Regional REIT - Acquisitions are accretive and portfolio enhancing

Regional REIT (RGL) has announced the acquisition of three high-quality, recently refurbished office assets, with good environmental credentials, for an aggregate £26.5m, reflecting an accretive net initial yield of 8.0%. Across its portfolio, as the ‘return to the office’ builds, RGL expects a positive demand-supply balance for attractive regional offices to generate further value creation, despite economic and political challenges. This is based on the expectation of rental growth and increased occupancy driving valuation gains. Recent market weakness leaves the shares on a highly attractive FY21 yield of 8.6% and 23% discount to NAV.