Growing high yield asset base

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.