AEW UK REIT plc (AEWU) AEW UK REIT plc: NAV Update and Dividend
Declaration 20-Jan-2022 / 07:00 GMT/BST Dissemination of a
Regulatory Announcement, transmitted by EQS Group. The issuer is
solely responsible for the content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
20 January 2022
AEW UK REIT Plc
NAV Update and Dividend Declaration
AEW UK REIT plc (LSE: AEWU) (the "Company"), which directly owns
a diversified portfolio of 35 regional UK commercial property
assets, announces its unaudited Net Asset Value ("NAV") and interim
dividend for the three-month period ended 31 December 2021.
Highlights
-- NAV of GBP180.94 million or 114.21 pence per share as at 31
December 2021 (30 September 2021: GBP174.29million or 110.01 pence
per share).
-- NAV total return of 5.63% for the quarter (30 September 2021
quarter: 4.58%).
-- 3.49% like-for-like valuation increase for the quarter (30
September 2021 quarter: 3.11%), driven byretail warehousing
(like-for-like increase of 6.73%) and industrial (like-for-like
increase of 5.16%) sectors.
-- EPRA earnings per share ("EPRA EPS") for the quarter of 1.80
pence (30 September 2021 quarter: 1.30pence).
-- Interim dividend of 2.00 pence per share for the three months
ended 31 December 2021, in line with thetargeted annual dividend of
8.00 pence per share.
-- Disposal of Wella Warehouse, Basingstoke, for gross proceeds
of GBP5.86 million, which was 1.7x itspurchase price.
-- Purchase of Central Six Retail Park in Coventry for a
purchase price of GBP16.41 million / GBP110 per sq ft.The purchase
price reflects a net initial yield of circa 11%, with an
anticipated reversionary yield of 12.5%.
-- The Company remains conservatively geared with a loan to NAV
ratio of 29.84% (30 September 2021: 28.97%).At the quarter end, the
Company had a cash balance of GBP7.39 million and GBP6.0 million of
its loan facility availableto draw up to the maximum 35% Loan to
NAV at drawdown.
-- For the rental quarter commencing on 25 December 2021,
approximately 98% of rent has been collected or isexpected to be
received prior to quarter end. The remainder of rents owed will
continue to be pursued.
-- We remain encouraged by the consistent rent collection
levels, which stand at over 98% for each quartersince the onset of
the pandemic (excluding current quarter).
-- The continued improvement in economic conditions has brought
about the return of a share price premium toNAV. We hope the
Company will be in a position to take advantage of continued strong
demand for its shares to growour capital base in due course.
Alex Short, Portfolio Manager, AEW UK REIT, commented:
"The portfolio continues to generate strong capital growth,
largely driven by yield compression of the industrial assets and
strong performance of our retail warehousing assets. We have also
seen our ERVs move on as a result of continued strong occupier
demand, supported by a compelling asset management story. We are
pleased to be paying a dividend of 2p for the 25th consecutive
quarter.
Following the sale of the two strongly performing industrial
assets in Q3, we invested a significant portion of the proceeds in
a multi let retail warehouse park purchased at Central Six,
Coventry. At the point of purchase this acquisition is accretive to
EPS with an expectation of further growth to come in 2022 as the
asset's business plan is implemented.
The expected sale of our Glasgow office, which has a high level
of vacancy, and the completion of ongoing works at our Blackpool
asset in the coming months will support a reduction in costs and
the rebuilding of our EPS in line with expectations."
Portfolio Manager's report
The portfolio continues to generate strong capital growth, with
valuations increasing by 3.49% on a like-for-like basis (30
September 2021 quarter: 3.11%). As with the previous quarter, this
was largely driven by the performance of the industrial assets in
the portfolio which saw a like-for-like increase of 5.16% and make
up 51.1% of the portfolio as at 31 December 2021.
Although valuations have again partly been driven by yield
compression, we have also seen our ERVs move on as a result of
continued strong occupier demand, supported by a strong asset
management story. We have again seen good performance at our office
holding in Bristol, with recent lettings at above ERV moving the
valuation higher. We are likely to implement a programme of
refurbishment works at this asset in the expectation of achieving
further rental growth in an ever-improving market. Our office park
at Oxford has also continued to perform well with its transition to
life sciences/medical use, a sector which is proving particularly
popular with both tenants and investors.
