AEW UK REIT PLC Acquisition of two high yielding retail assets (1400I)
December 01 2022 - 2:00AM
UK Regulatory
TIDMAEWU
RNS Number : 1400I
AEW UK REIT PLC
01 December 2022
1 December 2022
AEW UK REIT Plc
Acquisition of two high yielding retail assets
AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") is pleased
to announce that it has unconditionally exchanged on the purchase
of a 67,020 sq ft mixed-use block located in Bath city centre at a
price of GBP13,000,000, reflecting a low capital value of GBP194
per sq ft and an attractive net initial yield of 8.5%. Completion
of the asset purchase is expected later this week. The Company has
also completed the purchase of a freehold retail asset in the
London Borough of Bromley for a price of GBP5,300,000, reflecting a
low capital value of GBP101 per sq ft and an attractive net initial
yield of 8.7%. Following these two acquisitions, the Company will
have circa GBP7 million to deploy on other new purchases while
retaining sufficient cash for working capital purposes.
The asset in Bath, known as Northgate House, provides 48,805 sq
ft of retail accommodation fronting on to Bath's High Street, Upper
Borough Walls and Union Passage. The retail accommodation is let to
11 tenants anchored by TK Maxx which has recently renewed its
commitment to the location by agreeing the removal of a tenant
break option. Retail lettings provide a weighted unexpired lease
term in excess of five years. The remaining 18,215 sq ft of
accommodation comprises grade A specification offices recently
refurbished by the vendor. The office accommodation is fully let to
a wholly owned subsidiary of Regus Group until 2032, trading as
co-working brand, Spaces.
The Bath office market is characterised by tight supply and
Spaces provides the largest and only international brand of
serviced office accommodation trading in the city. The office
passing rent of GBP22 per sq ft provides a low base from which the
Manager hopes to grow income due to a recent outstanding rent
review.
Northgate House is centrally located in Bath between Union
Street, Bath's prime retail pitch, and High Street which links to
the famous landmark of Pulteney Bridge. Bath is a designated UNESCO
World Heritage Site and one of the UK's top tourist destinations
attracting some 6.25 million visitors per annum.
The asset is held leasehold from Bath and North East Somerset
Council for an unexpired period of 178 years at a peppercorn
rent.
The Bromley asset is located in a prominent position on the
western side of the pedestrianised Bromley High Street and provides
54,215 sq ft of accommodation, let in its entirety to Next Holdings
Limited. The accommodation comprises a four-storey retail unit with
the ground, basement and first floor providing sales accommodation
with ancillary accommodation on the second floor. The unit is known
to trade strongly for the retailer.
Next Holdings Limited has occupied the property since 2000 and,
in September 2021, renewed on a four-year lease at a rebased level
of rent. A comprehensive store re-fit was undertaken by the tenant
at this time, demonstrating the retailer's commitment to the
location.
Bromley is a well-connected Greater London borough, with direct
train links to London Victoria and London Bridge in 16 and 20
minutes, respectively. The area is undergoing significant
regeneration with numerous residential-led schemes, including the
significant Churchill Quarter mixed-use development providing over
400 homes, situated just 50 metres to the south of the
property.
Commenting on the purchase, Laura Elkin, Portfolio Manager of
AEW UK REIT said, "Over recent weeks, we have taken time to
carefully consider where best value can be found and we are
delighted to have acquired these high yielding retail assets both
located in strong locations. The purchase prices of both assets
reflect low capital values which we believe will provide excellent
value to our shareholders over the long term. We continue to
analyse a very interesting pipeline of potential acquisitions for
AEWU's strategy and, following full investment of the remaining
capital available for deployment, the Company's earnings are
expected to return to full cover of its dividend. "
ENDS
Enquiries
AEW UK
Laura Elkin laura.elkin@eu.aew.com
+44(0) 20 7016 4869
Henry Butt henry.butt@eu.aew.com
+44(0) 20 7016 4869
Nicki Gladstone nicki.gladstone-ext@eu.aew.com
+44(0) 7711 401 021
Company Secretary
Link Company Matters Limited aewu.cosec@linkgroup.co.uk
+44(0) 1392 477 500
TB Cardew AEW@tbcardew.com
Ed Orlebar +44 (0) 7738 724 630
Tania Wild +44 (0) 7425 536 903
Henry Crane +44 (0)7918 207 157
Liberum Capital
Darren Vickers / Owen Matthews +44 (0) 20 3100 2000
Notes to Editors
About AEW UK REIT
AEW UK REIT plc (LSE: AEWU) aims to deliver an attractive total
return to shareholders by investing predominantly in smaller
commercial properties (typically less than GBP15 million), on
shorter occupational leases in strong commercial locations across
the United Kingdom. The Company is currently invested in office,
retail, industrial and leisure assets, with a focus on active asset
management, repositioning the properties and improving the quality
of income streams. AEWU is currently paying an annualised dividend
of 8p per share.
The Company was listed on the Official List of the Financial
Conduct Authority and admitted to trading on the Main Market of the
London Stock Exchange on 12 May 2015. www.aewukreit.com
LEI: 21380073LDXHV2LP5K50
About AEW UK Investment Management LLP
AEW UK Investment Management LLP employs a well-resourced team
comprising 26 individuals covering investment, asset management,
operations and strategy. It is part of AEW Group, one of the
world's largest real estate managers, with EUR85.2bn of assets
under management as at 30 June 2022. AEW Group comprises AEW SA and
AEW Capital Management L.P., a U.S. registered investment manager
and their respective subsidiaries. In Europe, as at 30 June, AEW
Group managed EUR39.5bn of real estate assets on behalf of a number
of funds and separate accounts with over 470 staff located in 12
locations.
www.aewuk.co.uk
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END
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