TIDMAEWL
RNS Number : 6709D
AEW UK Long Lease REIT PLC
01 February 2018
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, CANADA, JAPAN,
AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY
OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF
THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
This announcement is an advertisement and not a prospectus.
Investors should not purchase or subscribe for any transferable
securities referred to in this announcement except on the basis of
information in the summary, securities note and share registration
document (together, the "Prospectus") published by AEW UK Long
Lease REIT plc (the "Company" or "AEW UK Long Lease REIT") in
connection with the placing, offer for subscription and
intermediaries offer of ordinary shares of GBP0.01 each in the
Company (the "Shares") (the "Issue") pursuant to the share issuance
programme of the Company ("Share Issuance Programme") and the
admission of such Shares to listing on the premium listing segment
of the Official List and to trading on the main market for listed
securities of the London Stock Exchange plc ("Admission"). A copy
of the Prospectus is available, inter alia, from
www.aewukllreit.com.
This announcement is not an offer to sell, or a solicitation of
an offer to acquire, securities in the United States or in any
other jurisdiction. Neither this announcement nor any part of it
shall form the basis of or be relied on in connection with or act
as an inducement to enter into any contract or commitment
whatsoever.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
AEW UK Long Lease REIT plc
Placing, Offer for Subscription and Intermediaries Offer
GBP35 million maximum Issue
and
Publication of a Prospectus
1 February 2018
Further to the announcement made by AEW UK Long Lease REIT plc
(the "Company" or "AEW UK Long Lease REIT") on 8 January 2018 of
its intention to issue additional shares pursuant to its Share
Issuance Programme, the board of directors of AEW UK Long Lease
REIT is pleased to announce a placing, offer for subscription and
intermediaries offer of new Shares (the "Issue") at a price of 99
pence per Share (the "Issue Price").
Background
At the time of its IPO in June 2017, the Company stated its
expectation to invest substantially all the net proceeds of the IPO
within nine months of listing by investing in alternative and
specialist real estate sectors in the UK to offer a secure,
diversified and inflation-linked income return, whilst at least
maintaining capital values in real terms. The Company is pleased to
announce that GBP95.2 million (which includes the acquisition
costs) has now been deployed in 14 properties, with the acquisition
of a further two properties expected to complete in mid February
2018. This will result in deployment of the net IPO proceeds and
substantially all of the GBP30 million drawn under the Company's
new loan facility with Canada Life Investments, announced on 8
January 2018.
In addition, AEW UK Investment Management LLP (the "Investment
Manager") has a further pipeline of five properties totaling
GBP18.5 million under offer on behalf of the Company in the
leisure, pub and hotel sectors, which meet the Company's investment
policy and objectives and which are expected to complete during
February and March 2018. The Investment Manager is also engaged in
active due diligence on an attractive pipeline of assets in excess
of GBP50 million.
The Company's investments have, to date, exceeded the minimum
portfolio targets with an average lease length of 22 years and 90%
of the rental income from leases with rent reviews linked to
inflation. Across the portfolio the average net initial yield is
5.6 per cent and the income is secured against 15 tenants,
including Premier Inn Hotels, Biffa Waste Services Limited,
Travelodge Hotels and Volkswagen Group UK Limited. The existing
assets are diversified across eight sectors: hotels (24%);
industrial (20%), car showrooms (17%), student accommodation (11%),
medical/care (11%), leisure (8%), power stations (5%), and petrol
filling stations (4%)(1) .
The Company has declared dividends totalling 1 pence per Share,
in line with the schedule announced at the time of the Company's
IPO.
