Acquisition of £20m Norfolk House, Birmingham

4 February 2019

REGIONAL REIT Limited

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

Acquisition of £20m Norfolk House, Birmingham Central Office

Regional REIT Limited (LSE: RGL), the regional real estate investment specialists, today announces it has exchanged and completed on contracts to purchase Norfolk House, Smallbrook Queensway, Birmingham, for a consideration of £20m with a current net initial yield of 7.92%, in an off market transaction.

The 119,687 sq. ft. freehold property is in a highly commercial location in the centre of Birmingham; situated adjacent to Birmingham New Street Station, the Bullring Shopping Centre and close to the proposed new HS2 station, which will better link Birmingham to both London and Manchester.  The building comprises 12 retail units amounting to 27,433 sq. ft. and office accommodation of 92,254 sq. ft.. The main office tenant is HMRC occupying 49% of the property.

The building is 98.75% occupied with a net income of c.£1.69m.

Stephen Inglis, Chief Executive Officer of London & Scottish Investments, the Asset Manager, commented:

"We are delighted to have acquired Norfolk House. This is a high quality asset, where substantial capital expenditure for refurbishment has been undertaken and yet still offers further value enhancing asset management initiatives.

The building is in a pivotal location in Birmingham city centre which has been undergoing, and will continue to benefit from, a substantial redevelopment programme to enhance rental and capital values. This continues the REIT's strategy of identifying off market deals, which will enhance income and provide excellent future prospects, in key regional locations."

London & Scottish Property Asset Management Ltd. is the property manager for the vendor and has a 6.7% interest in the property.

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About Regional REIT

Regional REIT Limited (LSE: RGL) is a London Stock Exchange Main Market traded specialist real estate investment trust focused on office and industrial property interests in the principal regional locations of the United Kingdom outside of the M25 motorway.

Regional REIT is managed by London & Scottish Investments, the Asset Manager, and Toscafund Asset Management, the Investment Manager, and was formed by the combination of two existing funds previously created by the Managers as a differentiated play on the expected recovery in UK regional property, to deliver an attractive total return to Shareholders and with a strong focus on income.

The Group's investment portfolio, as at 30 June 2018, was spread across 151 regional properties, 1,294 units and 950 tenants. As at 30 June 2018, the investment portfolio had a value of £758.7m and a net initial yield of 6.4%. The weighted average unexpired lease term to first break was 3.5 years.

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)