Rents and occupancy figures dipped across Regional REIT’s portfolio in the first three months of the year, but as inflation falls to 2.3% the group said it remained confident for the future.
Rent roll totalled £65.5m in the three months ended 31 March, down from £67.8m at the end of the same period last year. ERV was down from £87m to £84.3m. Occupancy also dipped, down from 84.6% to 79.9%.
The value of the REIT’s portfolio fell from £700.7m at the end of 2023 to £688.2m.
Despite the downward trend, Stephen Inglis, chief executive of the REIT’s asset manager, London & Scottish Property Investment Management, remained confident in the future.
“With inflation pressures subsiding, we expect this to lead to an easing of pressure on the wider economy and in turn the likely reduction in the borrowing cost environment,” he said. “The combination of these two factors should see a positive impact on the investment market and transactional activity, assisting the sales programme and the value of our assets.”
He added: “We are acutely aware of the need to reduce our LTV back towards the 40% long-term target and finding the most appropriate solution for the retail bond, which is due to mature in August. We are continuing to progress the work on debt and equity refinancing options available to the company, while executing the controlled disposal programme.”
Regional REIT’s LTV is 55.2%. It has gross borrowings of £413.2m, with a weighted average debt duration of 3.2 years and an earliest repayment date of August this year.
The group also updated on progress to improve EPC ratings across its portfolio. Some 55.8% of its assets are now EPC B and above or exempt, up from 42.1% at the end of last year. Almost 26% are EPC C, with 11.5% EPC D and 6.7% E and below.
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