Shareholder Update and Dividend Declaration
Summary by AI BETAClose X
23 October 2025
AEW UK REIT plc
Shareholder Update and Dividend Declaration
AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company"), which directly owns a value-focused, diversified portfolio of 34 UK commercial properties, announces its unaudited Net Asset Value ("NAV") as at 30 September 2025 and interim dividend for the three months ended 30 September 2025.
Highlights
· NAV of £172.82 million or 109.09 pence per share as at 30 September 2025 (30 June 2025: £172.47 million or 108.87 pence per share).
· NAV total return of 2.04% for the quarter (30 June 2025 quarter: 0.69%).
· 0.11% like-for-like portfolio valuation increase for the quarter (30 June 2025 quarter: 0.05% increase).
· PRA earnings per share ("EPRA EPS") for the quarter of 2.19 pence (30 June 2025 quarter: 1.73 pence).
· Interim dividend of 2.00 pence per share for the three months ended 30 September 2025, paid for 40 consecutive quarters and in line with the targeted annual dividend of 8.00 pence per share, representing a dividend yield of 7.3% as at quarter-end.
· Loan to GAV ratio at the quarter end was 25.17% (30 June 2025: 25.21%). Significant headroom on all loan covenants.
· Company continues to benefit from a low fixed cost of debt of 2.959% until May 2027.
· £354,459 annualised rental income increase during the quarter via completed asset management initiatives.
· Share price strength enabling reissuance of 150,000 treasury shares post quarter-end.
Laura Elkin, Portfolio Manager, AEW UK REIT, commented:
"We are pleased to report another quarter of strong performance, with earnings of 2.19 pence per share and NAV total return of 2.04%. The strength of this quarter's EPS is partly due to the Company being close to fully invested, which was not the case for the previous three quarters. The Company's earnings also continue to benefit from rental growth in its portfolio, with ROM Group Ltd's rent review at Brightside Lane, Sheffield, and a lease renewal for Fieldrose Limited (trading as KFC) at The Railway Centre, Dewsbury, being notable examples, collectively adding £177,250 of annualised rental income.
With circa £5.8 million of available capital cash at quarter-end, in addition to the Company's usual £5 million buffer, we are working on several near-term asset management opportunities and considering an exciting medium-term pipeline of potential acquisitions to maximise income. Careful management of the Company's cost base continues to underpin robust earnings, with low incurrence of bad debt and void costs reflecting the quality and stability of the portfolio.
The Company's shares continue to trade at close to NAV, being at a 0.08% discount at quarter-end. On several occasions during the quarter, the Company's shares traded at a premium to NAV, allowing the recent reissuance of 150,000 treasury shares. We are delighted that the market is starting to recognise our achievement of seven consecutive quarters of like-for-like valuation gain in the Company's portfolio during a period when property markets have remained subdued. This success demonstrates the effectiveness of the Company's counter-cyclical investment approach and active asset management strategy in driving income and capital growth through market cycles.
The prior quarter marked the tenth anniversary of AEWU's IPO, since when the Company has delivered a decade of outperformance against both the MSCI Balanced Funds Quarterly Property Index and its peers in the UK diversified REIT space, the data for which was released this quarter. Over this time frame, the Company has achieved an annualised NAV and shareholder total return of 9%, and maintained its quarterly dividend of 2.00 pence per share, which has now been paid for 40 consecutive quarters.
Finally, we are delighted that the Company won the 'Best for Property' category in the QuotedData Investors' Choice Awards 2025 during the quarter. This is testament to the consistently strong performance delivered by the Company, which AEW, as Manager, looks forward to building on in the future."
Valuation Movement
As at 30 September 2025, the Company owned investment properties with a total fair value of £216.05 million, as assessed by the Company's independent valuer, CBRE. The like-for-like valuation increase for the quarter of £0.25 million (0.11%) is broken down as follows by sector:
|
Sector |
Valuation 30 September 2025 |
Like-for-like valuation movement for the quarter |
||
|
|
£ million |
% of portfolio |
£ million |
% |
|
Industrial |
80.41 |
37.22 |
1.76 |
2.23 |
|
High Street Retail |
44.32 |
20.52 |
(0.14) |
(0.30) |
|
Other |
38.71 |
17.92 |
(0.53) |
(1.34) |
|
Retail Warehouses |
29.28 |
13.55 |
0.34 |
1.16 |
|
Office |
23.33 |
10.79 |
(1.18) |
(4.83) |
|
Total |
216.05 |
100.00 |
0.25 |
0.11* |
* This is the overall weighted average like-for-like valuation increase of the portfolio.
