Regional REIT : FY 2022 Results Announcement

Regional REIT Limited

("Regional REIT", the "Group" or the "Company")

2022 Full Year Results

A robust performance with strong rent collections and increased rental income, with a sector leading dividend yield

Regional REIT (LSE: RGL), the regional office specialist today announces its full year results for the year ended 31 December 2022.

Financial highlights:

•  Net rental income increased by 12.2% to £62.6m (2021: £55.8m) - reflecting large portfolio acquisition in August 2021

•  EPRA EPS of 6.6pps (2021: 6.6pps); IFRS EPS (12.6)pps (2021: 6.3pps)

•  2022 dividend of 6.6pps (2021: 6.5pps), fully covered by EPRA earnings; currently yielding more than 11.3%*

•  Total rent collection for 2022 was 98.7%** of rent due, improved against the 97.7% of rent collected for the equivalent period in 2021

•  Primarily as a consequence of macro factors affecting the property sector, the portfolio value decreased to £789.5m (2021: £906.1m); reflecting a decrease of 12.1% on a like-for-like basis in the year, after adjusting for capital expenditure, acquisitions and disposals - outperforming the MSCI Rest of UK Office index capital decline of 17.3% over the same period

•  IFRS Net Asset Value per share 78.1p (2021: 97.4p); EPRA NTA per share of 73.5p (2021: 97.2p)

•  Rent roll remained strong at £71.8m (2021: £72.1m); average rent let by sq.ft. increased by 7.0% to £13.65

•  Group's cost of debt (incl. hedging) remained low at 3.5% pa (2021: 3.3% pa) - 100% fixed and hedged, ensuring the maximum cost of debt will not exceed 3.5% pa

•  Weighted average debt duration 4.5 years (2021: 5.5 years)

•  Net LTV increased to 49.5% (2021: 42.4%), due to the reduction in portfolio valuation; ample headroom remains on all loan covenants

*At a share price of 58.2p at the close of 27 March 2023.

**As at 17 March 2023, rent collections to 31 December 2022 amounted to 98.7%; actual rent collected 98.7%, monthly rents 0.0% and deals agreed of 0.0%.

Operational highlights:

A high-quality portfolio of property assets diversified by geography and tenant type - generating substantial rental income whilst delivering a high quarterly dividend

•  Rental income generated from a large spread of tenants and industries across a growing and geographically diversified portfolio of 154 properties (2021: 168), 1,552 units (2021: 1,511) and 1,076 occupiers (2021: 1,077)

•  Portfolio valuation split by region: England 78.3% (2020: 75.7%), Scotland 16.7% (2021: 19.0%) and the balance of 5.0% in Wales (2021: 5.3%). In England, the largest regions were the Midlands and the South East

•  The Group made disposals amounting to £84.1m (net of costs) during 2022. The proceeds from these disposals were promptly recycled into acquiring £74.7m (before costs) of attractive earnings accretive assets

•  At the period end, 91.8% of the portfolio by market value was offices (2021: 89.8%), retail 3.6% (2021: 3.7%), industrials 3.1% (2021: 5.1%), and Other 1.4% (2021: 1.4%)

•  EPRA Occupancy (by ERV) was 83.4% (2021: 81.8%)

•  Completed 114 new lettings in 2022, totalling 330,173 sq. ft., which will provide gross rental income of c. £5.9m

Post period end

•  On 14 February 2023, the Company announced that 99% of its tenants had returned to the office in some form.

•  On 23 February 2023, the Company declared the Q4 2022 dividend of 1.65pps, which will be paid to shareholders on 6 April 2023.

Stephen Inglis, CEO of London and Scottish Property Investment Management, the Asset Manager, commented:

"Following the turmoil of the pandemic, 2022 was an operationally strong year with earnings accretive asset recycling of £84.1m (after costs) of disposals and £74.7m (before costs) of acquisitions in areas identified as growth regions across the UK.

