AEW UK REIT PLC Acquisition of Industrial Units (3930E)
May 08 2017 - 1:00AM
UK Regulatory
TIDMAEWU
RNS Number : 3930E
AEW UK REIT PLC
08 May 2017
AEW UK REIT acquires industrial units in Basildon and
Runcorn
AEW UK REIT plc (LSE: AEWU) (the "Company"), which owns a
diversified portfolio of 31 regional UK commercial property assets,
announces the acquisition of industrial assets in Basildon, Essex
and Runcorn, Cheshire, for a total of c GBP2.6 million.
Basildon comprises a 33,000 sq ft single-let industrial building
located on the established Pipps Hill Industrial Estate, just off
the A127, approximately five miles from Junction 29 of the M25. The
purchase price of GBP2.0 million reflects an attractive net initial
yield of 9.3%, a reversionary yield of 8.8% and a low capital value
of GBP64 per sq ft. The building will be let on a new 10 year lease
to Merson Signs Ltd, at a passing rent of GBP6 per sq ft.
The Runcorn asset, which shows an initial yield of 7.8%,
completes the Company's acquisition of the whole of the Sarus Court
industrial estate, where the Company already owned five of the six
units. The estate provides well specified, modern industrial units
of between 11,000 and 17,000 sq ft, which are let to a number of
light-industrial occupiers on a WAULT of over 4 years. The newly
acquired unit, which is let to Dimension Data until 2020, offers
significant reversionary potential, with a passing rent of GBP4.50
per sq ft which is more than 15% lower than a recent Sarus Court
letting secured by AEW UK at GBP5.25 per sq ft.
Sarus Court forms part of the wider Manor Park industrial
estate, strategically located to the west of Runcorn and five
kilometers from the Mersey Gateway Project, a new six lane bridge
over the River Mersey connecting the towns of Runcorn and Widnes
and linking the M56 to M62. The project is due for completion in
autumn 2017.
In order to complete the transactions, the Company utilised
funds gained from the sale of its asset on the Equinox Business
Park in Salisbury, which completed in February, together with an
additional GBP1.5 million which has been drawn down from its
existing loan arrangement with lender RBSi which has seen the
Company's gearing position increase from a loan to value ratio of
18.7%, to 19.8%.
Commenting on the acquisitions, Alex Short, the Company's
Portfolio Manager at AEW UK Investment Management LLP, said, "We
are pleased to add two more high yielding acquisitions to the
portfolio, in a defensive sector that has continued to out-perform
other parts of the commercial real estate market.
"Basildon is a very strong industrial location that has seen
significant rental growth over the past 18 months. The unbroken 10
year lease will improve the Company's overall income profile;
furthermore we believe that the acquisition pricing is well
supported by the asset's underlying vacant possession value,
limiting any downside risk.
"The Runcorn purchase offers significant rental upside, whilst
bringing the whole estate under the Company's ownership, which will
add value from an estate management perspective. The off-market
acquisition demonstrates our continued origination capabilities
across the UK."
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
Enquiries
AEW UK
Alex Short
alex.short@aeweurope.com
+44(0) 20 7016 4880
Nicki Gladstone
nicki.gladstone-ext@aeweurope.com
+44(0) 20 7016 4880
Company Secretary
Benjamin Hanley,Capita Company Secretarial
Services
Benjamin.Hanley@capita.co.uk
+44(0) 1392 477 653
FTI Consulting
Richard Sunderland, Claire Turvey,
Richard Gotla
aewuk@fticonsulting.com
+44(0) 2037 271 000
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQBLGDURUGBGRU
(END) Dow Jones Newswires
May 08, 2017 02:00 ET (06:00 GMT)
Aew Uk Reit (LSE:AEWU)
Historical Stock Chart
From Apr 2024 to May 2024
Aew Uk Reit (LSE:AEWU)
Historical Stock Chart
From May 2023 to May 2024