Regional REIT owner RNP is leaning on demand in Britain’s regions as local policy momentum around devolution and growth zones helps support tenant activity and keeps asset sales close to book value.
RNP regional REIT disposals near book value
ESR Europe LSPIM, the investment adviser to Cohen & Steers REIT and Preferred Income Fund’s regional REIT exposure, said the business completed £21.5 million of disposals before costs, marginally below book value, underscoring what it called the “intrinsic and attractive value” of its assets. It also secured 26 new market lettings that generated £1.9 million of rental income, slightly ahead of the £1.8 million of breaks and expiries, a sign that occupancy and cash flow are holding up.
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For investors, that matters because regional office and mixed-use landlords have been under pressure from higher interest rates, weaker liquidity and uneven tenant demand. A disposal program that clears assets near valuation, rather than at steep discounts, suggests the market is not marking down the portfolio as aggressively as some feared.
The backdrop is also improving at the policy margin. A stronger focus on devolution in the UK has encouraged local authorities to compete more directly for investment, infrastructure and jobs, which can boost demand for regional real estate outside London. That matters for income-focused REIT holders because even modest leasing gains can help offset debt costs and support distributions.
The stock has been trading close to its 50-day moving average and 200-day moving average, with recent technical readings showing the shares slightly below both levels and momentum easing. That leaves the name sensitive to further evidence that regional leasing demand is stabilizing and that disposals continue to be executed without heavy valuation haircuts.
The next catalyst will be whether the REIT can keep converting regional policy support into actual rent growth and capital recycling, especially if UK rates stay restrictive.
| Entity | Gains | Losses |
|---|---|---|
| RNP / Regional REIT | ▲Near-book-value disposals, higher lettings | ▼Limited upside if rates stay high |
| Tenants in UK regions | ▲More local investment and space choice | ▼Potentially firmer rents |
| Income investors | ▲Better cash-flow visibility | ▼Weak if leasing slows |
| Sellers of regional assets | ▲Improved pricing discipline | ▼Forced discounts avoided |
