Regional REIT posts steady earnings amid wider uncertainty
Property investment trust Regional REIT posted a solid performance in the first quarter, with rent income, collection rates and property value all staying steady despite ongoing uncertainty.
The firm, which primarily owns offices outside of London, has spent much of the start of the year putting out fires. In March its shares collapsed by over 30 per cent in a day, after it warned shareholders it may have to raise £75m at a heavy discount to its share in order to pay off a debt that matures in August.
Yet its fundamentals have remained steady, with a high rent collection rate of 97.2 per cent, up from 96.3 per cent in the equivalent period of 2023, and an occupancy of 79.9 per cent – the same as the previous year.
Its rent roll fell slightly from £67.8m to £65.5m, and its estimated rental value dropped from £84.3m.
The trust declared it would pay a dividend of 1.2p per share, down from 1.65p for the same period last year.
Stephen Inglis, CEO of London and Scottish Property Investment Management, commented: “During the period under review, rent collection remained strong, positive leasing momentum was maintained, EPC [energy performing certificate] ratings continued to improve, and the disposals programme remains on track for 2024.
“With inflation pressures subsiding, we expect this to lead to an easing of pressure on the wider economy, and in turn the likely reduction in the borrowing cost environment.”
The firm said it was continuing to find the “most appropriate solution” for the bond maturing August.
The trust has one of the highest loan-to-value (LTV) ratios in the market at 55 per cent.
In these latest results it confirmed its desire to get its LTV ration down to its long-term target of 40 per cent, which it said it would carry out through asset sales.