Regional Reit Share Discussion Threads

[stewart64] 17/1/2018 09:51

Has been traded on a very large spread this year which I believe is hampering progress on the share price.

[nimbo1] 16/1/2018 14:17

ive bought quite a few in here recently - all held in isa's and sipp. having moved out of some of the bond proxies for fear they are rolling over, especially if sterling strengthens further - anyway hope the c.7.5% yield should offer some protection for a while while i consider my next move.

[speedsgh] 16/1/2018 10:31

New Edison research note...

Asset growth and refinancing completed -

[alan@bj] 12/1/2018 08:59

Investors Chronicle have updated their opinion:-
With relatively low rents, Regional REIT’s portfolio offers significant reversionary value that will be crystallised over time as leases come up for renewal. The other attraction is the dividend, which yields over 7 per cent, and is fully covered by after-tax earnings. Trading at a discount to forecast net asset value, the shares are a must for income seekers. At 103p, buy.

[skyship] 31/12/2017 16:47

CREI isn't my favourite in the new "Income" sector due to its NAV premium. Personally I prefer EPIC, RGL & RLE; but whichever, this interview explains exactly why I believe the sector to be safe for income and growth:

[stewart64] 28/12/2017 12:32

Really messing with tbe spread just now...101.25, 103.0. Untradeable either way.

[skyship] 21/12/2017 15:21

See EDISON’s comments on the Interims, noting the adding back of exceptional costs:
======================================================================

Regional REIT’s (RGL) interim results show strong growth in assets, with the portfolio reaching £640m compared with £386m at the time of the IPO in November 2015. Rental income during the period was solid but lacked some of the momentum we had hoped for given the continuing positive supply-demand situation in regional commercial property markets. This should accelerate in H2 and through next year as recently acquired assets contribute fully and as occupancy increases, including the launch of several key refurbishment projects. RGL’s dividend yield, fully covered by earnings, is highly attractive, while its regional focus should prove more resilient to macroeconomic headwinds than London real estate.

H1 asset growth with earnings to follow:

H117 contracted rent rose from £44.0m at end-2016 to £54.6m, primarily reflecting a significant expansion of the asset base but also active letting activity. Occupancy (by value) rose to 83.3% (end-2016: 82.7%) but was slightly lower on a like-for-like basis. Continuing refurbishments were more of a drag in H1 than we had allowed for, dampening rental income and increasing void costs, but the managers are confident of increasing momentum in H2, when four major refurbishment projects are due to complete, and when recently acquired assets make a full period contribution.



Note: *EPRA EPS is adjusted to exclude exceptional expenses and estimated performance fees.

[sleepy] 21/12/2017 15:01

I read Note 10 as indicating that the 5.6p includes the increase in value of properties but the 2.9p excludes the increase

[skyship] 21/12/2017 08:01

Note10 to the Interims explains. EPS 5.6p; but EPRA EPS down at 2.9p due to exceptional valuation impairments:

[sleepy] 20/12/2017 19:16

I don’t follow this closely but I note divs of 7.7p pa and EPRA EPS of 7.7p in 2016 but only 2.9p in H1 2017

[solarno lopez] 20/12/2017 11:38

Thanks Skyship and best wishes to you

[skyship] 20/12/2017 11:37

Sorry, above post a bit disjointed/unfinished. I was called away to help unload a log delivery. V. pleased as I was down to my last 5 logs and Christmas just around the corner!

Can't recall everything I was going to say - most likely needlessly(!), but one thing is relevant. I would prefer slightly higher LTV rather than the issue of further equity:

# Cost of equity currently 7.7%

# Cost of new debt 3.85% inc. hedge

RGL now a banker in my portfolio; and well pleased to get another 10k from the excess subscription - assuming I get 100% of my application.

A bit tied up for the next few days, so in case no further opportunity:

I wish everyone on this thread all Health & Happiness for Christmas and The New Year

[skyship] 20/12/2017 08:00

Yes

In the documents the f/c dividend is for 7.85p; providing a covered yield of 7.7%

Perhaps perversely I'm happy with less equity issuance; prefer they use the available debt.

===============================================================

The Second New Portfolio comprises office properties with 210 lettable units with a total of 136 individual tenants and 75 per cent. occupancy by lettable area. The portfolio was valued at GBP44.8 million as at 8 November 2017, with a combined contracted rent roll of GBP4.2 million per annum reflecting a yield of 9.2 per cent. on a weighted average unexpired lease term of 3.1 years (2.1 years to first break).

The Second New Portfolio Acquisition is conditional upon the Company raising and being in receipt of net proceeds of at least GBP75 million pursuant to the Capital Raising (the "Second New Portfolio Capital Raising Condition"). After the refinancing of the First New Portfolio Acquisition, and assuming minimum net proceeds pursuant to the Capital Raising of at least GBP75 million, the consideration for the Second New Portfolio Acquisition is expected to be funded using the proceeds of the Capital Raising.

The Company expects to be able to waive the Second New Portfolio Capital Raising Condition if the Minimum Proceeds are raised and the Second New Portfolio Facility is available.

The Company estimates the Second New Portfolio Acquisition will be immediately earnings-enhancing.

[sleepy] 19/12/2017 21:28

Is dividend covered?

[alan@bj] 19/12/2017 19:24

Same here - my entitlement was 1250 and I applied for that plus a further 1250.

