Regional REIT has ramped up its disposal programme as it looks to strengthen its balance sheet and insulate itself from a cautious letting market.
Trueman House in Leeds, part of the firm’s regional office portfoio
The company completed £51.6m of disposals in 2025, up from £30.8m in 2024, the REIT revealed in its full-year results.
It also secured a £72.4m, multi-bank refinancing and reduced its gross borrowings to £266.2m, cutting its net loan-to-value-ratio to 40.4%.
The management plans to continue disposals at similar levels in 2026, with £41m either completed, contracted, under offer, or in negotiation.
Regional REIT’s portfolio valuation fell to £555.2m from £622.5m in 2024, partly driven by its sales programme. Like-for-like portfolio valuation fell 5% year-on-year.
“Regional REIT delivered good progress last year against its main targets, despite continued challenging market conditions,” said Stephen Inglis, head of the firm’s investment adviser, ESR Europe LSPIM.
Stephen Inglis, Regional REIT
“However, against a prolonged downturn in the property cycle and with the war in the Middle East adding to geopolitical and economic uncertainty, the leasing market remains subdued, with some tenants taking longer to make decisions, and often choosing not to move at all.
“While this backdrop continues to temper near‑term activity, emerging supply constraints for quality, energy‑efficient space across key UK regional markets provide a supportive medium‑term outlook.”
Regional REIT completed 64 new market lettings in 2025, totalling £3.2m of rent at 3.9% above 2024 estimated rental value (ERV). Net rental income fell from £46m in 2024 to £40.3m.
Notable lettings included existing tenant Threesixty Services renewing its lease for 8,117 sq ft of space at The Royals, Altrincham Road, Manchester until June 2030, at an annual rent of £125,850, or £15.50/sq ft.
At 300 Bath Street in Glasgow, Securigroup let 9,618 sq ft on a lease to November 2035 with a break option in 2031, at an annual rent of £246,023, equating to £25.58/sq ft; while at Woodlands Court in Bristol, Hill Partnerships let 3,584 sq ft to January 2036 for £73,930 a year, equating to £20.63/sq ft.
The REIT continues to execute a capital spending programme to improve EPC ratings, with 84.5% now rated ‘C’-plus and 60% either EPC ‘B’ plus or exempt.
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