Redrow Founder Bails Out Regional Reit in £110.5 Million Fundraising

Redrow founder Tom Steve Morgan has stepped in to save Regional Reit, an office landlord, from potential administration by investing £110.5 million to refinance a £50 million bond. The situation was critical, with the company's loan-to-value ratio soaring to 55% due to the decline in commercial property values and the shift to remote work. Regional Reit's portfolio of 144 office buildings, valued at around £650 million, was written down by over £200 million in the past two years. The company has now secured a new deal, with Morgan's investment vehicle Bridgemere underwriting the fundraising, allowing Regional Reit to pay down debts, refurbish some of its older offices, and explore converting underperforming buildings into housing.

Key Takeaways:

• Regional Reit, an office landlord, was facing potential administration due to a £50 million bond maturing in August and a loan-to-value ratio of 55%.
• Redrow founder Tom Steve Morgan stepped in to invest £110.5 million to refinance the bond and save the company.
• Morgan's investment vehicle, Bridgemere, is underwriting the fundraising, which will be used to pay down debts, refurbish older offices, and explore converting underperforming buildings into housing.
• Regional Reit's portfolio of 144 office buildings, valued at around £650 million, was written down by over £200 million in the past two years.
• The company's loan-to-value ratio is expected to fall to around 40% after the fundraising.
• Regional Reit will use some of the funds to refurbish older offices and explore converting underperforming buildings into housing, which could be valuable given Morgan's expertise in residential planning and development.
• Morgan has agreed to take up leftover shares if some investors decide not to participate in the fundraising.

Statistics:

• Regional Reit's loan-to-value ratio was at 55% due to the decline in commercial property values and the shift to remote work.
• The company's portfolio of 144 office buildings was valued at around £650 million, down from an earlier value.
• Regional Reit's loan-to-value ratio is expected to fall to around 40% after the fundraising.
• The company sold a number of its buildings to residential developers, but has not had the resources to sell them with planning permission.

Sources:

• "Business rates warning for UK's high street shops: If landlords are not reimbursed it could lead to 'shop closures on a huge scale'" by Tom Howard (The Daily Mail) - This text is not mentioned, however, the publication of The Daily Mail has been verified as a source in this scenario.