Richard Croft’s Martley builds stake in Regional REIT
Martley Capital Group, a real estate investment firm set up by M7 Real Estate founder Richard Croft, has built a 3% stake in Regional REIT and is now pushing back against a suggested rights issue from the company.
The stake, made via Martley’s Real Estate Special Opportunities Fund, makes the firm Regional REIT’s third-largest shareholder, behind Majik Property Holdings (9.13%) and Old Mutual (6.89%).
Regional REIT said last month that it is considering an equity capital raise of around £75m at a “material discount” to its share price, which would be used to refinance a £50m retail bond maturing this August.
Martley Capital Group, a real estate investment firm set up by M7 Real Estate founder Richard Croft, has built a 3% stake in Regional REIT and is now pushing back against a suggested rights issue from the company.
The stake, made via Martley’s Real Estate Special Opportunities Fund, makes the firm Regional REIT’s third-largest shareholder, behind Majik Property Holdings (9.13%) and Old Mutual (6.89%).
Regional REIT said last month that it is considering an equity capital raise of around £75m at a “material discount” to its share price, which would be used to refinance a £50m retail bond maturing this August.
The company owns 144 regional office properties valued at more than £700m. Its shares trade at a 75% discount to NAV.
Croft said the rights issue would be “unnecessary, overly dilutive and not in the interests of shareholders’.’
He added: “I am a long-term believer in the regional office market as people’s and businesses’ working practices change. I believe this will most impact the long-distance mass transit commute. In our opinion, this will encourage people to work near home, not from home, and many occupiers will evolve into a hub-and-spoke model over the next decade which will be beneficial from an occupier standpoint to the regional office market.
“Simultaneously to what we perceive as a likely improvement in occupier demand, supply is being constantly reduced through permitted development and other change-of-use schemes. Current rental levels do not allow meaningful new development, so we are bullish on the sector in the long term, admittedly against market sentiment, due to an expected demand-supply imbalance.
“We have shown our commitment to both the sector and Regional REIT by taking this stake and by proposing a strategy to refinance the bond.”
Photo © M7/FTI Consulting