Benefits of the Issue:
The Directors believe that the Issue will have the following
principal benefits for Shareholders:
-- Grow the Company, thereby spreading fixed operating costs
over a larger asset base, which should reduce the on-going charges
per Share
-- Provide additional capital which will enable the Company to
benefit from the continued investment opportunities in the market
and further diversify its assets
-- Potentially enhance the NAV per Share through new Share
issuance at a premium to the prevailing NAV per Share, after the
related costs have been deducted
-- Increase the number of Shares in issue, which may provide
Shareholders with additional liquidity. This should enhance the
marketability of the Company and should result in a broader
investment base over the longer term
Key Highlights of the Issue:
-- Maximum issue size of 35 million new Shares (the "New Shares")
-- Issue Price of 99.0 pence per New Share, representing a 0.6
per cent. discount to the closing price of 99.6 pence per Share as
at 31 January 2018 and a 2.6 per cent. discount to the average 3
month closing price of 101.7 pence per Share
The Issue Price reflects the 1.0 pence per Share dividend
received by investors since IPO
-- The Company is targeting an annual dividend of 5.5 pence per
Share, paid quarterly, with effect from the financial year
commencing 1 July 2018, with an ambition to grow this in line with
UK inflation thereafter.(2) New Shares will rank pari passu with
the existing Shares in all respects from the date of issue but will
not be eligible for the dividend payable in respect of the period
from 1 October 2017 to 31 December 2017
-- The Issue, which is not underwritten, is conditional, amongst
other things, on the Share Issuance Agreement having become
unconditional in accordance with its terms. If these conditions are
not met, the Issue will not proceed and an announcement will be
made via a Regulatory Information Service
-- Application will be made for the New Shares to be issued
pursuant to the Issue to be admitted to the premium listing segment
of the Official List of the FCA and to trading on the London Stock
Exchange's main market for listed securities
Investment Highlights:
-- AEW UK Long Lease REIT invests in a diverse portfolio of
assets within alternative and specialist property sectors that are
under-represented in institutional portfolios and benefit from
long-term demand drivers.
-- Key focus on capital preservation through detailed analysis
and understanding of the real estate fundamentals, ensuring there
is the potential for higher alternative use value and capital
recovery.
-- Strong current pipeline of investment opportunities offering
high quality, inflation-linked long-duration income. The five
assets in the pipeline have an average net initial yield of c. 6.3%
per cent and a weighted average unexpired lease term to first break
of c. 20 years. This pipeline should enable the Company to deploy
capital raised under the Issue in the near future, although there
can be no certainty that the Company will complete any of the
transactions in its investment pipeline.
-- The Company has a conservative level of gearing, with a
target loan to value of 30%. On 8 January 2018, the Company
announced that it had entered into a new GBP30 million loan
facility with Canada Life Investments. The term facility is up to
35% loan to property value, provided on a portfolio basis. The loan
is fixed for 8 years at a total rate of 3.05% per annum. On 19
January 2018 the Group drew down on the entire facility. The
released funds will be invested in the existing pipeline.
-- The Investment Manager has an experienced team with a track
record in both long lease funds and REITs with an established
pipeline of origination for long lease assets. They form part of
AEW Global, one of the world's largest real estate managers, with
more than EUR58 billion of assets under management.
The Issue will comprise:
-- an offer of Shares to certain institutional and professional
investors in qualifying geographies (the "Placing");
-- an offer of Shares to the public in the UK (the "Offer for Subscription"); and
-- an offer of Shares to certain financial intermediaries in the
UK, who will facilitate the participation of their retail clients
in the UK (the "Intermediaries Offer").
The Intermediaries Offer
The Intermediaries Offer is now open following publication of
the Prospectus. Retail investors can apply through stockbrokers and
share dealing providers who are participating in the Offer as
Intermediaries.
Retail investors can find further information about the
Intermediaries Offer, including the Prospectus and a list of the
firms acting as Intermediaries at www.aewukllreit.com. The current
list of Intermediaries participating in the Intermediaries Offer
are set out in Appendix A. Additional Intermediaries may elect to
participate during the course of the Intermediaries Offer.
-- The minimum individual application size in the Intermediaries Offer will be GBP1,000.
