AEW UK REIT PLC Acquisition of Logistics Warehouse in Bradford (4713Q)

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RNS Number : 4713Q

AEW UK REIT PLC

30 November 2016

30 November 2016

AEW UK REIT plc

AEW UK REIT ACQUIRES LOGISTICS WAREHOUSE IN BRADFORD

AEW UK REIT plc (LSE: AEWU) (the "Company"), which owns a diversified portfolio of 28 regional UK commercial property assets, is pleased to announce the acquisition of a c. 144,000 sq ft logistics warehouse in Bradford for GBP4.95 million, reflecting a Net Initial Yield of 8.1%, reversionary yield of 8.9% and a capital value of GBP34 per sq ft.

The warehouse, which is located on the established Euroway Trading Estate in Bradford, is let to Advanced Supply Chain on an eight year lease, at a low passing rent of GBP2.98 per sq ft, providing opportunities for future income growth. The site is strategically located near Junction 2 of the M606 and is close to the major conurbations of both Leeds (17km) and Manchester (60km), while also providing good access to the M1 servicing Birmingham and London, as well as the A1 north. A number of distribution operators are located on the Euroway Estate, highlighting the strength of the location, including Marks and Spencer, whose 1.1 million sq ft regional distribution warehouse facility is located directly adjacent to the newly acquired asset.

Commenting on the deal, Alex Short, REIT Portfolio Manager at AEW UK Investment Management LLP, said, "The acquisition of this well located logistics asset, on an attractive yield, is underpinned by the rapid growth we are seeing in online retail, which is leading to an increased occupier demand for logistics warehousing. The current low level of rent offers significant upside potential and we believe that that the acquisition pricing is well supported by the asset's underlying vacant possession value, while fitting with our stated strategy of acquiring higher-yielding, income producing assets that offer asset management and rental growth opportunities."

Following the acquisition, the Company has invested a total of GBP128 million across 28 regional commercial property assets and has a GBP9.33 million investment in AEW UK's Core Property Fund.

 
 Enquiries 
 AEW UK 
 Alex Short                         [e-mail] 
                                    [phone] 
 Nicki Gladstone                    [e-mail] 
                                    [phone] 
 Company Secretary 
 Benjamin Hanley, Capita Company    [e-mail] 
  Secretarial Services 
                                    T: 01392 477 653 
 FTI Consulting 
 Richard Sunderland, Claire         [e-mail] 
  Turvey, Richard Gotla 
                                    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 GBP10 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 GBP23m.

Since its IPO in May 2015, AEWU has invested a total of GBP128 million across 28 regional commercial property assets and has a GBP9.33 million investment in AEW UK's Core Property Fund. It 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 AEWU to crystallise value through rent reviews and lease re--gears.

AEWU 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 EUR19.1 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.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 30, 2016 02:00 ET (07:00 GMT)