Shareholder Update and Dividend Declaration
Summary by AI BETAClose X
28 January 2026
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 31 December 2025 and interim dividend for the three months ended 31 December 2025.
Highlights
· NAV of £173.47 million or 109.32 pence per share as at 31 December 2025 (30 September 2025: £172.82 million or 109.09 pence per share).
· NAV total return of 2.05% for the quarter (30 September 2025 quarter: 2.04%).
· 0.33% like-for-like portfolio valuation decrease for the quarter (30 September 2025 quarter: 0.11% increase), outperforming the CBRE December UK Index.
· EPRA earnings per share ("EPRA EPS") for the quarter of 2.36 pence (30 September 2025 quarter: 2.19 pence).
· Interim dividend of 2.00 pence per share for the three months ended 31 December 2025, paid for 41 consecutive quarters and in line with the targeted annual dividend of 8.00 pence per share, representing a dividend yield of 7.4% as at quarter-end.
· Loan to GAV ratio at the quarter end was 25.06% (30 September 2025: 25.17%). Significant headroom on all loan covenants.
· Company continues to benefit from a low fixed cost of debt of 2.959% until July 2027.
· Reissued 250,000 treasury shares during the quarter, taking advantage of periods of share price premium to NAV.
Laura Elkin, Portfolio Manager, AEW UK REIT, commented:
"We are pleased to report another quarter of strong performance, with earnings of 2.36 pence per share and NAV total return of 2.05%. The Company's earnings continue to benefit from a solid tenant base, contributing to another period of portfolio stability. This has led to reduced bad debt occurrences, as well as a decrease in professional fees, typically associated with times of greater transactional activity.
Following the disposal of a vacant office unit at the Company's holding in Hitchin, there is circa £6.8 million of available capital cash at quarter-end above the Company's retained £5.0 million cash buffer. We are progressing several near-term asset management opportunities, such as the planned refurbishment of Queen's Square, Bristol, and are considering an exciting medium-term pipeline of potential acquisitions to increase income.
The Company's shares continue to trade close to NAV, being at a 1.39% discount at quarter-end. On several occasions during the quarter, the Company's shares traded at a premium to NAV, allowing the reissuance of 250,000 shares from treasury. We are delighted that the market is recognising the Company's consistently strong performance 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.
Steady growth in the Company's share price over the last year from 100.4p to 107.8p as at 31 December 2025 has been encouraging. This progress, combined with consistent payment of the Company's quarterly dividend of 2.00 pence per share, which has now been paid for 41 consecutive quarters, has delivered a one-year shareholder total return of 15.3%. Against this backdrop of compelling NAV and shareholder total returns, the Company continues to assess opportunities for growth."
Valuation Movement
As at 31 December 2025, the Company owned investment properties with a total fair value of £215.34 million, as assessed by the Company's independent valuer, CBRE. The like-for-like valuation decrease for the quarter of £0.71 million (0.33%) is broken down as follows by sector:
|
Sector |
Valuation 31 December 2025 |
Like-for-like valuation movement for the quarter |
||
|
|
£ million |
% of portfolio |
£ million |
% |
|
Industrial |
79.73 |
37.03 |
(0.68) |
(0.85) |
|
High Street Retail |
44.32 |
20.58 |
- |
- |
|
Other |
38.66 |
17.95 |
(0.05) |
(0.13) |
|
Retail Warehouses |
30.18 |
14.01 |
0.90 |
3.07 |
|
Office |
22.45 |
10.43 |
(0.88) |
(3.75) |
|
Total |
215.34 |
100.00 |
(0.71) |
(0.33)* |
* This is the overall weighted average like-for-like valuation decrease of the portfolio.
Portfolio Manager's Review
Despite the Company's increase in NAV for the quarter, its portfolio experienced a modest like-for-like valuation decrease of 0.33%. Whilst this marks a departure from the trend of 11 consecutive quarters of like-for-like valuation gains, the Company's portfolio has outperformed CBRE's December UK Index, which, for the same period, reported a capital value decline of -0.6%, and a total return of only 0.8%.
