AEW UK REIT Plc which holds a diversified portfolio of 35 commercial investment properties throughout the UK, is pleased to publish its full year results for the year ended 31 March 2019.
Mark Burton, Chairman of AEW UK REIT, commented: “A key feature of the financial year has been achieving the target income returns of 8.00 pence per share (‘pps’) from the Company’s established portfolio of assets. Such returns demonstrate the success of both the Company’s investment strategy and the stock selection process of the Investment Manager when deploying the proceeds of the most recent capital raise, as well as our active asset management. The Board expects this level of return to continue, with further value expected to be gained through asset management initiatives in the short term. Additionally, we continue to see attractive opportunities across our target sectors. The portfolio is defensively positioned for any Brexit outcome, with no exposure to London offices and broad diversification by sector and region. We look forward to raising additional capital to pursue identified opportunities as and when market conditions allow.”
Financial Highlights
Net Asset Value (‘NAV’) of £149.46 million and of 98.61 pps as at 31 March 2019 (31 March 2018: £146.03 million and 96.36 pps).
Operating profit before fair value changes of £13.52 million for the year (11 months ended 31 March 2018: £9.60 million).
Unadjusted profit before tax (‘PBT’) of £15.54 million and earnings of 10.26 pps for the year (11 months ended 31 March 2018: £9.82 million and of 7.17 pps).
EPRA Earnings Per Share (‘EPRA EPS’) for the year of 8.07 pence (11 months ended 31 March 2018: 6.56 pence).
Total dividends of 8.00 pps have been declared for the year (11 months ended 31 March 2018: 7.33 pps, equating to an annualised dividend of 8.00 pps).
Shareholder Total Return for the year of 5.44% (11 months ended 31 March 2018: 3.65%).
The price of the Company’s Ordinary Shares on the Main Market of the London Stock Exchange was 92.80 pps as at 31 March 2019 (31 March 2018: 95.60 pps).
As at 31 March 2019, the Company had drawn £50.00 million (31 March 2018: £50.00 million) of a £60.00 million (31 March 2018: £60.00 million) term credit facility with the Royal Bank of Scotland International Limited (‘RBSi’) and was geared to 25.30% of the Gross Asset Value (‘GAV’) (31 March 2018: 26.00%) (see note 21 below for further details).
The Company held cash balances totalling £2.13 million as at 31 March 2019 (31 March 2018: £4.71 million). Under the terms of its loan facility, the Company can draw a further £2.31 million (31 March 2018: £1.11 million) to the maximum 35% loan to NAV at drawdown.
On 1 March 2019, the Company published its Prospectus in relation to a Share Issuance Programme of up to 250 million new Ordinary shares and up to 250 million convertible redeemable preference shares (“C shares”). No shares have been issued, to date, under the programme.
Property Highlights
The Company acquired one property during the year for a purchase price of £6.93 million, excluding acquisition costs (11 months ended 31 March 2018: 10 properties for £60.11 million). The Company made two full disposals and two part disposals during the year for gross sales proceeds of £6.80 million (11 month period ended 31 March 2018: one disposal for gross sales proceeds of £11.05 million).
As at 31 March 2019, the Company’s property portfolio had a fair value of £197.61 million across 35 properties (31 March 2018: £192.34 million across 36 properties) and a historical cost of £196.86 million (31 March 2018: £196.64 million).
The majority of assets that have been acquired are fully let and the portfolio had an EPRA Vacancy Rate of 2.99% as at 31 March 2019 (31 March 2018: 7.10%).
Rental income generated in the year under review was £17.18 million (11 months ended 31 March 2018: £12.33 million). The number of tenants as at 31 March 2019 was 95 (31 March 2018: 104).
EPRA Net Initial Yield (‘NIY’) of 7.62% as at 31 March 2019 (31 March 2018: 7.73%).
Weighted Average Unexpired Lease Term (‘WAULT’) of 4.87 years to break (31 March 2018: 5.08 years) and 6.10 years to expiry (31 March 2018: 6.16 years).