Portfolio Manager's Review
The Company's portfolio achieved a like-for-like valuation increase of 0.11% for the quarter. The industrial and retail warehousing sectors, in particular, displayed notable gains, rising by 2.23% and 1.16% respectively. In both instances, valuation gains were driven principally by active asset management, which continues to distinguish the Company's investment style.
The Company's industrial assets, which represent the largest sector exposure at 37% of the portfolio, recorded a seventh consecutive quarter of valuation growth, being up 6.05% over the past year alone. During the quarter, the Company settled ROM's outstanding rent review at Brightside Lane, Sheffield, increasing the rent by £155,500 per annum. The valuation of the property subsequently increased by 21.5% over the period. With a further 4.5 years unexpired lease term, and the prospect of further rental growth, whether the tenant renews or vacates, the asset remains a hold for the Company. The example of Brightside Lane highlights the ongoing positive momentum for rents in the industrial sector, where the Company's net initial yield and reversionary yield stand at 7.16% and 9.57% respectively. Additionally, the average passing rent for the portfolio's industrial sector is notably low at £3.80 per sq. ft. versus an ERV of £4.71 per sq. ft.
Industrial gains were also recorded at Storey's Bar in Peterborough and Gresford Industrial Estate in Wrexham, with values increasing by 4.21% and 3.41% respectively. These rises were fuelled by strengthening occupier sentiment, as the tenants have historically made substantial investments in their properties and remain committed to their locations. Additionally, the potential for rental growth, with upcoming rent reviews on the horizon, has bolstered this positive trend.
During the period, four retail warehousing transactions were completed, securing a combined annual rent of circa £248,500. Most notably, the Company completed a new letting to Wren Kitchens Limited at Barnstaple Retail Park, where, following completion of the refurbishment works at the former Poundland unit (referenced in last quarter's announcement), the tenant entered a 10-year lease at a rent of £98,500 per annum in return for 12 months' rent free. After protracted negotiations with Fieldrose Limited (trading as KFC), the tenant renewed their lease on a 15-year term at an annual rent of £86,000 with no tenant incentive. Both these deals highlight the Company's active management style, as well as the ongoing positive occupational momentum in the sector. The retail warehousing sector was consequently up by 1.16% for the period, building on the success of the past two quarters.
After a strong previous quarter in high street retail, during which the Company's standard retail assets rose by 1.51% due to improved sentiment and leading retailers reaffirming their commitment to physical locations, this quarter has been relatively subdued (down 0.30%), with no notable asset management transactions to report.
Finally, the office sector, representing the Company's smallest weighting at 11%, faced a challenging quarter, with the overall valuation down 4.83%. This decline is largely attributed to Novia Financial plc's notice to vacate 16,500 sq. ft. of space at Cambridge House, Bath, where it currently pays a rent of £362,000 per annum. The Company is exploring both office lettings and alternative uses in this busy city centre location. In tandem with the ongoing refurbishment of Queens Square, Bristol, the Company's office sector exposure continues to experience muted performance while asset management initiatives mature.
Net Asset Value
The Company's unaudited NAV at 30 September 2025 was £172.82 million, or 109.09 pence per share. This reflects an increase of 0.20% compared with the NAV per share at 30 June 2025. The Company's NAV total return, which includes the interim dividend of 2.00 pence per share for the period from 1 April 2025 to 30 June 2025, was 2.04% for the three-month period ended 30 September 2025.
|
|
Pence per share |
£ million |
|
NAV at 1 July 2025 |
108.87 |
172.47 |
|
Capital expenditure |
(0.11) |
(0.18) |
|
Valuation change in property portfolio |
0.15 |
0.24 |
|
Income earned for the period |
3.16 |
5.01 |
|
Expenses and net finance costs for the period |
(0.98) |
(1.55) |
|
Interim dividend paid |
(2.00) |
(3.17) |
|
NAV at 30 September 2025 |
109.09 |
172.82 |
|
|
|
|
The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards. It incorporates the independent portfolio valuation at 30 September 2025 and income for the period, but does not include a provision for the interim dividend declared for the three-month period to 30 September 2025.
