|That all reads very positively. The properties under offer to let should just about take care of the remaining cover needed for the dividend. After that, it's all about capital growth and they seem to have a strategy for dealing with that. Happy to hold 8% yield is just too good to give up.|
|NAV Update and Dividend Declaration - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/nav-update-and-dividend-declaration/201611151122302272P/
NET ASSET VALUE
The Company's unaudited NAV as at 31 October 2016 was £118.05 million, or 95.47 pence per share. This reflects an increase of 0.95% per share compared with the NAV as at 31 July 2016, or a NAV total return, including the first interim dividend for the period from 1 May 2016 to 31 July 2016 of 2.0 pence per share, of 3.13%. As at 31 October 2016, the Company owned investment properties with a fair value of £125.88 million.
The Company today announces an interim dividend of 2.0 pence per share for the period from 1 August 2016 to 31 October 2016. The dividend payment will be made on 31 December 2016 to shareholders on the register as at 25 November 2016. The ex-dividend date will be 24 November 2016.
The dividend of 2.0 pence per share will be designated 1.60 pence per share as an interim property income distribution ('PID') and 0.40 pence per share as an interim ordinary dividend ('non-PID').
The actual earnings per share for this period were 1.95 pence as a result of a reduction in the dividend received from the Core Fund. As noted above, the Company will look to sell down its holding in the Core Fund and reinvest the proceeds from any sale into direct property holdings. The Board of Directors continues to express confidence in the Company's continued ability to meet the 2.0 pence per quarter target dividend payment from property income based upon the existing assets. In addition, asset management initiatives continue to add to the Company's income stream. 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.
Alex Short, Portfolio Manager, AEW UK REIT, commented:
"We have now seen two valuation dates since the referendum result in June and are encouraged by how the value of the portfolio has stabilised and also by its resilience to market uncertainty. Since July our valuers have removed their caveat reflecting a lack of post-Brexit transactional evidence from our valuations and have also applied a modest level of post-Brexit capital growth. Trading in the Company's shares has also been stable over the last quarter with a consistent premium being maintained which has allowed us to raise £6m in new equity from tap issues. The net proceeds of the share issues, and debt facility up to 20% loan to GAV, are under offer on new acquisitions in the industrial sector.
Across the portfolio we continue to see the occupier market remaining active, with robust levels of tenant demand. As a result, 40% of the portfolio's current vacancy is now under offer including units in Oxford, Sheffield and Salisbury. Once completed, these lettings, with an income stream totalling over £400,000 pa, will reduce the current portfolio vacancy from 8.70% of ERV to 3.5%. In locations where this occupier demand is coupled with a shortage of good quality supply we are seeing rental value uplift which gives confidence in the portfolio and has been additive to value. Examples of this include Queen Square in Bristol where new lettings have been achieved above the valuer's estimate of rental value. Also at Fargate in Sheffield, highlighting the success of our strategy to invest only in major retail centres, we have seen some significant rental value growth due to nearby recent lettings which is contrary to the national trend.
Conscious of an uncertain global economic backdrop, defensive downside protection remains a focus of our stock selection process with a focus on investment values that are underwritten by replacement cost, vacant possession and alternative use values and therefore less exposed to capital erosion. In addition to this we are looking to lengthen income steams where possible and we are currently in negotiation with the portfolio's largest tenant occupying a distribution warehouse close to the M1 who has lease events both this year and next; supply in this location is tight due to a lack of development and we believe the tenant in question is wedded to the surrounding area. We are also seeing many examples where a less proactive approach is required due to tenants not operating break clauses or remaining in occupation post expiry, again often due to a lack of supply highlighted by AEW at acquisition. The portfolio's second largest tenant, The Secretary of State for Communities and Local Government, did not option a break in June and during the last quarter Wella, the portfolio's fifth largest tenant, removed a break clause from their lease in Basingstoke.
