Positive Rent Collection & Asset Management Update

5 May 2020

REGIONAL REIT Limited

("Regional REIT" or the "Company")

Positive Rent Collection & Asset Management Update

Regional REIT (LSE: RGL), the regional real estate investment specialist focused on building a diverse portfolio of income producing regional UK core and core plus office and industrial property assets, today announces further positive rent collection progress, an asset management update and an attractive disposal.

Rent Collection Update

Regional REIT is pleased to provide a further update on the good progress achieved by our active asset management strategy in continuing to secure high levels of rent collection, despite the unprecedented current market conditions. As at 1 May 2020, 92.8% had been collected in total, which compares favourably with 91.6% rent collection at the same date in 2019. This comprised of 87.2% of our Q1 2020 rents due and agreed collections from occupiers who are now settling monthly amounting to 5.6%. In addition, we have agreed temporary rent holidays with repayment plans on an additional 1.3%. We continue discussions with tenants on the remaining outstanding element and expect to increase the collection amount in the next few weeks.

Asset Management Update

The Company's Asset Manager, London & Scottish Property Investment Management, has continued to successfully manage the assets proactively, and the Company provides the following update on further good progress:

Elmbridge Court, Gloucester: Frazer-Nash Consultancy Ltd. has renewed its leases of Unit C1 and C2 of the property (4,925 sq. ft.) for a further five years from September this year at a rent of £85,000 per annum (£17.26/sq. ft.), an uplift of 38% against the previous rent.

Oakland House, Talbot Road, Stretford, Greater Manchester: The existing tenant, Greater Manchester Combined Authority, has renewed its lease of the 8^th Floor (East Wing) of the office property (5,481 sq. ft.). The annual rent is £63,032 per annum (£11.50/sq. ft.), which is a 27% uplift to the previous rental agreement.

Part Ground Floor, Betchworth House, Redhill: Current tenant Man Energy Solutions UK Ltd. has renewed the existing lease of the 1,778 sq. ft. office unit for a further five years at a rent of £42,000 per annum (£23.62/sq. ft.), a 12% uplift against the previous rent.

North Malting & North Kiln, Felaw Street, Ipswich, Suffolk: KCOM Group Ltd. has re-geared its existing lease for the second floor of the office property (11,897 sq. ft.), at a rent of £92,000 per annum (£7.73/sq. ft.), with the tenant's break date having now moved out two years to 28 September 2022.

Gyleview House, 3 Redheughs Rigg, Edinburgh: Existing tenant Citibase, has renewed the current lease for occupancy of the entire serviced office property (24,503 sq. ft.) for a further 5 years.

Braidhurst House, Lark Way, Strathclyde Business Park, and Bellshill: New letting to ADT Fire and Security PLC on the ground floor office premises (8,416 sq. ft.) at a rent of £109,408 per annum (£13.00/sq. ft.) for five years.

Commercial Street and Wellington Arcade, Brighouse: Costa Coffee Ltd. has signed a new lease for 10 years for 3,170 sq. ft. of previously vacant retail space at a rent of £40,000 per annum (£12.62/sq. ft).

Disposal above valuation

Sheldon Court, Wagon Lane, Birmingham: The office asset purchased in 2013 has been sold, following the expiration of the occupational leases, at an attractive price of £2,408,400. This represents a positive uplift of 7% above the 31 December 2019 valuation.

Stephen Inglis, CEO of London & Scottish Property Investment Management, the Asset Manager of Regional REIT commented:

"We are encouraged that having positioned the Company well through active asset and micro property management and given our established close relationships with tenants we are making real progress despite the current market environment. Our ongoing strategy is reinforced by the strength of our rental income collection even in today's market.

The strategy of diversification, through our number of properties (160), units (1,251), quality and number of individual tenants (904), regional geographical spread and the broad range of services our tenants provide has continued to serve us well, with high tenant quality and no one tenant comprising more than 2.5% of rental income. We continue to maintain a low LTV with longer term fixed or hedged debt which positions us well in the current conditions.

Today we announce further positive benefits of our proactive asset management strategy with a number of rental increases for Q1 and Q2 progressing as planned. We look forward to continuing to provide further updates in due course."

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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 160 properties, 904 tenants as at 31 December 2019, with a valuation of 787.9m.

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.

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)