Sale of Cheshunt Office & First Letting for Aztec

10 September 2018

REGIONAL REIT Limited

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

REGIONAL REIT COMPLETES £17.25m SALE OF CHESHUNT OFFICE SITE AND AGREES FIRST LETTING FOR AZTEC WEST

Regional REIT (LSE:RGL), the UK regional office and industrial property focused real estate investment trust, today announces it has exchanged and completed on the sale of Turnford Place, Great Cambridge Road, Cheshunt for £17.25m. This reflects a net initial yield of 5.8%.

The 59,176 sq. ft. modern office block site was originally acquired by Regional REIT on 27 December 2017 as part of the Newton portfolio. At that time, the office development was valued at £14.3m. The sale price marks an uplift of 20.6% against the 31 December 2017 valuation.

This week also saw the first letting of space at 800 Aztec West in Bristol. The Aztec West site, which comprises 73,000 sq. ft. of office space in total, was acquired in January 2016 as part of the Rainbow portfolio.

Regional REIT has overseen a comprehensive £6.9m refurbishment of the site, which includes full re-cladding, a new double height fully glazed entrance and atrium reception, shower facilities, cycle storage and electric vehicle charging points amongst other improvements including the enhancement of the energy efficiency of the building to a "B" rating.

Under the ten-year agreement, Edvance SAS will lease 31,000 sq. ft. at a headline rental rate of £21.50/sq. ft.. Regional REIT have worked with Edvance to provide flexibility around lease durations on the space with provisions for breaks and incentives.

Stephen Inglis, Chief Executive Officer of London & Scottish Investments Limited, the Asset Manager to Regional REIT, commented: "Both these transactions demonstrate our active approach to portfolio and asset management. With Cheshunt, we again saw an opportunity to realise returns at a significant premium to the property 31 December 2017 valuation. In line with our business strategy, we will look to redeploy the proceeds into acquiring other assets where we can add value and thereby drive yields."

"At Aztec West, we took the rare decision to take on a fairly large renovation project because there was clear market demand and a lack of quality office space in the area. Consequently, we have significantly driven the rental value, which will in turn improve valuation and yield."

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About Regional REIT

Regional REIT Limited (LSE: RGL) is a London Stock Exchange Main Market traded specialist real estate investment trust focused on office and industrial property interests in the principal regional locations of the United Kingdom outside of the M25 motorway.

Regional REIT is managed by London & Scottish Investments, the Asset Manager, and Toscafund Asset Management, the Investment Manager (together the "Managers") and was formed by the combination of two existing funds previously created by the Managers as a differentiated play on the expected recovery in UK regional property, to deliver an attractive total return to Shareholders and with a strong focus on income.

The Group's investment portfolio, as at 31 December 2017, was spread across 164 regional properties, 1,368 units and 1,026 tenants. As at 31 December 2017, the investment portfolio had a value of £737.3m and a net initial yield of 6.5%. The weighted average unexpired lease term to first break was 3.5 years.

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

Cautionary Statement

This document has been prepared solely to provide additional information to Shareholders to assess the Group's performance in relation to its operations and growth potential. The document should not be relied upon by any other party or for any other reason. Any forward looking statements made in this document are done so by the Directors in good faith based on the information available to them up to the time of their approval of this document. However, such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

ESMA Legal Entity Identifier ("LEI"): (549300D8G4NKLRIKBX73)