2024 Full Year Results

25 March 2025

Regional REIT Limited

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

2024 Full Year Results

Strong operational delivery and transformed balance sheet provide pathway to recovery

Regional REIT (LSE: RGL), the regional office specialist, today announces its full year results for the 12 months to 31 December 2024.

Stephen Inglis, Head of ESR Europe LSPIM Ltd, the Asset Manager, said:

"While 2024 was another challenging year for both the property market and the regional office sector in particular, Regional REIT continued to deliver a strong operational performance, and the successful completion of the £110.5m equity raise has transformed the Company's balance sheet. With this increased flexibility, Regional REIT is well placed to take advantage of the significant opportunities for value creation within the portfolio. We now have the capital to refurbish assets to drive rental income growth while simultaneously pursuing accretive initiatives, such as securing planning consents ahead of sales, and this has the potential to deliver good shareholder value over the medium term.

"We fully recognise that we remain at the start of the pathway to recovery and the company remains laser-focused on continuing to further reduce its LTV. There is a lot of work to do, and this will remain a priority through 2025, with £18.6m of disposals already in legal due diligence.

"It is clear that we are starting to see an improvement in sentiment in the UK office market, albeit there will be a lag before we see this reflected in the Company's financial performance. There continues to be occupational headwinds, however the diversified nature of Regional REIT's tenant base combined with the high-quality nature of its occupiers and its competitive rents significantly mitigates any risk. With supportive fundamentals, extensive scope for value creation within the portfolio, and increased balance sheet flexibility, Regional REIT can look to the future with optimism."

Diversified portfolio with slowing valuation decline in H2

· Portfolio valuation £622.5m (2023: £700.7m), down 8.2% on a like-for-like basis, with a decrease of 3.1% in H2

· EPRA NTA £340.7m (2023: £290.8m)

Resilient operational performance underpinning fully covered

· EPRA EPS 19.2pps (2023: restated 33.1pps) post share issuance and 1 for 10 share consolidation

· Dividend declared of 7.8p* (2023: 5.25p) fully covered

*Q1 '24 dividend 1.2p, post the capital raise and subsequent share consolidation the Company declared Q2-Q4 dividends of 6.6p

Transformed balance sheet unlocks opportunities to create value across portfolio

· Gross borrowings reduced to £316.7m (2023: £420.8m); cash and cash equivalents £56.7m (2023: £34.5m)

· Net LTV 41.8% (2023: 55.1%) following successful £110.5m capital raise

· Continued momentum in disposals programme; total disposals £28.6m (net of costs) across 18 assets

· c.£107m of sites identified for sale, of which circa £18.6m either contracted, under offer, or in negotiation

New lettings 13.5% ahead of ERV supported by targeted Capex programme for value enhancing asset management

· EPRA occupancy remains robust at 78% (2023: 80%)

· Rent collection remains high at 98.6% (2023: 98.9%); 61 new lettings during the period totalling £3.2m rent roll, with lettings achieved 13.5% above 2023 ERV Gross annualised rent roll £60.7m (2023: £67.8m)

· A further 14 notable new lettings and renewals/regears achieved post period end for 114,888 sq.ft. amounting to £1.6m

Progressing our sustainability strategy to improve the quality of the portfolio

· c.82.7% of the portfolio EPC C or better (2023: 73.7%)

Portfolio strategy update

Following the successful equity raise completed in the period, the Company announced that £28.4m of the proceeds would be used to fund accretive capital expenditure projects, including securing planning consents to reposition assets ahead of sales. Significant progress has already been made in identifying priority sites and preparing the pipeline.

Over the next four years, c.20 sites have been identified where planning applications will be submitted to change the use to alternatives such as student accommodation, residential or hotel use ahead of a sale, to maximise value for shareholders. It is anticipated that this programme will deliver good shareholder value over the medium term. This is in addition to the 43 sites marked for nearer-term disposal.

Along with £371.2m core assets that are well positioned to deliver income on an ongoing basis, there are a further £126.5m of assets strategically located in areas of high office demand where capex is required to bring the sites up to a grade A or B standard.

Currently, there are 7 capital projects underway for £5.4m, 11 projects scheduled to commence on-site works by the end of H1 '25 for £7.9m and 10 projects that have been identified for £8.9m. This amounts to a total investment of £22.2m.

Outlook

With the average number of days spent in the office across the portfolio now up to four days a week, together with a lack of high quality and sustainable regional office space and no real new supply coming on stream, we believe Regional REIT is well positioned to deliver future rental growth. However, we anticipate that the business will not start seeing the benefits of this increased momentum until 2026.

Following the capital raise in 2024, Regional REIT's transformed balance sheet allows the company to advance its capex programme and pursue additional initiatives over the next 12 months. These initiatives include securing higher value planning consents to drive value. Additionally, proceeds from planned portfolio sales will be used to further reduce the Company's LTV.

- ENDS -

Enquiries:

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 ESR Europe LSPIM Limited, the Asset Manager, and ESR Europe Private Markets Limited, the Investment Adviser.

Regional REIT's commercial property portfolio is comprised wholly of income producing UK assets, predominantly offices located in the regional centres outside of the M25 motorway. The portfolio is geographically diversified, with 126 properties, 1,271 units and 780 tenants as at 31 December 2024, with a valuation of c.£622.5m.

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.

LEI: 549300D8G4NKLRIKBX73

FINANCIAL KEY POINTS

Year Ended 31 December 2024

Income focused - opportunistic buying and strategic selling, coupled with intensive asset management, continues to secure long-term income.

* During the year the Company offered 15 new ordinary shares for every 7 existing shares. This resulted in an increase of 1,105,149,821 Ordinary Shares being issued. Subsequently there was a 10 for 1 split with the resulting Ordinary shares in issue being 162,088,483. See note 28 for details of the restatement.

** The European Public Real Estate Association ("EPRA"). The EPRA's mission is to promote, develop and represent the European public real estate sector. As an EPRA member, we fully support the EPRA Best Practices Recommendations. Specific EPRA metrics can be found in the Company's financial and operational highlights, with further disclosures and supporting calculations provided in the full Annual Report.

*** Alternative Performance Measures. Details are provided in the full Annual Report.

Operational KEY POINTS

Year Ended 31 December 2024

Income focused with intensive asset management.

* Alternative Performance Measures. Details are provided in the full Annual Report.

PERFORMANCE KEY POINTS

Year ended 31 December 2024

A key focus on delivering high dividend distributions to shareholders.

Chairman's Statement

"Letting demand for our portfolio remained robust, with 2024 lettings having exceeded the prior year's estimated rental values by a significant 13.5%."

David Hunter, Chairman

As I begin my first months in this role, I, together with the rest of the Board fully acknowledge the unprecedented challenges our Company and shareholders have faced over recent years. However, the £110.5 million capital raise in July 2024 enabled the Company to fully repay the £50 million Retail Bond in August, reduce overall bank borrowings and focus on accretive capital expenditure projects.

Overview

While it was another difficult year for the property market and the regional office sector, our active management strategy did enable the Company to outperform the MSCI Rest of UK Offices Index which declined by 8.9% over the year with our portfolio value falling by 8.2% on a like-for-like basis after adjustments for acquisitions, disposals, and capital expenditure. The bulk of that fall was in the first half of the year with some signs of stabilisation in values in the second half.

Throughout the year, the Board remained committed to delivering consistent quarterly dividend distributions to our shareholders, ensuring full compliance with the HMRC REIT guidelines and maintaining a covered annual dividend. Our strong operational performance - driven by effective asset management and robust rent collection - further supported these uninterrupted dividend payments. The Board recognises the importance of delivering dividend growth on a fully covered basis going forward, and that will remain an overriding priority.

Letting demand for our portfolio remained robust despite overall occupancy falling on a like for like basis, with 2024 lettings having exceeded the prior year's estimated rental values by a significant 13.5%. This encouraging element of performance reflects the appeal of our properties and ability to cater for all tenants' requirements from a single desk to a stand-alone headquarter office. We do firmly believe that our portfolio is well positioned to benefit from the continued return-to-office momentum across the United Kingdom. This will be enhanced in the medium term by a more favourable macroeconomic environment and easing UK monetary policy, supporting the quarterly dividends and adding shareholder value.

