MIDAS SHARE TIPS: Real estate bond launched by Regional Reit offers income over six years
Savings rates are at a record low and the chances of an imminent increase receded last week, with figures showing that inflation is stable, wages are barely moving and the economy is sluggish.
In such an environment, a six-year retail bond paying 4.5 per cent annual interest looks appealing.
The bond has been launched by Regional Reit, a property group focused on offices and industrial sites outside the M25.
Opportunity: The bond has been launched by Regional Reit, a property group focused on offices and industrial sites outside the M25
Regional Reit (Reit stands for real estate investment trust) was only listed on the main market in 2015 but it is run by a group of established and experienced property experts whose strategy is simple but effective.
Primarily interested in generating sustained yearly income, they look for properties where they can improve rents. They do this by refurbishing or extending sites, varying the mix of occupants, filling vacancies and working harder with tenants, to ensure they are satisfied.
The company currently has more than 1,000 tenants spread across 160 sites, so its portfolio is extremely diversified.
Midas verdict: Regional Reit is a solid business and the bonds offer investors a decent income stream over the next six years, although they can be bought or sold at any time on the Stock Exchange’s retail bond market from August 7. Available from several mainstream brokers, the bonds offer an attractive addition to a share-based investment portfolio, especially for income-seeking investors.
Traded on: Retail bond market Ticker: RGL1 Contact: regionalreit.com or 020 7845 6100