Regional REIT Ltd (LON:RGLR) issued a trading update on 25 May providing portfolio statistics and declared a dividend of 1.8p for Q117 and then announced a major new letting on 30 May. Management has continued to reduce tenant concentration and has further rebalanced the portfolio towards offices and away from Scotland, in line with the intentions stated when it listed in November 2015. Regional economies remain robust, supporting occupier demand, while investment in new buildings is still subdued, constraining supply. RGL offers an attractive dividend supported by a growing portfolio of high-yielding assets in markets that may be more resilient to macroeconomic headwinds than London real estate.
Robust occupier demand
The letting of the whole of the recently acquired Brennan House near Farnborough is the 27th new lease in the portfolio in FY17 and came only two months after the property was acquired, supporting management’s indication that regional occupier markets are healthy. The deal takes occupancy in the Conygar portfolio to 89% and in the total portfolio to c 84%, management targets 90% by the end of FY17.
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