LONDON (ShareCast) - (ShareCast News) - Regional REIT announced its trading update and dividend declaration for the third quarter on Thursday, as the group continued to pursue its strategy of "providing investors with an attractive return on a sustained and consistent basis from investing in and managing offices and light industrial property in the main regional centres of the UK outside of the M25 motorway".
The company said that since 1 January to date, it has exchanged on 90 new leases, including 43 since 30 June 2016, totalling 603,471 square feet.

When fully occupied, they will provide approximately £4.5m pa of rental income.

In addition, the group has completed 33 regears on around 40% of the leases that have come up for renewal in the period, achieving a 1.2% uplift on the headline rent.

Including the regears, the acquisition of new replacement tenants and ongoing discussions with existing tenants who continue to hold over in the properties for which the leases have come up for renewal, around 75% of the headline rent has been retained.

Capital expenditure year-to-date was £9.2m gross, amounting to £6.1m net after recoveries and dilapidations.

Looking ahead, the group said it has seen a good performance being maintained in the industrial and office occupancy markets of the UK's regions.

It added that it remains confident as to its own growth prospects and is trading in-line with management's expectations for 2016.

Management said it expects an occupancy rate of around 85% to be achieved by the year end.

"The group has continued to deliver on its strategy and the commitments that were made with the IPO last year," said group property director Stephen Inglis.

"The business has maintained its progress in the third quarter of 2016 as occupancy in the UK's principal regional office and industrial markets has proved to be positive.

"Most evidently we can see this progress with the Wing and Rainbow Portfolios, which were acquired by the group in the first quarter."

Inglis said the key focus for the business remains income and the ability to pay dividends, underpinned by occupancy and rental growth.

"Whilst well positioned for organic development the company remains opportunistic and will continue to explore opportunities to further exploit the strong presence we have in the regions."

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