There is a lot of work to do and the Board remains committed to reducing LTV while progressing opportunities across the portfolio to generate sustainable, long-term value for shareholders.

Financial Resources

The Company's EPRA NTA increased to £340.7 million (IFRS NAV: £351.6 million) as at 31 December 2024, representing an increase of £49.9 million from £290.8 million (IFRS NAV: £306.1 million) as at 31 December 2023. This increase was driven by the £110.5 million equity capital raise, although it was partially offset by a challenging commercial real estate market that led to a decline in the property portfolio revaluation. A strong cash balance of £56.7 million was retained as of 31 December 2024 (2023: £34.5 million), of which £55.9 million was unrestricted (2023: £30.2 million).

The Company's debt position, which is comprised entirely of fixed and hedged interest rate debt, helped the Company mitigate rate volatility. With the repayment of the 4.5% £50 million Retail Bond, the weighted average cost of debt was reduced to 3.4% at the end of 2024 (2023: 3.5%), and the Net Loan-to-Value (LTV) decreased to 41.8% as of 31 December 2024, compared with 55.1% as at 31 December 2023.

The Company continues to execute its controlled disposal programme, consisting of 18 assets and three-part sales of assets, amounting to circa £28 million, net of costs.

Sustainability

Once again, I am pleased to report the significant progress achieved by the ESG Working Party in 2024, which improved the Company's Global Real Estate Sustainability Benchmark (GRESB) from 66 to 73 and maintained a two Green Star Status. Additionally, we continued to achieve advancements in our EPC ratings and EPRA sustainability accreditation. Overall performance remains robust.

82.7% of our portfolio attained EPC ratings C plus or better (compared with 73.7% on 31 December 2023), while EPC B plus and exempt rose steeply to 57.7% (compared with 31.6% on 31 December 2023). This progress moves us nearer to meeting the Minimum Energy Efficiency Standard ('MEES') target of EPC B, well ahead of the stated 2030 target. Importantly, with limited compliant office supply in the regions, providing high quality, energy efficient space can be a key differentiator for Regional REIT, driving improved occupancy and rental growth.

Market Environment

UK office investment reached £1.8 billion in Q4 2024, bringing the annual total to £7.3 billion, a 27% decline from 2023. London saw the sharpest drop, with investment falling 34% to £4.7 billion, while regional markets declined 5.5% to £2.34 billion. Q4 2024 transactional yields for central London offices rose slightly to 6.02% and yields for the rest of the UK increased by 43 basis points to 7.75%.

Looking ahead, Lambert Smith Hampton ("LSH")1 sees 2024 as an inflection point for office space sector. LSH forecasts total returns averaging c7.9% per annum citing improved staff occupancy and tighter supply. Underpinning LSH's forecast, Centre for Cities2 notes London office attendance rose from 2.2 to 2.7 days weekly; KPMG3 reports 76% of financial leaders plan to boost attendance; and Willis Towers Watson4 finds 60% of firms enforce office-day policies, improving engagement (85%), culture (72%), and learning (69%). Regional REIT's own annual tenant survey found that current active office occupation is now above pre-pandemic active occupancy, while employee occupation has stabilised at an average of four days a week.

1 UK Investment Transactions Bulletin, UKIT Q4 2024 by Lambert Smith Hampton (LSH), Jan. 2025

2 The Future of Work, Centre for Cities report (in partnership with Imperial College London), Sep. 2024

3 Financial Services employee survey, KPMG, Oct. 2024

4 Flexible Work Models Pulse survey by WillisTowersWatson, Dec. 2024

Dividends

The dividend remains a significant component of total shareholder returns. During the period under review, prior to the capital raise and share consolidation, the Company declared a Q1 2024 dividend of 1.2pps. Following the capital raise and subsequent share consolidation, the Company declared a Q2 2024 dividend of 2.2pps on 10 September 2024, a Q3 2024 dividend of 2.2pps on 13 November 2024, and has now declared a Q4 2024 dividend of 2.2pps. These dividend distributions ensure compliance with the HMRC REIT regime. Notably, the Company has paid a fully covered dividend for 2024, having also paid a covered dividend for 2023. Since inception, the Company has declared dividends amounting to 65.35pps noting the aforementioned one for ten share consolidation on 29 July 2024 and has distributed approximately £251.4 million in dividends to shareholders.

Performance

The period under review was impacted by the announced equity capital raise on the 27 June 2024. The Company's total shareholder return was -40.5%, versus the return of -11.7% for the FTSE EPRA NAREIT UK Total return Index over the same period. The annualised EPRA Total Return was 0.6% p.a. (2023: 1.5% p.a.).

Board Changes

As announced on 18 December 2024, following a thorough search process and in line with the Company's policy, I was appointed as an Independent Non-Executive Director and Chair designate. I have since been appointed to the Audit, Nomination, and Management Engagement & Remuneration Committees and, following a handover period, assumed the role of Chair of the Board on 18 March 2025, succeeding Kevin McGrath, who stepped down after completing his nine-year tenure.

On behalf of the Board and our shareholders I extend our thanks to Kevin for his leadership and unwavering commitment over the years. His guidance and dedication have been instrumental in the governance of the Company, particularly with regard to our successful £110.5 million equity capital raise in 2024.

As announced on 11 October 2024, Daniel Taylor stepped down as Senior Independent Director and Non-Executive Director ("NED") of the Company, having completed his nine-year tenure in accordance with the Company's policy. Again, I record our appreciation of Daniel's significant contribution during his tenure.

Also on 11 October, Massy Larizadeh was appointed as Senior Independent Director. An independent NED since June 2022, she chairs the Management Engagement & Remuneration and Nomination Committees.

Finally, as announced on 21 October 2024, Nicole Burstow was appointed as a Non-Executive Director, representing our new significant shareholder Bridgemere Investments Limited. Nicole, a chartered accountant with over 20 years of financial services experience, is currently CFO of Bridgemere Group and was previously Deputy CEO of DSW Capital.

Annual General Meeting

The notice for the 2025 AGM will be published on our website and circulated to Shareholders in line with the Company's Articles of Incorporation. In accordance with the Company's Articles of Incorporation and the AIC Code, all Directors will stand for re-election at the AGM, except for Ms Burstow and myself, as we were appointed as Directors since the last AGM and will therefore stand for election. Directors maintain their professional development through regular briefings from the Company Secretary and the Company's other advisers. As well as being committed to orderly succession planning, the Board will enhance its skills base as necessary. The Board looks forward to engaging with Shareholders at the AGM.

Shareholder and Stakeholder Engagement

We welcomed Bridgemere Investments Limited as a new significant shareholder following the successful completion of the capital raise and thank them and our existing shareholders for their support. We look forward to working with Bridgemere and all our stakeholders as we look to return to growth.

Tenant and stakeholder satisfaction is key to our success. We aim to provide high-quality workspaces that accommodate diverse business needs, from small flexible units to corporate headquarters. Engaging actively with tenants is central to our asset management strategy, helping us understand their needs, address challenges, and enhance our workspaces. We promote open and transparent communication, ensuring a collaborative approach that benefits all stakeholders and improves operational efficiency. The Company welcomes shareholder engagement, with further details available at www.regionalreit.com and in the full Annual Report.

Outlook

The property market continues to adjust to the evolving economic conditions and cautious investor sentiment. While the management team is doing all it can to increase returns including through capex, leasing and sales, performance is to some extent inevitably dependent on recovery in the sector. However, demand for well-located, high-quality office space remains resilient, supported by the continued return to the office, and there are significant opportunities to create value within the portfolio by progressing accretive initiatives such as securing planning consents ahead of sales. The Company remains focused on active asset management to drive occupancy, enhance tenant retention, and optimise rental growth, underpinning sustainable dividend distributions. As businesses prioritise dynamic and engaging workspaces, the Company is well placed for recovery, which will support long-term value creation and benefit shareholders as confidence gradually returns to the commercial property market.