-- The last date for the receipt of applications by
Intermediaries is 14 February 2018. (Some Intermediaries may have
an earlier deadline and you should consult your Intermediary for
the exact date and time.)
Commenting on today's announcement, Steve Smith, Chairman of AEW
UK Long Lease REIT:
"We are very pleased with AEW UK Long Lease REIT's progress
since IPO last June, with the assembled portfolio providing high
quality secure income with inflation-linkage. Having now fully
invested the equity, the assets under offer will substantially
fully utilise the debt that the Company has secured. , The
Investment Manager is continuing to originate an attractive
pipeline of assets across a range of property sectors, giving us an
opportunity to raise additional capital that can be quickly
deployed and increase the scale of the Company."
(1) All numbers are as at 31 January 2018, pro-forma, based on
deployment of the net IPO proceeds and substantially all of the
GBP30m debt, including the acquisition of two assets totalling
GBP6m which are under offer (non-binding basis) and subject to
completion.
(2) This is a target only. There is no guarantee that the target
dividend can or will be achieved and it should not be taken as an
indication of the Company's expected or actual return.
Expected Timetable:
2018
Publication of Prospectus Thursday 1 February
Latest time and date for receipt of 11.00 am, Wednesday 14
completed application forms and payment February
in full under the Offer for Subscription
Latest time and date for receipt of 3.00 pm, Wednesday 14
completed application forms from intermediaries February
in respect of the Intermediaries Offer
Latest time and date for commitments 4.00 pm, Wednesday 14
under the Placing February
Publication of the results of the Issue Thursday 15 February
Admission and commencement of unconditional 8.00 am, Monday 19 February
dealings in Shares in respect of the
Issue
The dates specified are subject to change without further
notice. Any changes to the expected timetable will be notified by
the Company through a Regulatory Information Service.
Fidante Capital are acting as Sponsor, Financial Adviser and
Sole Bookrunner to the Company. Solid Solutions Associates are
acting as Intermediaries Offer Advisor.
Terms used and not defined in this announcement will have the
meanings given to them in the Prospectus.
Further details of the Issue and the Share Issuance Programme
are set out in the Prospectus, which will shortly be available on
the Company's website www.aewukllreit.com, and at the Company's
registered office: 6(th) Floor, 65 Gresham Street, London EC2V
7NQ.
A copy of the Prospectus will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM.
For further information, please contact:
AEW UK Investment Management LLP
Alex Short
Laura Elkin 020 7016 4880
Sponsor, Financial Adviser and Sole Bookrunner
Fidante Capital
Katie Standley
Nick Donovan
Sales
Patrick Valentine
Justin Zawoda-Martin
Daniel Balabanoff 020 7832 0900
Intermediaries Offer Enquiries
intermediaries@solid-solutions.co.uk
Solid Solutions
Nigel Morris 020 7549 1613
Media Enquiries
aew@tbcardew.com
TB Cardew 020 7930 0777
Ed Orlebar 07738 724 630
Tom Allison 07789 998 020
Lucy Featherstone 07789 374 663
Investment Manager
AEW UK Investment Management LLP is part of AEW Global, one of
the world's largest real estate managers, with EUR57.7 billion of
assets under management as at 30 September 2017. AEW Global
comprises AEW SA and AEW Capital Management L.P., a U.S. registered
investment manager. In Europe, as at 30 September 2017, AEW Global
managed EUR26.6 billion in value in properties of all types located
in 15 countries, with c. 400 staff. The Investment Manager is a
50:50 joint venture between the principals of the Investment
Manager and AEW Europe.
The Company
Investment Objective, Policy, and Strategy
The investment objective is to generate a secure and predictable
income return, sustainable in real terms, whilst at least
maintaining capital values, in real terms, by investing in a
diversified portfolio of UK properties, predominately in
alternative and specialist sectors.
