REG - AEW UK REIT PLC - Half-Yearly Results
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RNS Number : 4402I AEW UK REIT PLC 21 November 2025
21 November 2025
AEW UK REIT plc
Announcement of Unaudited Half Yearly Results for the period ended 30
September 2025
Robin Archibald, Chairman of AEW UK REIT plc, commented:
"The Board is pleased to report shareholder total return of 11.44% for the
first half of our financial year to 31 March 2026, reflecting the strength and
resilience of both the portfolio and investment strategy in a subdued property
market. The Company's shares traded close to NAV, with periods of premium
pricing, highlighting growing market confidence in AEWU's consistent
outperformance against the benchmark and its peers. With seven consecutive
quarters of like-for-like portfolio valuation gains and a decade of
uninterrupted annual dividends of 8p per share, AEWU continues to deliver
exceptional value to shareholders, and we wish to congratulate the Investment
Manager on its outstanding 10-year track record. Looking forward, the
Investment Manager sees compelling buying opportunities in UK commercial
property as valuations are at their lowest in 10 years. As a result, the Board
is actively considering ways to scale the strategy and capitalise on AEWU's
proven track record of value creation through careful stock selection and
disciplined asset management."
Financial Highlights
● Net Asset Value ('NAV') of £172.82 million and of 109.09 pence per share
('pps') as at 30 September 2025 (31 March 2025: £174.44 million and 110.11
pps).
● NAV Total Return* for the period of 2.70% (six months ended 30 September 2024:
10.05%).
● Operating profit before fair value changes of £6.96 million for the period
(six months ended 30 September 2024: £8.90 million).
● Profit Before Tax ('PBT')** of £4.71 million and earnings per share ('EPS')
of 2.98 pps for the period (six months ended 30 September 2024: £16.64
million and 10.30 pps). PBT includes a £1.47 million loss arising from
changes to the fair values of investment properties in the period (six months
ended 30 September 2024: £7.03 million gain) and £0.02 million realised loss
on disposal of investment properties (six months ended 30 September 2024:
£1.48 million gain).
● EPRA Earnings Per Share ('EPRA EPS')* for the period of 3.91 pps (six months
ended 30 September 2024: 4.43 pps).
● Total dividends* of 4.00 pps declared in relation to the period (six months
ended 30 September 2024: 4.00 pps), bringing the total number of uninterrupted
quarters in which the 2 pps dividend has been paid to 40.
● Shareholder Total Return* for the period of 11.44% (six months ended 30
September 2024: 19.35%).
● The price of the Company's Ordinary Shares on the London Stock Exchange was
109.00 pps as at 30 September 2025 (31 March 2025: 101.40 pps).
● As at 30 September 2025, the Company had drawn £60.00 million (31 March 2025:
£60.00 million) of its £60.00 million (31 March 2025: £60.00 million) loan
facility with AgFe and was geared to 25.17% of GAV (31 March 2025: 25.01%).
See note 15 in the Annual Report for the year ended 31 March 2025 for further
detail.
● The Company held cash balances totalling £13.20 million as at 30 September
2025 (31 March 2025: £25.99 million).
Property Highlights
● As at 30 September 2025, the Company's property portfolio had a valuation of
£216.05 million across 34 properties (31 March 2025: £204.55 million across
33 properties) as assessed by the valuer((1)) and a historical cost of
£220.52 million (31 March 2025: £207.96 million).
● The Company acquired one property during the period for a purchase price of
£11.15 million excluding acquisition costs (year ended 31 March 2025: one
property for a purchase price of £10.00 million, excluding acquisition
costs).
● The Company made no disposals during the period (year ended 31 March 2025: two
properties for gross sale proceeds of £32.55 million).
● The portfolio had an EPRA vacancy rate** of 6.32% as at 30 September 2025 (31
March 2025: 7.50%).
● Rental income generated during the period was £9.53 million (six months ended
30 September 2024: £9.57 million).
● EPRA Net Initial Yield ('EPRA NIY')** of 8.18% as at 30 September 2025 (31
March 2025: 7.97%).
● Weighted Average Unexpired Lease Term ('WAULT')* of 3.95 years to break and
5.61 years to expiry (31 March 2025: 4.12 years to break and 5.73 years to
expiry).
(*) See the KPIs in the Annual Report for the year ended 31 March 2025 for
the definition of alternative performance measures.(
**) See the glossary in the Annual Report for the year ended 31 March 2025
for the definition.(
(1)) The valuation figure is reconciled to the fair value under IFRS in note
9.
