AEW UK REIT plc: NAV Update and Dividend Declaration (891873)
18 Ottobre 2019 - 8:00AM
UK Regulatory
AEW UK REIT plc (AEWU)
AEW UK REIT plc: NAV Update and Dividend Declaration
18-Oct-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
18 October 2019
NAV Update and Dividend Declaration for the three months to 30 September
2019
AEW UK REIT plc (LSE: AEWU) ("the Company"), which, as at 18 October 2019,
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 2019.
Highlights
· At 30 September 2019, the fair value independent valuation of the
property portfolio was GBP196.05 million (30 June 2019: GBP196.56 million). On
a like-for-like basis the valuation of the property portfolio decreased by
GBP0.51 million (0.26%) over the quarter (30 June 2019: decrease of GBP1.05
million and 0.53%).
· NAV of GBP147.55 million or 97.36 pence per share (30 June 2019: GBP148.33
million or 97.87 pence per share).
· EPRA earnings per share ("EPRA EPS") for the quarter of 2.13 pence per
share (30 June 2019: 2.25 pence per share).
· The Company today announces an interim dividend of 2.00 pence per share
for the three months ended 30 September 2019, in line with the targeted
annual dividend of 8.00 pence per share.
· NAV total return of 1.52% for the three months ended 30 September 2019
(three months ended 30 June 2019: 1.28%).
· The Company remains conservatively geared with a gross loan to value
ratio of 25.50% (30 June 2019: 25.44%).
Alex Short, Portfolio Manager, AEW UK REIT, commented:
"Despite the backdrop of ongoing political uncertainty, the Company remains
confident in its ability to deliver on its objectives. The value of our
assets has remained robust to date, particularly in the office and
industrial sectors, where assets have either been acquired at conservative
levels or provide exciting value-add opportunities. There has been some loss
of value in retail assets, in line with the structural changes that we are
seeing across the retail sector, however, this has been mitigated by the
portfolio's light exposure to the sector at 14.2% and also by value gains in
other parts of the portfolio. EPRA Earnings cover of the quarterly 2 pence
per share dividend remains healthy, at 106% this quarter.
The portfolio, now increasingly mature, is offering us numerous
opportunities to undertake asset management initiatives which provide
various potential routes to add value. Over the past quarter this has
included the settlement of an industrial rent review in Bradford at an
increase of 14% above the level of our valuer's ERV. In addition, post
quarter-end, we have completed a lease extension on an industrial unit in
Basingstoke, which has been achieved at 46% above the previous passing rent
due to its short term.
Despite our positive outlook for the portfolio, we are conscious of the
opportunity to limit downside risk in an uncertain macro environment and,
with this in mind, we have recently taken a number of steps to reduce risk
associated with the Company's debt facility. In October 2018, we documented
the extension of the loan's term, pushing expiry from October 2020 to
October 2023. In addition, earlier this month we completed an amendment to
the loan agreement with RBSi, which increases the loan to NAV covenant from
45% to 55%, subject to certain conditions. Neither of these changes have
increased the current ongoing cost of the facility, other than incurring
up-front fees. Our aim is to continue to keep gearing at a conservative
level in accordance with the Company's stated policy."
The like-for-like valuation decrease for the quarter of GBP0.51 million
(0.26%) is detailed as follows by sector:
Sector Valuation 30 Valuation Valuation
September 2019 movement for the movement for the
quarter quarter
GBP million GBP million %
Industrial 93.93 0.05 0.05
Office 44.35 1.14 2.65
Other 30.02 0.00 0.00
Retail 27.75 (1.70) (5.77)
Total 196.05 (0.51) (0.26)
Net Asset Value
The Company's unaudited NAV as at 30 September 2019 was GBP147.55 million, or
97.36 pence per share. This reflects a decrease of 0.53% compared with the
NAV as at 30 June 2019. The Company's NAV total return, which includes the
interim dividend for the period from 1 April 2019 to 30 June 2019 of 2.00
pence per share, is 1.52% for the three-month period ended 30 September
2019. As at 30 September 2019, the Company owned investment properties with
a fair value of GBP196.05 million.
Pence per share GBP million
NAV at 1 July 2019 97.87 148.33
Capital expenditure (0.06) (0.09)
Valuation change in property (0.54) (0.82)
portfolio
Valuation change in derivatives (0.04) (0.06)
Income earned for the period 2.87 4.34
Expenses and net finance costs for (0.74) (1.12)
the period
Interim dividend paid (2.00) (3.03)
NAV at 30 September 2019 97.36 147.55
The NAV attributable to the ordinary shares has been calculated under
International Financial Reporting Standards and incorporates the independent
portfolio valuation as at 30 September 2019 and income for the period, but
does not include a provision for the interim dividend for the three month
period to 30 September 2019.
