NAV Update and Dividend Declaration

AEW UK REIT plc (AEWU) AEW UK REIT plc: NAV Update and Dividend Declaration 21-Jul-2021 / 10:34 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. 21 July 2021 AEW UK REIT Plc (the "Company") NAV Update and Dividend Declaration AEW UK REIT plc (LSE: AEWU) (the "Company"), which, as at 21 July 2021, directly owns a diversified portfolio of 36 regional UK commercial property assets, announces its unaudited Net Asset Value ("NAV") and interim dividend for the three month period ended 30 June 2021. Highlights Interim dividend of 2.00 pence per share for the three months ended 30 June 2021, in line with the targeted annual dividend of 8.00 pence per share.  EPRA earnings per share ("EPRA EPS") for the quarter of 2.14 pence (31 March 2021 quarter: 1.10 pence). NAV of £169.69 million or 107.11 pence per share as at 30 June 2021 (31 March 2021: £157.08 million or 99.15 pence per share). NAV total return of 10.04% for the quarter (31 March 2021 quarter: 5.51%). Acquisitions of two properties: Arrow Point Retail Park, Shrewsbury, for £8.35 million and 15-33 Union Street, Bristol, for £10.19 million. Successful outcome of legal action against two well-funded national tenants to recover unpaid rent. All rent arrears due from these tenants have since been collected. The Company remains conservatively geared with a loan to NAV ratio of 29.76% (31 March 2021: 25.15%). As at 30 June 2021, the Company had a cash balance of £8.43 million and £8.89 million of its loan facility available to draw up to the maximum 35% Loan to NAV at drawdown. For the rental quarter commencing on 24 June 2021, 88% 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: "The Company's portfolio generated record strong capital growth for the quarter with valuations increasing by 7.47% on a like-for-like basis, the highest quarterly increase since IPO in 2015.  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 10.62% for the quarter and make up 57% of the portfolio as at 30 June 2021. The industrial and logistics sectors have benefitted from accelerated changes in consumer habits and the shift towards online retail and this continues to be reflected in valuation movements. There is also some expectation that the UK will begin to see an increase in localised production as a result of supply chain disruption and this could lead to take up being focussed more on traditional manufacturing accommodation, which has seen a decline in total stock in recent years, rather than the currently favoured logistics assets. We are now seeing more attractive investment opportunities coming to the market and the Company made two acquisitions during the quarter for a combined gross purchase price of £18.54 million, drawing £11.00 million of its loan facility. The first, Arrow Point Retail Park in Shrewsbury, was acquired in May for £8.35 million and is a fully-let, purpose-built retail park prominently located on a busy commercial estate, providing a net initial yield of 8.7%. The second, 15-33 Union Street, Bristol, is a retail site located on a busy pedestrian thoroughfare in Bristol city centre and provides a net initial yield of 8.0%. Both of these assets provide opportunity for value growth in the medium to long term, and also strong and stable income streams from their tenancy profiles. While we continue to take a cautious approach towards the retail sector, judging each site on its specific merits, these two acquisitions are an excellent fit for the portfolio. The retail sector now makes up 18% of the portfolio valuation. The Company's EPRA EPS was 2.14 pence for the quarter, providing a dividend cover of 107% (31 March 2021: 1.10 pence and 55%). During the quarter, the Company announced the successful outcome of legal action against two well-funded national tenants to recover unpaid rent and subsequently recovered all rent arrears due from those tenants. The collection of these significant arrears allowed the reversal of the prudent doubtful debt provision which contributed a one-off 0.37 pence to EPRA EPS during the quarter. In the coming quarters the Company's earnings will benefit from its recent acquisitions as well as the completion of asset management initiatives. Ongoing remedial works at the Company's property in Blackpool, which amounted to 0.13 pence per share for the quarter, and a high level of vacancy at its property in Glasgow, which has exchanged to be sold subject to achieving planning for student accommodation and vacant possession, are temporarily restricting the Company's earnings potential. Both are expected to be complete by early 2022. We are also encouraged by recent improvements in rent collection levels, which now stand at over 96% for each quarter since the onset of the pandemic (ex current quarter). It is hoped that continued easing of lockdown restrictions will allow this trend to continue. The Company has £8.43 million of cash and £8.89 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. The Company's share price was 96.00 pence as at 30 June 2021 (31 