Edison Investment Research Limited: Edison issues update on Regional REIT (RGL)

London, UK, 21 November 2017

Edison issues update on Regional REIT (RGL)

Regional REIT (RGL) is trading in line with management's expectations, is seeing a good level of interest in both its office and industrial properties, and has continued to be active in letting since 30 June. As a result, it expects occupancy rates to increase across the portfolio in the near term, supporting income from the growing portfolio (c £650m in assets). Lettings since the end of September indicate progress towards the 85% occupancy rate that we target for end-2017 and then towards 90% by the end of 2018. On this basis, RGL's highly attractive and growing dividend is fully covered by forecast earnings, while its regional focus should prove more resilient to macroeconomic headwinds than London real estate.

RGL's prospective dividend yield of 7.5% is the highest of all UK REITs, while its price/EPRA NAV of 0.96% sits within the middle of the range despite a strong focus on asset management with potential for capital gains. The geographic spread of its non-London portfolio, its sector and tenant diversity, and high asset yield all mitigate macroeconomic risks. The successful launch and letting of major refurbishment projects during H217/H118 is an important near-term catalyst.Click here to view the full report.

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