As a precursor to a more stable view on pricing, the Investment market has seen a healthy level of activity since the end of the summer and is currently showing a strong pipeline of opportunities suitable for the future growth of the strategy. With this in mind, approval has been given by the Board of Directors to sell down the Company's Core Fund holding (at NAV or better) at an appropriate time now that pricing has returned to offer. Although this holding was particularly accretive to performance during the ramp-up phase, with a more mature portfolio the holding is now less relevant to the Company's strategy and the intention will be to reinvest the proceeds from any sale as quickly as possible back into direct property holdings".|
|Failed to nick a penny and now out, but happy to sit out for the time being. Tap issue RNS yesterday, at first glance looks a good price (97p) but actually they get the divi backdated, ie they actually paid 95p, which is approx. NAV by my estimate, and the highest price I'd be minded to buy back in at.|
|Have sold a few, since the last NAV didn't take account of the divi, ie c.94.5p is now c.92.5p today on XD day. It'll recover that in income over the next 3 months of course, but just trying to nick a penny or two.|
|2p XD today. Nice that it's a quarterly payer - never more than 3 months until the next 2p.|
|Fair point SteMiS, but no investment is risk free, especially one with an 8% yield. I reckon the risk / reward balance here is acceptable. If they can do more deals like Bristol, then the balance is in our favour.|
|@STeMiS - they seem to be doing OK on that front so far, but it's a fair point - in a recession that could well happen. They would of course have 6 months of empty rates relief before Empty Rates became an issue (industrial use; 3 months for offices. Both mitigable to some extent, but not cost-free). Of more importance is being able to re-let quickly, and at the same or higher levels.
Suspect they'll be buying more shortly too - personally I don't want to see them get too geared.|
|The problem is is that many of the properties are on leases with very little time remaining on them. If AEW are unable to relet them then rental income will fall and empty property rates will be payable meaning the dividend will have to be cut.|
|94.57p so "almost full asset backing" maybe more appropriate ;) But when much of the NAV fall due to that daft AEW UK Core Property Fund moving from single price to offer/bid, can't say it's too concerning. Welcome aboard and good luck to us.
Of more interest is the divi being covered by revenues, & seems they're well aware of the importance of that.|
|Finally bought into these this morning. This is never going to be a stellar performer, but an 8% yield paid quarterly, with full asset backing, is going to be hard to beat.|
|Been some good buys on it since the results, slightly surprised now it's clearly trading above NAV. Still - they reiterated the dividend target and where else can you get over 8% yield.
Still - I'd like to see some more evidence of the value-added management, and see that reflected in a rising NAV. Writing off acquisition costs vs NAV is going to be painful in a flat property market.
One more positive - gearing is very low. I'll be watching out for them trying to increase it, I'm quite happy with it remaining low.|
|Not sure what to make of this morning's RNS - mostly positive, eg:
"...Returns in strong UK regional locations remains positive for the foreseeable future. AEW UK REIT's low level of gearing and the strength of its covenants gives us confidence that, by continuing to focus on income producing assets, it can continue to deliver on its stated dividend policy across the portfolio and generate market-leading total returns to shareholders."
But countered by a NAV fall due mostly to something I wasn't aware of:
" The value of the REIT's interest in the AEW UK Core Property Fund ("the Core Fund") is now 14.4% below its value as at 30 April 2016 despite the underlying fall in value of the property held by the Core Fund being only 2.6% down. This is predominantly a result of the Manager's movement of the fund's swinging single price from offer to bid and also the application of a further dilution levy of 5% to the funds overall pricing"|
|Small beer, but positive nonetheless:
RNS Number : 3830G
AEW UK REIT PLC
05 August 2016
5 August 2016
AEW UK REIT plc secures three new tenants at 40 Queen Square, Bristol
-Lettings bring occupancy level to 80% following major refurbishment programme-
August 5 2016 - AEW UK REIT plc ("AEWU" or "the Company") announces that it has secured three new lettings at 40 Queen Square, its office building in Bristol city centre, totalling 38,301 sq ft. Since AEWU acquired the asset last year, it has implemented a significant refurbishment programme, with these new lettings consistent with AEWU's strategy of maintaining high-yielding income streams while driving rental growth and adding value through active asset management.
40 Queen Square is located in the centre of Bristol and totals 38,301 sq ft, over four floors of Grade-A office space. AEWU has completed a 10 year lease with commercial law firm Beale & Company for 3,850 sq ft, a 10 year lease with the planning consultancy firm Turley for 3,100 sq ft, and a 10 year lease with commercial building consultants Malcom Hollis for 3,500 sq ft, at a total rental of GBP230,000 per annum. The building is now 80% pre-let, with three suites remaining; one is currently under offer, measuring 1,500 sq ft, while the remaining two total 2,000 sq ft and 5,500 sq ft.
Queen Square is one of the most sought after business addresses in Bristol, benefiting from excellent transport links - Bristol Temple Meads train station is less than 1km away - and surrounded by a range of local amenities, with the central retail and leisure district around Broadmead, Quakers Friars and Cabot Circus just a ten minute walk away.
The property was acquired in December 2015 and AEWU has since implemented an extensive refurbishment programme, including an upgrade of the communal areas and the addition of new bike racks and showers. The newly let spaces have been finished to a high specification and include new suspended ceilings, new carpets, LED lighting with PIR detection and lighting control modules, and VRV heating and cooling systems, which have improved the energy efficiency of the building.