Share Price
The closing ordinary share price at 30 September 2025 was 109.0p, an increase of 0.55% compared with the share price of 108.4p at 30 June 2025. The closing share price represents a discount to the NAV per share of 0.08%. The Company's share price total return, which includes the interim dividend of 2.00 pence per share for the period from 1 April 2025 to 30 June 2025, was 2.40% for the three-month period ended 30 September 2025.
Dividend
Dividend declaration
The Company today announces an interim dividend of 2.00 pence per share for the period from 1 July 2025 to 30 September 2025. The dividend payment will be made on 28 November 2025 to shareholders on the register as at 31 October 2025. The ex-dividend date will be 30 October 2025. The Company operates a Dividend Reinvestment Plan ("DRIP"), which is managed by its registrar, MUFG Corporate Markets Limited. For shareholders who wish to receive their dividend in the form of shares, the deadline to elect for the DRIP is 7 November 2025.
The dividend of 2.00 pence per share will be designated 2.00 pence per share as an interim property income distribution ("PID").
The Company has now paid a 2.00 pence quarterly dividend for 40 consecutive quarters1, providing consistently high levels of income to our shareholders.
1For the period 1 November 2017 to 31 December 2017, a pro rata dividend of 1.33 pence per share was paid for this two-month period, following a change in the accounting period end.
Dividend outlook
It remains the Company's intention to continue to pay dividends in line with its dividend policy. In determining future dividend payments, regard will be given to the financial circumstances prevailing at the relevant time, as well as the Company's requirement, as a UK REIT, to distribute at least 90% of its distributable income annually.
Financing
Equity:
At 30 September 2025, the Company's share capital consisted of 158,424,746 ordinary shares in issue, with 350,000 shares held in treasury.
Post quarter end, the Company re-issued 150,000 treasury shares. Consequently, the Company's share capital now consists of 158,574,746 ordinary shares in issue, with 200,000 shares held in treasury.
Debt:
The Company has a £60.00 million, five-year term loan facility with AgFe, a leading independent asset manager specialising in debt-based investments. The loan is priced as a fixed rate loan with a total interest cost of 2.959% until May 2027.
The loan was fully drawn at 30 September 2025, producing a Loan to GAV ratio of 25.17%.
Headroom on the debt facility's 60% loan to value ("LTV") covenant continues to be conservative. For those properties secured under the loan, a 53.25% fall in valuation would be required before the LTV covenant were to be breached.
Investment Update
There were no acquisitions or disposals during the quarter.
Asset Management Update
The Company completed the following asset management transactions during the quarter:
710 Brightside Lane, Sheffield (industrial) - The Company settled ROM Group Limited's (ROM) outstanding open market rent review at £529,500 per annum (£4.25 per sq. ft.) representing a 41.57% increase in the previous passing rent of £374,000 per annum (£3.00 per sq. ft.). The valuation of the asset subsequently increased by 21.51% this quarter.
ROM is a specialist supplier of steel reinforcement solutions primarily for the construction industry. ROM will occupy the 124,577 sq. ft. manufacturing facility for a further 4.5 years.
Carrs Coatings, Eagle Road, Redditch (industrial) - The Company settled Carrs Coatings Ltd's August 2025 annual uncapped RPI rent review at £319,519 per annum (£8.41 per sq. ft.), representing a £14,709 per annum (4.83%) increase.
The unit is single-let to Carrs Coatings Ltd until August 2028. The lease was entered into as a sale and leaseback in 2008 at an initial starting rent of £170,300 per annum (£4.50 per sq. ft.).
Diamond Business Park, Wakefield (industrial) - The Company has commenced the demolition of Diamond House, an obsolete 1970s purpose-built office block consisting of 27,098 sq. ft., at a cost of £229,807 (inclusive of fees and contingency). The office became fully vacant earlier this year with the last remaining tenant surrendering their lease to vacate early. Refurbishment or conversion to residential use were also considered, with demolition being the most viable route forward, with the cleared land creating a 1.8 acres industrial open storage letting opportunity with an ERV of £50,000 per acre, as well as eliminating approximately £79,000 per annum of landlord shortfalls. Practical completion is expected later this month.
