27th May 2016 07:20
LONDON (Alliance News) - Regional REIT Ltd on Friday said it remains positive on its prospects for 2016, after reducing its cost of debt during the first quarter and increasing the share of its portfolio which are offices and industrial sites.
The real estate trust said as at March 31, offices by value made up 59.1% of its portfolio, up from 58.4% at its initial public offering in November, whilst industrial sites made up 29.0%, up from 25.3% in November. Sites in England and Wales represented 67% of the portfolio, having made up 64.4% at its IPO.
Regional REIT said its cost of debt fell to around 3.7% per year for the three months to March 31, having been around 4.5% at December 31, whilst it reported gross borrowings of GBP225.9 million, up from GBP128.6 million at December 31, and a net loan-to-value ratio of around 40%, up from 25.4%/
At the period end, there were 130 properties and 970 units in its portfolio, with around 700 tenants, Regional REIT said. This amounted to around GBP507.0 million of gross property assets and a contracted rent roll run-rate of around GBP43.5 million per year.
Occupancy by area came in at 80.9% at March 31, although on a like-for-like basis compared to December 31, occupancy was 82.0%, broadly in line with the 82.8% posted in December.
Regional REIT purchased the Wing portfolio in March for GBP37.5 million, comprising of four multi-let office buildings and a multi-let industrial space. It also purchased the Rainbow portfolio in March, comprising of twelve assets, five of which are offices and seven of which are industrial sites, for GBP80.0 million.
The company also completed a number of disposals during the three month period, included five retail assets for GBP4.8 million and the office tower Churchill Plaza in Basingstoke for GBP12.0 million.
Since the period-end it has also sold its student accommodation site in Glasgow for GBP17.4 million, and also purchased a multi-let office building in Nottingham for GBP4.3 million.
Regional REIT said it will pay a dividend of 1.75 pence per share for the three months to March 31.
"Into 2016 we have delivered on our strategy and the commitments we made at the time of the listing, of significant acquisitions, asset management initiatives including disposals and reducing the cost of our debt financing," said Chairman Kevin McGrath.
"We remain positive on the prospects for the group in 2016, with a sustained growth in rental income and tight control of costs, accompanied by some further growth in assets and an active management of the portfolio mix. We see a strong underpinning for longer term net asset value growth and returns to our shareholders," McGrath added.
Shares in Regional REIT were up 0.7% at 105.00p on Friday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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