Shareholder Update

26 August 2026

AEW UK REIT plc

Shareholder Update

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 shareholder update and unaudited Net Asset Value ("NAV") as at 30 June 2026.

Highlights

·    NAV of £171.05 million or 107.80 pence per share as at 30 June 2026 (31 March 2026: £171.97 million or 108.38 pence per share).

·     NAV total return of 1.31% for the quarter (31 March 2026 quarter: 0.96%).

·     Shareholder total return of 7.47% for the quarter (31 March 2026 quarter: -6.31%).

·     0.11% like-for-like portfolio valuation increase for the quarter. Thirteenth quarter of like-for-like capital growth out of the past 14 quarters (31 March 2026 quarter: 0.05% increase).

·     EPRA earnings per share ("EPRA EPS") for the quarter of 1.89 pence (31 March 2026 quarter: 1.71 pence).

·    As announced separately on 29 July 2026, interim dividend of 2.00 pence per share for the three months ended 30 June 2026, in line with the targeted annual dividend of 8.00 pence per share, representing a dividend yield of 7.7% as at quarter-end.

·   Loan to GAV ratio at the quarter end was 25.33% (31 March 2026: 25.21%). Significant headroom on all loan covenants.

·   The Company continues to benefit from a low fixed cost of debt of 2.959% until July 2027, and has arranged an interest rate cap to protect against the risk of higher rates when it refinances.

·   Sale of Circuit, Cardiff for £1.475 million, representing a circa 42% premium to the 31 March 2026 valuation, completing post quarter end, on 23 July 2026.

·      £427,250 per annum uplift in contractual income from three industrial transactions completed during the quarter. 

·    An announcement was made earlier today on no intention to make a bid in connection with Alternative Income  REIT, the detail of which is contained in that announcement.

Laura Elkin, Portfolio Manager, AEW UK REIT, commented:

"The Company concluded several key transactions this quarter that will secure future earnings for shareholders, completing new lettings on vacant accommodation in the portfolio totalling approximately 3% of total ERV. These lettings include space at the Company's office holding at Queen Square in Bristol, which is now fully occupied, and at its multi-let industrial estate at Sarus Court in Runcorn, which attracted two new lettings during the quarter, both achieving a new high rent for the estate on a per sq. ft. basis. Together with a strong lease renewal at Walkers Lane in St Helen's, where a 48% uplift in the passing rent was achieved, these new lettings are reflected in an improved EPRA EPS figure of 1.89p for the quarter, representing a dividend cover of 94.5%.

Despite NAV falling by 0.5%, the Company's underlying portfolio experienced a modest valuation gain of 0.11%, marking the thirteenth quarter of like-for-like capital growth out of the past 14 quarters and continuing to outperform valuation indices, albeit marginally.

We remain confident in the outlook for AEWU's strategy and believe that the portfolio is robustly positioned to continue to achieve the Company's investment objective. Reflecting this confidence, the Board has, for the 43rd consecutive quarter, announced a dividend payment of 2.00 pence per share.

We continue to see significant attractive buying opportunities in the UK real estate market and are working with the Company's Board and advisers to explore routes to raise capital, with a view to taking advantage of these."

Valuation Movement

As at 30 June 2026, the Company owned investment properties with a total fair value of £215.68 million, as assessed by the Company's independent valuer, CBRE Limited ("CBRE"). The like-for-like valuation increase for the quarter of £0.23 million (0.11%) is broken down as follows by sector:

^* This is the overall weighted average like-for-like valuation increase of the portfolio.

Portfolio Manager's Review

This quarter, the Company's portfolio achieved a like-for-like valuation increase of 0.11%, continuing its consistent trend of quarterly valuation growth, having seen an increase of 0.05% in the previous quarter. This marks the thirteenth quarter of like-for-like valuation gains out of the past 14 quarters. The Company's portfolio again outperformed CBRE's Quarterly UK Index, which, for the same period, reported -0.2% capital value growth and a total return of 1.2%.

Performance this quarter was not driven by any particular sector, but rather by asset management gains at individual properties such as Walkers Lane, St Helens (industrial) and The Railway Centre, Dewsbury (retail warehousing). There were also gains at Circuit, Cardiff, where the Company exchanged on the sale of the nightclub asset at a price £440,000 above the 31 March 2026 valuation. Valuation increases in the industrial sector were largely offset by UK-wide yield-softening in the sector.

In the industrial sector, Walkers Lane in St Helens reported a strong like-for-like valuation increase of 11.05%, having already seen a valuation increase of 5.03% in the previous quarter. This represents a total uplift over the past two quarters of £1.025 million, driven by the completion of a 10-year lease renewal with Kverneland Group UK Limited at a rental increase of circa 48%. During the quarter, the Company also completed two new lettings at Sarus Court, Runcorn, at rents 42% higher than the previous passing rents. This marks the fruition of the asset management strategy for these two units: refurbishing them and, in doing so, crystallising rental growth and securing two new high-quality tenants, both on 10-year leases. The valuation for the period was flat but followed a 4.03% increase in the previous quarter.

