REG - AEW UK REIT PLC - Acquisition of high-yielding retail warehouse unit

Aew UK ReitAnnouncement

27/03/2023 07:00

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RNS Number : 2225U  AEW UK REIT PLC  27 March 2023

27 March 2023

 

AEW UK REIT plc

 

Acquisition of high yielding retail warehousing unit in Preston

AEW UK REIT plc (LSE: AEWU) ("AEWU" or the "Company") is pleased to announce
that it has completed the purchase of a freehold solus retail warehousing unit
in Bamber Bridge, Preston for £6,450,000, reflecting a low capital value of
£110 per sq ft and an attractive net initial yield of 9.5%.

The 58,696 sq ft unit is single-let to Matalan Retail Limited and has another
9.2 years left on the lease. Matalan is known to trade strongly from the
location, with the store being one of its top 10 performers, as well as being
the retailer's first ever store in the U.K. The lease benefits from a 2027
rent review to the higher of open market value, or 2.5% per annum compounded,
resulting in a minimum reversionary yield of 10.7%.

The site totals 4.39 acres, providing a low site cover of 30%. It is well
located on Cuerden Way which connects to the A6, half a mile from Junction 1
of the M65. Neighbouring tenants include Aldi and Sainsburys to the south,
with predominantly industrial uses to the north. There is the potential to
repurpose the unit for trade counter or industrial use, and to extend the
accommodation, subject to planning, if required in future.

In January, Matalan announced the completion of a refinancing, reducing its
gross debt by 43% from £593 million to £336 million. The new debt facility
will mature in 2027. The refinancing also provides £100 million for business
growth over the next three years, with a return to profitability anticipated
in FY 2024.

Commenting on the purchase, Laura Elkin, Portfolio Manager of AEW UK REIT
said: "We are pleased to have purchased this retail warehousing unit that
provides a very attractive day one yield that is set to increase at review in
the future. Our due diligence has shown that Matalan trades well from the
location, giving us confidence in its continued occupation, and in the
stability of the income stream. As we look to return the portfolio to full
investment, we continue to analyse an interesting pipeline of potential
acquisitions, and expect to make further purchase announcements in the coming
months."

 

 

ENDS

 

 Enquiries
 AEW UK
 Laura Elkin                     laura.elkin@eu.aew.com (mailto:laura.elkin@eu.aew.com)
                                 +44(0) 7917 058 337
 Henry Butt                      henry.butt@eu.aew.com (mailto:henry.butt@eu.aew.com)
                                 +44(0) 7920 499 076
 Nicki Gladstone                 nicki.gladstone-ext@eu.aew.com (mailto:nicki.gladstone-ext@eu.aew.com)
                                 +44(0) 7711 401 021
 Company Secretary
 Link Company Matters Limited    aewu.cosec@linkgroup.co.uk
                                 +44(0) 7548773155

 TB Cardew                       AEW@tbcardew.com (mailto:AEW@tbcardew.com)
 Ed Orlebar                      +44 (0) 7738 724 630
 Tania Wild                      +44 (0) 7425 536 903
 Henry Crane                     +44 (0)7918 207157

 Liberum Capital
 Darren Vickers / Owen Matthews  +44 (0) 20 3100 2222

 

 

 

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 (http://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.

 

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