Performance in challenging market in 2025

Positioning the business for the future in 2026

Regional REIT (LSE: RGL), the regional commercial property specialist, today announces its full year results for the 12 months to 31 December 2025.

Stephen Inglis, Head of ESR Europe LSPIM, Investment Adviser, said:

“Regional REIT delivered good progress last year against its main targets despite continued challenging market conditions. We strengthened the balance sheet with a successful multi-bank refinancing of £72.4m of debt, completed £51.6m of disposals at 1.3% above book value and reduced the LTV to 40.4% at the end of the year. In addition, in a testing letting market the company secured 64 new market lettings at 3.9% above 2024 ERV. We are focussed on continuing this progress in 2026.

However, against a prolonged downturn in the property cycle and with the war in the Middle East adding to geopolitical and economic uncertainty, the leasing market remains subdued, with some tenants taking longer to make decisions, and often choosing not to move at all. While this backdrop continues to temper near‑term activity, emerging supply constraints for quality, energy‑efficient space across key UK regional markets provide a supportive medium‑term outlook.

In this context, the Board feels it is right to act with increased prudence, targeting* an 8p dividend per share for 2026; distributing a minimum 90% of the profit from the property rental business going forward in alignment to the REIT regulation. This will give the Company additional flexibility as we continue our accretive and essential capital expenditure programme to improve our assets and benefit from increasing occupier demand for quality space.

Along with our key objectives to maximise leasing activity and reduce void costs, we remain focused on strengthening the balance sheet further. We are aiming to achieve disposals at a similar level in 2026 as they were in 2025, while progressing targeted asset repositioning to drive long‑term value.

The investment case for regional offices remains clear. There is an increasing supply and demand imbalance for quality office space in the regions, and a looming shortage of Grade A accommodation conforming to EPC A and B. These structural trends, supported by limited new construction in recent years, will ultimately drive higher occupancy in the Regional REIT portfolio and at higher rents, which will underpin improved valuations over the medium term.”

*The dividend target stated in this announcement is a target only and not a profit forecast. There can be no assurance that this target will be met, or that the Company will make any distributions at all and it should not be taken as an indication of the Company’s expected future results. 

Portfolio valuation

·    Portfolio valuation £555.2m (2024: £622.5m) – driven in part by the sales programme

·    Like-for-like portfolio valuation decreased by 5.0% year-on-year, (3.0% decline excluding capital expenditure adjustment, with the benefits yet to be captured in the valuation); reflecting a decline of 2.9% in the second half

·    EPRA NTA £315.2m (2024: £340.8m)


Resilient operational performance supporting fully covered dividend

·    EPRA EPS 11.8p (2024: 19.2p)

·    Dividend declared of 10p (2024:7.8p); fully covered

·    Plan to distribute a minimum 90% of the profit from the property rental business going forward; targeting a dividend of 8 pence per share dividend for 2026

Return to its Shareholders, with a strong focus on income supported by additional capital growth prospects.

The dividend of 8p is around a yield of 8.5% although if you already own your buying yield will be lower. Nonetheless it provides a fairly ‘secure’ income in troubled times to re-invest back into the SNOWBALL.