Regional REIT shrinks portfolio
Listed property investor Regional REIT has shrunk its portfolio by £25m in asset sales over the course of the last year, making no new acquisitions.
The company, which has offices in Old Trafford overseeing properties throughout the North West, announced full year results to the stock market this morning to December 31, 2023, showing rent roll decreased to £67.8m from £71.8m.
Realised losses on the disposal of investment properties amounted to £0.7 million (2022: loss £8.6 million). The loss on the disposals were from the aggregate disposal of 10 properties and four 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 £73.3 million (2022: loss of £113.2 million), and an adjustment of £13.0m from rent smoothing, due to the Group now recognising the fair value of investment property as equal to the independent property valuer’s valuation of £700.7m, which is presented net of the prepayments arising from rent smoothing.
Since 31 December 2023, the Company has completed a further eight disposals and two part sales for an aggregate total of £13.4m (before costs) in line with the 2023 year end valuation.
Its second biggest new letting of the year was at the Foundation Chester Business Park, where GB Group renewed its lease to July 2028, with a break option in July 2026, at a rental income of £289,500 pa (£18.21/ sq. ft.) on 15,902 sq. ft. of space.
Stephen Inglis, CEO of London and Scottish Property Investment Management, the Asset Manager, commented: “2023 was another active period for the Company, in which we completed 88 new lettings, 7.1% above the Company’s external valuer’s estimated rental value (ERV) as at the 2023 year end. In addition, as part of the Company’s asset disposal programme to reduce the LTV, disposals during the year amounted to £25m (net of costs).
“Since 31 December 2023, the Company has completed eight disposals and two part sales for an aggregate total of £13.4m (before costs), in line with 2023 year end valuation. Currently, there are some 58 assets at various stages of disposal amounting to some £130m.
“Significant preparatory work has been undertaken to date in respect of both the debt and equity options for the refinancing of the £50m August 2024 retail bond. We look forward to providing an update in due course.”