David Hunter

Chairman

24 March 2025

ASSET MANAGER AND INVESTMENT ADVISERS' REPORT

"We are beginning to see an improvement in sentiment in the UK office market, with the average number of days in the office having stabilised at four days a week. There is also a growing recognition of the vital role the office plays in driving productivity and strengthening a company's culture."

Stephen Inglis

Head of ESR Europe LSPIM Ltd.

Asset Manager

While 2024 has undoubtedly been another challenging year for the property market and the regional office market in particular, with the successful equity raise in July Regional REIT enters 2025 with cautious optimism. We are beginning to see an improvement in sentiment in the UK office market, with the average number of days in the office having stabilised at four days a week across our portfolio. There is also a growing recognition of the vital role the office plays in driving productivity a strengthening a company's culture.

We anticipate a slow and steady improvement to the occupational market in 2025, however, it will take time for the impact of these changes to flow through to our financial performance. On a like-for-like basis the valuation of the portfolio fell by 8.2% in the year to £622.5m, although the pace of this reduction slowed to 3.1% in the second half. If, as is widely forecast, interest rates continue to fall then this will bring stability and confidence and ultimately be beneficial to real estate values.

Our operational performance continues to be robust. At an operational level, the business delivered 61 new lettings last year at 13.5% above 2023 ERV, totalling £3.2m rent roll. Rent collection remained high at 98.6%, and occupancy amounted to 77.5% compared to 80.0% in 2023. This slight reduction was in part due to the business holding some buildings vacant while it progresses planning applications to add value.

Importantly, the combination of our ongoing controlled disposals programme and the successful £110.5m equity raise have transformed Regional REIT's balance sheet, taking LTV to 41.8% at the end of the year from 55.1% in 2023. This ensures that we have the resources and flexibility to take advantage of the opportunities we see to create value across our portfolio. Further reducing LTV via selected disposals remains a priority, and a total of 43 sites totalling c. £106.7m have been earmarked for sale, with nine sales totalling £18.6m either contracted, under offer, or in negotiation.

Looking ahead, along with a targeted capex programme to bring selected assets up to the necessary standard to optimise rents, a key objective will be maximising the opportunities we see in the portfolio to add value by securing planning consents ahead of sales. Over the medium term, based on current property values we estimate that there is the potential to add substantial value through these initiatives.

There is a lot of work to do. However, the team is laser focused on delivering against our restated strategy and with a transformed balance sheet there are extensive opportunities across the portfolio. Regional REIT is well placed to deliver against its objective of being a high dividend paying REIT, while also pursuing added capital value.

KEY POINTS FROM 2024

· High Level of Rent Collection

Achieved a high level of rent collection. As at 14 March 2025, rent collection remains robust, with FY 2024 at 98.6%, adjusting for monthly rent and agreed collections plans, which is similar to the equivalent date in 2024 when 98.9% had been collected.

· Increase in Average Rent

Average rent by let sq. ft. increased by 1.1% from £13.82 per sq. ft. in December 2023 to £13.92 per sq. ft. in December 2024.

· New Lettings - Greater than ERV

Completed 61 new lettings in 2024, totalling 191,541 sq. ft and 13.5% above ERV, which when fully occupied will provide a gross rental income of c. £3.2 million.

· Increase in GRESB Score

The Company submitted its Fourth Global Real Estate Sustainability Benchmark ("GRESB") assessment resulting in an increased score of 73 from 66.

· Disposals Programme

Disposals during 2024 totalled £28.6 million (net of costs), reflecting a net initial yield of 8.3% (10.6% excluding vacant assets).

· Outperform the MSCI Monthly Data

The like-for-like value of the portfolio decreased by 8.2% from 31 December 2023 to 31 December 2024 after adjusting for capital expenditure, acquisitions and disposals during the period (7.1% excluding capital expenditure adjustment). Noting that some assets are being held for repurposing potential, MSCI monthly data shows a capital value decline of 8.9% for the rest of the UK offices over the same period.

UK Office Investment Activity

Investment in UK offices reached £1.8 billion in Q4 2024, bringing the total for the year to £7.3 billion, 27% lower than 20231. The decline in overall office investment was primarily driven by a significant drop in London, where investment fell by 34% to £4.7 billion in 2024 down from £7.2 billion in 2023. The regional office markets also experienced decline in investment in 2024 when compared to 2023 of 5.5%, an annual total of £2.34 billion from £2.48 billion.

Transactional yields2 for central London offices we marginally up for Q4 2024 at 6.02% against the same period in Q4 2023. In contrast the transactional yields for the rest of the UK were 7.75% for Q4 2024, an increase of 0.5% on the Q4 2023.

Looking ahead, Lambert Smith Hampton ("LSH"), see 2024 as an inflection point for the office sector. LSH forecast to returns averaging c7.9% per annum citing improved staff occupancy and tighter supply.

Underpinning LSH's forecast, the Office for Nation Statistics ("ONS") data3 shows that in 2024, 42% of workers in the UK on average travelled exclusively to work, while only 13% worked from home full-time, a drop from 25% in 2021. Additionally, approximately 26% of the UK workforce were hybrid working in 2024.

Recent surveys underscore a growing trend toward increased office attendance across the UK, driven by new policies, improved team engagement, and recognised in-office benefits.

· Centre for Cities Survey4: In London, workers increased their office attendance from 2.2 days per week in 2023 2.7 days in 2024, signalling a gradual return.

· KPMG Survey5: A survey of financial services leaders shows that 76% plan to increase attendance, with 37% expecting employees to be in the office at least four days weekly.

· Willis Towers Watson Survey6: 'Flexible Work Models Pulse' reports that 60% of UK companies now enforce a minimum office-days policy, boosting engagement (85% culture (72%), and learning (69%).

These findings continue to highlight the benefits and productivity companies observe from in person collaboration.

1 UK Investment Transactions Bulletin, UKIT Q4 2024 by Lambert Smith Hampton (LSH), Jan. 2025

2 Transactional Yield focuses on the yield at the point of purchase, based on the current property income

3 ONS, Public opinions and social trends, Great Britain: social mobility, Jan. 2025

4 The Future of Work, Centre for Cities report (in partnership with Imperial College London), Sep. 2024

5 Financial Services employee survey, KPMG, Oct. 2024

6 Flexible Work Models Pulse survey by WillisTowersWatson, Dec. 2024

Occupational Demand in the UK Regional Office Market

Avison Young announced that the take-up of office space across the nine7 regional markets reached 2.2 million square feet (sq.ft.) in Q4 2024, on par with the previous quarter and the highest since Q4 2022, 33.9% above the previous quarter and 18.2% above the five year quarterly average take-up. The annual total was 10% higher than 2023, at 7.9m sq.ft. with positive occupier sentiment, particularly from larger corporates.

The high demand and short supply across the nine regional markets continue to keep rental growth high, with an average of 6.6% prime rental growth. Occupational demand in the regional office markets continued to be driven by the financial and professional services sector, with both accounting for 18.0% share each in Q4 2024. However, the sector with the most growth was Education and training with 39% annual increase.

In terms of the development pipeline, in 2025 it is estimated that approximately 2.0 million sq.ft. of office space is currently under construction in the Big Nine8 regional markets, with 36% already pre-let. The estimated pipeline total is the lowest since 2017 and therefore likely to produce supply shortages. 2024 saw refurbishments take a 38% share, up from 24% in 2023 and this trend is expected to continue into 2025. The data supports LSH's comment (See UK Office Activity) on tighter supply of office space in the forthcoming years.

7 Nine regional office markets mentioned by Avison Young include: Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, Newcastle

8 The Big Nine, Quarterly update of regional office activity, Q4 2024 by Avison Young, Feb. 2025

Rental Growth in the UK Regional Office Market

According to monthly data from MSCI, rental value growth finished the year on a high for 'Rest of UK Office' markets with growth of 2.4%. Conversely, central London offices experienced modest growth of 1.2% over the same period. Avison Young report that seven of the Big Nine's cities saw an increase in their prime rents this quarter; with the top three being an increase of:

• 14.1% to Bristol with £48.50 per square foot (psf)

• 13.7% to Liverpool at £29.00 psf

• 12% to Cardiff at £28.00 psf

This brought the Big Nine's average annual prime rental growth to 6.6% in Q4.