Contact details
AEW UK
Laura Elkin laura.elkin@eu.aew.com (mailto:laura.elkin@eu.aew.com)
+44(0) 20 7016 4880
AEW Investor Relations investor_relations@eu.aew.com
Company Secretary
MUFG Corporate Governance Limited aewu.cosec@cm.mpms.mufg.com
+44 (0) 333 300 1932
Cardew Group aew@cardewg (mailto:aew@cardewgroup.com) roup (mailto:aew@cardewgroup.com)
.com (mailto:aew@cardewgroup.com)
Tania Wild +44 (0) 7425 536 903
Henry Crane +44 (0) 7918 207 157
Panmure Liberum
Darren Vickers +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
AEW is one of the world's largest real estate asset managers, with €78.8bn
of assets under management as at 31 March 2025. AEW has over 920 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 2025, AEW managed €37.2bn of real estate assets in Europe on
behalf of a number of strategies and separate accounts. AEW has over 515
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 €18.5bn of real estate across European markets.
www.aew.com (http://www.aew.com)
AEW UK Investment Management LLP is the Investment Manager. AEW is a group
of companies that includes AEW Europe SA and its subsidiaries, as well as
affiliated company AEW Capital Management, L.P. in North America and its
subsidiaries. AEW Europe SA, 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 SA 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.
Attribution Analysis of Financial Results
The Company's NAV as at 30 September 2025 was £172.82 million or 109.09 pps
(31 March 2025: £174.44 million or 110.11 pps). This represents a decrease of
1.02 pps or 0.93 % over the six-month period, with the underlying movement in
NAV set out in the table below:
Pps
NAV as at 1 April 2025 110.11
Capital expenditure (0.59)
Valuation changes in property portfolio (0.35)
Income earned for the period 6.16
Expenses for the period (2.24)
Dividends paid (4.00)
NAV as at 30 September 2025 109.09
Financing
As at 30 September 2025, the Company has a £60.00 million loan Facility with
AgFe, in place until May 2027, the details of which are presented below:
30 September 2025 31 March 2025
Facility £60.00 million £60.00 million
Drawn £60.00 million £60.00 million
Gearing (Loan to GAV) 25.17% 25.01%
Gearing (Loan to NAV) 34.72% 34.40%
Interest rate 2.959% 2.959%
fixed fixed
Chairman's Statement
Overview
The Company ("AEWU") has delivered robust total return performance during the
period, despite continued political and economic uncertainty, most notably in
relation to the upcoming UK Budget later this month. May 2025 marked the
Company's tenth anniversary, a decade during which it has consistently paid
annualised dividends of 8p per share and realised significant capital profits
on disposals from its portfolio. The Investment Manager is to be congratulated
on an outstanding record over the decade in absolute and relative terms
against peers and property indices alike.
AEWU has delivered strong returns using its diversified, value-focused and
sector agnostic investment approach, acquiring mispriced assets throughout
varying market cycles. In the current environment, average commercial property
capital values are at their lowest point since the Company launched. The
Investment Manager believes this presents an exciting prospect for AEWU, with
a broad range of attractively priced opportunities which could be pursued,
should the Company have available cash to deploy, a subject which the Board is
actively exploring with its advisers.
Investment and share price performance
Shareholder total return amounted to 11.4% for the first half of the year
(9.0% on a 10-year annualised basis), driven by robust portfolio performance
and a commensurate uplift in share price. At period end, the Company's shares
were trading at close to NAV, being at a 0.08% discount. On several occasions,
the Company's shares traded at a premium to NAV, allowing the recent
reissuance of 150,000 treasury shares. We are delighted that the market is
starting to recognise our achievement of seven consecutive quarters of
like-for-like valuation gain in the Company's portfolio during a period when
property markets have remained subdued.
The Investment Manager has achieved total return outperformance against both
the MSCI benchmark and its peers in the UK diversified REIT space. With a
property total return for the period of 3.2% versus the 3.0% produced by the
MSCI benchmark (9.4% vs 4.7% on a 10-year annualised basis), the significant
benefit of the Company's income-focused and value-driven strategy is
apparent.
