Regional REIT (RGL) 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.
The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles. Income returns have been significantly more stable. Across all main sectors, valuations are showing significant negative adjustment to higher bond yields and economic uncertainty, in many cases despite continuing rent growth. Unlike previous downturns, there are few areas of over-supply and gearing is generally lower.
Adam Dickinson
Head of IR
Daniel Taylor
Non Executive Director
Kevin McGrath
Chairman
Stephen Inglis
Non Executive Director
Tim Bee
Non Executive Director
William D. Eason
Non Executive Director
Forecast net debt (£m)
395.9
Forecast gearing ratio (%)
84
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 4.6 | (7.1) | (31.4) |
Relative | (1.0) | (15.6) | (32.1) |
52 week high/low | 90.1p/56.5p |
RGL’s Q422 DPS, along with a trading update, is scheduled for 23 February, ahead of full year results in March. Q322 DPS declared of 1.65p is in line with RGL’s 6.6p target for the year (+3%), supported by continuing operational progress and strong rent collection, despite a deteriorating economic environment. Year-to-date new lettings at end-Q322 were £3.8m, above the 2019 pre-pandemic level and in December RGL announced the significant letting of a previously vacant office property on a 15-year lease (with 10-year break), adding £0.8m pa in rent. End-Q322 rent roll was £72.2m (H122: £72.0m) and EPRA occupancy increased to 84.6% vs 83.8% at June. With an ERV of £93.3m, income potential remains significant, primarily from further letting vacant space. With all debt fixed/hedged for almost five years, RGL’s interest costs are unaffected by rising interest rates.
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 | 9.5 | 5.5 |
2021A | 55.8 | 45.2 | 28.8 | 6.6 | 9.3 | 5.0 |
2022E | 62.3 | 50.7 | 0.7 | 6.5 | 9.5 | 6.0 |
2023E | 64.3 | 52.0 | 34.2 | 6.7 | 9.2 | 6.1 |
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