26 June 2023

AEW UK REIT Plc

Sale of two industrial assets for £16.1m

AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") is pleased to announce that it has completed on the sale of two industrial assets, being Euroway Trading Estate, Bradford and Lockwood Court, Leeds, for combined proceeds of £16,100,000. This reflects a blended net initial yield (NIY) of 6.2% and a weighted average premium to acquisition price of 31.2%. The prices achieved for the individual assets are £6,450,000 for Euroway Trading Estate, reflecting a 6.8% NIY, and £9,650,000 for Lockwood Court, reflecting a 5.9% NIY.

Euroway Trading Estate was acquired in November 2016 for £4,950,000, reflecting an 8.1% NIY. At acquisition, the property benefitted from a new eight-year term certain to Advanced Supply Chain (BFD) Ltd. In December 2019, the Company completed a rent review which resulted in a 9.1% annual rental uplift.

Lockwood Court was acquired in February 2019 for £7,320,000, reflecting a 7.7% NIY. The property was acquired with the benefit of a new 10-year lease to L.W.S. (Yorkshire) Ltd ("L.W.S."), guaranteed by Harrogate Spring Water. In December 2019, AEWU secured a new 10-year lease to Harrogate Spring Water, following L.W.S. entering into liquidation.

Both sales realise significant profit for AEWU's shareholders. For Euroway Trading Estate and Lockwood Court respectively, their sales prices exceeded the most recent valuation prior to going under offer by 17.3% and 9.7%, as well as their acquisition prices by 30.3% and 31.8%. Reinvestment of the sales proceeds into comparatively higher yielding pipeline assets will be accretive to the Company's earnings.

Laura Elkin, Portfolio Manager, AEW UK REIT plc, commented: "Both Euroway Trading Estate and Lockwood Court have performed well, delivering strong returns to AEWU shareholders since acquisition. The value creation through strong performance of the Yorkshire industrial markets, coupled with our successful asset management initiatives, presented an opportunity to crystallise capital growth and reinvest the sales proceeds into higher yielding opportunities. As such, we expect to make further purchase announcements in the coming months."

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 is one of the world's largest real estate asset managers, with €84.3bn of assets under management as at 31 March 2023. AEW has over 880 employees, with its main offices located in Boston, London, Paris and Hong Kong 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 31 March 2023, AEW managed €39.2bn of real estate assets in Europe on behalf of a number of funds and separate accounts. AEW has over 480 employees based in 12 locations across Europe and has a long track record of successfully 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 over €22bn of real estate across European markets.