AEW UK REIT plc Property Performance vs. Benchmark for the six months to 30
September 2025
Performance Metric AEW UK REIT (%) Benchmark (%)*
Capital Growth (0.7) 0.8
Income Return 3.9 2.3
Total Return 3.2 3.0
Source: MSCI 30 September 2025
*The Benchmark refers to MSCI/AREF PFI Balanced Funds Quarterly Property Index
Dividends
The Company continues to pay quarterly dividends of 2p per share (as it has
done now for 40 consecutive quarters), which were 98% covered by the earnings
of 3.91p for the period. Earnings continue to be bolstered by the completion
of asset management initiatives, which crystallised £473,349 per annum of
additional rental income during the period. The Company's cost base continues
to underpin robust earnings, with low incurrence of bad debt and void costs
reflecting the quality and stability of the portfolio. Sustainability of the
dividend, as well as its potential growth, continue to be areas of Board
focus.
The Company remains committed to paying its quarterly dividend of 2p per share
predominantly from net income but also using a total return approach where
required, and realised capital profits from disposals.
Gearing
The Company has a fully drawn debt facility of £60 million, which is due to
mature in May 2027, with a fixed interest rate of 2.959%, representing a
25.17% Loan to Gross Asset Value ratio. The loan covenants all have
significant headroom.
The use of gearing and the Company's ability to refinance is monitored closely
by the Board and the Investment Manager alike. The Investment Manager has a
specialist in-house debt team. When practical and most effective to do so, the
Company will be refinanced. We recognise that the expected interest cost on a
future facility is unlikely to be as competitive as it was when the current
facility was secured. That said, it is currently expected that any refinancing
will not lead to materially different earnings and capital performance
compared with what the Company has been able to achieve over the past 10
years.
Portfolio
At period end, the Company had a diversified portfolio of 34 UK commercial
properties. The average lot size was £6.4 million, with occupancy of 93.7%
from 132 tenants. The Company had cash of £13.2 million, including its usual
£5 million cash buffer. Most of the cash balance above the buffer has been
earmarked for capital expenditure or other asset management initiatives.
During the period, the Company completed the purchase of an 8.4-acre freehold
leisure asset in Leicester for £11,150,000. The purchase price reflected an
attractive net initial yield of 10.6% and a capital value of £103 per sq. ft.
The acquisition completed the Company's redeployment of sale proceeds from the
disposal of Central Six Retail Park in Coventry in December 2024.
No disposals were made by the Company during the period.
Awards
The Board is delighted that the Company's market leading performance and
investment approach have been recognised in the winning of two awards during
the period. The Company has once again been awarded by EPRA, the European
Public Real Estate Association, a gold medal for its high standard of
financial reporting, as well as a gold medal for standards of sustainability
reporting.
Post period-end, the Company won two further awards. The first was the
Citywire Investment Trust Award in the 'UK Property' category for the sixth
consecutive year. This is awarded to the Company with the highest NAV total
returns over an annualised three-year period. The Company also won the 'Best
for Property' category in the QuotedData Investors' Choice Awards 2025, voted
for by retail investors.
These awards are testament to the consistently strong performance delivered by
the Company, which AEW, as Investment Manager, looks forward to building upon
in the future.
Outlook
The Board and Investment Manager continue to explore growth opportunities for
the Company that would be beneficial to shareholder interests. Appropriate
scaling of AEWU's strategy is expected to bring shareholder benefits,
including improved liquidity in the Company's shares and a reduction in the
operating cost ratio.
The Investment Manager has conviction in the current buying opportunities seen
in the UK commercial real estate market, and believes that now is an ideal
time to deploy capital, as property values are at their lowest point since the
Company's IPO. With a proven track record of stock selection, the Investment
Manager expects that any acquisitions made in the near-term would yield strong
performance and shareholder returns in the future.
Robin Archibald
Chairman
20 November 2025
Investment Manager's Report
Property Market Overview
Despite continuing political and economic uncertainty, valuations in UK
commercial property remained largely stable during the six months to 30
September 2025, with the exception of regional secondary offices where weak
investor sentiment and pricing discovery persists. The period signifies a
rebound for retail, with some yield tightening on the high street, as leading
retailers reaffirm their commitment to physical locations and report strong
trading updates that reflect improving occupational dynamics, notwithstanding
a host of additional cost pressures. With Rachel Reeves' postponed Budget
looming, investment activity - which has been steadily improving, underpinned
by early signs of capital growth and a return to positive real returns - is
expected to be muted for the remainder of the calendar year. There remains
strong continued investor focus on rental growth. Positive rental growth
across all market sectors should enhance UK property total returns going into
2026.
