Regional REIT : Potential Equity Raise for Accretive Opportunities

20 February 2020

REGIONAL REIT Limited

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

Potential Equity Fundraise for Accretive Growth Opportunities

Regional REIT (LSE: RGL), the regional real estate investment specialist focused on building a diverse portfolio of income producing regional UK core and core plus office and industrial property assets, today announces that it is considering an equity fundraise. The proceeds will be used to take advantage of its growing near term pipeline of accretive growth opportunities in the investment market.

Occupational take-up in the Group's properties remains robust, which coupled with an experienced hands-on asset manager delivering successful asset management initiatives, has resulted in the diversified income portfolio continuing to expand. As announced on 29 January 2020, the portfolio was valued at £787.9m as at 31 December 2019, an increase of 9.7% during 2019, reflecting acquisitions made in the period. The like-for-like value of the Group's core office and industrial segment (93.6% by value) also increased in 2019 by 1.4%. Portfolio valuation was broadly unchanged on a like for like basis with a 0.1% decrease.

The successful June 2019 equity capital raise targeted £50.0m and was substantially oversubscribed at £62.5m. The funds have all been invested ahead of schedule in 11 high quality office assets for a total of £63.9 million producing a combined net initial yield of 8.7%, further diversifying the portfolio:

· August 2019, £25.9m acquisition of six offices located Birmingham, Bristol, Cardiff, Chester, Glasgow and Manchester. The assets total circa 172,442 sq. ft. providing a net income of c. £2.36 million p.a. from 27 tenants; equating to a net initial yield of 8.87% and anticipated reversionary yield of 9.54%.

· October 2019, £27.7m acquisition of four multi-let offices located in Redhill, Harefield, Bristol and High Wycombe. The assets total circa 131,036 sq. ft. providing a net income of c. £2.59 million p.a. from 24 tenants; equating to a net initial yield of 8.7% and anticipated reversionary yield of 9.7%.

· December 2019, £10.3m acquisition of a blue chip company headquarters located in Edinburgh. The office asset comprises 43,676 sq. ft., with a current contracted rent of £880,000 p.a. and a net initial yield of 8.0%.

The asset manager continues to see a growing near term pipeline of accretive growth investment opportunities which would further de-risk the portfolio by sector, region, and tenant type, whilst providing asset management potential.

The funds would be deployed in line with the Group's investment policy with a view to delivering further value to shareholders.

Any such equity fundraise is expected to follow the publication of a prospectus, with further announcements to follow in due course.

As previously announced, forthcoming events:

27 February 2020 Q4 2019 Dividend Declaration

26 March 2020 Full Year 2019 Preliminary Results Announcement

There will be a briefing for analysts at 9:30am on 26 March 2020 at the Buchanan offices, 107 Cheapside, EC2V 6DN. To request attendance please contact regional@buchanan.uk.com

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Enquiries:

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, offices and industrial units located in the regional centres outside of the M25 motorway. The portfolio is highly diversified, with 160 properties, 904 tenants as at 31 December 2019, with a valuation of £787.9m.

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.

The Company's shares were admitted to the Official List of the UK's Financial Conduct Authority and to trading on the London Stock Exchange on 6 November 2015. For more information, please visit the Group's website at www.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)