We continue to view upcoming lease events and vacancies as opportunities to grow income and add value, particularly within the industrial sector, where the net initial yield and reversionary yield for the sector stand at 6.12% and 9.56%, respectively.

In the office sector, the Company completed a 10-year management agreement with IWG, operating under its Signature brand, at Queens Square, Bristol. This follows the significant refurbishment of 11,681 sq. ft. of previously vacant space, along with the building's reception area, and has resulted in there now being no vacant office space in the property. With a projected stabilised occupancy rate of 80% by year three, the Company anticipates annual revenue greater than the ERV of £418,500 per annum (£35 per sq. ft.). The valuation for the period was flat, having already experienced significant growth of 7.59% in the previous quarter following practical completion of the refurbishment works.

Assets in the high street retail and retail warehousing sectors experienced a relatively quiet quarter, characterised by minimal overall valuation movement. Although no asset management transactions were completed during the period, The Railway Centre, Dewsbury (retail warehousing) recorded a 2.33% increase in value as a result of rent free "burn off", having previously completed a lease renewal to Sports Direct in the period ending 31 December 2025.

Following the announcement on 16 March that National Car Parks Limited (NCP) had appointed joint administrators, the valuation of Tanner Row, York, which sits within the portfolio's "other" sector, was flat for the quarter, having fallen by 7.94% in the previous quarter. The car park remains operational, with the administrators reaffirming their intention for NCP to continue trading from the property and rent being paid monthly in arrears. We are actively seeking regular updates from the administrators and concurrently exploring interest from other operators, as well as potential alternative uses for this centrally located 0.8-acre mixed use site.

Net Asset Value

The Company's unaudited NAV at 30 June 2026 was £171.05 million, or 107.80 pence per share. This reflects a decrease of 0.53% compared with the NAV per share at 31 March 2026. The Company's NAV total return, which includes the interim dividend of 2.00 pence per share for the period from 1 April 2026 to 30 June 2026, was 1.31% for the three-month period ended 30 June 2026.

^*Represents disposal costs in relation to Circuit, Cardiff, which exchanged on 11 June 2026 and subsequently completed post quarter end, on 23 July 2026.

AEWU has incurred expenses relating to corporate activity of around £200,000, principally in relation to due diligence on Alternative Income REIT plc ("AIRE"), having been invited to make a proposal by the board of AIRE earlier in the year.

The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards. It incorporates the independent portfolio valuation at 30 June 2026 and income for the period, but does not include a provision for the interim dividend declared for the three-month period to 30 June 2026.

 Share Price

 The closing ordinary share price at 30 June 2026 was 104.40p, an increase of 5.45% compared with the share price of 99.00p at 31 March 2026. The closing share price represents a discount to the NAV per share of 3.15% which remains the tightest within the peer group. The Company's share price has subsequently increased to 105.80p as at close on 25 August 2026, resulting in a tightening of the discount to approximately 1.86%. The Company's share price total return, which includes the interim dividend of 2.00 pence per share for the period from 1 April 2026 to 30 June 2026, was 7.47% for the three-month period ended 30 June 2026.

Dividend

Dividend declaration

On 29 July 2026, the Company announced an interim dividend of 2.00 pence per share for the period from 1 April 2026 to 30 June 2026. The dividend payment will be made on 4 September 2026 to shareholders on the register as at 7 August 2026. The ex-dividend date will be 6 August 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 14 August 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 43 consecutive quarters, providing consistently high levels of income to our shareholders.

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 June 2026, the Company's share capital comprised 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 30 June 2026, producing a Loan to GAV ratio of 25.33%.

Headroom on the debt facility's 60% loan to value ("LTV") covenant continues to be conservative. For those properties secured under the loan, a 53.19% fall in valuation would be required before the LTV covenant were to be breached.

The Manager is already engaged in productive discussions with potential lenders, including the incumbent, well in advance of the term date on the existing debt in July 2027.

As announced on 3 June 2026, the Company bought an interest rate cap to protect against the risk of higher interest rates when its fixed rate debt facility with AgFe expires in July 2027. The cap was acquired as a prudent measure given the uncertainty over the medium-term outlook for interest rates and will run from 20 July 2027 to 20 July 2030 covering £30.0 million of borrowings, equivalent to 50% of the Company's current debt. The Company has paid a one-off premium of £638,000 for the cap, which limits the SONIA rate on the Company's borrowings to a maximum of 4.064% over the three-year term. The capital movement on this hedge arrangement during the period amounted to £201,297, as reflected in the movement in NAV set out in the above table.

 Investment Update

During the quarter the Company exchanged on the following investment transaction:

Circuit, Greyfriars Road, Cardiff (leisure) - On 11 June 2026, the Company exchanged contracts at auction for the sale of the property for £1.475 million (£37 per sq. ft.), reflecting a net initial yield of 14.78%. This price represents a circa 42% premium to the 31 March 2026 valuation of £1.035 million (£26 per sq. ft.). The sale subsequently completed, post quarter end, on 23 July 2026.

