VALUATION OF HOLDING IN AEW UK CORE PROPERTY FUND

RNS Number : 6097M

AEW UK REIT PLC

14 October 2016

 

AEW UK REIT plc

REVISED VALUATION METHODOLOGY FOR INVESTMENT IN AEW UK CORE PROPERTY FUND

AEW UK REIT plc (LSE: AEWU) (the "Company") announces that it expects to amend its valuation methodology in respect of its holding in the AEW UK Core Property Fund (the "Core Fund").

To date, the Company's valuation methodology has been to value the holding in the Core Fund at its single swinging share price, which can be at a premium ("offer basis") or discount ("bid basis") to the underlying net asset value per share of the Core Fund (the "Core Fund NAV"), depending on levels of subscriptions and redemptions.

At the date of the last published NAV of the Company, 31 July 2016, the Core Fund was valued on a bid basis and had applied a dilution adjustment of 5%, and the Core Fund share price represented a 6.4% discount to the Core Fund NAV at that time. The Core Fund subsequently moved its single price mechanism from a bid basis back to an offer basis and removed its dilution adjustment of 5%, as announced by the Company on 30 September 2016.

In respect of the NAV to 31 October 2016, it is expected that the Company's valuation of the Core Fund will be amended to value the holding in the Core Fund at the Core Fund NAV. The Directors, in consultation with the Company's professional advisers, expect to adopt the amended valuation methodology in order to provide a better reflection of fair value than the single swinging price in current market conditions. The Directors reserve the right at all times to determine the fair value of the Company's holding in the Core Fund using an alternative methodology depending on market conditions at the valuation date.

Enquiries
AEW UK
Laura Elkin	[e-mail]
	[phone]
Nicki Gladstone	[e-mail]
	[phone]
Company Secretary
Benjamin Hanley, Capita Company Secretarial Services	[e-mail]
	T: 01392 477 563
FTI Consulting
Richard Sunderland, Claire Turvey, Richard Gotla	[e-mail]
	T: 020 3727 1000

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 £10 million), on shorter occupational leases, in strong commercial locations across the United Kingdom.

Since its IPO in May 2015, the Company has invested just over £123 million in 27 properties, including £9.75 million in AEW UK's Core Property Fund, 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 the income stream. Whilst occupational demand in strategic locations remains, securing tenants on shorter leases allows the Company to crystallise value through rent reviews and lease re‐gears.

The Company is currently paying a dividend of 8p per share p.a. and targets a total annual return, over the medium term, in excess of 12% on the IPO issue price, net of all fees.

Real estate investment specialist AEW UK Investment Management LLP is a joint venture between the management team, which together has an average of 25 years of real estate experience, and AEW Europe, which has €48.1 billion of real estate assets under management. AEW UK Investment Management LLP has a strong and expert asset management team, with a proven record of identifying and delivering value from real estate assets across all sectors.

 

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