Dividend
The Company today announces an interim dividend of 2.00 pence per share for
the period from 1 July 2019 to 30 September 2019. The dividend payment will
be made on 29 November 2019 to shareholders on the register as at 1 November
2019. The ex-dividend date will be 31 October 2019.
The dividend of 2.00 pence per share will be designated 2.00 pence per share
as an interim property income distribution ("PID").
The EPRA EPS for the three-month period to 30 September 2019 was 2.13 pence
(30 June 2019: 2.25 pence).
The Directors will declare dividends taking into account the level of the
Company's net income and the Directors' view on the outlook for sustainable
recurring earnings. As such, the level of dividends paid may increase or
decrease from the current annual dividend of 8.00 pence per share. Based on
current market conditions, the Company expects to pay an annualised dividend
of 8.00 pence per share in respect of the financial period ending 31 March
2020.
Investors should note that this target is for illustrative purposes only,
based on current market conditions and is not intended to be, and should not
be taken as, a profit forecast or estimate. Actual returns cannot be
predicted and may differ materially from this illustrative figure. There can
be no assurance that the target will be met or that any dividend or total
return will be achieved.
Financing
Equity
The Company's issued share capital consists of 151,558,251 Ordinary Shares
and there was no movement during the quarter.
Debt
The Company's borrowings remained at GBP50.00 million throughout the quarter
and at 30 September 2019, the Company was geared at a gross loan to value of
25.50% and a net loan to value of 24.48%.
The loan continues to attract interest at LIBOR + 1.4%. To mitigate the
interest rate risk that arises as a result of entering into a variable rate
linked loan, the Company has entered into interest rate caps on GBP36.51
million of the total value of the loan (GBP26.51 million at 2.5% cap rate and
GBP10.00 million at 2.0% cap rate) up to October 2020, resulting in the loan
being 73% hedged.
Earlier this month, the Company announced that it had completed an amendment
to its existing loan agreement which increases the facility's loan to NAV
covenant from 45% to 55% (subject to certain conditions). There will be no
changes to the margin charged at the current level of gearing as a result of
this amendment.
The loan term runs to October 2023 and the Company has entered into
additional interest rate caps covering the period from October 2020 to
October 2023, capping a notional value of GBP46.51 million at LIBOR of 2.0%
per annum, which represents 93% of the current GBP50.00 million loan balance.
The Investment Manager and the Company will keep the levels of gearing and
hedging under review.
Portfolio activity and asset management
Knowles Lane, Bradford
A rent review dated September 2018 has been settled at an industrial unit in
Bradford. The review documents a new passing rent of GBP182,500, representing
a 14% increase on the previous rent, which is also ahead of the valuer's
ERV. The back-dated increase in rent from September 2018 up to the date of
the settlement of the review has been recognised as income in the quarter to
September 2019.
Bessemer Road, Basingstoke
A lease extension for a term of six months has been completed with HFC
Prestige Manufacturing in Basingstoke. Due to the short extension period, a
rental level has been agreed 46% ahead of the previous passing rent.
Enquiries
AEW UK
Alex Short alex.short@eu.aew.com
+44(0) 20 7016 4848
Nicki Gladstone nicki.gladstone-ext@eu.aew.com
+44(0) 7711 401 021
Company Secretary
Link Company Matters Limited aewu.cosec@linkgroup.co.uk
+44(0) 1392 477 500
TB Cardew AEW@tbcardew.com
Ed Orlebar +44 (0) 20 7002 1482
Lucas Bramwell +44 (0) 7789 374 663
Liberum Capital
Gillian Martin/Owen Matthews +44 (0) 20 3100 2000
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 GBP15 million), on shorter occupational leases in strong
commercial locations across the United Kingdom. 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, raising GBP100.5m.
Since IPO it has raised a further GBP51m.
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 the income stream.
AEWU is currently paying an annualised dividend of 8p per share.
www.aewukreit.com [1] [2]
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 EUR68.2bn of assets under management as at 30 June 2019. 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 2019, AEW Group managed EUR31.9bn of real estate assets on behalf of a
number of funds and separate accounts with over 400 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 [3]
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.: 23812
EQS News ID: 891873
End of Announcement EQS News Service
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October 18, 2019 02:00 ET (06:00 GMT)
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