Industrial
A total of £1.9 billion in transactions was recorded in the UK in Q3. This
brings the year-to-date total to £5.75 billion, down marginally (2%) on the
same period last year. Investors are facing challenging conditions due to
ongoing geopolitical uncertainty. However, according to CBRE's European
Investor Intentions Survey, investment volumes are expected to rise during the
second half of the year, although yields are anticipated to remain stable for
the rest of 2025, with yield compression likely pushed out into 2026.
Average rents for UK industrial properties continue to increase, albeit at a
slower pace compared to last year. The annual growth rate for the year ending
September 2025 was 4.6%, slowing from 4.8% in August, and 6.2% a year ago.
Rental growth is expected to continue to decelerate throughout the rest of
2025, with a forecast annual growth rate of 4.2% in 2025. This trend is
projected to slow further in 2026, with a growth forecast of 3.1%, before
picking up again between 2027 and 2029.
We believe that the Company's industrial portfolio, with a low average passing
rent of £3.80 per sq. ft. compared to an ERV of £4.71 per sq. ft. and a
reversionary yield of 9.57% (initial yield of 7.16%), is well-positioned,
despite the anticipated slowdown in rental growth.
Retail
The period has presented a mixed bag of messages. Retail sales in Q2 increased
by 3.2% year-on-year, with volumes up by 1.9%. However, this quarterly figure
masks erratic monthly performance, with strong trading in April followed by a
downturn in May. Sales volumes also rose in Q3, increasing by 5.6% when
comparing September 2025 to September 2024, with good weather in July and
August boosting the sale of clothes. Despite several retail-unfriendly
measures, such as higher National Insurance contributions and minimum wage
increases being implemented in April, the UK's retail vacancy rate continues
to decline gradually, accompanied by rental growth of 2.0%. Fashion brand
Next, a tenant in two properties owned by the Company, reported a stronger
than expected 10.5% increase in full-price sales for its third quarter. This
has prompted Next to raise its full-year pre-tax profit guidance for the
fourth time in eight months (now projected to exceed £1.1 billion by the end
of January 2026).
The retail investment markets remain constrained by a lack of stock, primarily
driven by ongoing geopolitical uncertainty rather than negative sentiment.
With larger institutions continuing to act as net sellers rather than buyers,
we still consider the sector attractive, albeit only for 'best-in-class'
assets where there is strong demand from occupiers.
Offices
Unsurprisingly, the investment market continued to struggle in the first half
of 2025, with transaction volumes totalling £373.5 million across the main
regional cities. This figure is 25% lower than at the same point in 2024 and
48% below the five-year H1 average. Secondary locations, out-of-town parks and
buildings that require significant modernisation continue to be most out of
favour. However, following a period of substantial value adjustments,
investors are beginning to re-engage, as the gap between buyer and seller
expectations narrows.
During the first six months of 2025, leasing activity maintained momentum,
with take-up reaching 2.5 million square feet across the 10 main UK regional
cities tracked by Knight Frank. This figure represents a 7% increase compared
to the same period in 2024 and is also 7% above the five-year average for the
first half of the year. Additionally, it marks the strongest H1 performance
recorded since 2022. Grade A space accounted for 55% of the total office
take-up, highlighting the sustained demand for high-quality accommodation.
Competition for this limited market segment is intensifying, with vacancy
rates at just 3.1% of total office stock.
The Company's office sector, which is its lowest sector weighting of 11%, has
had a quiet period while it carries out the refurbishment of vacant space and
the reception at Queens Square in Bristol. The timing of these works is
opportune with occupier markets gathering momentum.
Alternatives
Across the alternative sectors, visibility of performance in trading updates
is key to investor demand. Despite rising labour costs from the higher minimum
wage and National Insurance contributions, leisure spend remains strong as
consumers prioritise it over other discretionary spend. According to
Barclaycard data, hospitality and leisure spending continued to grow overall
in Q2 2025, with increases of 6.7% in April, 3.3% in May and 2.1% in June. The
mini boom in April mirrored the spike in retail sales, yet the leisure sector
did not experience the same downturn as retail in May.
CBRE anticipates operators increasing prices to improve margins, but as demand
for experiential operators outpaces supply, rental growth and a softening of
landlord contributions is predicted going into 2026. Most cinema operators are
now predicting a return to profitability, which is expected to have a positive
impact on the investment market.
