Attractive £10.65m disposal 15.8% above valuation

12 July 2021

REGIONAL REIT Limited

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

Disposal 15.8% above valuation

 Successful £10.65m Leeds office sale

Regional REIT Limited (LSE: RGL), the UK regional office specialist, is today pleased to announce it has exchanged and completed on the disposal of Arena Point, Leeds for £10.65m, representing a substantial uplift of 15.8% against the 31 December 2020 valuation.

The purchaser intends to demolish the 19-storey office block (76,176 sq. ft.) to make way for a 43-storey tower, providing accommodation for 705 students.

The £10.65m disposal represents the final part of the long term business plan for this asset, which the Company acquired with the adjacent two-storey casino and pub, known as the Podium Buildings, in March 2016 for £10.5m. In July 2018, the Podium Buildings were sold to Unite Students for £12.2m for development into what is now the 16 and 27-storey towers at White Rose View. The final disposal of Arena Point has now secured profits after all costs for the site of some £9.3m, producing a geared internal rate of return of 24.6%.

The capital will be recycled into the Group's attractive and growing pipeline of higher yielding office opportunities to diversify further the portfolio by geography and income streams, in line with the Group's stated strategy.

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

"The disposal of Arena Point at nearly 16% above the 2020 year end valuation concludes the successful long term business plan for the site; having generated profits after all costs for the site in excess of £9.3m. The successful final execution of this ambitious site plan is testament to the capabilities of the asset management team to add considerable value.

We have a strong and growing pipeline of attractive new acquisition opportunities and intend to reinvest the proceeds of this sale into other mispriced office assets offering similar high returns in terms of yield and capital growth."

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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 of offices located in the regional centres outside of the M25 motorway. The portfolio is geographically diversified, with 153 properties, 874 occupiers as at 31 March 2021, with a valuation of £734.7m.

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