"The macro-economic environment provided significant headwinds for REITs in 2022 and was one of the most challenging years we have seen for the property sector in some time, as inflation has driven costs upwards and the increase in interest rates impacted valuations. We have not been immune to these challenges, with rising energy costs putting pressure on net earnings and the portfolio valuation decreasing by 12.9% to £789.5m, versus the MSCI Rest of UK Office decline of 17.3%; reflecting a decrease of 12.1% on a like-for-like basis, after adjusting for acquisitions, disposals and capital expenditure.

"In spite of all of the challenges, robust rent collections of 99% for the twelve months ended 31 December 2022 enabled the delivery of a covered dividend of 6.6pps, which we had indicated at the beginning of 2022. I would like to take this opportunity to thank my team for all their hard work and yet again delivering for our shareholders.

"As previously announced, a November 2022 study of our tenant's active occupation noted 99% of our tenant roster had returned to the office in some form, with only 12 tenants still to return, and we are witnessing increasing numbers of employees returning across all regions of the UK. I have consistently stated that it will be the end of 2023 and into 2024 before we see any long term trends emerging as companies see employees return to the office in numbers, which will then determine what works best for their business and their employees. It is clear there will not be a one size fits all strategy. However, the clear anecdotal evidence convinces me that most businesses will end up with the majority of people in the office the majority of time, which remains supportive for overall demand in our sector."

Forthcoming Events

- ENDS -

Enquiries:

Regional REIT Limited

Press enquiries through Buchanan

Toscafund Asset Management Investment Manager to the GroupTel: +44 (0) 20 7845 6100

Adam Dickinson, Investor Relations, Regional REIT Limited

London & Scottish Property Investment Management Asset Manager to the Group

Tel: +44 (0) 141 248 4155

Stephen Inglis

Buchanan Communications Financial PR

Tel: +44 (0) 20 7466 5000

Charles Ryland, Henry Wilson, George Beale

About Regional REIT

Regional REIT Limited ("Regional REIT" or the "Company") and its subsidiaries (the "Group") is a United Kingdom ("UK") based real estate investment trust that launched in November 2015. It is managed by London & Scottish Property Investment Management Limited, the Asset Manager, and Toscafund Asset Management LLP, the Investment Manager.

Regional REIT's commercial property portfolio is comprised wholly of income producing UK assets and comprises, predominantly of offices located in the regional centres outside of the M25 motorway. The portfolio is geographically diversified, with 154 properties and 1,076 occupiers as at 31 December 2022, with a valuation of c.£789.5m.

Regional REIT pursues its investment objective by investing in, actively managing and disposing of regional core and core plus property assets. It aims to deliver an attractive total return to its Shareholders, targeting greater than 10% per annum, with a strong focus on income supported by additional capital growth prospects.

For more information, please visit the Group's website atwww.regionalreit.com.

Cautionary Statement

This document has been prepared solely to provide additional information to Shareholders to assess the Group's performance in relation to its operations and growth potential. The document should not be relied upon by any other party or for any other reason. Any forward-looking statements made in this document are done so by the Directors in good faith based on the information available to them up to the time of their approval of this document. However, such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

ESMA Legal Entity Identifier ("LEI"): 549300D8G4NKLRIKBX73

Financial Highlights

Year ending 31 December 2022

Income focused - opportunistic buying and strategic selling, coupled with intensive asset management, continues to secure long-term income

** Alternative Performance Measures. Details are provided in the full Annual Report.

EPRA

The EPRA's mission is to promote, develop and represent the European public real estate sector. As an EPRA member, we fully support the EPRA Best Practices Recommendations. Specific EPRA metrics can be found in the Company's financial and operational highlights, with further disclosures and supporting calculations can be found within the full Annual Report.

Operational Highlights

Year ending 31 December 2022

Deliberately diversified and strengthened portfolio by location and tenant - regions primed for growth