NAV Update and Dividend Declaration

RNS Number : 2618H

AEW UK REIT PLC

27 November 2015

 

NAV Update and Dividend Declaration for the period 1 August to 31 October 2015

27 November 2015

AEW UK REIT plc (LSE: AEWU) (the "Company") announces its Net Asset Value and interim dividend for the period ended 31 October 2015.

Highlights

·      12 Properties acquired during the period for total of £47.71 million (net of acquisition costs).

·      Fair Value independent valuation of the property portfolio as at 31 October 2015 of £71.36 million. Acquisitions costs on new property purchases have been written-off. The valuation of the property portfolio on a like for like basis compared with 31 July 2015 has increased by 1.31%.

·      AEW UK Core Property Fund valuation of £9.94 million.

·      The Company has secured a £40m 5 year term loan facility with RBS International. This facility will provide gearing up to 20% loan to Net Asset Value measured at drawdown.

·      NAV per share at 31 October 2015 of 97.09 pence.

·      Earnings per share (excluding revaluation gains and losses on fair value of investments) for the period from inception of the Company to 31 October 2015 of 1.36 pence per share ('PPS').

·      Earnings per share (excluding revaluation gains and losses on fair value of investments) as adjusted for amounts received from rental guarantees and rental top-ups for the period from inception of the Company to 31 October of 1.53 pps.

Net Asset Value

The Company's unaudited NAV as at 31 October 2015 was £97.58m, or 97.09 pence per share. As at 31 October 2015, the Company owned investment properties with a Fair Value of £71.36m. The Company's investment in AEW UK Core Property Fund is valued at £9.94m and the Company had cash balances of £15.8m for capital investment.

	Pence per share	£ million
NAV at 1 August 2015	97.12	97.60
Portfolio acquisition costs	(2.47)	(2.47)
Valuation change in property portfolio	1.09	1.09
Valuation change in AEW UK Core Property Fund	0.15	0.15
Income earned for the period	1.47	1.48
Expenses for the period	(0.27)	(0.27)
NAV at 31 October 2015	97.09	97.58

The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards and incorporates the independent portfolio valuation as at 31 October 2015 and income for the period but does not include a provision for the first interim dividend, which will be paid in December 2015.

Dividend

The Company announces an interim dividend of 1.50 pps for the period from the inception of the Company to 31 October 2015. The dividend payment will be made on 31 December 2015 to shareholders on the register as at 11 December 2015. The ex-dividend date will be 10 December 2015.

The dividend of 1.50 pps will be designated 1.50 pps as an interim property income distribution ('PID').

Portfolio activity

During the 3 month period ending 31 October 2015, the Company has acquired a further 12 properties as described below:

225 Bath Street, Glasgow was purchased for £12.2 million (including an amount for rent top up; net of acquisition costs). This property comprises a refurbished 87,827 square foot office building and is currently fully let to 6 tenants. This property has a net initial yield of 10.0% and a weighted average unexpired lease term ("WAULT") of 2.3 years to break and 4.5 years to expiry. The Estimated Rental Value ('ERV') for the property is just over £1,315,000 which equates to a reversionary yield of 10.2%.

Valley Retail Park, Belfast was purchased for £7.15 million (net of acquisition costs). This property is a modern 100,413 square foot retail park located in Newtonabbey, Belfast. This property has a net initial yield of 12.8% and a WAULT of 3.5 years to break and 7 years to expiry. The ERV for the property is £953,923 and the reversionary yield is 13.8%.

Stoneferry Retail Park, Hull was purchased for £2.16 million (net of acquisition costs). Stoneferry Retail Park occupies a prominent roundabout site totalling 17,656 sq ft approximately 2 miles to the north of Hull city centre. The scheme comprises 2 retail warehouse units along with a drive thru Burger King and 113 customer parking spaces. This property has a net initial yield of 10.0% and a WAULT of just under 7 years to expiry. The ERV for the property is £210,481 and a reversionary yield of 9.2%.

710 Brightside Lane, Sheffield was purchased for £3.5 million (net of acquisition costs). This property is located to the north-east of Sheffield, with good access from both the city centre and the M1 and within one mile of the Meadowhall Shopping Centre. This property has a net initial yield of 9.5% and the lease provides for a tenant break option in just under 10 years' time. The ERV for the property is £350,000 and the reversionary yield is 9.5%.