The decision to sell was driven by the significant headwinds currently affecting the nightclub sector, including changes in consumer behaviour and rising operating costs, together with the introduction of six-month rolling break options from August this year.

The asset was originally acquired in February 2022 for £3.625 million (£92 per sq. ft.), reflecting a net initial yield of 7.75%, and subsequently experienced a decline in value following the previous tenant's entry into administration in February 2024.

 Asset Management Update

The Company completed the following asset management transactions during the quarter:

40 Queen Square, Bristol (office) - The Company entered into a 10‑year management agreement with Development UK 04 Ltd (IWG), operating under its Signature brand, for all the vacant office space in the property. This space represents 32% of the total floor area, amounting to 11,681 sq. ft.

The management agreement, which exchanged on 1 May 2025, was conditional on the Company completing a Cat A+ refurbishment and Cat B fit‑out to IWG's specification. Additional capex was also required for M&E modifications to the already refurbished first and third floors to accommodate a cellular serviced‑office layout. The total cost of the refurbishment project was circa £1.3 million.

IWG's management fees are set as a percentage of gross revenue. With a projected stabilised occupancy rate of 80% by year three, the Company anticipates annual revenue notably greater than the ERV of £418,500 per annum (£35 per sq. ft.).

The Company also completed a five-year lease renewal with Beale & Company Solicitors LLP, who were previously paying a rent of £123,000 per annum (£31.92 per sq. ft.). The new lease, which commenced on 13 July 2026, is at a rent of £144,490 per annum (£37.50 per sq. ft.) and includes a tenant-only break option at the third anniversary. In return for committing to the new lease, the tenant has received a three-month rent-free incentive, with a further two months' rent-free conditional on the break option not being exercised.

Walkers Lane, St Helens (industrial) - The Company completed a 10-year lease renewal with Kverneland Group UK Limited, whose previous lease expired on 30 September 2025 paying a rent of £389,000 per annum. The new lease is at a rent of £575,000 per annum (£6.15 per sq. ft.), reflecting an uplift of approximately 48%, and includes a tenant-only break option at the fifth anniversary. In return for committing to the new lease, the tenant has received a six-month rent-free incentive, which is subject to a six-month rent penalty if the break option is exercised at the end of the fifth year. The valuation was subsequently up by 11.05% for the quarter.

The Kverneland Group was founded in 1879 and is a leading international company developing, producing and distributing agricultural machinery and services. Walkers Lane represents the Group's only UK warehouse and is used for the storage and distribution of agricultural machinery and spare parts.

Sarus Court, Runcorn (industrial) - The Company completed a new letting of Unit 1002, comprising 12,233 sq. ft., to Roger's Truck Services Limited. The tenant has entered into a straight 10-year lease at a rent of £116,250 per annum (£9.50 per sq. ft.), compared with an ERV of £107,000 per annum (£8.75 per sq. ft.). This represents a significant increase on the previous rent of £81,646 per annum (£6.67 per sq. ft.), reflecting an uplift of approximately 42%, following refurbishment of the unit at a cost of £425,000 (£34.75 per sq. ft.). In return for committing to the new lease, the tenant benefits from a six-month rent-free period and has provided a rent deposit equivalent to four months' rent.

The Company also completed a new letting of Unit 1003, comprising 13,097 sq. ft., to New Performance Health Limited. The tenant has entered into a 10-year lease, with a tenant-only break option at the fifth anniversary, at a rent of £125,000 per annum (£9.55 per sq. ft.), compared with an ERV of £114,500 per annum (£8.75 per sq. ft.). This represents a significant increase on the previous rent of £88,029 per annum (£6.72 per sq. ft.), reflecting an uplift of approximately 42% following refurbishment of the unit at a cost of £393,000 (£30 per sq. ft.). In return for committing to the new lease, the tenant benefits from a six-month rent-free period and has provided a rent deposit equivalent to three months' rent and a parent company guarantee.

Diamond Business Park, Wakefield - The Company completed a three-year lease renewal with Compac UK Ltd from 16 July 2026 at a rent of £69,035 per annum subject to a tenant-only break options after 12 months. The rent of £5.00 per sq. ft. exceeds valuers' ERV by 25%.

Tanner Row, York (other) - Further to the announcement made on 17 March regarding NCP, which occupies the multi‑storey car park at Tanner Row and currently pays 78% of the annual rent received from this multi-let property, the Company confirms that the administrator (PwC) continues to pay rent monthly in arrears and has confirmed that it has no intention of vacating the site or seeking to alter the terms of the existing lease.  

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

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 €74.2bn of assets under management as at 31 March 2026. AEW has over 815 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 31 March 2026, AEW managed €35.8bn of real estate assets in Europe on behalf of a number of strategies and separate accounts. AEW has over 510 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 over €13bn of real estate across European markets.

www.aew.com

AEW UK Investment Management LLP is the Investment Manager.  AEW is a group of companies that includes AEW Europe and its subsidiaries, as well as affiliated company AEW Capital Management, L.P. in North America and its subsidiaries. AEW Europe, 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 headquarters offices in Paris and London. AEW Europe 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.