Regional REIT upbeat on third-quarter performance

(Sharecast News) - Regional REIT issued a positive third-quarter trading update on Wednesday, marked by a 9.3% increase in new letting income this year. The London-listed real estate investment trust said supported by a £110.5m equity fund raise, it repaid a £50m retail bond and allocated funds to reduce bank facilities and enhance its portfolio with capital projects aimed at boosting earnings and long-term value.

High tenant retention remained a feature of the quarter, with 77.7% of the rent roll up for renewal retained, and 55 new tenant leases totaling 161,668 square feet secured year-to-date, contributing £2.6m in annual rental income.

The capital raise was driving refurbishment projects, including a £2.7m upgrade at Ashby Park, which led to a 10-year lease with Ashfield Healthcare and Q Collection UK, generating £0.5m in annual rent.

Regional REIT declared a third quarter dividend of 2.2p per share, continuing its commitment to dividend distributions.

On the ESG front, Regional REIT said it was advancing its sustainability goals with a portfolio EPC improvement aligned with its target of achieving an EPC B rating by 2030.

The company added that its GRESB score increased to 73, earning a two Green Star status.

Despite a subdued investment market, Regional REIT said it remained focused on portfolio repositioning to capture further growth opportunities, while maintaining dividend distributions and advancing its sustainability agenda.

"The group continued to trade well, achieving strong rent collection and lease retention for the quarter, with an average rental income uplift of 9.3% for the year to 30 September, against a backdrop of uncertain market conditions," said Stephen Inglis, head of the asset manager, ESR Europe LSPIM.

"The deployment of the capital raise proceeds into capital accretive projects has commenced at a pace with eight projects in course for a total investment of £15m.

"We have already completed the full refurbishment project at Ashby Park, Ashby De La Zouch leading to a new 10-year lease generating £0.5m pa rental income."

At 1252 GMT, shares in Regional REIT were up 0.81% at 124.2p.

Reporting by Josh White for Sharecast.com.