Regional REIT has cut its exposure to the industrial sector with an active six months of disposals, during which the firm took advantage of what it called “premium” prices for the sector.
The company made £60.4m of disposals in the six months to 30 June – a significant increase in disposals from the £3.7m it sold in the first six months of 2017.
Among its major disposals was a portfolio of light industrial assets for £39.1m, proceeds from which were recycled into regional office assets. It made £40.1m of acquisitions in the first six months of the year, £35.2m of which was from a single portfolio of offices.
Regional REIT made an additional £26.4m disposal of a multi-let industrial estate in Cumbernauld, Scotland in August.
As a result, industrial comprises 21% of Regional REIT’s portfolio – down from 26% this time last year.
Stephen Inglis, chief executive of Regional REIT’s asset manager London & Scottish Investments, said: “Regional REIT has continued to be opportunistic in H1 2018, disposing of non-core assets and reinvesting capital in quality assets where our asset management platform can add value.
“In addition, we made a strategic decision to sell a mixed-quality industrial portfolio where in part we had completed our business plan, to take advantage of the huge investor appetite and ‘premium’ prices being paid for this type of asset.”
Regional REIT’s portfolio grew to £758.7m – up from £640.4m in June 2017 – despite the disposals. Like-for-like value increased by 4.5%.
Its EPRA NAV was up by 7.3% since December to 113.6p per share, which the company attributed to profits from its disposals alongside a growth in valuations.
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