REGIONAL REIT Limited
(“Regional REIT” the “Group” or the “Company”)
Q4 Dividend, Year End Valuation and Trading Update
2024 Lettings 13.5% Above ERV
Regional REIT (LSE: RGL) today announces its portfolio valuation as at 31 December 2024, Q4 dividend and a positive update for both EPC ratings and rent collections.
Trading Update
The Group traded robustly during 2024 completing 61 new lettings totalling £3.2m rent roll, with these lettings being 13.5% above 2023 ERV.
Full Year 2024 Valuation and Portfolio Update
· The like-for-like value of the portfolio decreased by 8.2% from 1 January 2024 to 31 December 2024, after adjusting for capital expenditure, acquisitions and disposals during the period (7.1% excluding capital expenditure adjustment); a decrease of 3.1% in the period 1 July 2024 to 31 December 2024
· Portfolio valuation £622.5m (2023: £700.7m), with disposals amounting to £30.8m (before costs) during 2024 in line with their respective sale valuation dates (2023: £26.1m)
· Net loan-to-value ratio 41.8% (2023: 55.1%)
· Gross annualised rent roll £60.7m (2023: £67.8m); ERV £83.2m (2023: £87.0m)
· Total rent collection to date for 2024 has remained high at 98.1% compared with 98.4% for 2023
· Excellent progress on EPC ratings with c.82.7% (2023: 73.7%) of the portfolio EPC C or better
· 126 properties (2023: 144); 780 tenants (2023: 978)
· England represented 77.1% (2023: 78.4%) (by value), Scotland 16.6% (2023: 16.2%) and Wales 6.3% (2023: 5.4%)
· EPRA Occupancy (by ERV) at 77.5% (2023: 80.0%)
· Average lot size c. £4.9m (2023: c. £4.9m)
· Gross borrowings £316.7m (2023: £420.8m); cash and cash equivalents £56.7m (2023: £34.5m)
· Group cost of debt (incl. hedging) decreased to 3.4% pa (2023: 3.5% pa) -100% fixed and hedged ensuring the maximum cost of debt in 2025 will not exceed 3.4%
· Weighted average debt duration 2.9 years (2023: 3.5 years)
Stephen Inglis, Head of ESR Europe LSPIM Ltd., the Asset Manager, commented:
“2024 has been another challenging year for the property market, the REIT sector and the regional office market. Undoubtedly, we are beginning to see improvement in sentiment in the UK office market and companies’ attitudes to staff attendance in the office. This will result in enhanced rents for the quality accommodation that Regional REIT provides and improving occupancy levels following our Capex programme, leading to an improved net income position.
With the restated strategy of Regional REIT continuing to be a high dividend paying REIT, coupled with an additional focus on pursuing added capital value through initiatives such as obtaining higher value planning consents, this does mean we are holding some vacant and part vacant assets for longer, which does have a short term impact on occupancy and net income. It is expected that the value improvement upside will be substantial on those assets.
The Company’s LTV remains a core focus for the Board, and the management continues to pursue options to reduce this, with all the Company’s debt remaining 100% fixed and hedged to ensure that the maximum cost does not exceed 3.4%.
We look forward to updating shareholders on additional progress made by the Company’s management team at the Company’s full year results in March.”
Capital expenditure programme
Further to the 13 November 2024 announcement, an additional two capital projects have been approved for £1.5m resulting in ten current projects involving a total investment of £16.5m.
Highlight:
· Capitol Park, Leeds – £1.2m deal led refurbishment of Truman House (10,297 sq. ft). delivering an annual rent of £0.3m (£23.09 /sq.ft.), an expected valuation uplift of c.£1.8m and raising the rental tone benefiting other assets in the Company’s portfolio at this location.
Q4 2024 Dividend Declaration
As previously indicated, the Company is pleased to declare that it will pay a dividend of 2.2 pence per share (“pps”) for the period 1 October 2024 to 31 December 2024. The entire dividend will be paid as a REIT property income distribution (“PID”).
The key dates relating to this dividend are:
| Ex-dividend date | 27 February 2025 |
| Record date | 28 February 2025 |
| Last day for DRIP election | 14 March 2025 |
| Payment date | 04 April 2025 |
Prior to the capital raise and share consolidation* the Company declared a Q1 2024 dividend of 1.2pps. Post the capital raise and subsequent share consolidation the Company declared a Q2 2024 dividend of 2.2pps on 10 September 2024, Q3 2024 dividend of 2.2pps on 13 November 2024 and is now declaring a Q4 2024 dividend of 2.2pps.
*On 29 July 2024, the shares in issue were consolidated by ratio of 1 new share for every 10 shares.
The level of future payment of dividends will be determined by the Board having regard to the UK REIT requirements, the financial position and performance of the Group at the relevant time, the interest of shareholders and the long-term future of the Company.
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