Regional REIT beat its benchmark index in 2019 and increased property portfolio value by 9.7%.
In a market update, the group said total shareholder return (with dividends reinvested) during the year was 32.5%, ahead of the FTSE EPRA NAREIT UK Index that was at 30.6%. The group paid dividends of 8.20p in the year, a dividend yield of 7.2%.
The overall valuation of its portfolio at the end of the year was £787.9m (31 December 2018: £718.4m), consisting of 160 properties (2018: 150) and 904 tenants (2018: 874), having deployed the £62.5m it raised in a placing during the year.
On a like-for-like basis, the value of the group’s office and industrial segment (93.6% by value) increased in 2019 by 1.4%, after adjusting for capital expenditure and disposals during the period. Overall, on a like-for-like basis the portfolio value fell slightly by 0.1% (due to a sharp decline in its small retail holdings).
At the end of the year the group’s net loan-to-value ratio was 38.9% (31 December 2018: 38.3%).
So far in 2020 the group has sold two assets (a petrol filling station in Leicester for £1.8m, 38.5% above book value and an office in Bristol for £3m, 7.7% above book value) and carried out three lettings worth £468,100 in annual rent.
Stephen Inglis, chief executive of Regional REIT’s asset manager, said: “We are delighted with the positive progress achieved during 2019, continuing our risk averse approach, whereby we have continued to exploit the huge potential of our assets and increase the number of tenants, properties and geographic spread and thereby increasing the diversity of our income and assets.
“Significantly, Regional REIT outperformed the FTSE EPRA NAREIT UK Index in 2019, with our core office and industrial portfolio increasing by 1.4% on a like for like basis.
“Our asset management initiatives and strong letting performance were maintained. We continued with our strategic acquisitions resulting in a 9.7% increase in the 2019 portfolio valuation. Excluding retail, which only represents 5% of our portfolio, our like for like valuation increases were strong, and are likely to increase still further, due to the uplift the markets have witnessed following the general election result.
“We expect industrial assets to continue to perform well and we also expect a substantial increase in enquiries during 2020/2021 for regional offices, given the positive supply/demand dynamics, attractive yields and positive rental growth story. We expect this to drive strong returns in this sector.”
RGL : Regional REIT beats benchmark index in 2019