Notice of Dividend Amount • Oct 18, 2019
Notice of Dividend Amount
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Dissemination of a RegulatoryAnnouncement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
AEW UK REIT plc (LSE: AEWU) ("the Company"), which, as at 18 October 2019, directly owns a diversified por1olio 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.
"Despite the backdrop of ongoing polical uncertainty, the Company remains confident in its ability to deliver on its objecves. The value of our assets has remained robust to date, parcularly in the office and industrial sectors, where assets have either been acquired at conservave levels or provide excing valueadd opportunies. 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 migated by the por1olio's light exposure to the sector at 14.2% and also by value gains in other parts of the por1olio.EPRA Earnings cover of the quarterly 2 pence per share dividend remains healthy, at 106% this quarter.
The por1olio, now increasingly mature, is offering us numerous opportunies to undertake asset management iniaves which provide various potenal routes to add value. Over the past quarter this has included the seDlement of an industrial rent review in Bradford at an increase of 14% above the level of our valuer's ERV. In addion, 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 posive outlook for the por1olio, 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 addion, 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 condions. Neither of these changes have increased the current ongoing cost of the facility, other than incurring up-front fees. Our aim is to connue to keep gearing at a conservave level in accordance with the Company's stated policy."
The like-for-like valuaon decrease for the quarter of £0.51 million (0.26%) is detailed as follows by sector:
| Sector | Valuaon 30 September 2019 | Valuaon movement for the quarter | Valuaon movement for the quarter |
|---|---|---|---|
| £ million | £ 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) |
The Company's unaudited NAV as at 30 September 2019 was £147.55 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 3 0 September 2019. As at 3 0 September 2019, the Company owned investment properes with a fai r value of £196.05 million.
| Pence per share | £ million | |
|---|---|---|
| NAV at 1 July 2019 | 97.87 | 148.33 |
| Capital expenditure | (0.06) | (0.09) |
| Valua7on change in property porolio | (0.54) | (0.82) |
| Valua7on change in deriva7ves | (0.04) | (0.06) |
| Income earned for the period | 2.87 | 4.34 |
| Expenses and net finance costs for the period | (0.74) | (1.12) |
| Interim dividend paid | (2.00) | (3.03) |
| NAV at 30 September 2019 | 97.36 | 147.55 |
The NAV aDributable to the ordinary shares has been calculated under Internaonal Financial Reporng Standards and incorporates the independent por1olio valuaon 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 3 0 September 2019.
The Company today announces an interim dividend of 2.00 pence per share for the period from 1 July 2019 to 3 0 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 distribuon ("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 condions, 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 illustrave purposes only, based on current market condions and is not intended to be, and should not be taken as, a profit forecast or esmate. Actual returns cannot be predicted and may differ materially from this illustrave figure. There can be no assurance that the target will be met or that any dividend or total return will be achieved.
The Company's issued share capital consists of 151,558,251 Ordinary Shares and there was no movement during the quarter.
The Company's borrowings remained at £50.00 million throughout the quarter and at 3 0 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 connues to aDract interest at LIBOR + 1.4%. To migate 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 £36.51 million of the total value of the loan (£26.51 million at 2.5% cap rate and £10.00 million at 2.0% cap rate) up to October 2020, resulng in the loan being 73% hedged.
Earlier this month, the Company announced that it had completed an amendment to its exisng loan agreement which increases the facility's loan to NAV covenant from 45% to 55% (subject to certain condions).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 addional interest rate caps covering the period from October 2020 to October 2023, capping a noonal value of £46.51 million at LIBOR of 2.0% per annum, which represents 93% of the current £50.00 million loan balance. The Investment Manager and the Company will keep the levels of gearing and hedging under review.
A rent review dated September 2018 has been seDled at an industrial unit in Bradford. The review documents a new passing rent of £182,500, represenng 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 seDlement of the review has been recognised as income in the quarter to September 2019.
A lease extension for a term of six months has been completed with HFC Presge 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 [email protected] +44(0) 20 7016 4848 Nicki Gladstone [email protected] +44(0) 7711 401 021
Company Secretary Link Company MaDers Limited [email protected]
+44(0) 1392 477 500 TB Cardew [email protected]
Ed Orlebar +44 (0) 20 7002 1482 Lucas Bramwell +44 (0) 7789 374 663
Liberum Capital Gillian Marn/Owen MaDhews +44 (0) 20 3100 2000
AEW UK REIT plc (LSE: AEWU) aims to deliver an aDracve total return to shareholders by invesng predominantly in smaller commercial properes (typically less than £15 million), on shorter occupaonal leases in strong commercial locaons across the United Kingdom. The Company was listed on the Official List of the UK Lisng Authority and admiDed to trading on the Main Market of the London Stock Exchange on 12 May 2015, raising £100.5m. Since IPO it has raised a further £51m.
The Company is currently invested in office, retail, industrial and leisure assets, with a focus on acve asset management, reposioning the properes and improving the quality of the income stream.
AEWU is currently paying an annualised dividend of 8p per share.
AEW UK Investment Management LLP employs a well-resourced team comprising 26 individuals covering investment, asset management, operaons 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 respecve 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.
ISIN: GB00BWD24154 Category Code: MSCM TIDM: AEWU LEICode: 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 ofAnnouncementEQS News Service
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