Regional REIT's Office Assets

EPRA occupancy of the Group's regional offices of 76.4% as at 31 December 2024 (2023: 79.2%). A like-for-like comparison of the Group's regional offices' EPRA occupancy, as at 31 December 2024 versus 31 December 2023, shows occupancy of 76.4% (2023: 80.5%). WAULT to first break was 2.7 years (2023: 2.6 years); like-for-like WAULT to first break of 2.7 years (2023: 2.6 years).

Property Portfolio

As at 31 December 2024, the Group's property portfolio was valued at £622.5 million (2023: £700.7 million), with rent roll of £60.7 million (2023: £67.8 million), and an EPRA occupancy of 77.5% (2023: 80.0%). On a like-for-like basis, 31 December 2024 versus 31 December 2023, EPRA occupancy was 77.5% (2023: 81.3%).

There were 126 properties (2023: 144) in the portfolio, with 1,271 units (2023: 1,483) and 780 tenants (2023: 978). If the portfolio was fully occupied at Colliers International Property Consultants view of market rents, the rental income would be £83.2 million per annum as at 31 December 2024 (2023: £87.0 million).

As at 31 December 2024, the net initial yield on the portfolio was 5.9% (2023: 6.2%), the equivalent yield was 10.4% (2023: 9.9%) and the reversionary yield was 11.6% (2023: 10.8%).

Property Portfolio by Sector

Property Portfolio by Region

Tables may not sum due to rounding

Top 15 Investments (market value) as at 31 December 2024

Tables may not sum due to rounding

Top 15 Tenants (share of rental income) as at 31 December 2024

Tables may not sum due to rounding.

Property Portfolio Sector and Region Splits by Valuation and Income as at 31 December 2024

By Valuation

As at 31 December 2024, 90.7% (2023: 92.1%) of the portfolio by market value was offices and 3.6% (2023: 3.1%) was retail. The balance was made up of industrial, 3.7% (2023: 3.2%) and other, 2.0% (2023: 1.7%). By UK region, as at 31 December 2024, Scotland represented 16.6% (2023: 16.2%) of the portfolio and England 77.1% (2023: 78.4%); the balance of 6.3% (2023: 5.4%) was in Wales. In England, the largest regions were the Midlands, the South-East and the North-East.

By Income

As at 31 December 2024, 90.5% (2023: 91.3%) of the portfolio by income was offices and 4.4% (2023: 4.2%) was retail. The balance was made up of industrial, 3.2% (2023: 2.8%), and other, 1.9% (2023: 1.7%). By UK region, as at 31 December 2024, Scotland represented 16.0% (2023:15.8%) of the portfolio and England 78.0% (2023: 78.6%); the balance of 6.0% was in Wales (2023: 5.6%). In England, the largest regions were the Midlands, the South-East and the North-West.

Lease Expiry Profile

The WAULT on the portfolio is 4.6 years (2023: 4.7 years); WAULT to first break is 2.9 years (2023: 2.8 years). As at 31 December 2024, 13.8% (2023: 15.9%) of income was from leases, which will expire within one year, 10.5% (2023: 10.7%) between one and two years, 39.7% (2023: 33.3%) between two and five years and 36.1% (2023: 40.1%) after five years.

Tenants by Standard Industrial Classification (SIC)

As at 31 December 2024, 11.8% of income was from tenants in the professional, scientific and technical activities sector (2023: 11.5%), 11.2% from the administrative and support service activities sector (2023: 10.4%), 10.5% from the information and communication activities sector (2023: 12.2%), 8.7% from the wholesale and retail trade sector (2023: 8.0%) and 6.4% from the electricity, gas, steam and air conditioning supply sector (2023: 6.5%). The remaining exposure is broadly spread.

No tenant represents more than 3.0% of the Group's rent roll as at 31 December 2024, the largest being 2.8% (2023: 2.5%).

Financial Review

Net Asset Value

In the year ended 31 December 2024, the EPRA NTA* of the Group increased to £340.7 million (IFRS NAV: £351.6 million) from £290.8 million (IFRS NAV: £306.1 million) as at 31 December 2023, with an EPRA NTA of 210.2pps (IFRS: 216.9pps).

The EPRA NTA increase of £50.0 million since 31 December 2023 was predominately due to the equity capital raise proceeds of £110.5 million, offset by a £54.7 million reduction in the revaluation of the property portfolio held as at 31 December 2024, £2.0 million from lease incentives and £3.2 million realised loss on the disposal of properties.

The investment property portfolio valuation as at 31 December 2024 amounted to £622.5 million (2023: £700.7 million). The property valuation decrease since the December 2023 year end is a reflection of £54.7 million in property revaluation, £28.6 million of net property disposals and loss on the disposals of £3.2 million, offset by subsequent expenditure of £8.2 million.

Overall, on a like-for-like basis, the portfolio value decreased by 8.2% during the year.

The table below sets out the acquisitions, disposals and capital expenditure for the respective periods:

*Further details of the new EPRA performance measures are provided in the full Annual Report.

The EPRA NTA is reconciled in the table below:

Table may not sum due to rounding

Income Statement

Operating profit before gains and losses on property assets and other investments for the year ended 31 December 2024 amounted to £36.1 million (2023: £43.1 million). Loss after finance and before taxation of £39.5 million (2023: loss £67.5 million). 2024 included the rent roll for properties held from 31 December 2023, plus the partial rent roll for properties disposed of during the year. Rental and property income amounted to £65.2 million, excluding recoverable service charge income and other similar items (2023: £70.1 million), the decrease is due to a reduction in the rent roll being held during the year to 31 December 2024.

More than 80% of the rental income was collected within 30 days of the due date and the allowance for doubtful debts in the year amounted to £0.5 million (2023: £0.5 million).

Non-recoverable property costs, excluding recoverable service charge income and other similar costs, amounted to £19.3 million (2023: £16.3 million), and the rent roll amounted to £60.7 million (2023: £67.8 million).

Realised losses on the disposal of investment properties amounted to £3.2 million (2023: loss £0.7 million). The loss on the disposals were from the aggregate disposal of 18 properties and three-part sales in the period, on which individual asset management plans had been completed and/or were of sub-optimal asset size. The change in the fair value of investment properties amounted to a loss of £54.7 million (2023: loss of £73.3 million), and an adjustment of £2.0 million (2023: £13.0 million) from rent smoothing.

Net capital expenditure amounted to £8.2 million (2023: £10.2 million). The change in value of right of use assets amounted to a charge of £0.1 million (2023: charge £0.1 million).

Interest income amounted to £1.4 million (2023: £0.1 million).

Finance expenses amount to £15.2 million (2023: £16.2 million). The decrease is due to the 4.5% £50 million of Retail Bonds being repaid in August 2024 and net borrowings being repaid during the year, amounting to £54.0m in the year.

The EPRA* cost ratio, including direct vacancy costs, was 44.7% (2023: 38.5%). The increase in the cost ratio is ostensibly a reflection of the increase in Other property expenses and irrecoverable costs. The EPRA cost ratio, excluding direct vacancy costs was 17.4% (2023: 16.4%). The ongoing charges for the year ending 31 December 2024 were 9.3% (2023: 7.5%) and 3.5% excluding void costs (2023: 3.2%).

The EPRA Total Return from Listing to 31 December 2024 was 5.6% (2023: 12.7%), with an annualised rate of 0.6% pa (2023: 1.5% pa).

*Further details of the new EPRA performance measures are provided in the full Annual Report.

Dividend

In relation to the year from 1 January 2024 to 31 December 2024, the Company declared dividends totalling 7.80pps (2023: 5.25pps). Prior to the capital raise and share consolidation, the Company declared a Q1 2024 dividend of 1.2pps. Following the capital raise and subsequent share consolidation, the Company declared a Q2 2024 dividend of 2.2pps on 10 September 2024, a Q3 2024 dividend of 2.2pps on 13 November 2024, and a Q4 2024 dividend of 2.2pps on 20 February 2024. A schedule of dividends can be found in the full Annual Report.