Barnstaple Retail Park, Barnstaple (retail warehousing) - The Company completed a new lease to Wren Kitchens Limited, who has taken the former Poundland unit. Wren has signed a 10-year lease with a tenant break option on the expiry of the fifth year at a rent of £98,500 per annum (£17.25 per sq. ft.). On the expiry of the fifth year, the rent will be reviewed to the lower of open market or 2.5% per annum, compounded. Wren has been granted a 12-month rent free period, with a further six months should it not exercise the break option.
Railway Centre, Dewsbury (retail warehousing) - After protracted negotiations, the Company completed a lease renewal with Fieldrose Limited (Fieldrose), trading as KFC, whose lease expired on 23 December 2023. Fieldrose has signed a 15-year lease, which includes a tenant break option at the end of the tenth year, at an annual rent of £86,000. No rent-free period or tenant incentive was given. Additionally, the outstanding rent review from December 2018 has also been settled at £67,000 per annum. The previous passing rent was £64,250 per annum.
Unit B, Arrow Retail Park, Shrewsbury (retail warehousing) - The Company completed a new lease of Unit B to Summerhouse Solutions Limited (Summerhouse), trading as Summerhouse Interiors. Summerhouse has signed a five-year lease which includes a tenant-only break option on the expiry of the third year, subject to a penalty of three months' rent. The annual rent is £32,000 (£6.96 per sq. ft.), and the letting includes an initial three-month rent-free incentive.
Unit C, Arrow Retail Park, Shrewsbury (retail warehousing) - The Company completed a new lease of Unit C to Lifecycle Group Holdings Limited. The tenant has signed a 10-year lease which includes a tenant-only break option on the expiry of the fifth year. The annual rent is £32,000 (£6.96 per sq. ft.), with no rent-free incentive being given.
Glossary of Commonly Used Terms
Industry specific terms used in the Company's communications are defined in the glossary of commonly used terms which can be found on the Company's website: https://www.aewukreit.com/investors/glossary
AEW UK
|
Laura Elkin Henry Butt |
laura.elkin@eu.aew.com
|
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AEW Investor Relations |
investor_relations@eu.aew.com |
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Company Secretary |
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MUFG Corporate Governance Limited |
aewu.cosec@cm.mpms.mufg.com |
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Cardew Group |
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Ed Orlebar Tania Wild Henry Crane |
+44 (0) 7738 724 630 +44 (0) 7425 536 903 +44 (0) 7918 207 157 |
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Panmure Liberum |
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Darren Vickers |
+44 (0) 20 3100 2222 |
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
AEW is one of the world's largest real estate asset managers, with €73.8bn of assets under management as at 30 June 2025. AEW has over 860 employees, with its main offices located in Boston, London, Paris and Singapore and offers a wide range of real estate investment products including comingled funds, separate accounts and securities mandates across the full spectrum of investment strategies. AEW represents the real estate asset management platform of Natixis Investment Managers, one of the largest asset managers in the world.
As at 30 June 2025, AEW managed €35.8bn of real estate assets in Europe on behalf of a number of strategies and separate accounts. AEW has over 520 employees based in 11 offices across Europe and has a long track record of implementing core, value-add and opportunistic investment strategies on behalf of its clients. In the last five years, AEW has invested and divested a total volume of almost €15.0bn of real estate across European markets.
AEW UK Investment Management LLP is the Investment Manager. AEW is a group of companies which includes AEW Europe SA and its subsidiaries as well as affiliated company AEW Capital Management, L.P. in North America and its subsidiaries. AEW Europe SA, together with its subsidiaries AEW UK Investment Management LLP, AEW S.à.r.l., AEW Invest GmbH and AEW SAS, is a European real estate investment manager with headquarter offices in Paris and London. AEW Europe SA and AEW Capital Management, L.P. are owned by Natixis Investment Managers. Natixis Investment Managers is an international asset management group based in Paris, France, that is principally owned by Natixis, a French investment banking and financial services firm. Natixis is principally owned by BPCE, France's second largest banking group.
Disclaimer
This communication cannot be relied upon as the basis on which to make a decision to invest in AEWU. This communication does not constitute an invitation or inducement to subscribe to any particular investment. Issued by AEW UK Investment Management LLP, 8 Bishopsgate, London, EC2N 4BQ.
Company number: OC367686 England. Authorised and regulated by the Financial Conduct Authority.
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