The retail warehousing sector, in particular, demonstrated a significant gain during the quarter, rising by 3.07%. This increase was solely driven by proactive asset management at Barnstaple Retail Park, where the Company completed a reversionary lease with B&Q Limited. This lease regear resulted in a new 'term certain' of 15 years and an annual rent increase of £80,280, leading to a valuation increase of £900,000, or 11.94%, for the quarter. Additionally, the EPS for this quarter benefited from a £125,000 dilapidations payment received from Sports Direct concerning its former store at Barnstaple, which was subsequently let to Farmfoods Limited in Q4 2024.
It was a relatively quiet quarter for the high-street retail sector, characterised by minimal overall valuation movement and only one leasing transaction, being a 10-year lease renewal with Costa Limited, documented in line with the previous rent of £52,000 per annum, at Pearl House, Nottingham.
The Company successfully disposed of a vacant 5,225 sq. ft. office block located behind its high-street retail asset on Bancroft in Hitchin. The property was sold for £1,000,000, over two times the September 2025 book value. This transaction has also increased the net initial yield of the remaining asset from 8.29%, as at 30 September, to 8.67%, as at 31 December 2025.
The Company's industrial assets, which constitute the largest sector exposure at 37% of the portfolio, recorded a valuation decline of 0.85%, following an impressive seven consecutive quarters of like-for-like valuation growth. This downturn was primarily influenced by Apollo Business Park in Basildon, where Vink UK Limited, previously paying an annual rent of £256,500 per annum, vacated on 30 September 2025. In response, we are actively pursuing planning permission for a new prime 58,500 sq. ft. unit. This strategic asset management decision has led to the property being revalued as a development site. The valuation decline incurred at Basildon has been mitigated by gains elsewhere in the industrial sector, most notably at Walkers Lane in St Helens, where terms have recently been agreed for the renewal of the exiting tenant's lease, and at Mangham Road in Rotherham where the ERV has increased over the quarter. The example of Rotherham highlights the ongoing positive momentum for rents in the industrial sector, where the Company's net initial yield and reversionary yields stand at 6.76% and 9.55%, respectively. Additionally, the average passing rent for the portfolio's industrial sector is notably low at £3.59 per sq. ft. versus an ERV of £4.85 per sq. ft.
Like the high street retail sector, the leisure sector also had a quiet quarter while asset management initiatives progress. The Company billed Neos 13 Ltd (trading as Circuit nightclub) annual turnover rent equating to £57,862 per annum which also benefited EPS for the period.
Finally, the office sector, representing the portfolio's smallest weighting at 10.43%, faced a challenging quarter as asset management initiatives are yet to mature, with the overall valuation down 3.75%. This decline is largely attributed to shortening lease lengths at Queen's Square in Bristol, where the planned refurbishment of 11,681 sq. ft. of vacant space is due to commence in February.
Net Asset Value
The Company's unaudited NAV at 31 December 2025 was £173.47 million, or 109.32 pence per share. This reflects an increase of 0.22% compared with the NAV per share at 30 September 2025. The Company's NAV total return, which includes the interim dividend of 2.00 pence per share for the period from 1 July 2025 to 30 September 2025, was 2.05% for the three-month period ended 31 December 2025.
|
|
Pence per share |
£ million |
|
NAV at 1 October 2025 |
109.09 |
172.82 |
|
Capital expenditure |
(0.32) |
(0.51) |
|
Gain on sale of investments |
0.30 |
0.48 |
|
Valuation change in property portfolio |
(0.10) |
(0.16) |
|
Income earned for the period |
3.30 |
5.24 |
|
Expenses and net finance costs for the period |
(0.95) |
(1.50) |
|
Interim dividend paid |
(2.00) |
(3.17) |
|
Issue of treasury shares |
- |
0.27 |
|
NAV at 31 December 2025 |
109.32 |
173.47 |
|
|
|
|
The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards. It incorporates the independent portfolio valuation at 31 December 2025 and income for the period, but does not include a provision for the interim dividend declared for the three-month period to 31 December 2025.
