Regional REIT: Boost to bottom line as it looks beyond emergency capital raise

  • August 5, 2024

Regional REIT: Boost to bottom line as it looks beyond emergency capital raise

Regional REIT: Boost to bottom line as it looks beyond emergency capital raise
The West Midlands recorded a 72 per cent increase in overseas investment projects last year, creating almost 7,000 jobs.

Embattled real estate investment trust Regional REIT was given a boost from exchanges on six big leases in the three months to June, helping it achieve a double digit net rental uplift since the start of the year.

The London-listed firm, which in June issued a £110m capital raise to stave off liquidation , saw its rental income grow by 11 per cent against December 2023 thanks to exchanges on the six spaces that totalled nearly 70,000 sq ft and represent £0.7m in annual income.

The real estate investment trust , which owns corporate and office space outside of London, also offloaded three of its properties – and a fourth part sale – in the quarter to June 30, totalling £6.9m; a net yield of 9.6 per cent.

The results are a further sign that the trust’s fundamentals remain steady , even in the immediate aftermath of its last ditch fundraising to pay off £50m it owed in bonds that were set to mature in August.

The capital raise took place at a 50 per cent discount to the firm’s closing share price of 20.2p, triggering a collapse in the trust’s market capitalisation from which it is yet to recover.

Regional REIT , which has properties in Leeds, Birmingham and Welwyn Garden City, confirmed in this latest update that it had paid off its retail bond, and reduced its bank facilities – the equivalent of a corporate overdraft – by £26.3m, leaving it nearly £30m for additional capital expenditure.

Stephen Inglis, the chief executive of London & Scottish Property Investment Management and who manages the investment trust, said: “During the quarter we were pleased to achieve further progress in the Group’s letting activity and disposal programme, with £0.7m of additional notable rental income from new leases and £6.9 million generated from recent disposals.

“As announced on 18 July 2024, the successful capital raise of £110.5m ensures the repayment of the retail bond, facilitate the further reduction of the LTV to 40.6%, and will provide for accretive capital expenditure on assets for the long term.”