Debt Financing and Gearing

Borrowings comprise of third-party bank debt. The bank debt is secured over properties owned by the Group and repayable over the coming five years. The weighted average maturity of the bank debt 2.9 years (2023: 3.5 years).

The Group's borrowing facilities are with: the Royal Bank of Scotland, Bank of Scotland and Barclays; Scottish Widows Ltd. & Aviva Investors Real Estate Finance; Scottish Widows Ltd. and Santander UK. The total bank borrowing facilities at 31 December 2024 amounted to £316.7 million (2023: £370.8 million) before unamortised debt issuance costs.

At 31 December 2024, the Group's cash and cash equivalent balances amounted to £56.7 million (2023: £34.5 million), of which £55.9 million (2023: £30.7 million) was unrestricted cash.

The Group's net loan to value ("LTV") ratio stands at 41.8% (2023: 55.1%) before unamortised costs.

Debt Profile and LTV Ratios as at 31 December 2024

Table may not sum due to rounding.

As at 31 December 2024, the Group had headroom against its borrowing covenants.

The net gearing ratio (net debt to Ordinary Shareholders' equity (diluted)) of the Group was 73.9% as at 31 December 2024 (2023: 126.2%).

Interest cover, excluding amortised costs, stands at 2.7 times (2023: 2.9 times) and including amortised costs, stands at 2.4 times (2023: 2.7 times).

* Before unamortised debt issue costs

** Based on Colliers International Property Consultants Ltd.

Hedging

The Group applies an interest hedging strategy that is aligned to the property management strategy and aims to mitigate interest rate volatility on at least 90% of the debt exposure.

Table may not sum due to rounding

1WACD - Weighted Average Effective Interest Rate including the cost of hedging

There is no over-hedged position as at 31 December 2024.

Tax

The Group entered the UK REIT regime on 7 November 2015 and all of the Group's UK property rental operations became exempt from UK corporation tax from that date. The exemption remains subject to the Group's continuing compliance with the UK REIT rules.

On 9 January 2018, the Company registered for VAT purposes in England.

During 2024, the Group recognised a deferred tax charge of £64,590 (2023: £8,431).

PRINCIPAL RISKS AND UNCERTAINTIES

Effective risk management is embedded throughout Regional REIT and underpins the execution of the Company's strategy, the positioning of the business for growth and maintaining the regular income over a long-term sustainable horizon.

Risk Framework and Approach

The Board acknowledges the importance of embedding a framework to identify, actively monitor, managing and mitigating its risks, which include, but are not limited to: strategic, valuation, healthcare, economic and political, funding, tenant, financial and tax charges, operational, regulatory, environmental risks and emerging risks.

The Board has overall responsibility for the Company's system of risk management and internal controls. It is supported by the Audit Committee in the management of risk. The Audit Committee is responsible for determining the principal risks facing the business and reviewing, at least annually, the effectiveness of the Company's financial control, risk management and internal control processes.

Over the long term, the business will face other challenges and emerging threats for which it remains vigilant.

However, the Board also views the risks as opportunities that, when effectively managed, can enhance performance. Thus, having an effective risk management process is key to support the delivery of the Company's strategy.

Approach to Managing Risk - Identification, Evaluation And Mitigation

The risk management process emphasis is upon awareness and is structured to identify, evaluate, manage and mitigate, rather than eliminate, risks faced. The Company maintains a detailed and formal matrix of current principal risks, which uses risk scoring to evaluate risks consistently. This allows the risks to be monitored and mitigated as part of a risk management process with the Audit Committee undertaking, at a minimum on a six-monthly basis or more frequently if required, a robust evaluation of these risks facing the Company.

Risks are identified and assessed according to their potential impact on the Company and to their likelihood occurrence. The Audit Committee utilises the risk matrix to prioritise individual risks, allocating scores to each risk for both the likelihood of its occurrence and the severity its impact. Those with the highest gross rating in terms of impact are highlighted as top risks within the matrix and are defined as principal risks.

Although the Board believes that it has a robust framework of internal controls in place, it recognises it can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.

Risk Appetite

Taking risks is an essential and inherent facet of operating any business. As such the risk management approach is not to eliminate all risk but to ensure that appropriate strategies are in place to identify, actively monitor, manage and mitigate the key risks.

The Board is responsible for defining the level of risk that the Company assumes and ensuring that it remains in-line with the Company's strategy. Risk appetite is integral to the Board's approach to risk management, business planning and decision making. The level and type of risk that the Company is willing to bear will vary over time.

The Board, in collaboration with the Asset Manager and Investment Manager, and with the latest information available, regularly reviews the risk appetite of the Company allowing a prompt response to identified emerging risks.

Emerging Risks

The Board is cognisant of emerging risks defined as potential trends, sudden events or changing risks, which are characterised by a high degree of uncertainty in terms of probability of occurrence and possible effects on the Company. Once emerging risks become sufficiently clear, they may be classed as a principal risk and added to the risk matrix.

To help manage emerging risks and discuss other wider matters affecting property, the Board has an annual strategy meeting. The Board considers having a clear strategy is the key to managing and mitigating emerging risk.

The Company's principal risks consist of the ten most significant risks which are composed of eight strategic and two operational risks. The strategic risks relate to investment strategy, valuation, healthcare, economics and political, funding, tenant, financial and tax changes, and environmental and energy efficiency standards; operational risk encompasses business disruption, and accounting, legal and regulatory.

The below list, in no particular order, sets out the current identifiable principal and emerging risks, including their impact and the actions taken by the Company to mitigate them. It does not purport to be an exhaustive list of all the risks faced by the Company.

Principal Risk Summary

1. Strategic

7. Financial and Tax Changes

8. Operational

9. Accounting, Legal, and Regulatory

10. Environmental and Energy Efficiency Standards

Changes to the Principal Risks and Uncertainties

The Board, via the Audit Committee, has reviewed and agreed the movement during the year to each of the identified principal risks and uncertainties following review of these risks, having considered the characteristics of these and the broader economic and geopolitical factors influencing them.

A potential emerging risk is the adoption of artificial intelligence in office-based roles, which could pose both a risk and opportunity for the demand of office space. The Board, alongside the Asset and Investment Manager, continues to monitor developments in this area.

The potential impact of these risks on the Company's long-term strategy is considered evaluated to ensure informed decision-making and proactive management.

SUSTAINABILITY REPORT

The Sustainability Report is provided in the full Annual Report.

Extract FROM the Directors' REPORT

The full Directors' Report, which includes the Corporate Governance Statement, is provided in the full Annual Report.

Share Capital

As at 31 December 2024, the Company's total issued share capital was 162,088,483* Ordinary Shares (2023: 515,736,583).

On 18 July 2024, shareholders approved a Capital Raising and Share Consolidation and the Company raised approximately £110.5 million of gross proceeds, in aggregate, by way of a fully underwritten Placing, Overseas Placing and Open Offer of 1,105,149,821 New Ordinary Shares. Following completion of the Capital Raising, the Ordinary Shares were consolidated at the Consolidation Ratio of one Consolidated Share for every 10 Ordinary Shares.

All of the Company's Ordinary Shares are listed on the Main Market segment of the London Stock Exchange and each Ordinary Share carries one vote.

There is only one class of Ordinary Shares in issue for the Company, in adherence to the REIT requirements. The only other shares the Company may issue are particular types of non-voting restricted preference shares, of which none (2023: none) are currently in issue.

At the AGM held on 5 August 2024, the Directors were granted authority to allot Ordinary Shares on a non- pre-emptive basis for cash up to a maximum number of 16,208,864 Shares (being 10% of the issued share capital on 19 July 2024). The Directors were also granted the authority to disapply pre-emption rights in respect of the allotment of Ordinary Shares up to a maximum number of 16,208,864 Shares (being 10% of the issued share capital on 19 July 2024) where the allotment of such Shares is for the sole purpose of financing an acquisition or other capital investment as defined by the Pre-Emption Group's Statement of Principles.

No shares were issued under these authorities during the year under review, and the authorities will expire at the Company's 2025 AGM where resolutions for their renewal will be sought, or, if sooner, on 5 November 2025.

