Region Group Boosts Property Portfolio Value to $4.5 Billion
Region Group reports a $129 million uplift in its investment property portfolio valuation as of December 2025, alongside improved net tangible assets and stable gearing levels.
- Investment property portfolio valuation rises from $4.37 billion to $4.5 billion
- Like-for-like valuation increase and capital expenditure drive growth
- Weighted average capitalisation rate compresses by 10 basis points to 5.87%
- Pro forma gearing remains within target range at 32.6%
- Net Tangible Assets increase by 8 cents to $2.55 per security
Property Valuation Update
Region Group (ASX – RGN) has announced a notable increase in the valuation of its investment property portfolio as at 31 December 2025. The total portfolio value rose by $129.2 million, climbing from $4.374 billion at the end of June 2025 to $4.503 billion. This uplift reflects a combination of a like-for-like valuation increase and capital expenditure invested across the portfolio.
Drivers Behind the Valuation Growth
The valuation increase was partly driven by external valuations conducted on 21 properties, which represent 25.5% of the portfolio by value. These external assessments confirmed a positive movement in property values. The remaining properties were internally valued, contributing an additional $95.7 million to the overall uplift. Capital expenditure of $33.5 million also played a role in enhancing asset values, signaling ongoing investment in property improvements.
Capitalisation Rate and Gearing Position
Region Group’s portfolio weighted average capitalisation rate compressed by 10 basis points to 5.87%, indicating a modest increase in property market valuations relative to income streams. Meanwhile, the company’s pro forma gearing ratio stands at 32.6%, comfortably within its targeted range of 30% to 40%. This suggests a balanced approach to leverage, maintaining financial flexibility while supporting growth initiatives.
Impact on Net Tangible Assets
The net tangible assets (NTA) per security increased by 8 cents to $2.55, assuming no other balance sheet movements. This improvement reflects the enhanced asset base and underlines the company’s strengthened financial position. For investors, the rise in NTA can be seen as a positive indicator of underlying value growth within the trust.
Looking Ahead
While the valuation update is encouraging, the announcement leaves some questions unanswered, particularly regarding the detailed breakdown of capital expenditure and the influence of broader market conditions on property values. Analysts and investors will be watching closely for further quarterly updates to assess whether this positive trend can be sustained amid evolving economic factors.
Bottom Line?
Region Group’s steady valuation gains and disciplined gearing set the stage for cautious optimism in 2026.
Questions in the middle?
- How will ongoing capital expenditure impact future property valuations?
- What external market factors could influence the next valuation cycle?
- Will Region Group maintain its gearing within the current target range amid growth plans?
