23.5% yield! 1 of the best REITs to buy in July?

Real Estate Investment Trusts (REITs) have long been a terrific way to gain exposure to the property market and earn some passive income. With the vast majority of net rental income paid out as dividends, REITs often provide shareholders with impressive yields. But right now, ( ) is wearing the crown for the largest yield.

At 23.5%, shareholders are earning a pretty monumental income stream. What’s driving this enormous payout? And is this a trap or a buying opportunity? Investigating the yield The percentage payout shareholders enjoy is driven by two factors.

Either the underlying business is hiking dividend payments, or the stock price has collapsed through the floor. In the case of Regional, it’s the latter. Like most REITs, Regional’s in the business of buying properties and renting them out to generate a reliable and consistent flow of cash.

Across the first three months of 2024, the firm generated £65.5m in rent, with 97.2% of tenants paying on time.

And with an occupancy just shy of 80%, business appears to be relatively stable from an operational perspective. Sadly, the firm’s property portfolio has been hit fairly hard in terms of valuation. With interest rates going through the roof, market prices have tumbled, dragging down the share price.

And the impact on Regional has been especially diabolical, given that 92.8% of its real estate portfolio is invested in office space – something that’s slowly falling out of fashion on the back of remote working sol.