At the AGM held on 5 August 2024, the Company was authorised to purchase up to a maximum of 16,208,864 of its own Ordinary Shares (being 10% of the Company's issued share capital on 19 July 2024).

No shares have been purchased under this authority during the year under review, which will expire at the Company's 2025 AGM where a resolution for its renewal will be sought, or, if sooner, on 5 November 2025.

* During the year the Company offered 15 new ordinary shares for every 7 existing shares. This resulted in an increase of 1,105,149,821 Ordinary Shares being issued. Subsequently there was a 10 for 1 split with the resulting Ordinary shares in issue being 162,088,483.

Restrictions on the Transfer of Shares

Subject to the Articles, as well as applicable foreign securities laws, a shareholder may transfer all or any of their Ordinary Shares in any manner which is permitted by Guernsey law or in any other manner which is from time to time approved by the Board.

If any Ordinary Shares are owned directly, indirectly or beneficially by a person believed by the Board to be a "Non-Qualified Holder" (see below), the Board may give notice to such person requiring them either: (i) to provide the Board within 30 days of receipt of such notice with sufficient satisfactory documentary evidence to satisfy the Board that such person is not a Non-Qualified Holder, or (ii) to sell or transfer their Ordinary Shares to a person who is not a Non-Qualified Holder within 30 days and within such 30 days to provide the Board with satisfactory evidence of such sale or transfer and pending such sale or transfer, the Board may suspend the exercise of any voting or consent rights and rights to receive notice of or attend any meeting of the Company and any rights to receive dividends or other distributions with respect to such Ordinary Shares.

Where condition (i) or (ii) is not satisfied within 30 days after the serving of the notice, (i) the person will be deemed, upon the expiration of such 30 days, to have forfeited their Ordinary Shares or (ii) if the Board in its absolute discretion so determines, the Company may dispose of the Ordinary Shares at the best price reasonably obtainable and pay the net proceeds of such a disposal to the former holder.

A Non-Qualifying Holder is defined as any person whose ownership of Ordinary Shares, or the transfer of Ordinary Shares to such person, may:

• cause the Company's assets to be deemed "plan assets" for the purposes of the US Internal Revenue Code of 1986 (as amended), or US Employee Retirement Income Security Act of 1974 (as amended);

• cause the Company to be required to register as an "investment company" under the US Investment Company Act 1940;

• cause the Company or any of its securities to be required under the US Exchange Act, the US Securities Act or any similar legislation;

• cause the Company not being considered a "Foreign Private Issuer", as such term is defined in rule 3b-4(c) under the US Exchange Act;

• cause the Investment Adviser to be required to register as a municipal Adviser under the US Exchange Act;

• result in the Company being disqualified from issuing securities pursuant to Rule 506 of Regulation D under the US Securities Act;

• cause a loss of partnership status for US federal income tax purposes or a termination of the US partnership under US Internal Revenue Code of 1986 (as amended), Section 708;

• result in a person holding Ordinary Shares in violation of the transfer restrictions put forth in any prospectus published by the Company from time to time; or

• cause the Company to be a "controlled foreign corporation" for the purposes of Section 957 of the US Internal Revenue Code of 1986, (as amended), or may cause the Company to suffer any pecuniary or tax disadvantage or any person who is deemed to be a Non-Qualified Holder by virtue of their refusal to provide the Company with information that it requires in order to comply with its obligations under exchange of information agreements.

Restrictions on Voting Rights

Other than those discussed above, the Company does not have any restrictions on shareholder voting rights.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the Group Financial Statements in accordance with applicable laws and regulations.

Guernsey company law requires the Directors to prepare financial statements for each financial year. The Directors are required under the UK Listing Rules of the Financial Conduct Authority to prepare the group financial statements in accordance with UK-adopted International Accounting Standards. 

The financial statements of the Group are required by law to give a true and fair view of the state of the Group's affairs at the end of the financial period and of the profit or loss of the Group for that period and are required by UK-adopted International Accounting Standards to present fairly the financial position and performance of the Group.

In preparing each of the Group financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· present a true and fair view of the financial position, financial performance and cash flows of the Company;

· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with UK-adopted International Accounting Standards; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions; disclose with reasonable accuracy at any time the financial position of the Group; enable them to ensure that the financial statements comply with the requirements of The Companies (Guernsey) Law 2008 and, as regards the Group financial statements, the UK-adopted International Accounting Standards. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on Regional REIT's website.

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE CONSOLIDATED ANNUAL REPORT

Each of the Directors, whose names and functions are found within the full Annual Report, confirms that to the best of each person's knowledge:

• the financial statements, prepared in accordance with UK-adopted International Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the undertakings included in the consolidation taken as a whole;

• the Strategic Report, including the Asset and Investment Managers' Report, includes a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face; and

• the Annual Report and financial statements for the year ended 31 December 2024, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Group's position, performance, business model and strategy.

This responsibility statement was approved by the Board of Directors and signed on its behalf by:

David Hunter

Chairman

24 March 2025

FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024

The notes below are an integral part of these consolidated financial statements.

Total comprehensive losses all arise from continuing operations.

Consolidated Statement of Financial Position as at 31 December 2024

The notes below are an integral part of these consolidated financial statements.

These consolidated group financial statements were approved by the Board of Directors and authorised for issue on 24 March 2025 and signed on its behalf by:

David Hunter

Chairman

24 March 2025

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024

For the year ended 31 December 2023

The notes below are an integral part of these consolidated financial statements.

Consolidated Statement of Cash Flows for the Year Ended 31 December 2024

The notes below are an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements

For the Year Ended 31 December 2024

1. Corporate information

The Group's consolidated financial statements for the year ended 31 December 2024 comprise the results of the Company and its subsidiaries (together constituting the "Group") and were approved by the Board and authorised for issue on 24 March 2025.

The Company is a company limited by Shares incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended (the "Law"). The Company's Ordinary Shares are admitted to the Official List of the Financial Conduct Authority ("FCA") and traded on the London Stock

Exchange ("LSE").

The Company was incorporated on 22 June 2015 and is registered with the Guernsey Financial Services Commission as a Registered Closed-Ended Collective Investment Scheme pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended, and the Registered Collective Investment Scheme Rules & Guidance 2021.

The Company did not begin trading until 6 November 2015 when the Shares were admitted to trading on the LSE.

The nature of the Group's operations and its principal activities are set out in the Strategic Report.

The address of the registered office is Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey GY2 4LH.

2. Basis of preparation

In accordance with Section 244 of The Companies (Guernsey) Law 2008, the Group confirms that the financial information for the year ended 31 December 2024 are derived from the Group's audited financial statements and that these are not statutory accounts and, as such, do not contain all information required to be disclosed in the financial statements prepared in accordance with UK-adopted International Accounting Standards.

The statutory accounts for the year ended 31 December 2024 have been audited and approved, but have not yet been filed.

The Group's audited financial statements for the year ended 31 December 2024 received an unqualified audit opinion and the auditor's report contained no statement under section 263(2) or 263(3) of The Companies (Guernsey) Law 2008.

The financial information contained within this preliminary statement was approved and authorised for issue by the Board on 24 March 2025.

2.1 Functional and presentation currency

The financial information is presented in Pounds Sterling, which is also the functional currency of all Group companies, and all values are rounded to the nearest thousand (£'000) pounds, except where otherwise indicated.

2.2 Going concern

The Directors confirm that they have a reasonable expectation that the Group has adequate resources

to continue as a going concern. This expectation is underpinned by having made an assessment of the Group's ability to continue in operational existence, giving due consideration to the Group's cashflow forecast, which encompasses cash resources, rental income, acquisition and disposals of investment properties, elective and committed capital expenditure, dividend distributions and the borrowing facilities and the respective maturities.

Following the successful completion of the £110.5 million equity capital raise in July 2024, the Group ended the year under review with £56.7 million of cash and cash equivalents, of which £55.9 million was unrestricted cash. The borrowing facilities remained compliant with all loan covenants, with a net LTV of c. 41.8%, based upon the value of the Group's investment properties as at 31 December 2024. Rental income collections remained robust with 98.6% of rent invoiced in the year collected as at 14 March 2025.

