AEW UK REIT PLC Acquisition of multi-let industrial in Basildon (2103C)

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RNS Number : 2103C

AEW UK REIT PLC

12 April 2017

12 April 2017

AEW UK REIT plc

AEW UK REIT PLC ACQUIRES MULTI-LET INDUSTRIAL BUILDING IN BASILDON, ESSEX

AEW UK REIT plc (LSE: AEWU) (the "Company"), which owns a diversified portfolio of 29 regional UK commercial property assets, announces the acquisition of a c. 69,000 sq ft multi-let industrial building in Basildon, Essex, for GBP4.55 million, reflecting a high Net Initial Yield of 7.8% and a capital value of GBP66 per sq ft.

The warehouse, which is located within the established Cranes Farm Industrial area, is fully let to four tenants', providing a WAULT of just under 4 years to lease breaks and 6 years to expiry. The current lettings show an average passing rent of GBP5.50 per sq ft which is significantly below the local market average and as such, the building presents an opportunity for near-term rental income uplift through asset management. The site is strategically located adjacent to the A127, which provides quick vehicular access to Junction 29 of the M25.

Commenting on the deal, Alex Short, the Company's Portfolio Manager at AEW UK Investment Management LLP, said, "This off-market acquisition of a well-located, multi-let industrial asset in the South East of England offers both an attractive day one yield and the potential to improve the income profile over a short timeframe, whilst also demonstrating our strong origination capabilities.

"Basildon has seen strong commercial rental performance over the past 18 months, driven by a supply demand imbalance, and as such, prime and secondary rents in the town now sit at GBP8.50 per sq ft and GBP6.75 per sq ft respectively. Furthermore, we believe that the acquisition pricing is well supported by the asset's underlying vacant possession value, highlighting the strength of the occupational market in this location."

Following the acquisition, the Company has invested a total of GBP133 million across 29 regional commercial property assets and has a GBP7.44 million investment in AEW UK's Core Property Fund.

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 GBP133 million across 29 regional commercial property assets and has a GBP7.7 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.

www.aewukreit.com

For further information, please contact:

 
 Enquiries 
 
 AEW UK 
 Alex Short 
 [e-mail] 
 [phone] 
 
 Nicki Gladstone 
 [e-mail] 
 [phone] 
 
 Company Secretary 
 Benjamin Hanley 
 Capita Company Secretarial 
  Services 
 [e-mail] 
 [phone] 
 
 FTI Consulting 
 Richard Sunderland, Claire 
  Turvey, Richard Gotla 
 [e-mail] 
 [phone] 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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April 12, 2017 02:00 ET (06:00 GMT)