Demand for leisure assets, particularly those priced at around £10 million,
strengthens as buyers anticipate yield compression and believe that pricing
has bottomed out. We continue to view the leisure sector as attractive on a
selective basis, especially for assets that offer superior income returns and
larger land holdings, or for sites in urban areas that may benefit from
alternative use values, most likely residential.
Sources:
UK Real Estate Navigator
Knight Frank UK Logistics Market Dashboard - September 2025
UK Real Estate Market Outlook Mid-Year Review 2025 Report
Retail sales, Great Britain - Office for National Statistics
BBC News
UK Operational Real Estate
Property Portfolio
Sector weighting by valuation - high industrial weighting and low
exposure to offices
Sector Percentage
Industrial 37%
High Street Retail 20%
Other 18%
Retail Warehouse 14%
Offices 11%
Geographical weighting by valuation - highly diversified across the UK
Region Percentage
South West 27%
Yorkshire and Humberside 17%
North West 10%
South East 9%
Eastern 9%
West Midlands 8%
East Midlands 7%
Wales 7%
Rest of London 5%
Scotland 1%
Like-For-Like Valuation Movement for the Period
Valuation as at 30 September 2025 Like-For-Like Valuation Movement for the Period
Sector (£m) % of Portfolio (£m) (%)
Industrial 80.41 37.22 1.82 2.31
High Street Retail 44.32 20.52 0.53 1.20
Other 38.71 17.92 (1.34) (4.62)
Retail Warehouses 29.28 13.55 0.63 2.18
Office 23.33 10.79 (1.28) (5.18)
Total 216.05 100.00 0.36 0.17*
* This is the overall weighted average like-for-value valuation increase of
the portfolio.
Top Ten Assets
At period-end, the portfolio's top 10 assets constituted 49.6% of the overall
portfolio value. As detailed in the Annual Report, these are diversified
across both sector and geography.
Property Sector Sq. Ft Market Value Range (£m)
1. Wrexham, Gresford Industrial Estate Industrial 279,541 10.0 - 15.0
2. Bath, Northgate House High Street Retail 67,020 10.0 - 15.0
3. Dagenham, London East Leisure Park Other 102,400 10.0 - 15.0
4. Leicester, Freemans Leisure Park Other 108,771 10.0 - 15.0
5. Bristol, 40 Queen Square Office 36,433 10.0 - 15.0
6. Bath, Cambridge House Office 51,132 10.0 - 15.0
7. Hitchin, Bancroft High Street Retail 46,905 5.0 - 10.0
8. York, 25 George Hudson Street Other 18,599 5.0 - 10.0
9. Runcorn, Sarus Court Industrial 82,379 5.0 - 10.0
10. Peterborough, Storey's Bar Road Industrial 184,114 5.0 - 10.0
Investment Update
The Company made one acquisition during the period:
Freemans Leisure Park, Leicester (other) - In June, the Company completed the
purchase of an 8.4-acre freehold site in the centre of Leicester (the
"Property"), for £11,150,000. The purchase price reflects an attractive net
initial yield of 10.6% and a capital value of £103 per sq. ft.
The property occupies a prominent position on an arterial route one mile south
of Leicester city centre, close to the University of Leicester's student
campus, and totals 108,771 sq. ft. across five units along with service yards
and 582 car parking spaces.
The property is fully let to a well-known group of national tenants including
Odeon Cinemas Ltd, Mecca Bingo Ltd, Spirit Pub Company Ltd and Nando's
Chickenland Ltd, providing a weighted average unexpired lease term to expiry
of greater than eight years. The property presents various short-to-medium
term asset management opportunities, including rental growth prospects through
upcoming rent reviews; the possibility of an EV charging letting; and
appraising alternative uses, such as hotel and restaurant, for areas of the
site that have not already been developed.
Leicester benefits from high levels of footfall as the largest city in the
East Midlands with one of the fastest growing populations in the UK. The city
is served by rail connections to London, Birmingham and Nottingham, and is
situated at the midpoint between London and Leeds on the M1 motorway.
The acquisition completes the Company's redeployment of sale proceeds from the
disposal of Central Six Retail Park in Coventry.
There were no disposals during the period.
Asset Management Update
The Company completed the following material asset management transactions
during the period:
11-15 Fargate, Sheffield (retail) - The Company completed a new lease to Boots
Opticians Professional Services & Seven Hills Optical Ltd, trading as
Boots Opticians. The tenant has entered a 10-year lease, with a tenant break
option on the expiry of the fifth year, paying a rent of £62,500 per annum.
