Intention to raise new equity
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.
AEW UK LONG LEASE REIT PLC
8 January 2018
Investment Update, New Bank Facility and Proposed Issue of New Equity
AEW UK Long Lease REIT plc (the "Company") raised £80.5 million from institutional and retail investors at its IPO in June 2017 via an Initial Placing, Offer for Subscription and Intermediaries Offer, under a Share Issuance Programme of up to £300 million.
At the time, the Company stated its expectation to invest substantially all the net proceeds of the IPO within nine months of listing by investing in alternative and specialist real estate sectors in the UK to offer a secure, diversified and inflation-linked income return, whilst at least maintaining capital values in real terms. The Company is pleased to announce that £76 million (which includes the acquisition costs) has now been deployed.
New Bank Facility
The Company further announces that it has entered into a new £30 million 8 year fixed loan (to 20 October 2025) with Canada Life Investments. The term facility is up to 35% loan to property value, provided on a portfolio basis.
Investment Update
AEW UK Investment Management LLP (the "Investment Manager") has seven properties totalling c. £30 million under offer on behalf of the Company, which are expected to complete by the end of January 2018. Completing on these properties (including the acquisition costs) will result in full deployment of the net IPO proceeds, and £30 million drawn under the Company's new loan facility.
In addition, the Investment Manager has a further pipeline of four properties totalling £16.3 million under offer on behalf of the Company in the leisure, pub and hotel sectors, which are expected to complete during February and March 2018. The Investment Manager is also engaged in active due diligence on a pipeline of assets in excess of £50 million.
Proposed Issue of New Equity
In light of the above pipeline of acquisitions, the Company is now seeking to raise a target amount of £35 million by way of a placing, offer for subscription and intermediaries offer (the "Issue") under its Share Issuance Programme. The amount of the Issue may be increased if the Directors are satisfied that the net proceeds can be deployed with a view to minimising the effect of cash drag on the existing shares. In addition, the Directors may reduce the size of the Issue if the pipeline of investments changes prior to the closing of the Issue. The Directors currently expect the Issue to close in early February 2018, subject to prevailing market conditions.
The net proceeds from the Issue will be used to acquire a diversified portfolio of long lease properties predominantly in alternative and specialist real estate sectors in line with the Company's investment policy. Based on the pipeline of deals, the Investment Manager expects to place further assets under offer over the coming weeks with an expectation of fully investing the net proceeds of the Issue by the end of April 2018.
The Company is targeting an annual dividend of 5.5 pence per share, paid quarterly, with effect from the financial year commencing 1 July 2018, with an ambition to grow this in line with UK inflation thereafter. New shares will not be eligible for the dividend payable in respect of the period from 1 October 2017 to 31 December 2017.
The price of the new shares to be issued pursuant to the Issue will be set by reference to the net asset value ("NAV") per share as at 31 December 2017 and the share price at the last practicable date prior to the publication of the Securities Note in relation to the Issue (the "Securities Note").
Further details of the Issue, including definitive timing and the issue price, will be announced on the publication of the Securities Note which, subject to receipt of regulatory approvals and prevailing market conditions, is expected to be before the end of January 2018.
This announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014.
For further information, please contact:
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AEW UK Investment Management LLP Alex Short Laura Elkin
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020 7016 4880 |
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Fidante Capital Katie Standley Nick Donovan
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020 7832 0900 |
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Media Enquiries: TB Cardew (Financial PR advisor) Ed Orlebar Tom Allison Lucy Featherstone
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020 7930 0777 07738 724630 07789 998020 07789 374663 |
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Company Secretary Link Company Matters Limited |
01392 477509
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LEI: 213800MPBIJS12Q88F71
This information is provided by RNS
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