AEW UK reports robust first half

The London-listed real estate investment trust’s net asset value (NAV) increased to £172.76m, or 109.05p per share, up from £162.75m and 102.73p per share at the end of March.

Its net asset value total return for the period surged to 10.05%, compared to 4.3% in the same period last year.

Operating profit before fair value adjustments reached £8.9m, up from £6.63m a year earlier, while profit before tax more than doubled to £16.64m, boosted by a £7.03m gain in property valuations and £1.48m in realised gains from property disposals.

Rental income remained resilient at £9.57m, slightly ahead of the £9.43m recorded in the same period last year.

The portfolio's EPRA net initial yield improved to 8.13%, and the EPRA vacancy rate was stable at 6.77%.

AEW UK’s weighted average unexpired lease term was 4.49 years to break and 5.9 years to expiry.

The board declared dividends of 4p per share for the period, consistent with the prior year, delivering a shareholder total return of 19.35%.

It also noted that the company’s share price increased to 98.4p as of 30 September, up from 85.8p in March.

The portfolio’s valuation rose to £215.64m, up from £210.69m at the start of the period, reflecting steady asset management performance despite the sale of one property for £6.3m.

With £14.47m in cash on hand and gearing reduced to 24.87% of gross asset value, the company said it was well-positioned to capitalise on future opportunities while maintaining steady income generation.

“Having joined the board of AEW UK REIT in the last year, I have been impressed by the historic and current performance record of the portfolio, in terms of the sustainability of income, and capital profits generated,” said chairman Robin Archibald.

“This has been achieved against a difficult market background for UK commercial property since the company's inception over nine years ago.”

Archibald described the company’s performance over the last six months as “impressive”, noting the 6.2% increase in net asset value, dividends covered by earnings, and the completion of a number of asset management initiatives by the AEW team.

“The sustained 2p per quarter dividend continues to be very attractive in comparison to other income products.”

At 0813 GMT, shares in AEW UK REIT were down 0.14% at 96.47p.

Reporting by Josh White for Sharecast.com.