Sale of Sheffield offices at 25% above valuation

6 June 2019

REGIONAL REIT Limited

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

Sale of Sheffield office building at 25% above Valuation

Regional REIT Limited (LSE: RGL), the regional real estate investment specialists, today announces that London and Scottish Property Investment Management (LSPIM) has on behalf of Regional REIT, contracted to sell the office building known as Aspect Court, Pond Hill, Sheffield to Sheffield Hallam University for £8.8 million, reflecting a net initial yield of 6.6%. The sale price marks an uplift of 39.7% since acquisition and 24.8% against the 31 December 2018 valuation.

The property was purchased in 2016 for £6.3 million following which various asset management initiatives were undertaken, increasing the length of leases and rental income. 

The total rental income for the property has increased to £620,000, representing an uplift of c. 18% from acquisition. The proceeds from the sale will be rapidly deployed towards the Group's considerable pipeline of opportunities.

Stephen Inglis, Chief Executive Officer of London & Scottish Property Investment Management, the Asset Manager, commented on the sale:

 "Following completion of the business plan for this building, we have agreed a sale to Sheffield Hallam which already occupies the building for academic accommodation. Over the past 3 years under Regional REIT's management, we have re-geared leases, taken back and re-let several floors resulting in increasing the lease length and rental income. This has resulted in the Group achieving a substantial premium of 25% over the December 2018 valuation.

The Company has a very substantial pipeline of potential acquisitions and we have already identified and agreed terms to recycle the capital achieved from this sale."

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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 London & Scottish Property Investment Management Limited, the Asset Manager, and Toscafund Asset Management LLP, the Investment Manager.

Regional REIT's commercial property portfolio is comprised wholly of income producing UK assets and comprises, predominantly, offices and industrial units located in the regional centres outside of the M25 motorway. The portfolio is highly diversified, with 150 properties, 1,192 units and 874 tenants as at 31 December 2018, with a valuation of £718.4m.

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.

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)