[uapatel] 19/12/2017 18:10

Chaps,

The they targeted £100M with minimum of £65M, they got around £72.27M.

How do peeps view this?

Small holding on my part - 10K shares and applies for 2K including allocation. Seems I will get the total amount. Will review if it's worth adding more at this stage/soon

[speedsgh] 19/12/2017 17:49

Gross proceeds of £73m raised against a target of £100m...

Results of Capital Raising -

On 4 December, Regional REIT announced a proposed Firm Placing, Placing, Open Offer and Offer for Subscription at 101 pence per share (the "Capital Raising").

Regional REIT is now pleased to announce that it has received valid applications and commitments for the Capital Raising such that the Company will issue 72,277,228 New Ordinary Shares at 101 pence per New Ordinary Share, raising, in aggregate, gross proceeds of £73.00 million. The disapplication of pre-emption rights in relation to these New Ordinary Shares was approved earlier at today's Extraordinary General Meeting. The issue of New Ordinary Shares will be split as follows:

· 49,504,950 New Ordinary Shares under the Firm Placing, raising gross proceeds of £50.00 million;

· 10,389,010 New Ordinary Shares taken up under the Open Offer, including excess applications, raising gross proceeds of £10.49 million;

· 10,007,568 New Ordinary Shares under the Placing, raising gross proceeds of £10.11 million; and

· 2,375,700 New Ordinary Shares under the Offer for Subscription, raising gross proceeds of £2.40 million.

Applications under the Open Offer (including excess applications) and the Offer for Subscription will all be met in full...

...Stephen Inglis, Chief Executive Officer of London & Scottish Investments, the Asset Manager of Regional REIT, commented:
This significant fundraising is testament to the strength of our business proposition and what we have delivered over the past two years. We are delighted to have secured the support of new and existing shareholders. The proceeds will enable us to acquire two major new portfolios that are immediately income and earnings accretive. Alongside the refinancing announced last week, which simplifies our balance sheet and significantly extends the average maturity of our debt, Regional REIT is well positioned for the next stage of its growth.

[alan@bj] 19/12/2017 13:46

Stewart - the reason for the fundraising is:-
Regional REIT (LSE: RGL) is pleased to announce it has agreed to acquire a portfolio of three real estate properties from NW UK III Limited comprising office properties in Woking, Cheshunt and Edinburgh and a portfolio of 17 office properties from Archimedes Real Estate LP (a fund managed by M7 Real Estate Limited) (the "Acquisitions").

To finance the Acquisitions the Company is proposing a Capital Raising to raise gross proceeds of c.GBP50 million through the issue of New Ordinary Shares by way of a firm placing ("Firm Placing") and additional gross proceeds of up to GBP50 million by way of a placing, open offer and offer for subscription ("Placing, Open Offer and Offer For Subscription"), all at an Offer Price of 101 pence per New Ordinary Share. The Capital Raising is conditional, inter alia, on minimum gross proceeds of GBP65 million being raised pursuant to the Capital Raising. The Board will have the ability to increase the size of the Issue by up to 25 per cent. should there be sufficient demand.

[speedsgh] 19/12/2017 11:50

Result of Extraordinary General Meeting -

Further to the Proposed Capital Raising announcement on 4 December 2017, Regional REIT is pleased to announce that shareholder approval of the Capital Raising was received at today's Extraordinary General Meeting...

...An announcement regarding the results of the Capital Raising is expected to be released shortly and by no later than 7:00am on 20 December 2017...

...It is expected that Admission and commencement of dealings in the New Ordinary Shares will become effective at 8.00 a.m. on 21 December 2017...

[stewart64] 13/12/2017 19:11

They could clear the debt with this offer, but I guess at least some of it will be used to buy more property otherwise the 7.8 % dividend will be a struggle. I certainly hope they don't leverage up even more, otherwise they will have a perennial need for open offers and a share price knock back. Fwiw I have applied for the extra eighth.

[skyship] 13/12/2017 09:45

Yesterdays Finals from Conygar (CIC) obviously make frequent mention of the stake in RGL they received as part of the proceeds from the portfolio sale to RGL earlier this year.

CIC has to be viewed as a willing seller of their stake at some stage. Perhaps a pity they couldn't have been eased out during the current deal.

[fenners66] 11/12/2017 13:03

pete - I see dilutions when say resource exploration companies who have never found anything , or sold anything let alone come anywhere near to making a profit ; offer more shares to mug punters at ever lower prices to pile on the misery.
Where you have money making assets , purchased with the new funds raised the only dilution is the element of the funds raised that are used for costs.
However we might see the costs for running the asset base spread further thus giving some of this back over time.

[skyship] 11/12/2017 10:29

A proxy bond paying 7.8% on the recent Edison f/c of a total dividend of 7.85p (7.65p) makes RGL a seriously attractive income stock, with the prospect of some capital gain thrown in as regional revaluations flow through.

The ship appears to have steadied since that drop to just under the 101p issue price; so I will seek another top-up in the public offer.

[lord gnome] 08/12/2017 11:07

I don't see it as a dilution, Peter. This is an asset-backed stock and will remain so. What matters is the nav per share and the income per share. In theory, an enlargement of the company should be positive in that we will be backed by a bigger and more-stable entity. Unless the bottom falls out of the markets - both stock and property - then I don't see this dropping back much under 100p. If however, there is a market correction (read panic) then anything is possible.