Non-material changes to Investment Policy
27 September 2023
AEW UK REIT plc
Non-material changes to Investment Policy
AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") announces that it has made certain non-material changes to its Investment Policy to better reflect current practice. The changes are:
· the removal of the Company's ability to invest in AEW UK Core Plus Property Fund (the "Core Fund") as the Company disposed of its last remaining units in the Core Fund in May 2017 and the Company has no current intention of re-investing in the Core Fund;
· deletion of the illustrative detail on the property sectors which the Company may invest in; and
· an amendment to the Borrowing Policy whereby the borrowing limit of 25% of Gross Asset Value may still be increased to 35% of Gross Asset Value provided that the directors of the Company (the "Directors") reasonably believe that the Company will complete an equity fundraising within six months (as opposed to three months as previously provided). For these purposes, "Gross Asset Value" means the aggregate value of the total assets of the Company as determined in accordance with the accounting principles adopted by the Company from time to time.
The Company has also made certain amendments to its Investment Management Agreement ("IMA") with AEW UK Investment Management LLP (the "Manager") to address changes in law and regulation since it was last updated in 2019 and to better reflect current practice. The commercial terms of the IMA remain materially unchanged.
Full details of the changes to the Investment Policy are highlighted at the end of this announcement.
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Enquiries |
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AEW UK |
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Laura Elkin |
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+44(0) 7917 058 337 |
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Henry Butt |
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+44(0) 7920 499 076 |
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Nicki Gladstone |
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+44(0) 7711 401 021 |
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Company Secretary |
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Link Company Matters Limited |
aewu.cosec@linkgroup.co.uk |
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+44(0) 7548773155
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TB Cardew |
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Ed Orlebar |
+44 (0) 7738 724 630 |
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Tania Wild |
+44 (0) 7425 536 903 |
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Henry Crane |
+44 (0)7918 207157 |
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Liberum Capital |
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Darren Vickers / Owen Matthews |
+44 (0) 20 3100 2222 |
REVISED INVESTMENT POLICY
The revised Investment Policy of the Company is included below. Additions are highlighted in bold underlined text and deletions are shown as strike through text.
Investment Objective
The investment objective is to deliver an attractive total return to Shareholders from investing predominantly in a portfolio of smaller commercial properties in the United Kingdom.
Investment Policy
In order to achieve its investment objective, the Company invests in freehold and leasehold properties across the whole spectrum of the commercial property sector (office properties, industrial/warehouse properties, retail warehouses and high street retail) resulting in a diversified tenant base.
Investment restrictions
1 The Company invests and manages its assets with the objective of spreading risk through the following investment restrictions:
1.1 the value of no single property, at the time of investment, will represent more than 15.00% of Gross Asset Value;
1.2 the Company may commit up to a maximum of 10.00% of its Net Asset Value (measured at the commencement of the relevant project) to development activities;
1.3 the value of properties, measured at the time of each investment, in any one of the following sectors: office properties, industrial/warehouse properties, retail warehouses and high street retail will not exceed 60.00% of Gross Asset Value;
1.4 investment in unoccupied and non‑income producing assets will, at the time of investment, not exceed 20.00% of Net Asset Value;
1.5 the Company may commit up to a maximum of 10.00% of the Net Asset Value (at the time of investment) in the AEW UK Core Plus Property Fund (the 'Core Fund'). The Company disposed of its last remaining units in the Core Fund in May 2017 and it is not the current intention of the Directors to invest in the Core Fund;
1.5 the Company will not invest in other closed ended investment companies; and
1.6 if the Company invests in derivatives for the purposes of efficient portfolio and cash management, the total notional value of the derivatives at the time of investment will not exceed, in aggregate, 35.00% of Gross Asset Value.
2 The Directors currently intend, at all times, to conduct the affairs of the Company so as to enable the Company to qualify as a REIT for the purposes of Part 12 of the Corporation Tax Act 2010 (and the regulations made thereunder).
3 The Company will, at all times, invest and manage its assets in a way that is consistent with its objective of spreading investment risk and in accordance with its published investment policy and will not, at any time, conduct any trading activity which is significant in the context of the business of the Company as a whole.
4 In the event of a breach of the investment policy and investment restrictions set out above, the Directors upon becoming aware of such breach will consider whether the breach is material, and if it is, notification will be made to a Regulatory Information Service.
5 Any material change to the investment policy or investment restrictions of the Company may only be made with the prior approval of Shareholders.
Borrowing Policy
1 The Company intends to utilise borrowings to enhance returns over the medium term. Borrowings will be utilised on a limited recourse basis for each investment on all or part of the total Portfolio. It is currently anticipated that the Directors will target a level of total borrowings of up to 25% of Gross Asset Value (measured at drawdown) and will comply with the REIT condition relating to the ratio between the Group's 'property profits' and 'property finance costs'.
2 The above borrowing limit of 25% may be increased to 35%:
2.1 PROVIDED THAT the Directors reasonably believe that the Company will complete an equity fundraising within threesix months of such investment; or
2.2 as part of the Manager's efficient portfolio management whereby the investment is made prior to the anticipated sale of an existing investment, and where completion of the sale is expected to be completed within three months of the relevant investment and the proceeds of such equity fund raising or sale would be reasonably expected to reduce the borrowing of the Company to 25% of the Gross Asset Value or less.
ENDS
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 £15 million), on shorter occupational leases in strong commercial locations across the United Kingdom. The Company 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 income streams. AEWU is currently paying an annualised dividend of 8p per share.
The Company was listed on the Official List of the Financial Conduct Authority and admitted to trading on the Main Market of the London Stock Exchange on 12 May 2015. www.aewukreit.com
LEI: 21380073LDXHV2LP5K50
About AEW UK Investment Management LLP
AEW UK Investment Management LLP employs a well-resourced team comprising 29 individuals covering investment, asset management, operations and strategy. It is part of AEW Group, one of the world's largest real estate managers, with €84.9bn of assets under management as at 31 December 2022. AEW Group comprises AEW SA and AEW Capital Management L.P., a U.S. registered investment manager and their respective subsidiaries. In Europe, as at 31 December 2022, AEW Group managed €38.5bn of real estate assets on behalf of a number of funds and separate accounts with over 470 staff located in 10 locations.
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