Regional Reit Share Price (RGL)

Oak Bloke

https://open.substack.com/pub/theoakbloke/p/theres-no-riddle-to-rgl?r=4zgkh3&utm_campaign=post-expanded-share&utm_medium=web

Trk

Thanks for the analysis ArbInv. My holding represents under 0.5% of the income portfolio I'm building (albeit with a 18% loss at present) - I'm tempted to double the stake to just under 1% and average down that loss a little. Will monitor

Having shared my analysis a few days ago some post earnings reflections are now included in the article and included below.

Regional REIT today published its Q1 2026 trading update, and my read is that it modestly strengthens the original thesis.

This is still not a clean compounder. It is still a bruised regional office landlord with refinancing risk, weak headline occupancy, and a balance sheet that needs continued discipline. But the update showed progress where it mattered. LTV fell from 40% to 39%, cash increased to £40.3m, gross borrowings fell, and the company completed further disposals close to December 2025 valuations. That last point matters most. If assets can be sold near book value, the current discount to reported NAV becomes harder to dismiss as entirely justified.

Operationally, the picture is mixed but not broken. Headline occupancy edged down from 76% to 75.5%, so the turnaround is not yet proven. But core portfolio occupancy improved to 87%, rent collection was strong at 98%, and new lettings and renewals were signed above ERV. That supports the idea that there is still demand for upgraded, well-located regional office space, even if the weaker legacy assets remain a drag.

The dividend was also rebased as expected, with a 2p Q1 payment, consistent with the 8p annual target. At today’s depressed share price, that remains a high yield, but I still view it as recovery income rather than core income.

So my conclusion is unchanged, but slightly firmer. Regional REIT remains a small opportunistic position, not a PYE spine holding. The key test is simple: keep selling non-core assets close to NAV, reduce debt, stabilize occupancy, and prove the rebased dividend is covered. If management keeps doing that, a 50%+ discount looks too harsh. If they cannot, this remains a value trap with a nice-looking yield.

Management getting lots of things right and the 2p quarterly dividend seems completely sensible... which means another 5% drop at 8am today for the bargain hunters no doubt!

Agree. I only have a starter position as obviously this is going to be rate sensitive but I like opening at this level.