In order to achieve its investment objective the Company invests
in freehold and long leasehold properties across the whole spectrum
of the UK property sector, but with a focus on alternative and
specialist real estate sectors. Examples of alternative and
specialist real estate sectors include, but are not limited to,
leisure, hotels, healthcare, education, logistics, automotive,
supported living and student accommodation.
The Company intends to achieve a diversified portfolio across
both properties and tenants. The Company will focus on properties
that can generate predictable income streams through long-leases
and have contractual exposure to inflation rates at the time of
investment.
The Company intends to supplement this core strategy with active
asset management initiatives to re-gear certain mid-life leased
properties.
The Company is not permitted to invest in land assets, including
development land which does not have a development agreement
attached, agriculture or timber.
In the current market environment the focus will be to invest in
properties to construct a portfolio with the following minimum
targets:
-- a weighted average unexpired lease term at the time of investment in excess of 18 years;
-- at least 85% of the portfolio's gross passing rent will have
leases with rent reviews linked to inflation (RPI or CPI) at the
time of investment;
-- investment in properties which typically have a value, at the
time of investment, of between GBP2 million and GBP30 million;
-- at least 70% of the properties will be in non-traditional sectors;
-- less than 30% of the properties will be in the traditional
sectors of retail, industrial and offices; and
-- over 90% of properties will be freehold or very long leasehold (over 100 years).
Once Gross Asset Value is GBP250 million or greater, future
investments will be made to target a portfolio with at least 80% of
the properties in non-traditional sectors, and less than 20% of the
properties in traditional sectors.
Whilst each acquisition will be made on a case by case basis, it
is expected that properties will typically offer the following
characteristics:
-- existing tenants with strong business fundamentals and
profitable operations in those locations;
-- depth of tenant/operator demand;
-- alternative use value;
-- current passing rent close to or below rental value; and
-- long-term demand drivers, including demographics, use of
technology or built-for-purpose real estate.
The full text of the investment objective, policy, and strategy
is set out in the Prospectus, which is available from
www.aewukllreit.com.
Appendix A:
LIST OF INTERMEDIARIES CURRENTLY PARTICIPATING
AJ Bell Securities Limited (Youinvest)
Alliance Trust Savings Limited
Barclays Bank PLC (Barclays Smart Investor)
Charles Stanley & Co Limited
Cornhill Capital Limited
Equiniti Financial Services Limited (Selftrade)
Jarvis Investment Management Limited (SharedealActive;
X-O.co.uk)
Redmayne-Bentley LLP
Saga Share Direct
Shareview
The Share Centre Limited
DISCLAIMER
The information in this announcement is for background purposes
only and does not purport to be full or complete. No reliance may
be placed for any purpose on the information contained in this
announcement or its accuracy or completeness. The material set
forth herein is for information purposes only and is not intended,
and should not be construed, as an offer of securities for sale in
the United States or any other jurisdiction.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States (including its
territories and possessions, any state of the United States and the
District of Columbia), Australia, Canada, South Africa or Japan.
The distribution of this announcement may be restricted by law in
certain jurisdictions and persons into whose possession any
document or other information referred to herein comes should
inform themselves about and observe any such restriction. Any
failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This announcement does not contain or constitute an offer for
sale of, or the solicitation of an offer or an invitation to buy or
subscribe for, Shares to any person in the United States,
Australia, Canada, South Africa or Japan or in any jurisdiction to
whom or in which such offer or solicitation is unlawful.
The Company will not be registered under the US Investment
Company Act of 1940, as amended. In addition, the Shares referred
to herein have not been and will not be registered under the US
Securities Act of 1933 (the "Securities Act") or under the
securities laws of any state of the United States and may not be
offered or sold in the United States or to or for the account or
benefit of US persons absent registration or pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable State securities laws. The offer and sale of
Shares referred to herein has not been and will not be registered
under the Securities Act or under the applicable securities laws of
any state, province or territory of Australia, Canada, South Africa
or Japan. Subject to certain exceptions, the Shares referred to
herein may not be offered or sold in Australia, Canada, South
Africa or Japan or to, or for the account or benefit of, any
national, resident or citizen of
Australia, Canada, South Africa or Japan. There will be no
public offer of the Shares in the United States, Australia, Canada,
South Africa or Japan.
