REG - Regional REIT Ltd - Q3 2025 Trading Update and Dividend Declaration

Regional REITAnnouncement

12/11/2025 07:02

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RNS Number : 2172H  Regional REIT Limited  12 November 2025

12 November 2025

REGIONAL REIT Limited

("Regional REIT", the "Group" or the "Company")

Q3 2025 Trading Update and Dividend Declaration

 

Regional REIT Limited (LSE: RGL), the regional commercial property specialist,
today announces a trading update for the three-month period from 1 July 2025
to 30 September 2025 and a dividend declaration for the third quarter of 2025.

 

Stephen Inglis, Head of ESR Europe LSPIM, Asset Manager commented:

 

"We remain committed to reducing leverage through our sales programme. During
the quarter, we achieved £17.1m of disposals at 1% above 30 June 2025
valuation, reflecting good progress and we expect to achieve the upper end of
our estimated £40m to £50m disposals for the full year. Leasing momentum has
been negatively impacted by the uncertainty stemming from the broader economic
environment and specifically by the inconsistent messaging from the UK
Government regarding the forthcoming budget. The lack of clarity has led many
prospective tenants to pause and adopt a 'wait and see' approach. While
enquiry levels continue to improve, the time from initial enquiry to legal
commitments remains lengthy.

 

In parallel, good progress continues to be made on the refinancing of the
August 2026 banking facility with completion expected well ahead of maturity."

 

Lettings and renewals update

During Q3 2025, 21 lettings to new tenants and renewals/regears were completed
across 86,779 sq. ft., delivering £1.7m of annualised rental income.
Retention remained high, with 87.0% of leases up for renewal remaining let to
the same tenants at increased rents. Notably:

 

·      Nine leases were exchanged during Q3, totaling 15,757 sq. ft.,
contributing £0.4m per annum ("pa") of rental income and 8.3% above June 2025
ERV. This takes the total number of leases exchanged with new tenants since 1
January 2025 to 29 leases, totaling 134,180 sq. ft.; delivering £1.8m pa of
rental income when fully occupied and reflecting 5.1% above June 2025 ERV

·      Lease renewals in Q3 achieved a 5.2% uplift against June 2025
ERVs

·      Post quarter end, four additional lettings and renewals/regears
have been achieved across 44,416 sq. ft. providing £0.4m of annualised rental
income

 

These figures reflect the Group's commitment to improve occupancy, through
tenant retention and leasing of vacant accommodation while driving rental
growth through proactive asset management.

 

Portfolio update

·    118 properties, 1,242 units and 690 tenants, totaling c.£595.9m of
gross property assets value (30 June 2025: £608.3m)

·    Strategic disposals amounted to £17.1m (before costs), which were
achieved at 1.0% above 30 June 2025 valuation and reflected a net initial
yield of 7.1%

·    The Kennedy Building, Leeds was acquired for £1.1m (before costs)
providing full ownership of a strategic island development site by Leeds
railway station

·    Q3 CAPEX spend £3.4m; Q1-Q3 £9.4m

 

 Continued operational delivery

During the quarter, the programme of strategic asset disposals and the net
movement in lettings together influenced both the rent roll and occupancy.

 

·    Rent roll of £54.3m (30 June 2025: £56.7m); ERV £80.8m (30 June
2025: £82.9m)

·    EPRA Occupancy (by ERV) 76.8% (30 June 2025: 78.6%)

·    EPRA Occupancy by portfolio segmentation*: Core 86.5%, CAPEX to Core
71.3%, Value Add 49.1%, and Sales at 61.4%

·    Total rent collection for the quarter as at 5 November 2025 97.7%

 

* Core: well positioned to deliver sustainable long-term income; Capex to
Core: targeted investment to upgrade assets to secure lettings; Value
Add: assets with potential for repositioning and planning gains; Sales:
assets targeted for disposal programme

 

Maintaining balance sheet discipline while delivering on strategy

·    Cash and cash equivalent balances £54.4m (2024: £56.7m)

·    Net loan-to-value ratio c. 41.8%(*)(2024: 41.8%)

·    Gross borrowings £303.6m (2024: £316.7m) - following post period
end disposals, borrowings amount to £282.0m

·    Group cost of debt (incl. hedging) 3.4% pa (2024: 3.4% pa) -100%
fixed and hedged. Good progress on refinancing the banking facility;
completion expected well ahead of maturity of August 2026

·    A further five disposals completed post quarter end totalling £13.3m
(before costs), 4.6% above 30 June 2025 valuation. Year-to-date disposals
amount to £38.1m (before costs), 1.8% above book value. Expect to complete
further disposals during Q4 ahead of year-end, supporting portfolio
repositioning and balance sheet strengthening.