Share Price
The closing ordinary share price at 31 December 2025 was 107.8p, a decrease of 1.10% compared with the share price of 109.0p at 30 September 2025. The closing share price represents a discount to the NAV per share of 1.39%. The Company's share price total return, which includes the interim dividend of 2.00 pence per share for the period from 1 July 2025 to 30 September 2025, was 0.73% for the three-month period ended 31 December 2025.
Dividend
Dividend declaration
The Company today announces an interim dividend of 2.00 pence per share for the period from 1 October 2025 to 31 December 2025. The dividend payment will be made on 4 March 2026 to shareholders on the register as at 6 February 2026. The ex-dividend date will be 5 February 2026. 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 18 February 2026.
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 41 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:
During the quarter, the Company re-issued 250,000 treasury shares. At 31 December 2025, the Company's share capital consisted of 158,674,746 ordinary shares in issue, with 100,000 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 July 2027.
The loan was fully drawn at 31 December 2025, producing a Loan to GAV ratio of 25.06%.
Headroom on the debt facility's 60% loan to value ("LTV") covenant continues to be conservative. For those properties secured under the loan, a 53.10% fall in valuation would be required before the LTV covenant were to be breached.
Investment Update
The Company completed the following part disposal during the quarter:
3-4 Portmill Lane, Hitchin (office) - On 14 October 2025, the Company completed the sale of 3-4 Portmill Lane, a vacant office block comprising 5,225 sq. ft., located behind the main retail parade on Bancroft in Hitchin. Competitive pricing was secured from a local owner-occupier at £1,000,000 (£191 per sq. ft.), significantly above the assets September 2025 book value of circa £497,000 (£95 per sq. ft.). The sale boosts the net initial yield of the remaining asset from 8.29%, as at 30 September, to 8.67%, as at 31 December 2025.
The decision to sell was driven by the office's non-core location with limited demand for occupational use, which did not align with the three retail frontages on Bancroft. Additionally, there was a risk of incurring vacant holding costs while exploring alternative uses for the property. This consideration was particularly relevant as the 12-month rent and shortfall guarantee, provided by the vendor at the time of purchase, is set to expire on 12 March 2026.
No acquisitions were made during the quarter.
Asset Management Update
The Company completed the following asset management transactions during the quarter:
Barnstaple Retail Park, Barnstaple (retail warehousing) - The Company completed a reversionary lease with B&Q Limited (B&Q) for a duration of seven years and seven months, resulting in a new lease expiry of 31 December 2040 (15 years in total). As part of this agreement, B&Q also signed a Deed of Variation increasing the rent from £348,000 per annum (£9.75 psf) to £428,280 per annum (£12.00 psf), reflecting an increase of £80,280 per annum. In return, the Company has granted B&Q a six-month rent-free period which started on 1 January 2026. Subsequently, the valuation of the property increased by £900,000, representing an 11.94% increase.
The Company billed SportsDirect.com Retail Limited a £125,000 dilapidations payment from following the refurbishment of its unit, which subsequently facilitated the letting to Farmfoods Limited in Q4 2024.
The Railway Centre, Dewsbury (retail warehousing) - After protracted negotiations, the Company completed a five-year lease renewal to SportsDirect.com Retail Limited, commencing on 31 December 2025, at an annual rent of £140,000 (£9.10 psf). The previous passing rent was £122,544 per annum (£7.96 psf), reflecting an increase of £17,456 per annum. Six months rent-free was given as an incentive.
Pearl House, Nottingham (high street retail) - Costa Limited, whose lease expired in September 2025 paying a rent of £52,000 per annum, has renewed its lease at the same rent for a term of 10 years with a break on the anniversary of the sixth year, with no rent-free tenant incentive.
Circuit, Cardiff (leisure) - Neos 13 Ltd (trading as Circuit nightclub), has been billed turnover rent for the period 1 October 2024 to 30 September 2025, equating to £57,862 per annum.
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 €73.4bn of assets under management as at 30 September 2025. AEW has over 830 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 September 2025, AEW managed €35.6bn of real estate assets in Europe on behalf of a number of strategies and separate accounts. AEW has over 515 employees based in 12 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 circa €14.0bn 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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