There will be a five-yearly open market upwards-only rent review. The tenant
has been granted a nine-month rent free period. Following completion of the
letting the property is now fully let.
Central Six Retail Park (the Triangle Site), Coventry (retail warehouse) -
Following the freehold disposal of Units 1-11 for £26,250,000 in December
2024, the Freeholder (Friargate JV Projects Limited, known as Friargate) of
the remaining site, known as the 'Triangle Site', which is still held on a
long leasehold by the Company, served notice to acquire the remaining site
from 29 July 2025 for a peppercorn.
The Triangle Site consists of three purpose-built retail warehousing units let
to Salvation Army, Costa Ltd and TUI UK Retail Ltd, and a drive-thru
restaurant let to Caspian Food Services Ltd, trading as Burger King, producing
an annual rental income of £380,000.
Diamond Business Park, Wakefield (industrial) - The Company completed a new
lease of Unit 10 to Machtech Technology Ltd. The tenant has entered into a
five-year lease with a tenant only break option in 2.5 years, paying a rent of
£46,890 per annum (£4.50 psf), which is £0.50 per sq. ft. above ERV. No
rent free or capital contribution was given as an incentive.
The Company completed the demolition of Diamond House, an obsolete 1970s
purpose-built office block consisting of 27,098 sq. ft., at a cost of
£229,807 (inclusive of fees and contingency). The office became fully vacant
earlier this year with the last remaining tenant surrendering its lease to
vacate early. Refurbishment or conversion to residential use were also
considered, with demolition being the most viable route forward, with the
cleared land creating a 1.8 acres IOS (industrial open storage) letting
opportunity with an ERV of £50,000 per acre, as well as eliminating
approximately £79,000 per annum of landlord shortfalls.
Westlands Distribution Park, Weston-super-Mare (industrial) - The Company has
completed a three-year lease renewal of Unit 4 with MCT Rehman Ltd at a rent
of £95,000 per annum (£3.61 per sq. ft.), which increases to £100,000 per
annum (£3.80 per sq. ft.) at the beginning of the second year, and £110,000
(£4.18 per sq. ft) in the third year.
The Company has also completed a short-term lease renewal of Unit 2 with J N
Baker Ltd, extending the term by an additional 12 months with a rolling
tenant-only break option that allows for termination on one month's notice
after the first three months of the term. The tenant will be paying a rent of
£159,500 per annum (£2.28 per sq. ft).
The Company has also completed a short-term lease of Units 2B and 2C with
Colin Venn. The lease will be for a total term of one year with a rolling
mutual break clause that allows termination at any time with one month's
notice. The tenant will pay rent of £6,000 per annum.
Sarus Court, Runcorn (industrial) - The Company completed a speculative
refurbishment project of units 1002, formerly let to PS2 Print Ltd. The works
comprised roof improvements, respraying of external elevations, internal
strip-out and decoration, and replacing M&E services to improve the EPC
rating to a B. The cost of the works was £426,000, including professional
fees. It is anticipated that the Company will crystalise significant rental
growth from the previous rent following the unit being re-let.
710 Brightside Lane, Sheffield (industrial) - The Company settled ROM Group
Limited's (ROM) outstanding 13 April 2025 open market rent review at £529,500
per annum (£4.25 per sq. ft.) representing a 41.57% increase in the previous
passing rent of £374,000 per annum (£3.00 per sq. ft.). The valuation of the
asset subsequently increased by 21.51%.
ROM Group is a specialist supplier of steel reinforcement solutions primarily
for the construction industry. ROM will occupy the 124,577 sq. ft.
manufacturing facility for a further 4.5 years.
Carrs Coatings, Eagle Road, Redditch (industrial) - The Company settled Carrs
Coatings Ltd's August 2025 annual uncapped RPI rent review at £319,519 per
annum (£8.41 per sq. ft.), representing a £14,709 per annum (4.83%)
increase.
The unit is single-let to Carrs Coatings Ltd until August 2028. The lease was
entered into as a sale and leaseback in 2008 at an initial starting rent of
£170,300 per annum (£4.50 per sq. ft.).
Barnstaple Retail Park, Barnstaple (retail warehousing) - The Company
completed a new lease to Wren Kitchens Limited, which has taken the former
Poundland unit. Wren has signed a 10-year lease with a tenant break option on
the expiry of the fifth year at a rent of £98,500 per annum (£17.25 per sq.
ft.). On the expiry of the fifth year, the rent will be reviewed to the lower
of open market or 2.5% per annum, compounded. Wren has been granted a 12-month
rent free period, with a further six months should it not exercise the break
option.
