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(Sharecast News) - Regional REIT reported a resilient performance in the first half of 2025 on Tuesday, with stable income and progress on refinancing and disposals offsetting weaker headline earnings from lease breaks and a softer investment market.
For the six months ended 30 June, the group declared a fully covered dividend of 5.0p per share, up from 3.4p a year earlier, delivering a total shareholder return of 9.6%.
EPRA earnings per share fell to 5.2p from a restated 13.5p.
The London-listed firm's portfolio was valued at £608.3m, down 2% on a like-for-like basis, while EPRA net tangible assets slipped to £328.7m from £340.8m at year-end.
Gross borrowings reduced to £310.0m, though net loan-to-value rose to 43.2%.
"Regional REIT continued to make progress in the delivery of its strategy in the first half of the year, albeit challenging conditions in the investment markets and a small number of lease breaks negatively impacted the group's overall performance in the period on a headline basis," said Stephen Inglis, head of asset manager ESR Europe LSPIM.
"Notwithstanding these challenges we are seeing property yields stabilising suggesting the market has bottomed."
The company executed £7.8m of sales before costs and has identified £93.2m of assets for disposal, with around £50m either contracted, under offer or in negotiation.
Post-period disposals of £6.8m further reduced borrowings to £303.6m.
Occupancy improved to 78.6% from 77.5%, with rent collection at 97.7%.
Regional REIT said 20 new lettings were secured during the half, generating £1.4m of rent roll at terms 4.2% ahead of estimated rental value.
Activity continued into the second half, with a further £1m of leases signed.
"With a clear uptick in occupational demand in the regional office market, combined with a lack of good quality Grade A supply with EPC A or B ratings, we are well placed to deliver on our strategy," Inglis added.
"We are receiving an increased level of letting enquires and are making strong progress on a pipeline of material new letting opportunities, which we expect to feed through into our results in 2026."
The board declared a second-quarter dividend of 2.5p per share, payable on 17 October.
At 1505 BST, shares in Regional REIT were down 2.2% at 122.25p.
Reporting by Josh White for Sharecast.com.
