21 July 2021

REGIONAL REIT Limited

("Regional REIT", the "Group" or the "Company")

Significant Disposal of £45m Industrial Portfolio

7.5% above valuation

Regional REIT Limited (LSE: RGL), the UK regional office specialist, is today pleased to announce it has exchanged contracts with ARA Dunedin (the "Purchaser") for the disposal of a significant industrial property portfolio for £45.0m. The completion is conditional upon the Purchaser having in place the required financing. This reflects a net initial yield of 6.75% to the Purchaser and is 7.5% above the valuation as at 31 December 2020. After capital expenditure, the sale represents an uplift of 18.0% from the acquisition price.

In line with the Company's stated strategy to exit the industrial sector in preference for higher yielding regional office investments, this disposal marks the sale of 62% (by value) of the Company's industrial holdings held as at 31 December 2020.

During the Company's ownership of the seven industrial properties (801,787 sq. ft.) located in Bromborough, Erith, Nottingham, Scunthorpe, Telford, Winsford and Wisbech, several asset management initiatives have been actioned to increase value. These initiatives included a series of renovations and the subdivision of some of the larger units, which assisted in improving occupancy rates, rental income and in turn, capital values.

It is anticipated that the proceeds from the disposal will be promptly recycled into the Group's strong pipeline of higher yielding office investments to further diversify the portfolio by geography and income stream.

Completion is expected to take place in August 2021.

Stephen Inglis, CEO of London & Scottish Property Investment Management, the Asset Manager of Regional REIT commented:

"The disposal of this industrial portfolio at 18% above the acquisition price enables the recycling of capital into higher yielding assets, where our bespoke asset management platform can best add shareholder value. This will also allow the Company to continue to focus on its clear strategy of offering investors exposure to a geographically diversified portfolio of regional office assets.

We look forward to providing a further update regarding the reinvestment of the proceeds from the sale in due course."

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About Regional REIT

Regional REIT Limited ("Regional REIT" or the "Company") and its subsidiaries (the "Group") is a United Kingdom ("UK") based real estate investment trust that launched in November 2015. It is managed by London & Scottish Property Investment Management Limited, the Asset Manager, and Toscafund Asset Management LLP, the Investment Manager.

Regional REIT's commercial property portfolio is comprised wholly of income producing UK assets and comprises, predominantly of offices located in the regional centres outside of the M25 motorway. The portfolio is geographically diversified, with 153 properties, 874 occupiers as at 31 March 2021, with a valuation of £734.7m.

Regional REIT pursues its investment objective by investing in, actively managing and disposing of regional core and core plus property assets. It aims to deliver an attractive total return to its Shareholders, targeting greater than 10% per annum, with a strong focus on income supported by additional capital growth prospects.

The Company's shares were admitted to the Official List of the UK's Financial Conduct Authority and to trading on the London Stock Exchange on 6 November 2015. For more information, please visit the Group's website at www.regionalreit.com.

Cautionary Statement

This document has been prepared solely to provide additional information to Shareholders to assess the Group's performance in relation to its operations and growth potential. The document should not be relied upon by any other party or for any other reason. Any forward looking statements made in this document are done so by the Directors in good faith based on the information available to them up to the time of their approval of this document. However, such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

ESMA Legal Entity Identifier ("LEI"): 549300D8G4NKLRIKBX73