Alex Short, Portfolio Manager, AEW UK REIT, commented: "Securing these new tenants is testament to the expertise and skills of our asset management team and also demonstrates the buoyancy of the high-quality office market in secondary UK cities. The increasing demand for both new and refurbished Grade-A office space, as Bristol becomes a prime location choice away from London for financial services and TMT businesses, coupled with an acute shortage of supply, is resulting in a rental price uplift which AEWU is well positioned to benefit from.
"The outlook for commercial property returns in UK regional cities remains positive for the foreseeable future and by continuing to focus on income producing assets, we are confident of delivering attractive returns to shareholders."|
|Bought into AEWU recently, missed the post-Brexit lows but am a sucker for yield and they seem to be going in the right direction.
As others have pointed out, the jury's still out to some extent, in particular how they survive a downturn. Hope their Empty Rates strategy is a good one..
But with cash raised previously at 101p and the yield seemingly getting up to target, fancy them as a long term hold.|
|AEW UK Reit present at our next growth company seminar on the 22nd: hTTp://www.sharesoc.org/seminarjune2016.html Shareholders and potential investors may be interested in attending!|
|A couple of NEDs have notified purchases of 50,000 shares each...
Director/PDMR Shareholding - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/director-pdmr-shareholding/201603101721597542R/
AEW UK REIT plc ("the Company") was today informed that Bim Sandhu, a Non-executive Director of the Company, had on 9 March 2016 acquired an interest in 50,000 Ordinary Shares of 1 pence each of the Company in London at a price of 94.03 pence per share.
Following this transaction, Mr Sandhu is interested in 400,000 Ordinary Shares of 1 pence each representing 0.340% of the total voting rights of the Company.
The Company was today also informed that James Hyslop, a Non-executive Director of the Company, had on 10 March 2016 acquired an interest in 50,000 Ordinary Shares of 1 pence each of the Company in London at a price of 93.00 pence per share.
Following this transaction, Mr Hyslop is now interested in 100,000 Ordinary Shares of 1 pence each representing 0.085% of the total voting rights of the Company.|
|NAV Update and Dividend Declaration - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/nav-update-and-dividend-declaration/201602291753395369Q/
"NAV per share at 31 January 2016 of 97.67 pence (31 October 2015: 97.09 pence)."
"The Company announces today a third interim dividend of 1.25 pps for the period from 15 December 2015 to 31 January 2016. The dividend payment will be made on 31 March 2016 to shareholders on the register as at 11 March 2016. The ex-dividend date will be 10 March 2016.
The dividend of 1.25 pps will be designated 1.25 pps as an interim property income distribution ('PID')."
NOTE - 2nd interim div of 0.75p is also payable on 31/3 (ex-div 10/12/15) - see HTTP://www.investegate.co.uk/aew-uk-reit-plc/rns/dividend-declaration/201512031603159513H/|
|Purchase of Property (9/2) - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/purchase-of-property/201602090949305089O/
The Board of AEW UK REIT plc (the "Company") is pleased to announce the acquisition of a portfolio of three single-let industrial warehouses located in Basingstoke, Rotherham and St Helen's comprising approximately 232,523 sq ft. The properties are fully let to Wella (UK) Holdings Ltd, Sapa Components UK Ltd and Kverneland Group UK Ltd respectively. The portfolio provides a WAULT of c.5 years to break and 6 years to expiry. The portfolio was acquired for £9.0m (net of acquisition costs) reflecting a net initial yield of 9.0%, reversionary yield of 9.6% and a capital value of £39 per sq ft overall.
With this purchase, the Company has just over £120m invested in 25 properties, including £9.75m in AEW UK's Core Property Fund.|
|Purchase of Property (20/1) - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/purchase-of-property/201601201003014321M/
The Board of AEW UK REIT plc (the "Company") is pleased to announce the acquisition of a multi let industrial warehouse located in Brockhurst Crescent, Walsall, West Midlands, an established commercial area located two miles from Junction 9 of M6. Comprising approximately 142,106 sq ft, the property is fully let to Tata Steel UK and Micheldever Tyre Services providing a WAULT of c 6.4 years. It was acquired for £3.85m (net of acquisition costs) reflecting a net initial yield of 9.9%, reversionary yield of 8.5% and a capital value of £28 per sq ft.
