also spent £1.5m enhancing two of the units it owns at Churchill Way West, a retail warehouse in Salisbury, with one unit improving from an EPC ‘D’ rating to an ‘A+’ rating. This was let to Lidl on a 25-year lease, with the second let to The Gym Group on a 15-year lease, both with five-yearly inflation-linked rent reviews. The combined rent is £595,000 per year, an increase of 68% compared to the previous passing rent for both units.

Not only that, but SREI has been disposing of assets, in most cases ahead of book value.

All told, SREI offers investors diversification, exposure to the more attractive sectors of real estate such as multi-let industrial and retail warehousing, a high headline yield with an attractive dividend growth profile and a laser focus on controlling costs, with a recent management fee change saving costs and with linkage to market capitalisation, further aligning management with shareholders.

Headlines will undoubtedly be fast-moving, thanks to the Middle East conflict, but we see the backdrop to the current spike in energy prices as being different from the one that followed Russia’s invasion of Ukraine.

Back then, pandemic-related supply chain bottlenecks, heightened demand from flush-with-cash households and strong labour conditions led to inflation sticking around.

Today, the outlook is cloudier, with softer labour conditions and households don’t have anywhere near as much in excess savings. While interest rates may go up slightly, we suspect the ceiling on how high they will go is much lower today.

Notwithstanding this, we see plenty of positive fundamental drivers underlying the UK commercial property market today, as judged by what had been a nascent recovery in REIT share prices. That rally looks to have been postponed, but the earnings growth potential combined with the c. 14.6% fall in SREI’s share price since the middle of January, which now equates to a c. 22.4% discount to NAV, looks to have thrown up an attractive entry point.

This report has been issued by Kepler Partners LLP (“Kepler”). Kepler is a third-party research firm and is remunerated by Schroder Unit Trusts Limited (“Schroders”) for the production and dissemination of investment research on Schroder Real Estate Investment Trust Limited (“SREIT”). On 24 March 2026, SREIT confirmed that it is a member of a consortium, along with LondonMetric Property plc, considering a possible offer for Picton Property Income Limited (“Picton”) under Rule 2.4 of the UK Takeover Code (the “Code”).

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