It continues to be a challenging period for the high street
retail sector, but with valuations in the portfolio stable again
this quarter, we are starting to see cause for selective optimism.
We are often seeing divergence between high street retail and
retail warehousing assets, in terms of both tenant and investor
demand, with this being evident in our retail warehousing
valuations, which have seen a 6.73% like-for-like valuation
increase this quarter (30 September 2021 quarter: 5.69%). This is
reflected in our recent purchase of a 94,891 sq ft retail warehouse
at Shrewsbury, offering an 8.7% NIY on purchase, where we are
seeing robust tenant commitment to the scheme at rents in excess of
ERVs. This is also true at our newly purchased asset at Central
Six, Coventry, where we expect tenant demand to support successful
asset management deals and, in time, rental growth. We will
continue to appraise buying opportunities and our existing
portfolio with this noticeable divergence in mind.
The proceeds from the sale of two of the Company's strongly
performing industrial holdings during Q3 2021 are now almost fully
invested. The multi-let retail warehouse park purchased at Central
Six, Coventry, is accretive to EPRA EPS at the point of purchase
and with the ongoing implementation of the business plan, there is
an expectation of further growth to come during the course of 2022.
Tenants at the Park include Next, Boots and Burger King and it is
located in a prime position near the city centre, immediately
adjacent to the train station. We have one further asset under
offer to buy and the completion of this purchase will take us back
to full investment and gearing in line with our target of a 35%
Loan to NAV ratio. It is anticipated that the sale of our office
asset in Glasgow, where we have a high level of vacancy, will
complete in the first half of 2022 (subject to planning consent),
and the ongoing service charge works at our Blackpool asset will
also conclude. Each of these events will lead to the cost overheads
falling, supporting the rebuilding of EPS, with the aim of
returning to full dividend cover in due course.
The Company's EPRA EPS was 1.80 pence for the quarter, providing
a dividend cover of 90% (30 September 2021: 1.30 pence and
65%).
Valuation movement
As at 31 December 2021, the Company owned investment properties
with a fair value of GBP225.84 million. The like-for-like valuation
increase for the quarter of GBP7.05 million (3.49%) is broken down
as follows by sector:
Sector Valuation 31 December 2021 Like-for-like valuation movement for the quarter
GBP million % GBP million %
Industrial 115.39 51.09 5.66 5.16
Office 40.32 17.86 0.38 0.94
High Street Retail 24.63 10.90 0.01 0.04
Retail Warehouses 32.95 14.59 1.00 6.73
Other 12.55 5.56 0.00 0.00
Total 225.84 100.00 7.05 3.49*
* This is the overall weighted average like-for-like valuation
increase of the portfolio.
Net Asset Value
The Company's unaudited NAV at 31 December 2021 was GBP180.94
million, or 114.21 pence per share. This reflects an increase of
3.82% compared with the NAV per share at 30 September 2021. The
Company's NAV total return, which includes the interim dividend of
2.00 pence per share for the period from 1 July 2021 to 30
September 2021, was 5.63% for the three-month period ended 31
December 2021.
Pence per share
GBP million
NAV at 1 October 2021 110.01 174.29
Portfolio acquisition costs (0.70) (1.12)
Profit on sale of investments 0.88 1.40
Capital expenditure (0.37) (0.59)
Valuation change in property portfolio 4.45 7.04
Valuation change in derivatives 0.15 0.23
Income earned for the period 2.91 4.62
Expenses and net finance costs for the period (1.12) (1.76)
Interim dividend paid (2.00) (3.17)
NAV at 31 December 2021 114.21 180.94
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards. It incorporates
the independent portfolio valuation at 31 December 2021 and income
for the period, but does not include a provision for the interim
dividend for the three-month period to 31 December 2021.
Dividend
Dividend declaration
The Company today announces an interim dividend of 2.00 pence
per share for the period from 1 October 2021 to 31 December 2021.
The dividend payment will be made on 28 February 2022 to
shareholders on the register as at 28 January 2022. The ex-dividend
date will be 27 January 2022.
(MORE TO FOLLOW) Dow Jones Newswires
January 20, 2022 02:00 ET (07:00 GMT)
Aew Uk Reit (LSE:AEWU)
Historical Stock Chart
From May 2024 to Jun 2024
Aew Uk Reit (LSE:AEWU)
Historical Stock Chart
From Jun 2023 to Jun 2024