Railway Centre, Dewsbury (retail warehousing) - After protracted negotiations,
the Company completed a lease renewal with Fieldrose Limited (Fieldrose),
trading as KFC, whose lease expired on 23 December 2023. Fieldrose has signed
a 15-year lease, which includes a tenant break option at the end of the tenth
year, at an annual rent of £86,000. No rent-free period or tenant incentive
was given. Additionally, the outstanding rent review from December 2018 has
also been settled at £67,000 per annum. The previous passing rent was
£64,250 per annum.
Unit B, Arrow Retail Park, Shrewsbury (retail warehousing) - The Company
completed a new lease of Unit B to Summerhouse Solutions Limited
(Summerhouse), trading as Summerhouse Interiors. Summerhouse has signed a
five-year lease which includes a tenant-only break option on the expiry of the
third year, subject to a penalty of three months' rent. The annual rent is
£32,000 (£6.96 per sq. ft.), and the letting includes an initial three-month
rent-free incentive.
Unit C, Arrow Retail Park, Shrewsbury (retail warehousing) - The Company
completed a new lease of Unit C to Lifecycle Group Holdings Limited. The
tenant has signed a 10-year lease which includes a tenant-only break option on
the expiry of the fifth year. The annual rent is £32,000 (£6.96 per sq.
ft.), with no rent-free incentive being given.
AEW UK Investment Management LLP
20 November 2025
PRINCIPAL RISKS AND UNCERTAINTIES
The Company's principal risks and uncertainties have not materially changed
since the 2025 Annual Report and can be found on pages 36 to 43 of that
Report.
The principal risks faced by the Company include the property market, property
valuation, tenant default, asset management initiatives, due diligence, fall
in rental rates, breach of borrowing covenants and availability and cost of
debt. In addition, the Board continues to monitor a number of emerging risks
that could potentially impact the Company, the principal ones being
geopolitical risk and climate change risk.
Interim Management Report and Directors' Responsibility Statement
Interim Management Report
The important events that have occurred during the period under review, the
key factors influencing the financial statements and the principal risks and
uncertainties for the remaining six months of the financial year are set out
in the Chairman's Statement and the Investment Manager's Report above and the
Principal Risks and Uncertainties set out in the 2025 Annual Report.
Responsibility Statement
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the UK;
· the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
(b) DTR 4.2.8R, being related party transactions that have taken place in
the first six months of the current financial year and that have materially
affected the financial position or performance of the Company during that
period; and any changes in the related party transactions described in the
last Annual Report that could do so.
On behalf of the Board
Robin Archibald
Chairman
20 November 2025
Financial Statements
Condensed Statement of Comprehensive Income
for the six months ended 30 September 2025
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Income
Rental and other property income 3 10,535 10,913 22,677
Property operating expenses 4 (1,787) (2,023) (5,818)
Impairment (loss)/ gain on trade receivables 10 (330) 469 430
Other income 3 - 1,056 1,082
Net rental and other income 8,418 10,415 18,371
Other operating expenses 5 (1,463) (1,511) (2,785)
Operating profit before fair value changes and gains on disposals 6,955 8,904 15,586
Change in fair value of investment properties 9 (1,465) 7,031 6,861
Realised (loss) / gains on disposal of investment properties 9 (21) 1,482 3,230
Operating profit 5,469 17,417 25,677
Finance Income 207 194 624
Finance expense (962) (973) (1,931)
Profit before tax 4,714 16,638 24,370
Taxation 6 - (313) (26)
Profit after tax 4,714 16,325 24,344
Other comprehensive income - -
Total comprehensive profit for the period 4,714 16,325 24,344
Earnings per share (pence) (basic and diluted) 7 2.98 10.30 15.37
The notes below form an integral part of these condensed financial statements.
