NAV Update and Dividend Declaration

AEW UK REIT plc (AEWU) AEW UK REIT plc: NAV Update and Dividend Declaration 21-Oct-2021 / 07:00 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. 21 October 2021 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 30 September 2021. Highlights Interim dividend of 2.00 pence per share for the three months ended 30 September 2021, in line with the targeted annual dividend of 8.00 pence per share.  NAV of £174.29 million or 110.01 pence per share as at 30 September 2021 (30 June 2021: £169.69 million or 107.11 pence per share). NAV total return of 4.58% for the quarter (30 June 2021 quarter: 10.04%). EPRA earnings per share ("EPRA EPS") for the quarter of 1.30 pence (30 June 2021 quarter: 2.14 pence). Sales of Langthwaite Industrial Estate, South Kirkby for £10.84 million and Wella Warehouse, Basingstoke for £5.86 million. The sales prices achieved were 1.9x and 1.7x the purchase prices respectively. The Company remains conservatively geared with a loan to NAV ratio of 28.97% (30 June 2021: 29.76%). At the quarter end, the Company had a cash balance of £15.16 million and £9.50 million of its loan facility available to draw up to the maximum 35% Loan to NAV at drawdown. Following completion of the sale of Wella Warehouse, Basingstoke, on 15 October 2021, the Company's cash balance is £20.06 million, all else equal. For the rental quarter commencing on 29 September 2021, 89% of rent has been collected or is expected to be received under monthly payment plans prior to quarter end. The remainder of rents owed will continue to be pursued. Alex Short, Portfolio Manager, AEW UK REIT, commented: "Following its highest quarterly valuation increase since IPO last quarter (30 June 2021 quarter: 7.47% on a like-for-like basis), the portfolio has again generated strong capital growth, with valuations increasing by 3.11% on a like-for-like basis. 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 4.33% and make up 55.5% of the portfolio as at 30 September 2021. This has again partly been driven by yield compression, but we have also seen our ERVs move on as a result of continued strong occupier demand, supported by a compelling asset management story. We have also seen good performance at our office holding in Bristol, with two recent lettings at above ERV moving the valuation onwards. Our office park at Oxford continues to perform well with its transition to life sciences/medical use, a sector which is seeing particularly strong investor demand. After a tumultuous period for the retail sector, we have seen valuations stabilise this quarter, with our valuations increasing by 1.36% on a like-for-like basis, particularly driven by our new retail warehousing holding in Shrewsbury.  Over the summer, the Company decided to sell two of its strong performing industrial holdings which have delivered excellent returns to AEWU shareholders over the last few years (Units 16 & 16A, Langthwaite Industrial Estate in South Kirkby for £10.84 million and Wella Warehouse in Basingstoke for £5.86 million). The value of the properties had climbed considerably, and these sales allowed us to realise a profit, exceeding both the prevailing valuations and the prices AEWU paid at acquisition. The sale of South Kirkby, which completed in August, was 31% ahead of the March 2021 valuation and 87% ahead of its purchase price. Basingstoke, which completed recently on 15th October, was 35% and 72% above the March 2021 valuation and purchase price respectively. The combined total of these sales (£16.7 million) will be reinvested into exciting opportunities that we are seeing in the market. The Company's EPRA EPS was 1.30 pence for the quarter, providing a dividend cover of 65% (30 June 2021: 2.14 pence and 107%). During the quarter, the Company made a prudent provision against service charge arrears on the ongoing remedial works in Blackpool, which amount to 0.27 pence per share. The Company also continues to incur vacancy costs at its property in Glasgow where contracts have been exchanged for sale. The Blackpool and Glasgow properties are temporarily restricting the Company's earnings. Following the planned sale of Glasgow in December 2021 and completion of the works at Blackpool in early 2022, we expect the cost overhead to fall, leading to an increase in the EPRA EPS. In the coming quarters, the Company's earnings will also benefit from new acquisitions as well as the completion of asset management initiatives. We currently have an attractive retail warehouse opportunity under offer and expect to complete imminently.  We are very encouraged by continuing improvements in rent collection levels, which now stand at over 99% for each quarter since the onset of the pandemic (excluding current quarter). The Company has £15.16 million of cash and £9.50 million of its loan facility available to draw up to the maximum 35% Loan to NAV at drawdown, which will allow us to take advantage of further attractive opportunities in the market. Following completion of the sale of Wella Warehouse, Basingstoke, on 15 October 2021, the Company's cash balance is £20.06 million, all else equal. The Company's share price was 102.80 pence as at 30 September 2021 (30 June 2021: 96.00 pence) and we hope that continued improvement in economic conditions will bring about the return of a share price premium to NAV." Valuation movement As at 30 September 2021, the Company owned investment properties with a fair value of £206.69 million. The like-for-like valuation increase for the quarter of £6.24 million (3.11%) is broken down as follows by sector: Sector Valuation 30 September 2021 Like-for-like valuation movement for the quarter £ million % £ million  % Industrial 114.72 55.50 4.76 4.33 Office 39.95 19.33 0.95 2.44 Retail 39.47 19.10 0.53 1.36 Other 12.55 6.07 0.00 0.00 Total 206.69 100.0 6.24 3.11 Net Asset Value The Company's unaudited NAV at 30 September 2021 was £174.29 million, or 110.01 pence per share. This reflects an increase of 2.71% compared with the NAV per share at 30 June 2021. The Company's NAV total return, which includes the interim dividend of 2.00 pence per share for the period from 1 April 2021 to 30 June 2021, was 4.58% for the three-month period ended 30 September 2021. Pence per share  £ million  NAV at 1 July 2021 107.11 169.69 Portfolio acquisition costs (0.01) (0.01) Profit on sale of investments 0.90 1.42 Capital expenditure (0.02) (0.04) Valuation change in property portfolio 2.70 4.28 Valuation change in derivatives 0.03 0.05 Income earned for the period 2.63 4.17 Expenses and net finance costs for the period (1.33) (2.10) Interim dividend paid (2.00) (3.17) NAV at 30 September 2021 110.01 174.29 The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards. It incorporates the independent portfolio valuation at 30 September 2021 and income for the period, but does not include a provision for the interim dividend for the three-month period to 30 September 2021. Dividend Dividend declaration The Company today announces an interim dividend of 2.00 pence per share for the period from 1 July 2021 to 30 September 2021. The dividend payment will be made on 19 November 2021 to shareholders on the register as at 29 October 2021.  The ex-dividend date will be 28 October 2021. The dividend of 2.00 pence per share will be designated 1.50 pence per share as an interim property income distribution ("PID") and 0.50 pence per share as an interim ordinary dividend ("non-PID"). The Company has now paid a 2.00 pence quarterly dividend for 24 consecutive quarters1, representing an unbroken record since IPO. 1For the period 1 November 2017 to 31 December 2017, a pro rata dividend of 1.33 pence per share was paid for this 2 month period, following a change in the accounting period. The EPRA EPS for the three-month period to 30 September 2021 was 1.30 pence (30 June 2021: 2.14 pence). Dividend outlook It remains the Company's intention to continue to pay dividends in line with its dividend policy and this will be kept under review given the current COVID-19 situation. In determining future dividend payments, regard will be given to the circumstances prevailing at the relevant time, as well as the Company's requirement, as a UK REIT, to distribute at least 90% of its distributable income annually, which will remain a key consideration. Financing Equity The Company's share capital consists of 158,774,746 Ordinary Shares, of which 350,000 are currently held by the Company as treasury shares. Debt The Company had borrowings of £50.50 million at 30 September 2021, producing a Loan to NAV ratio of 28.97% and allowing a further £9.50 million of the remaining facility to be drawn up to the maximum 35% Loan to Value at drawdown. The loan attracts interest at SONIA + 1.4% and the Company's all-in interest rate as at 30 September 2021 was 1.47%. To mitigate the risk of interest rates rising, the Company has interest rate caps effective for the remaining term of the loan to 23 October 2023, capping LIBOR at 1.0% on a notional value of £51.50 million. The interest rate caps will transition to SONIA on 31 December 2021. Rent Collection As of 18 October 2021, the Company had collected the following rental payments for the rental quarter commencing 29 September 2021 and for previous quarters since the onset of the COVID-19 pandemic, expressed as a percentage of the quarter's total rental income: Current Position as at 18 October 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Received 100% 100% 99% 99% 99% 99% 74% Monthly Payments Expected Prior to Quarter End - - - - - - 15% 100% 100% 99% 99% 99% 99% 89% Under Negotiation - - - - - - - 100% 100% 99% 99% 99% 99% 89% Outstanding - - 1% 1% 1% 1% 11% Total 100% 100% 100% 100% 100% 100% 100% It should be noted that this is an evolving picture with further payments being received each week.  For any amounts that remain outstanding that are owed by tenant companies who are known to have the ability to pay, the Company is pursuing these tenants. Asset Management Update: During the quarter the Company completed the following asset management transactions: Vantage Point, Hemel Hempstead (office) - We have completed a new 5-year ex-Act lease (tenant break option at the end of year 3) to Netronix Integration Limited at a rent of £33,683 pa / £14.50 psf, which is £3 psf above ERV. 4 months' rent free incentive was given, with a further 2 months should the tenant not exercise their tenant break option at the end of the third year. Bristol, 40 Queen Square (office) - Following the completion of a new 5-year ex-Act lease to Brewin Dolphin at £30 psf during the previous quarter, we have now also completed a lease renewal to Candide Limited until February 2025 at the same rent of £30 psf (£116,970 pa). The previous passing rent was £22.81 psf and only 1.5 months' rent free incentive was given. Above Bar Street, Southampton (high street retail) - We have exchanged on a new straight 5-year ex-Act lease to Shoe Zone at a gross rent of £80,000 pa, subject to approx. £40,000 landlord works. 12 months' rent free incentive was given. Sarus Court, Runcorn (industrial) - We have completed a 10-year lease renewal with NTT United Kingdom Limited (Dimension Data) at £5.75 psf (£64,066.50 pa) versus the previous passing rent of £5.25 psf.  There is a tenant break option in December 2025. 5 months' rent free incentive was given. Enquiries AEW UK Alex Short [e-mail] [phone] Henry Butt [e-mail] [phone] Nicki Gladstone [e-mail] [phone] Company Secretary Link Company Matters Limited [e-mail] [phone] TB Cardew [e-mail] Ed Orlebar Tania Wild [phone] [phone] Lucas Bramwell [phone] Liberum Capital Darren Vickers / Owen Matthews [phone] 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 £15 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 UK Listing 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 29 individuals covering investment, asset management, operations and strategy. It is part of AEW Group, one of the world's largest real estate managers, with €75.4bn of assets under management as at 30 June 2021. 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 2021, AEW Group managed €36.6bn of real estate assets on behalf of a number of funds and separate accounts with over 440 staff located in 9 offices. The Investment Manager is a 50:50 joint venture between the principals of the Investment Manager and AEW. In May 2019, AEW UK Investment Management LLP was awarded Property Manager of the Year at the Pensions and Investment Provider Awards. www.aewuk.co.uk

ISIN:	GB00BWD24154
Category Code:	MSCM
TIDM:	AEWU
LEI Code:	21380073LDXHV2LP5K50
OAM Categories:	3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.:	124840
EQS News ID:	1242286

End of Announcement	EQS News Service