Each of the Company, the Investment Manager, Fidante Capital and
their respective affiliates expressly disclaim any obligation or
undertaking to update, review or revise any forward-looking
statement contained in this announcement whether as a result of new
information, future developments or otherwise.
Any purchase of Shares in the Issue should be made solely on the
basis of the information contained in the Prospectus issued by the
Company in connection with the Issue and Admission. No reliance may
or should be placed by any person for any purposes whatsoever on
the information contained in this announcement or on its
completeness, accuracy or fairness.
Fidante Partners Europe Limited (trading as Fidante Capital) is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, and acting exclusively for the Company and
no-one else in connection with the Issue and Admission. They will
not regard any other person as their respective clients in relation
to the Issue and Admission and will not be responsible to anyone
other than the Company for providing the protections afforded to
their respective clients, nor for providing advice in relation to
the Issue and Admission, the contents of this announcement or any
transaction, arrangement or other matter referred to herein.
None of the Company, the Investment Manager, Fidante Capital or
any of their respective affiliates accepts any responsibility or
liability whatsoever for/or makes any representation or warranty,
express or implied, as to this announcement, including the truth,
accuracy or completeness of the information in this announcement
(or whether any information has been omitted from the announcement)
or any other information relating to the Company whether written,
oral or in a visual or electronic form, and howsoever transmitted
or made available or for any loss howsoever arising from any use of
the announcement or its contents or otherwise arising in connection
therewith. The Company, the Investment Manager, Fidante Capital and
their respective affiliates accordingly disclaim all and any
liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of this announcement or its
contents or otherwise arising in connection therewith.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements involve known and unknown risks and uncertainties, many
of which are beyond the Company's control and all of which are
based on the Company's board of directors' current beliefs and
expectations about future events. These forward-looking statements
may be identified by the use of forward- looking terminology,
including the terms "believes", "estimates", "plans", "projects",
"anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts.
Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's business,
the results of operations, financial condition prospects, growth
and dividend policy of the Company and the industry in which it
operates. Forward-looking statements speak only as of the date they
are made and cannot be relied upon as a guide to future
performance.
These forward-looking statements and other statements contained
in this announcement regarding matters that are not historical
facts involve predictions. No assurance can be given that such
future results will be achieved; actual events or results may
differ materially as a result of risks and uncertainties facing the
Company. Such risks and uncertainties could cause actual results to
vary materially from the future results indicated, expressed or
implied in such forward-looking statements. Forward looking
statements speak only as of the date of this announcement.
Information to Distributors
The Shares should be considered as 'non-complex' in accordance
MiFID (2014/65/EU) and the Markets in Financial Instruments
Regulation (MiFIR - 600/2014/EU) ("MiFID II").
Solely for the purposes of the product governance requirements
contained within: (a) MiFID II; (b) Articles 9 and 10 of Commission
Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c)
local implementing measures (together, the "MiFID II Product
Governance Requirements"), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Shares
have been subject to a product approval process, which has
determined that the Shares to be issued pursuant to the Issue and
any Shares which may be issued pursuant to any subsequent Issue
are: (i) compatible with an end target market of retail investors
and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID IIÍž and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Shares may decline and investors
could lose all or part of their investment; the Shares offer no
guaranteed income and no capital protection; and an investment in
the Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are
capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses
that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Placing.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, Fidante Capital will only procure investors who meet
the criteria of professional clients and eligible
counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Shares.
Each distributor is responsible for undertaking its own Target
Market Assessment in respect of the Shares and determining
appropriate distribution channels.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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