Acquisition of high yielding mixed use asset, York

19 July 2023

AEW UK REIT plc

Acquisition of high yielding mixed use asset in York

AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") is pleased to announce that it has completed the purchase of a freehold, mixed-use asset in York city centre for £10,020,000, reflecting an attractive net initial yield of 9.3%.

The 99,769 sq ft asset is multi-let to five tenants. 75% of the income is received from National Car Parks Ltd ("NCP"), who have occupied the 297-space car park since 2005 and have a further nine years remaining on their lease. The lease benefits from a 2027 rent review which will increase rent payable in line with the Retail Price Index, uncapped, resulting in a forecast reversionary yield in excess of 10%. NCP is one of the UK's largest car park operators with an estate of approximately 189,000 spaces over 642 sites. The company is owned by Park24, a Japanese based multi-national parking operator, and the Development Bank of Japan. Another four tenants occupy the ground and first floor retail and office accommodation fronting onto George Hudson Street.

The site totals 0.8 acres and is located inside the York City Wall, bordering the historic centre of the city, within the "Micklegate Quarter". It is situated in a prominent corner position on George Hudson Street and Tanner Row, within a 10-minute walk of key visitor attractions, including York Minster, the Yorkshire Museum and the York Dungeon. York's key retail provisions at Coppergate Shopping Centre, Coney Street, Davygate and Parliament Street are all within a 7-minute walk.

Following purchase of York, cash available for deployment in to high yielding pipeline assets is circa £15.0m.

Commenting on the purchase, Laura Elkin, Portfolio Manager of AEW UK REIT said, "We are pleased to have purchased this very well-located mixed-use asset at a day one yield that will be accretive to the Company's earnings. Our due diligence has shown that NCP trades well from the location and we expect this to continue given the popularity of York as a destination. Completion of the acquisition marks the strategic reinvestment into higher yielding assets of capital generated from recent sales. We continue to analyse an interesting pipeline of potential acquisitions and expect to make further purchase announcements in due course, which will bring us closer to our short-term target of full deployment of capital."

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.