Member Info for Jonarian

Fair enough - for those of us still in it we don't have much option but to hold at this point and hope for a SP recovery over the long term! It would be bonkers to sell out at the current level, IMO. If they can show a clear plan for the bond repayment that will help relieve immediate liquidity concerns which is depressing the price. This will also have to be dealt with as part of the going concern and longer term viability review as part of the annual report, which will be happening as we speak.

Bear in mind that RGL has a significant proportion of the portfolio in major regional cities and teh out of town assets are generally next to major transport hubs. Longer term it all comes back to the quality and positioning of the assets. Really the only thing to do at this point is wait for the dividend announcement, or crystallise a loss. The current share price assumes a c.65% discount to what the Dec NAV is likely to be.

There is probably no stock more sensitive to rates right now. I have to admit i didn’t think this would go lower than 30. Some positive news would go a long way.

As I mentioned below, I think the importance of LTV is being overstated unless we see a significant further drop in valuations. The banks are interested in the income.

I can see one of the existing senior lenders agreeing to a bridge facility assuming that the income cover is sufficient, albeit for a cost. This will of course put pressure on the dividend, but they may only need a facility of 20-30m by August.

Longer term much will depend on where interest rates settle, but if rental income growth is as expected for FY24 then this may make the broader refinancing quite viable in 2025.

What is sorely needed is an update alongside the dividend announcement of what the plan is for the bond and strategy for the longer term refinancing.

The link I was trying to post was the colliers regional office update from february.

While the share price is somewhat sickening at present, there is some cause for optimism:

- Regional office rents are holding up extremely well for the most part: [LINK REMOVED]

- The most recent rent roll number is healthy and the rent is being collected, per the feb update

- There is a clear trend to 'returning to the office' for most organisations, multiple sources / news articles on this

- Extremely low levels of deals and liquidity in 2023 have clearly depressed prices but UK regional office outlooks predict an increase in demand for 2024 with many suggesting that we are at the bottom of the cycle for most regions

- There is undersupply in regional offices and this is not going to change any time soon while the UK is seeing significant population growth, and high cost of living in London may push new arrivals outs. This should depress vacancy rates

- It looks like the company has done well getting most of the portfolio into the A-C EPC range which is crucial for the refinancing

- Despite recent US jobs data most observers agree that rate cuts are still coming this year which will be positive for valuations and make an immediate impact on the share price

I understand the concern around the bond but it matures in August, not March. We will know more over the next few months but as some have pointed out, lenders are primarily interested in income. I won't be concerned unless we see a significant increase in vacancies.

Nothing is certain but what I suspect will happen is further asset disposals over the next few months, and some kind of temporary bridge financing (possibly an RCF facility) from one of the existing lenders that cross collateralizes the portfolio while enabling them to continue with the asset disposal programme. Lenders will show flexibility on LTV if the income is strong.

The final possibility that no-one has suggested is a buyout of the whole portfolio by a private investor, which even at a discount to the EPRA NAV would realise a significant profit on the current share price.

DYOR