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(Alliance News) - Regional REIT Ltd on Tuesday raised its interim dividend in spite of a drop in profit and rental income in the first half of 2019, as the value of its portfolio declined.
For the six months to the end of June, the UK regional office and industrial property-focused investor reported a pretax profit of GBP10.7 million, down 76% from GBP45.3 million the year before.
This was largely due to a loss of GBP2.9 million on the fair value of investment properties, compared to a gain of GBP27.9 million the prior year.
Rental income dipped by 3.5% to GBP35.4 million from GBP36.7 million on lesser contributions from freehold properties and income from recoverable service charges.
As at June 30, Regional REIT's property portfolio was valued at GBP721.7 million, down 4.8% from GBP758.7 million the year before, but up 0.5% from GBP718.4 million at the end of December.
The portfolio itself now totals 149 properties, comprising 1,178 units and servicing 828 tenants. This is down from 151 properties a year before.
Net asset value per share at the end of June was 114.3 pence, up from 113.6p the same date the prior year, but down from 115.5p as at December 31.
Regional REIT declared a dividend of 3.8 pence per share, up 2.7% from 3.7p the prior year, and said this is in line with the trust's progressive dividend target of 8.25p for 2019.
"The outlook for the group is positive. The deliberately highly-diversified portfolio by region, tenant, and sector underpins our confidence of being able to maintain the quarterly dividends to our shareholders," said Chair Kevin McGrath.
"Whilst we can expect political and economic turbulence over the short term, we remain convinced of the ability of the long-term asset management initiatives to grow income streams and provide further opportunities for capital value enhancement, McGrath added.
Shares in Regional REIT were down 0.1% at 103.49 pence on Tuesday.