5th May 2020 12:09
(Alliance News) - Regional REIT Ltd on Tuesday reported that rent collection was actually slightly ahead of the prior year despite the ongoing virus pandemic, while it also signed a number of lease renewals and new leases.
The company's shares were up 4.5% at 77.85 pence in London at midday.
The real estate investment trust said it had collected 92.8% of rent in total as of Friday last week, having collected 91.6% of rent on the same date in 2019. This 92.8% figure included 87.2% of its first quarter rent due as well as "agreed collections from occupiers who are now settling monthly amounting to 5.6%".
Regional REIT has agreed temporary rent holidays with repayment plans for another 1.3% of occupiers.
"We continue discussions with tenants on the remaining outstanding element and expect to increase the collection amount in the next few weeks," the company said.
Furthermore, Regional REIT has renewed a number of leases, including on units C1 and C2 at Elmbridge Court, Gloucester with Frazer-Nash Consultancy Ltd. Rent for the units amounts to GBP85,000 per annum, a 38% rise from the previous rental agreement.
Greater Manchester Combined Authority has renewed its lease on the eighth floor of Regional REIT's Oakland House property there, with the new annual rent a 27% uplift from the prior agreement at GBP63,032 per annum.
KCOM Group Ltd also re-geared its lease of the second floor of an office property in Suffolk at GBP92,000 per annum with the break date moved out two years to September 2022.
A new five-year letting was agreed with ADT Fire & Security PLC for the ground floor of an office premises at GP109,408 per annum and a new ten-year lease was signed with Costa Coffee Ltd for a retail space at GBP40,000 per annum.
Regional REIT has sold office asset Sheldon Court in Birmingham for GBP2.4 million, 7% above its December 31 valuation.
Chief Executive Stephen Inglis said: "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."
By Anna Farley; [email protected]
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