Given the substantial amount of unrestricted cash currently held by the Group and, with the next borrowing due to mature being the Royal Bank of Scotland, Bank of Scotland and Barclays £99.8 million facility in August 2026, the Directors are satisfied that the Group and Company have adequate resources to continue in operational existence for a period of at least 12 months from the date that these Financial Statements were approved. Based on the above, together with available market information, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. Accordingly, the Directors consider that it is appropriate to continue to prepare the Financial Statements on a going concern basis.

2.3 Business combinations

At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. For an acquisition of a business where an integrated set of activities are acquired in addition to the property, the Group accounts for the acquisition as a business combination under IFRS 3 Business Combinations ("IFRS 3").

Where such acquisitions are not judged to be the acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based upon their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred tax arises.

2.4 New standards, amendments and interpretations

New standards, amendments to standards and interpretations which came into effect for accounting

periods starting on or after 1 January 2024 are as follows:

Amendments to IAS 1 'Presentation of Financial Statements' (effective for periods beginning on or after 1 January 2024) clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period and not expectations of or actual events after the reporting date. The amendments also give clarification to the definition of settlement of a liability.

Amendments to IAS 1 'Presentation of Financial Statements' (effective for periods beginning on or after 1 January 2024) give clarification with respect to covenants when assessing whether liabilities are classified as either current or non-current.

Amendments to IFRS 16 'Leases' (effective for periods beginning on or after 1 January 2024) include requirements to explain how an entity accounts for a sale and leaseback after the date of transaction.

Amendments to IAS 7 'Cash Flow Statements' and IFRS 7 'Financial Instruments: Disclosure' (effective for periods beginning on or after 1 January 2024) require disclosures to enhance the transparency of supplier finance arrangements and their effects on an entity's liabilities, cash flows and exposure to liquidity risk.

During the year ended 31 December 2024, none of the above had a material impact on the financial statements.

2.5 New standards, amendments and interpretations effective for future accounting periods

A number of new standards, amendments to standards and interpretations are effective for periods beginning on or after 1 January 2025 and have not been applied in preparing these financial statements. These are:

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (effective for periods beginning on or after 1 January 2024 but not yet endorsed for use in the UK).

IFRS S2 Climate-related Disclosures (effective for periods beginning on or after 1 January 2024 but not yet endorsed for use in the UK).

Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates' (effective for periods beginning on or after 1 January 2025) provides clarification upon treatment for transactions in a foreign currency that is not exchangeable into another currency at the measurement date.

IFRS 18 'Presentation and Disclosure in Financial Statements' (effective for periods beginning on or after 1 January 2027 but not yet endorsed for use in the UK) replaces IAS 1 'Presentation of Financial Statements'.

IFRS 19 'Subsidiaries without Public Accountability: Disclosures' (effective for periods beginning on or after 1 January 2027 but not yet endorsed for use in the UK)) specifies reduced disclosure requirements that an eligible entity is permitted to apply instead of the disclosure requirements in other IFRS Accounting Standards.

The Directors are assessing the impact these new amendments and standards will have on the preparation of the financial statements.

3. Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

3.1. Critical accounting estimates and assumptions

The principal estimates that may be material to the carrying amount of assets and liabilities are as follows:

3.1.1 Valuation of investment property

The value of investment property, is determined by independent property valuation experts to be the estimated amount for which a property should exchange on the date of the valuation in an arm's length transaction less the value of assets arising from rent smoothing. Properties have been valued on an individual basis. The valuation experts use recognised valuation techniques applying the principles of both IAS 40 and IFRS 13.

The value of the properties has been assessed in accordance with the relevant parts of the current RICS Red Book. In particular, we have assessed the fair value as referred to in VPS4 item 7 of the RICS Red Book. Under these provisions, the term "Fair Value" means the definition adopted by the International Accounting Standards Board ("IASB") in IFRS 13, namely "The price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date". Factors reflected include current market conditions, annual rentals, lease lengths and location. The significant methods and assumptions used by the valuers in estimating the fair value of investment property are set out in note 14.

The fair value of investment property is equal to the independent property valuer's valuation of £622.5m (2023: £700.7m) less the prepayment for rent smoothing of £15.0m (2023: £13.0m).

3.2. Critical judgements in applying the Group's accounting policies

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

3.2.1 Operating lease contracts - the Group as lessor

The Group has acquired investment properties that are subject to commercial property leases with tenants. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, particularly the duration of the lease terms and minimum lease payments, that it retains all of the significant risks and rewards of ownership of these properties and so accounts for the leases as operating leases.

3.2.2 Consolidation of entities in which the Group holds less than 50% but has power to control

Management considered that up until 9 November 2018, the Group had de facto control of View Castle Limited and its 27 subsidiaries (the "View Castle Sub Group") by virtue of the amended and restated Call Option Agreement dated 3 November 2015. Following a restructure of the View Castle Sub Group, the majority of properties held within the View Castle Sub Group now reside in a new special purpose vehicle ("SPV"). A new call option was entered into dated 9 November 2018 with View Castle Limited and five of its subsidiaries (the "View Castle Group"). As per the previous amended and restated Call Option Agreement, under this new option the Group may acquire any of the properties held by the View Castle Group for a fixed nominal consideration. Despite having no equity holding, the Group is deemed to have control over the View Castle Group as the Option Agreement means that the Group is exposed to, and has rights to, variable returns from its involvement with the View Castle Group, through its power to control.

3.2.3 Recognition of income

Service charges and other similar receipts are included in net rental and property income gross of the related costs as the Directors consider the Group acts as principal in this respect.

4. Summary of significant accounting policies

The accounting policies adopted in this report are consistent with those applied in the financial statements for the year ended 31 December 2023 and have been consistently applied for the year ended 31 December 2024. A new asset class has arisen in the year addressed in the accounting policy 4.3.

4.1 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the date of the Statement of Financial Position.

4.2 Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. Identifiable assets and liabilities acquired, and contingent liabilities assumed, in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

For acquisitions of subsidiaries not meeting the definition of a business, the Group allocates the cost between the individual identifiable assets and liabilities in the Group based on their relative fair values at the date of acquisition. Such transactions or events do not give rise to goodwill.

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated in full. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies.

The excess of the consideration transferred, and the amount of any non-controlling interest in the acquiree over the fair value of the identifiable net assets acquired, is recognised as goodwill.

4.2.1 Disposal of subsidiaries

When the Group ceases to have control over an entity, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in the carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

4.3 Associates

Associates are entities over which the investor has significant influence, being the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies. and holds 20% or more of the voting power.

The Group adopts the equity method of accounting on such assets. On initial recognition, the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the associate after the date of acquisition less distributions received.

The Group's share of the Associates' profit or loss is recorded in the Consolidated Income Statement.

4.4 Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined that its chief operating decision-maker is the Board of Directors.

After a review of the information provided for management purposes, it was determined that the Group has one operating segment and therefore segmental information is not disclosed in these consolidated financial statements. No single customer comprises in excess of 10% of the Group's revenue in either 2024 or 2023.

4.5 Investment property

Investment property comprises freehold or leasehold properties that are held to earn rentals or for capital appreciation, or both, rather than for sale in the ordinary course of business or for use in production or administrative functions.

Investment property is recognised, usually, on legal completion, when the risks and rewards of ownership have been transferred, and is measured initially at cost including transaction costs. Transaction costs include transfer taxes, professional fees for legal services and other costs incurred in order to bring the property to the condition necessary for it to be capable of being utilised in the manner intended. Subsequent to initial recognition, investment property is stated at fair value. The Group now recognise the fair value of investment property to be the value calculated by the independent property valuer less the value of assets arising from rent smoothing. Gains or losses arising from changes in the fair value are included in the Group's Consolidated Statement of Comprehensive Income in the period in which they arise under IAS 40, 'Investment Property'.

Additions to investment property include costs of a capital nature only. Expenditure is classified as capital when it results in identifiable future economic benefits, which are expected to accrue to the Group. All other property expenditure is charged in the Group's Consolidated Statement of Comprehensive Income as incurred.