Vantage Point, 23 Mark Road, Hemel Hempstead was purchased for £2.18 million (net of acquisition costs). This property comprises a two storey office building of 18,407 sq ft located within the established Maylands Business Park. The property is fully let to two tenants, providing a WAULT of 5 years to break and 9.4 years to expiry. This property has a net initial yield of 8.4%.  The ERV for the property is £193,722 and the reversionary yield is 8.4%.

11-15 Fargate & 18-36 Chapel Walk, Sheffield was purchased for £5.3 million (net of acquisition costs). This property provides a total of 40,128 sq ft with 8 retail units spread over basement, ground and first floors. Tenants include Paperchase, H Samuel and Claire's Accessories with the lettings providing a WAULT of 3.8 years to break and 5.3 years to expiry. This property has a net initial yield of 8.25%, inclusive of rental guarantees. The ERV for the property is £487,500 and the reversionary yield is 9.1%.

Barnstaple Retail Park was purchased for £6.79m (net of acquisition costs). This property comprises a fully let retail warehouse scheme, extending to 50,950 sq ft. The Park is anchored by a 35,690 sq ft B&Q store and includes a 9,605 sq ft unit let to Sports Direct and a 5,717 sq ft unit let to Poundland. This property has a net initial yield of 8.5% and a WAULT of 7.3 years to break and 8.6 years to expiry. The ERV for the property is £610,680 and the reversionary yield is 8.5%.

Carrs Coatings, Eagle Road, Redditch was purchased for £2.0m (net of acquisition costs). This property is located on the established North Moons Moat Industrial Estate to the east of Redditch, a short distance from Junction 3 of the M42. The site extends to circa 1.7 acres and accommodates an industrial warehouse building of 37,833 sq ft. This property has a net initial yield of 9.5% and the reversionary yield is 7.5%. The property is single let to Carrs Coatings Ltd providing an unexpired terms of 13 years with annual fixed rental uplifts in line with RPI. The ERV for the property is £170,249.

A portfolio comprising of 3 industrial warehouses was purchased for £3.06m (net of acquisition costs). This portfolio comprises of properites in Swinton, Mossley and Milton Keynes, all trading as Nationwide Crash Repair Centres. The leases, expiring in August 2023, provide a WAULT of just under 8 years and product a total rental income of £269,000 per annum which is considered to be rack rented.  The portfolio has a net initial yield and reversionary yield of 8.3%.

Units 1001-1004, Sarus Court, Runcorn was purchased for £3.37m (net of acquisition costs). The site extends to 3.6 acres and accommodates four industrial warehouse buildings totalling 56,153 sq ft. The property is fully let to two tenants on four leases providing a WAULT of 3.8 years to break and 5.2 years to expiry. The property has a net initial yield is 8.0% and a reversionary yield of 7.9%. The ERV for the property is £280,765.

The sector weighting, by value, of the direct investment portfolio as at 31 October 2015 was 39.6% offices, 43.7% retail and 16.7% industrial.

Post quarter end activity

The Company has made 2 further acquisitions during November 2015 and has approximately £88 million invested.

Equinox, Castlegate Business Park, Salisbury was purchased for £2.0 million (net of acquisition costs). This property is situated at the western end of Castlegate Business Park, an established industrial area located 3 miles north of Salisbury town centre. This property has a net initial yield of 11.3% and a WAULT of 1 year to break and 6 years to expiry. The ERV for the property is £195,000 and the reversionary yield is 9.2%.

Langthwaite Business Park, South Kirkby was purchased for £5.8 million (net of acquisition costs). This Business Park consists of two neighbouring industrial warehouses totalling 221,145 sq ft, let to Ardagh Glass Limited with a WAULT of c. 1 year to break and 2.5 years to expiry. The properties have a net initial yield of 11% and a reversionary yield of 12%.  The ERV for the properties totals just over £742,000.

Taking into account the above acquisitions, the sector weighting by value of the direct investment portfolio as at 27 November 2015 was 35.7% offices, 39.4% retail and 24.9% industrial.

The Company will publish the unaudited half yearly report for the period ended 31 October 2015 during December 2015.

Portfolio Manager's comment

Alex Short, of AEW UK Investment Management LLP, the Company's Investment Manager, commented "We are pleased to have now completed 17 acquisitions for the Company and have invested the majority of the IPO proceeds in line with our proposed timetable. We expect to make further announcements over the coming weeks as we invest the remaining equity and utilise our loan facility with RBS International."

Enquiries
Investor Relations	Company Secretary
Dana Eisner, AEW UK Investment Management LLP	Marco Murray, Capita Asset Services
[e-mail]	[e-mail]
T: 020 7016 4883	T: 020 7954 9792

 

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