Regional REIT: Delivering Results
Edison | Apr 03, 2017 09:06AM ET
Regional REIT Ltd (LON:RGLR) first full year results show that commitments made at the time of the IPO in November 2015 have been fulfilled. These include the delivery of portfolio and rent roll growth through active asset management, rebalancing towards England and Wales and office and industrial, debt cost reduction and the delivery of attractive returns through income and capital growth. Following considerable acquisitive growth in FY16, RGL has also bought the investment portfolio of Conygar Investment Co PLC (LON:CIC) for shares since the year-end. The acquisition is complementary, with minimal overlap of tenants or locations, and brings additional diversity and scale to the high-yielding portfolio, supporting a sector-leading dividend.
Active management for income
RGL signed 116 new leases in 2016, generating £5m of rental income and increasing like-for-like occupancy from 84.2% to 86.2%. £133.6m of acquisitions and £44.9m of net disposals at 8.6% and 6.8% net initial yields respectively demonstrated the manager’s ability to recycle capital and crystallise the value generated by asset management initiatives. While there was a slight decrease in EPRA NAV per share, the rent roll, which is more easily controlled than property valuations, increased from £35.9m to £44.0m over FY16, with the Conygar deal adding a further £9.7m from Q217. EPRA EPS of 7.7p enables RGL to pay a fully covered 7.65p dividend, yielding 7.5% on the current share price.
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