Regional REIT

LN: RGL

Market Cap£306m

Last Close 59.3p

Regional REIT owns a highly diversified commercial property portfolio of predominantly offices located in the regional centres of the UK. It is actively managed and targets a total shareholder return of at least 10% with a strong focus on income.

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Investment summary

With pandemic restrictions lifted and the return to work underway, Regional REIT’s (RGL) H122 results show good and continuing operational progress. The sharp rise in energy prices affected property costs, but this should moderate with government support measures. Combined with income seasonality and fully fixed/hedged borrowing costs, RGL expects a stronger H222 performance and reiterated its full-year DPS target of 6.6p.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 53.3 42.0 (31.2) 6.5 9.1 5.3
2021A 55.8 45.2 28.8 6.6 9.0 4.8
2022E 62.8 50.7 46.6 6.5 9.1 5.8
2023E 64.3 52.0 34.2 6.7 8.9 6.4
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles while income returns have been significantly more stable. Despite a deteriorating economic outlook market momentum has thus far been maintained. Interest rates are rising to combat inflation but remain relatively low in real terms. Like other real assets, commercial property has the potential to offer a degree of inflation hedging.

Last updated on 28/09/2022
Content on Regional REIT
Regional REIT – Continuing to deliver income-led returns
Real Estate | research Update | 27 September 2022
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Regional REIT – executive interview
Real Estate | Edison TV | 26 September 2022
Regional REIT – Acquisitions are accretive and portfolio enhancing
Real Estate | research Flash note | 23 June 2022
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Share price graph
Balance sheet
Forecast net debt (£m) 395.9
Forecast gearing ratio (%) 77
Price performance
%
1m
3m
12m
Actual (16.5) (22.0) (33.1)
Relative* (10.9) (17.6) (29.3)
52-week high/low 94.5p/59.2p
*% relative to local index
Key management
Kevin McGrath Chairman
Adam Dickinson Head of IR
Daniel Taylor Non Executive Director
Stephen Inglis Non Executive Director
Tim Bee Non Executive Director
William D. Eason Non Executive Director