March 2021: 83.20 pence) and we hope that continued improvements in economic conditions will bring about the return of trading at a premium to NAV and enable growth of the Company to resume, which remains a key objective." Valuation movement As at 30 June 2021, the Company owned investment properties with a fair value of £210.91 million. The like-for-like valuation increase for the quarter of £13.37 million (7.47%) is broken down as follows by sector: Sector Valuation 30 June 2021 Like-for-like valuation movement for the quarter £ million % £ million  % Industrial 120.42 57.10 11.57 10.62 Office 39.00 18.49 2.20 5.98 Retail 38.94 18.46 (0.40) (1.92) Other 12.55 5.95 0.00 0.00 Total 210.91 100.0 13.37 7.47 Net Asset Value The Company's unaudited NAV as at 30 June 2021 was £169.69 million, or 107.11 pence per share. This reflects an increase of 8.03% compared with the NAV per share as at 31 March 2021. The Company's NAV total return, which includes the interim dividend of 2.00 pence per share for the period from 1 January 2021 to 31 March 2021, was 10.04% for the three-month period ended 30 June 2021. Pence per share  £ million  NAV at 1 April 2021 99.15 157.08 Portfolio acquisition costs (0.74) (1.16) Valuation change in property portfolio 8.56 13.55 Income earned for the period 2.51 3.97 Expenses and net finance costs for the period (0.37) (0.58) Interim dividend paid (2.00) (3.17) NAV at 30 June 2021 107.11 169.69 The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards. It incorporates the independent portfolio valuation as at 30 June 2021 and income for the period, but does not include a provision for the interim dividend for the three month period to 30 June 2021. Dividend Dividend declaration The Company today announces an interim dividend of 2.00 pence per share for the period from 1 April 2021 to 30 June 2021. The dividend payment will be made on 31 August 2021 to shareholders on the register as at 30 July 2021.  The ex-dividend date will be 29 July 2021. The dividend of 2.00 pence per share will be designated 1.00 pence per share as an interim property income distribution ("PID") and 1.00 pence per share as an interim ordinary dividend ("non-PID"). The Company has now paid a 2.00 pence quarterly dividend for 23 consecutive quarters1. 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 June 2021 was 2.14 pence (31 March 2021: 1.10 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 During the quarter, the Company drew £11.00 million of its loan facility, taking its total borrowings to £50.50 million as at 30 June 2021. This produces a Loan to NAV ratio of 29.76% and allows a further £8.89 million of the remaining £9.50 million facility to be drawn up to the maximum 35% Loan to Value at drawdown. During the quarter, the Company agreed to move its loan agreement to be linked to the Sterling Overnight Index Average ("SONIA") as a result of the FCA's expectation that LIBOR will no longer be available after 31 December 2021. The loan will attract interest at SONIA + 1.4% from the date of the next interest payment in July 2021. As at 30 June 2021 the Company's all-in interest rate was 1.49%. To mitigate the risk of interest rates rising, the Company has interest rate caps effective for the remaining term of the loan, 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 at the date of this announcement, the Company had collected the following rental payments for the rental quarter commencing 24 June 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 21 July 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Received 99% 99% 98% 98% 96% 75% Monthly Payments Expected Prior to Quarter End - - - - - 13% 99% 99% 98% 98% 96% 88% Under Negotiation 1% 1% 1% 1% 3% 5% 100% 100% 99% 99% 99% 93% Outstanding 0% 0% 1% 1% 1% 7% Total 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: Arrow Point Retail Park, Shrewsbury - We have extended British Heart Foundation's unexpired term to break by pushing their November 2021 break option out to December 2024 in return for 4 months' rent free.  The majority of the rent free was used to write off rent arrears predating AEWU's ownership. Diamond Business Park, Wakefield - We have completed a new 5 year ex-Act lease at £41,866 pa / £3.75 per sq ft on Unit 14, which reflects a rent 25% above the March 2021 ERV. 6 months' rent free was given as an incentive. Bristol, 40 Queen Square - We have completed a new 5 year ex-Act lease to Brewin Dolphin at £103,770 pa / £30 per sq ft versus the previous passing rent of £22 per sq ft and the March 2021 ERV of £26 per sq ft.  A 12 month 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 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 €72.8bn of assets under management as at 31 March 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 31 March 2021, AEW Group managed €35.7bn of real estate assets on behalf of a number of funds and separate accounts with over 430 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.:	118148
EQS News ID:	1220635

End of Announcement	EQS News Service