9th Sep 2025 11:16
(Alliance News) - Regional REIT Ltd on Tuesday raised its interim dividend despite a fall in net asset value per share, as the firm said property yields are stabilising as the market has bottomed.
The London-based real estate investment trust said at the end of June, net asset value per share was 207.2 pence, down 37% from 372.7p a year ago. At the end of December, NAV per share was 216.9p.
Regional REIT declared an interim dividend of 5.0p per share for the first half of the year, up 47% from 3.4p.
In July 2024, Regional REIT shares were consolidated on a one-for-ten basis, after the number of shares in issue increased by 1.1 billion to 1.6 billion earlier in the month.
Rental and property income fell 9.8% to GBP39.9 million in the six months to the end of June from GBP44.2 million a year ago.
As a result, net rental and property income was down 19% to GBP19.3 million from GBP23.8 million.
The pretax loss narrowed to GBP7.9 million from GBP27.1 million.
Regional REIT said the overall portfolio valuation was down 2.3%, or 2.0% on a like-for-like basis, to GBP608.3 million from GBP622.5 million.
It said GBP93.2 million worth of sites have been identified for sale, of which around GBP50 million are either contracted, under offer or in negotiation.
Looking ahead, Regional REIT said there is increasingly a structural lack of quality new supply in the regional office market, which means the outlook is becoming more positive.
"In that context, with its diversified, national presence and clear opportunities for value creation, Regional REIT is well placed to benefit from these tailwinds over the medium term, albeit we do not expect to see this momentum to feed through into our results until 2026," the company noted.
It said there have been a number of unexpected lease breaks during the year, which have negatively impacted rental income, but it is encouraged by an increasing number of enquiries across the portfolio.
"Regional REIT continued to make progress in the delivery of its strategy in the first half of the year, albeit challenging conditions in the investment markets and a small number of lease breaks negatively impacted the group's overall performance in the period on a headline basis. Notwithstanding these challenges we are seeing property yields stabilising suggesting the market has bottomed," said Stephen Inglis, head of ESR Europe LSPIM Ltd, the asset manager.
"We continue to prioritise our capex programme, refurbishing and updating our capex to core assets to enhance the overall quality of our portfolio, drive rental growth and reduce costs. Although more long-term in nature, we are also advancing our plans to add value on sites by securing accretive planning consents."
Shares in Regional REIT were down 1.4% at 123.20 pence in London on Tuesday morning.
By Michael Hennessey, Alliance News reporter
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