With this purchase, the Company has just over £111m invested in 22 properties, including £9.75m in AEW UK's Core Property Fund.|
|40 Queen Square, Bristol - HTTP://www.dtzinvestments.co.uk/dynamic/pdf/162057/1/162057-1.pdf
Some info in the investment brochure doesn't tally exactly with that in the AEWU rns announcement (e.g. 38,559 sq ft vs 36,365 sq ft). However the asking price appears to have been OIEO £5.5m (capital value £143/sq ft) + it has been acquired by AEWU for £7.2m (capital value £198/sq ft). One can only assume that there was hot competition for the investment?
Plenty of useful info in the brochure including current tenant list + anticipated service charge shortfall for the service charge year ended 25/12/2015.|
|Purchase of Property (23/12) - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/purchase-of-property/201512231646421006K/
The Board of AEW UK REIT plc (the "Company") is pleased to announce the acquisition of 40 Queen Square, Bristol.
The Property comprises a 36,365 sq ft city centre office investment, multi-let with a WAULT of approximately 3 years to expiry and 1.5 years to break. It was acquired for £7.2m (net of acquisition costs) reflecting a net initial yield of 8.7%, a reversionary yield of 9.5% (on ERV) and a capital value of £198 per sq ft.
Queen Square was originally developed in the early 1700s and remains today as one of the most sought after business addresses in Bristol. The Square is surrounded by cafes and bars which front the harbour on the southern side, and is only a ten minute walk to the central retail and leisure district around Broadmead, Quakers Friars and Cabot Circus.
With this purchase, the Company has approximately £107m invested in 21 properties and including £9.75m in AEW UK's Core Property Fund...
...Commenting on the deal, Alex Short, REIT Portfolio Manager at AEW UK Investment Management LLP, said, "We are pleased to have acquired this office investment which is well located in the heart of Bristol with increasing levels of occupier demand driving rental growth."|
|Cleaver House, Runcorn - HTTP://boltonbirch.com/property/cleaver-house/
Seller was lookng for offers in excess of £900k. Bought by AEWU for £910k.
Oak Park, Droitwich - HTTP://www.gva.co.uk/Property/8861/
Seller was lookng for offers in excess of £4.9m. Bought by AEWU for £5.625m.
Odeon Cinema, adjacent to Victoria Plaza Shopping Centre
Victoria Plaza Shopping Centre itself appears to be on the market - HTTP://www.greenandpartners.co.uk/wp-content/uploads/2015/07/Southend-PDF-FINAL.pdf
The Odeon Cinema can be seen to the left of the shopping centre on the photo on pg7 of the pdf brochure + useful local plan on pg10|
|Purchase of Property - HTTP://www.investegate.co.uk/aew-uk-reit-plc--aewu-/rns/purchase-of-property/201512141147359608I/
AEW UK REIT PLC ANNOUNCES THREE FURTHER ACQUISITIONS
The Board of AEW UK REIT plc (the "Company") is pleased to announce the acquisition of a further three property assets.
The first comprises a prominent 49,764 sq ft town centre leisure investment in Southend-on-Sea, let to Odeon Cinemas Limited with a WAULT of approximately 7 years to expiry. The property was acquired for £5.7m (net of acquisition costs) reflecting a net initial yield of 8.4%, a reversionary yield of 9.1% and a capital value of £115 per sq ft.
The property is situated in the town centre adjacent to Victoria Plaza Shopping Centre and comprises an 8 screen cinema.
The Company has also acquired Cleaver House, Runcorn; a single let industrial unit forming part of the Sarus Court development that was acquired by the Company in October. The acquisition price of £910,000 (net of acquisition costs) reflects a net initial yield of 7.9%, a reversionary yield of 8.3% and a capital value of £57 per sq ft. The property is fully let to Performance Products Limited with expiry in 2021 and a tenant break option in 2018.
In addition, the Company has acquired Oak Park, a 188,515 sq ft industrial complex in Droitwich, let to Egbert H. Taylor & Co Limited (trading as Taylor Bins) with a WAULT of approximately 7 years to expiry. The property has been bought for £5.625m (net of acquisition costs) reflecting a net initial yield of 10.4%, a reversionary yield of 10.4% and a capital value of £30 per sq ft.
With these purchases, the Company has approximately £100m invested in 20 properties and including £9.75m in AEW UK's Core Property Fund.|
|Raising £17m @ 101 was quite impressive (these guys don't even get the initial div).
Often you need to offer a discount to get new investors in! Apologies if that seems obvious but somebody didn't think it was necessary.
So they are delivering the 8% income as promised..let's hope they can cover this dividend with the rent.
There is an element of risk here but compared to other funds this one is not intending to use much leverage.|