Region Group Boosts Property Valuations by $54.4m Amid Capital Rate Compression
Region Group reports a $54.4 million uplift in its investment property portfolio valuation as of June 30, 2025, driven by acquisitions and like-for-like gains, while maintaining stable gearing and net tangible assets growth.
- Investment property portfolio value rises to $4.374 billion
- Like-for-like valuations increase by $68.7 million
- Acquisitions add $64.5 million to portfolio value
- Weighted average capitalisation rate compresses by 11 basis points to 5.97%
- Pro forma gearing remains within target range at 32.8%
Strong Mid-Year Valuation Growth
Region Group (ASX – RGN) has announced a notable increase in the valuation of its investment property portfolio, rising by $54.4 million to $4.374 billion as at 30 June 2025. This growth reflects a combination of positive like-for-like valuation movements, strategic acquisitions, and portfolio adjustments through disposals.
The like-for-like valuation uplift of $68.7 million underscores the underlying strength and resilience of Region Group’s existing assets, signaling continued demand and confidence in the retail property sector despite broader economic uncertainties.
Portfolio Composition and Capitalisation Rate Trends
Acquisitions contributed an additional $64.5 million to the portfolio’s value, indicating ongoing investment activity aimed at enhancing asset quality and income streams. Meanwhile, disposals and assets held for sale reduced the portfolio by $119.6 million, reflecting a selective approach to portfolio management.
The portfolio’s weighted average capitalisation rate compressed by 11 basis points to 5.97%, a sign of tightening yields that often accompany increased investor appetite and perceived asset quality improvements. This compression can enhance property valuations but also signals a competitive market environment.
Financial Position and Net Tangible Assets
Region Group’s pro forma gearing stands at 32.8%, comfortably within its target range of 30% to 40%, suggesting a balanced approach to leverage that supports growth while managing financial risk. The net tangible assets per share increased by 3 cents to $2.45, although the company cautions that other mark-to-market balance sheet movements since December 2024 may affect this figure.
Overall, the update reflects a well-managed portfolio with positive valuation momentum and prudent financial metrics, positioning Region Group to navigate the evolving real estate landscape.
Bottom Line?
Region Group’s valuation gains and stable gearing set the stage for its next strategic moves amid shifting market dynamics.
Questions in the middle?
- How will other mark-to-market balance sheet movements impact the final NTA?
- What are the prospects for further capitalisation rate compression in the current market?
- Will Region Group pursue additional acquisitions or disposals in the near term?