 

* Gross property assets value based upon Colliers valuations as at 30 June
2025, adjusted for subsequent acquisitions, disposals and capital expenditure
in the period.

 

Q3 2025 Dividend Declaration

As previously indicated, the Company will pay a dividend of 2.50 pence per
share ("pps") for the period 1 July 2025 to 30 September 2025. The entire
dividend will be paid as a REIT property income distribution ("PID").

 

Shareholders have the option to invest their dividend in a Dividend
Reinvestment Plan ("DRIP"), and more details can be found on the Company's
website
https://www.regionalreit.com/investors/investors-dividend/dividend-reinvestment-plan
(https://url.avanan.click/v2/r02/___https:/www.regionalreit.com/investors/investors-dividend/dividend-reinvestment-plan___.YXAxZTpzaG9yZWNhcDphOm86ZWNkYTBhMDM2MjBlYjM3OTUzZDE5NjJiYmE4MjE3NmI6NzplNjkxOjkyY2I5NmU2Y2M0ZDZjNTdiYzFjOTkzYmEwNjc3ZTBiNWYzODJhMTZlYTkwZmJiYTFkMDIyNTYyYTBhMzU2ODU6cDpGOk4)
.

 

The key dates relating to this dividend are:

 

 Ex-dividend date            20 November 2025
 Record date                 21 November 2025
 Last day for DRIP election  15 December 2025
 Payment date                09 January 2026

 

The level of future payment of dividends will be determined by the Board
having regard to, among other factors, the financial position and performance
of the Group at the relevant time, UK REIT requirements, the interest of
shareholders and the long-term future of the Company.

 

Outlook

Regional REIT faces a subdued investment market with positive leasing momentum
hampered by extended transaction timelines and persistent uncertainty. The
Board remains focused on strategic disposals and repositioning assets to
unlock planning-led value. Operational discipline and dividend continuity
remain priorities, underpinned by proactive asset management.

 

 

Additional Background Information

 

Forthcoming Events

 

 20 February 2026  Q4 2025 Dividend Declaration and Portfolio Valuation
 24 March 2026     Full year 2024 Preliminary Results Announcement
 20 May 2026       May 2026 Trading Update and Outlook Announcement
                   Q1 2026 Dividend Declaration Announcement
 21 May 2026       Annual General Meeting

 

Note: All dates are provisional and subject to change

 

- ENDS -

 ESR Europe Private Markets Limited                 Tel: +44 (0) 203 831 9776
 Investment Manager to the Group
 Adam Dickinson, Investor Relations, Regional REIT

 ESR Europe LSPIM Limited                           Tel: +44 (0) 141 248 4155
 Asset Manager to the Group
 Stephen Inglis

 FTI Consulting                                     Tel: +44 (0)20 3727 1000
 Financial Communications                           RegionalREIT@fticonsulting.com (mailto:RegionalREIT@fticonsulting.com)
 Dido Laurimore, Giles Barrie

 

About Regional REIT

 

Regional REIT Limited ("Regional REIT" or the "Company") and its
subsidiaries (the "Group") is a United Kingdom ("UK") based real estate
investment trust that launched in November 2015. It is managed by ESR Europe
LSPIM Limited, the Asset Manager, and ESR Europe Private Markets Limited, the
Investment Adviser.

 

Regional REIT's commercial property portfolio is comprised wholly of income
producing UK assets, predominantly offices located in the regional centres
outside of the M25 motorway. The portfolio is geographically diversified, with
118 properties, 1,242 units and 690 tenants as at 30 September 2025, with a
valuation of c.£595.9m.

 

Regional REIT pursues its investment objective by investing in, actively
managing and disposing of regional Core and Core Plus Property assets. It aims
to deliver an attractive total return to its Shareholders, targeting greater
than 10% per annum, with a strong focus on income supported by additional
capital growth prospects.

 

The Company's shares were admitted to the Official List of
the UK's Financial Conduct Authority and to trading on the London Stock
Exchange on 6 November 2015. For more information, please visit the Group's
website at www.regionalreit.com
(https://url.avanan.click/v2/r02/___http:/www.regionalreit.com/___.YXAxZTpzaG9yZWNhcDphOm86NjNiYTA4MjhkYWFjMWMxYzA3ZmYyZTMxYmVlMGJjOTI6Nzo5ZGI4OjZiNGQzODEwNTY5NGE3NzhhZDYyOThlMmQ4ODdmNTY4YThmYjVmNWU4NGRjM2MxMGJjNmUzZmFkOWU2ZjY1Yjk6cDpGOk4)
.

 

LEI: 549300D8G4NKLRIKBX73

 

 

 

 

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