Investment properties cease to be recognised when they have been disposed of or withdrawn permanently from use and no future economic benefit is expected. The difference between the net disposal proceeds and the carrying amount of the asset (being the fair value at the start of the financial year) would result in either gains or losses at the retirement or disposal of investment property. Any gains or losses are recognised in the Group's Consolidated Statement of Comprehensive Income in the period of retirement or disposal.

4.6 Derivative financial instruments

Derivative financial instruments, comprising interest rate caps and swaps for hedging purposes, are initially recognised at fair value and are subsequently measured at fair value, being the estimated amount that the Group would receive or pay to sell or transfer the agreement at the period end date, taking into account current interest rate expectations and the current credit rating of the lender and its counterparties. The gain or loss at each fair value remeasurement date is recognised in the Group's Consolidated Statement of Comprehensive Income.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs significant to the fair value measurement as a whole.

4.7 Financial assets

The Group classifies its financial assets as at fair value through profit or loss or at amortised cost, depending on the purpose for which the asset was acquired. Currently the only assets classified at fair value through profit or loss are derivative financial instruments.

Assets held at amortised cost arise principally from the provision of goods and services (e.g. trade and other receivables), but also incorporate other financial assets where the objective is to hold these assets in order to collect contractual cash flows which comprise the payment of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost being the effective interest rate method, less provision for impairment.

The Group's financial assets comprise, equity investments, 'trade and other receivables', 'tenant loan' and 'cash and cash equivalents'.

The tenant loan relates to a loan made to a tenant which is subject to interest. The amount receivable has been recognised at amortised cost using the effective interest method. Impairment provisions are recognised based on the expected credit loss model detailed within IFRS 9.

4.8 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently carried at amortised cost less provision for impairment. Where the time value of money is material, receivables are carried at amortised cost using the effective interest method. Impairment provisions are recognised based on the expected credit loss model detailed within IFRS 9.

The Group recognises a loss allowance for expected credit losses on trade receivables. The loss allowance is based on lifetime expected credit losses. Trade receivables are grouped based on shared credit risk characteristics and the days past due. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition. The expected credit losses on these financial assets are estimated based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. Impaired balances are reported net, however, impairment provisions are recorded within a separate provision account with the loss being recognised within administration costs within the Consolidated Statement of Comprehensive Income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Lease premiums and other lease incentives provided to tenants are recognised as an asset and amortised over the period from date of lease commencement to termination date.

4.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at banks with original maturities of three months or less. Cash also includes amounts held in restricted accounts that are unavailable for everyday use.

4.10 Trade and other payables

Trade and other payables are initially recognised at their fair value being at their invoiced value inclusive of any VAT that may be applicable. Payables are subsequently measured at amortised cost using the effective interest method.

4.11 Bank and other borrowings

All bank and other borrowings (comprising bank loans and retail eligible bonds) are initially recognised at cost net of attributable transaction costs. Any attributable transaction costs relating to the issue of the bank borrowings are amortised through the Group's Statement of Comprehensive Income over the life of the debt instrument on a straight-line basis. After initial recognition, all bank and other borrowings are measured at amortised cost, using the effective interest method.

Bank and other borrowings are derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in Group's Consolidated Statement of Comprehensive Income.

4.12 Dividends payable to Shareholders

Equity dividends are recognised and accrued from the date declared and when they are no longer at the discretion of the Company.

4.13 Rental and property income

Rental income arising from operating leases on investment property is accounted for on a straight-line basis over the lease terms and is included in gross rental and property income in the Group's Consolidated Statement of Comprehensive Income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the lease asset and are recognised as an expense over the lease term on the same basis as the lease income.

For leases which contain fixed or minimum uplifts, the rental income arising from such uplifts is recognised on a straight-line basis over the lease term.

Tenant lease incentives are recognised as a reduction of rental revenue on a straight-line basis over the term of the lease. The lease term is the non-cancellable period of the lease together with any further term for which the tenant has the option to continue the lease where, at the inception of the lease, the Directors are reasonably certain that the tenant will exercise that option.

Surrender premiums received from tenants to terminate leases or surrender premises are recognised in the Group's Statement of Comprehensive Income when the right to receive them arises.

Dilapidation income is recognised in the Group's Statement of Comprehensive Income when the right to receive it arises.

When the Group is acting as an agent, the commission, rather than gross income, is recorded as revenue.

Income arising from expenses recharged to tenants is recognised in the year in which the compensation becomes receivable. Service charges and other similar receipts are included in net rental and property income gross of the related costs as the Directors consider the Group acts as principal in this respect.

4.14 Property costs

Non-recoverable property costs contain service and management charges related to empty properties.

Service and management charges are recognised in the accounting period in which the services are rendered.

Recoverable property costs contain service charges and other similar costs which are recognised in the accounting period in which the services are rendered.

4.15 Interest income

Interest income is recognised as interest accrued on cash balances held by the Group. Interest charged to a tenant on any overdue rental income is also recognised within interest income.

4.16 Finance costs

Interest costs are expensed in the period in which they occur. Arrangement fees that a Group entity incurs in connection with bank and other borrowings are amortised over the term of the loan.

4.17 Taxation

As the Company is managed and controlled in the UK, it is considered to be tax resident in the UK.

The tax currently payable is based on the taxable profit/(loss) for the period. Taxable profit/(loss) differs from net profit/(loss) as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current and deferred tax is calculated using tax rates that have been enacted or substantively enacted at the date of the Statement of Financial Position.

The Group elected to be treated as a UK REIT with effect from 7 November 2015. The UK REIT rules exempt the profits of the Group's UK property rental business from UK Corporation Tax. Gains on UK properties are also exempt from tax, provided that they are not held for trading or sold in the three years after completion of development. The Group is otherwise subject to UK Corporation Tax.

There are a small number of entities within the Group which fall outside the REIT rules and are subject to UK taxes on profits and property gains.

4.18 Deferred tax

Deferred tax is provided in full using the liability method on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit/(loss). The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax rates (and tax laws) enacted or substantively enacted at the date of the Statement of Financial Position. A deferred tax asset is recognised only to the extent that it is probable that future profits will be available for offset.

The deferred tax liability in relation to investment properties that are measured at fair value is determined assuming that the property will be recovered entirely through sale.

Deferred tax has been recognised on the unrealised property valuation gains/(losses) of properties owned by Group entities which fall outside of the REIT tax rules.

The current rate of UK Corporation Tax is 25%.

4.19 Stated capital

Stated capital represents the consideration received by the Company for the issue of Ordinary Shares. Ordinary Shares are classed as equity.

4.20 Share-based payments

The Group has entered into performance fee arrangements with the Asset Manager and Investment Adviser which depend on the growth in the net asset value of the Group exceeding a hurdle rate of return over a performance period. The fee will be partly settled in cash and partly in equity and the equity portion is therefore a Share-based payment arrangement. The fair value of the obligation is measured at each reporting period, and the cost recognised as an expense. The part of the obligation to be settled in Shares is credited to equity reserves. If circumstances change and the fee is no longer settled by the issue of Shares, then the amounts previously credited to equity reserves are reversed. In the current and prior year, no cash or equity rewards have been made.

4.21 Leased assets

The Group has a number of leases concerning the long-term lease of land associated with its long leasehold investment properties. These leased assets are capitalised as "right of use assets" by recognising the present value of the lease payments as an asset and a financial liability representing the obligation to make future lease payments.

Right of use assets are valued at fair value and the change in fair value is recognised in the Consolidated Statement of Comprehensive Income.

The associated financial liability is valued at the present value of future lease payments using an applicable incremental borrowing rate. The value of the financial liability is revalued at each reporting date. Lease payments reduce the financial liability and interest on the financial liability is recognised in finance costs.

5. Rental and property income

6. Property costs

7. Administrative and other expenses

Services provided by the Company's Auditor and its associates

The Group has obtained the following services from the Company's Auditor and its associates:

8. Directors' remuneration

Key management comprises the Directors of the Company. A summary of the Directors' emoluments is set out in the Directors' Remuneration Report in the full Annual Report.