Condensed Statement of Changes in Equity
for the six months ended 30 September 2025
Total capital
Capital and reserves
Share reserve and attributable to
Share premium retained Treasury Shares owners of
For the period 1 April 2025 to capital account earnings £'000 the Company
30 September 2025 (unaudited) Notes £'000 £'000 £'000* £'000
Balance as at 1 April 2025 1,587 56,578 116,543 (265) 174,443
Total comprehensive income - - 4,714 - 4,714
Dividends paid 8 - - (6,337) - (6,337)
Balance as at 30 September 2025 1,587 56,578 114,920 (265) 172,820
For the period 1 April 2024 to
30 September 2024 (unaudited) Notes
Balance at 1 April 2024 1,587 56,578 104,852 (265) 162,752
Total comprehensive income - - 16,325 - 16,325
Other distribution - - 21 - 21
Dividends paid 8 - - (6,337) - (6,337)
Balance as at 30 September 2024 1,587 56,578 114,861 (265) 172,761
Total capital
Capital and reserves
Share reserve and attributable to
Share premium retained Treasury owners of
For the year ended 31 March 2025 (audited) capital account earnings* Shares the Company
Notes £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2024 1,587 56,578 104,852 (265) 162,752
Total comprehensive income - - 24,344 - 24,344
Other distribution - - 21 - 21
Dividends paid 8 - - (12,674) - (12,674)
Balance as at 31 March 2025 1,587 56,578 116,543 (265) 174,443
(* The capital reserve has arisen from the cancellation of part of the
Company's share premium account and is a distributable reserve.)
( )
The notes below form an integral part of these condensed financial statements.
Condensed Statement of Financial Position
as at 30 September 2025
As at As at
30 September 2025 30 September 2024 As at
(unaudited) (unaudited) 31 March 2025
£'000 £'000 (audited)
Notes £'000
Assets
Non-Current Assets
Investment property 9 211,724 186,638 200,429
Receivables and prepayments 10 3,738 3,991 3,956
215,462 190,629 204,385
Current Assets
Investment property held for sale 9 469 24,793 -
Receivables and prepayments 10 11,506 11,387 9,281
Cash and cash equivalents 13,203 14,471 25,993
Other financial assets held at fair value - - 1,790
25,178 50,651 37,064
Total assets 240,640 241,280 241,449
Non-Current Liabilities
Interest bearing loans and borrowings 11 (59,828) (59,719) (59,773)
Lease obligations 13 (174) (174) (174)
(60,002) (59,893) (59,947)
Current Liabilities
Payables and accrued expenses 12 (7,805) (8,613) (7,046)
Lease obligations 13 (13) (13) (13)
(7,818) (8,626) (7,059)
Total Liabilities (67,820) (68,519) (67,006)
Net Assets 172,820 172,761 174,443
Equity
Share capital 1,587 1,587 1,587
Treasury shares (265) (265) (265)
Share premium account 56,578 56,578 56,578
Capital reserve and retained earnings 114,920 114,861 116,543
Total capital and reserves attributable to equity holders of the Company 172,820 172,761 174,443
Net Asset Value per share (pence) 7 109.09 109.05 110.11
EPRA Net Tangible Assets per share (pence) 7 109.09 109.05 110.11
The notes below form an integral part of these condensed financial statements.
Condensed Statement of Cash Flows
for the six months ended 30 September 2025
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 2024 31 March
2025 (unaudited) 2025
(unaudited) £'000 (audited)
£'000 £'000
Cash flows from operating activities
Profit before tax 4,714 16,638 24,370
Adjustment for:
Finance income (207) (194) (624)
Finance costs 962 973 1,931
Loss/(gain) from change in fair value of investment property 1,465 (7,031) (6,861)
Realised loss/ (gains) on disposal of investment property 21 (1,482) (3,230)
Increase in other receivables and prepayments (2,272) (1,504) (3,162)
Decrease/ (increase) in restricted cash 1,790 - (1,790)
Increase/ (decrease) in other payables and 1,012 (1,432) (1,988)
accrued expenses
Net cash flow generated from operating activities 7,485 5,968 8,646
Cash flows from investing activities
Purchase of and additions to investment property (12,965) (2,024) (13,335)
Disposal of investment property (21) 6,250 33,941
Finance income 207 194 624
Net cash (used in) / generated from investing activities (12,779) 4,420 21,230
Cash flows from financing activities
Withholding tax paid on distributions - - (782)
Finance costs (893) (964) (1,807)
Dividends paid (6,603) (6,350) (12,691)
Net cash flow used in financing activities (7,496) (7,314) (15,280)
Net (decrease)/ increase in cash and cash equivalents
(12,790) 3,074 14,596
Cash and cash equivalents at start of the period/year
25,993 11,397 11,397
Cash and cash equivalents at end of the period/year
13,203 14,471 25,993
The notes below form an integral part of these condensed financial statements.
Notes to the Condensed Financial Statements
for the six months ended 30 September 2025
1. Corporate information
AEW UK REIT plc (the 'