Regional REIT, a newly-incorporated regional commercial property company, today announces its application for admission of its ordinary shares of no par value (“Ordinary Shares”) to the premium listing segment of the Official List of the UK Listing Authority and admission to trading on the main market for listed securities of the London Stock Exchange (“Admission”). On Admission the Company will own a portfolio of commercial property interests in the principal regional locations of the UK outside of the Greater London area.
The Company’s Prospectus is expected to be published later today and it is expected that Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. on 6 November 2015. The Company will elect to become a UK Real Estate Investment Trust (“REIT”) following Admission.
Key highlights:
Investment objectives:
Deliver an attractive total return to Shareholders, with a strong focus on income, from investing in UK commercial property, predominantly in the office and industrial sectors in major regional centres and urban areas outside London
Target dividend yield of 7 to 8 per cent. on the placing price of £1.00 per Ordinary Share (the “Placing Price”) and 10 to 15% annual total property returns
REIT status
Portfolio summary:
London & Scottish Investments (“London & Scottish” or the “Asset Manager”), is the asset manager and Toscafund Asset Management LLP (“Toscafund” or the “Investment Manager”) is the investment manager (together, the “Managers”)
Property portfolio of £386 million (30 June 2015)
Combined contracted rent roll of £37.2 million per annum reflecting a yield of 9.1%
EPRA net asset value of £274.2m as at 30 June 2015 (before costs and expenses of the Transaction)
Weighted average unexpired lease term of 5.83 years (4.56 years to first break) with 84% occupancy by lettable area
Net LTV of 26% with a target net LTV of 35%
Cost of debt of 4.8% on a weighted average debt expiry of 3.8 years
The Placing and Admission:
80,000,000 existing Ordinary Shares are being placed on behalf of the Selling Shareholders at £1.00 per share equal to the pro forma EPRA Net asset value per share as at 30 June 2015 before costs and expenses of the Transaction
The Company will have 274,217,264 Ordinary Shares in issue at Admission which, at the Placing Price, would equate to a market capitalisation on Admission of c. £274.2m
Admission and first day of dealings is expected on 6 November 2015
Kevin McGrath, Chairman, says:
“The support this new REIT has received from both existing and new shareholders is very encouraging. We are delighted that a further high quality list of blue-chip institutional investors has decided to come on-board. This underlines our belief in the exciting prospects for regional commercial property in the UK, and is a reflection of the management team’s experience and expertise in this market.”
Stephen Inglis, Chief Investment Officer and Property Director of the Asset Manager, says:
“There is a structural lack of supply for quality office and industrial space in the major UK business areas outside of London – the areas showing the strongest signs of growth as the economy continues to improve. This, alongside our experience and knowledge of the market, presents us with an opportunity to create sustainable income and strong capital returns for our investors.”
