AIF - Alternative Investment Fund.
AIFM - Alternative Investment Fund Manager.
Break Option – A clause in a lease which provides the landlord or tenant with an ability to terminate the lease before its contractual expiry date.
Capex – Capital expenditure relates to spend used by the organisation to maintain or upgrade physical assets.
Company – Regional REIT Limited.
Contracted Rent – Annualised rent, adjusting for the inclusion of rent free periods. See also Passing Rent.
EPC – Energy Performance Certificate.
EPRA Cost Ratio - Ratio of overheads and operating expenses against gross rental income. Net overheads and operating expenses relate to all administrative and operating expenses including the share of joint ventures’ overheads and operating expenses, net of any service fees, recharges or other income specifically intended to cover overhead and property expenses.
EPRA - European Public Real Estate Association, a real estate industry body, which has issued Best Practice Recommendations to provide consistency and transparency in real estate financial reporting across Europe.
EPRA Earnings - Profit after taxation excluding investments and development property revaluations and gains/losses on disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation.
EPRA Net Asset Value (EPRA NAV) - IFRS assets excluding the mark-to-market on effective cash flow hedges and related debt instruments and deferred taxation revaluations.
Equivalent Yield – Weighted average of the initial yield and reversionary yield, representing the return that a property will produce based on the occupancy data of the tenant leases.
Estimated Rental Value (ERV) or Market Rent (MR) – External valuers’ opinion as to what the open market rental value of the property is on the valuation date and which could reasonably be expected to be the rent obtainable on a new letting of that property on the valuation date.
External Valuer – Independent external valuer of a property. The Company’s External Valuer is Cushman & Wakefield.
Fair Value Adjustment – Accounting adjustment to change the book value of an asset or liability to its market value.
Gross Property Assets - Investment properties encompassing the entire property portfolio of freehold and leasehold assets.
Gross Rental Income - Accounting based rental income under IFRS. When the Group provides lease incentives to its tenants the lease incentives are recognised over the lease term on a straight-line basis in accordance with IFRS. Gross rental income is the cash Passing Rent as adjusted for the spreading of these incentives.
Group – Regional REIT Limited and its subsidiaries.
Interest Cover – The number of times net interest payable is covered by underlying profit before gains and losses on property assets and other investments
IPO - Initial Public Offering. The Company’s Admission to London Stock Exchange was 6 November 2015.
Lease – Legally binding contract between a landlord and a tenant which sets out the basis on which the tenant is permitted to occupy a property, including the lease length.
Lease Incentive – Payment used to encourage a tenant to take on a new lease, for example a landlord paying a tenant a sum of money to contribute to the cost of a tenant’s fit-out of a property or by allowing a rent free period.
Lease Re-gear – Renegotiation of a lease during the term and often linked to another lease event, for example a Break Option or Rent Review.
Lease Renewal – Renegotiation of a lease with the existing tenant at its contractual expiry.
Lease Surrender – Agreement whereby the landlord and tenant bring a lease to an end other than by contractual expiry or the exercise of a Break Option. This will frequently involve the negotiation of a surrender premium by one party to the other.
Gross Loan-to-Value (LTV) Ratio - (Borrowings) / (Investment Properties Value), expressed as percentage.
Mark-to-Market (MTM) – Difference between the book value of an asset or liability and its market value.
Manager - The Company’s external Asset and Property Manager is London & Scottish Investments Limited. Its external Investment Manager is Toscafund Asset Management LLP.
Net Asset Value (NAV) (or Shareholder’ Funds) - The value of the investments and other assets of an investment company, plus cash and debtors, less borrowings and any other creditors. It represents the underlying value of an investment company at a point in time.
Net Gearing - (Borrowings – cash and cash equivalents) / (Total Issued Shares + Retained Earnings).
Net Initial Yield - (Annualised current passing rent less non-recoverable property expenses, such as empty rates) / (Investment Properties Value). This phrase is regularly used for Triple Net Initial Yield (NNNIY).
Net Loan-to-Value (LTV) Ratio - (Borrowings – less cash) / (Investment Properties Value) expressed as percentage.
Passing Rent - The rent that is payable at any particular time, allowing for lease incentives. This phrase is often used for Contracted Rent.
Occupancy Percentage - Percentage of the total area of all properties and units currently let to tenants.
Over Rented - When the Contracted Rent is higher than the ERV.
Property Income Distributions (PIDs) - Profits from property related business distributed to shareholders which are subject to tax in the hands of the shareholders as property income. PIDs are normally paid net of withholding tax, currently at 20%, which the REIT pays to the tax authorities on behalf of the shareholder. Certain types of shareholder (ie, pension funds) are tax exempt and receive PIDs without withholding tax. Property companies also pay out normal dividends, called non-PIDs, which are treated as not subject to withholding tax.
REIT – A qualifying entity which has elected to be treated as Real Estate Investment Trust for tax purposes. In the UK such entities must be listed on a recognised stock exchange, must be predominantly engaged in property investments activities and must meet certain ongoing qualifications as set out under section 705 E of the Finance Act 2013.
Rent Review – Periodic review of rent during the term of a lease, as provided for within a lease agreement.
Reversion – Expected increase in rent estimated by the Company’s External Valuer, where the passing rent is below the ERV. The increases to rent arise on rent reviews and lettings.
Reversionary Yield – Anticipated yield, excluding lease expiry, to which the Net Initial Yield will rise (or fall) once the rent reaches the Estimated Rental Value. ERV / Investment Properties Value expressed as a percentage.
Triple Net Initial Yield (NNNIY) - (Annualised current passing rent net of property related taxes, building insurance, and maintenance costs (the three “nets”) / (Investment Properties Value).
Weighted Average Unexpired Lease Term (WAULT) – is the average lease term remaining to first break, or expiry, across the portfolio weighted by contracted rental income (including rent-frees). The calculation excludes residential leases and development properties where relevant.
Weighted Average Debt Maturity – Each tranche of Group debt is multiplied by the remaining period to its maturity and the result is divided by total Group debt in issue at the period end.
Weighted Average Effective Interest Rate - The Group’s loan interest and hedging derivative costs per annum divided by total Group debt in issue at the period end.
Yield Compression - Occurs when the net equivalent yield of a property decreases, measured in basis points.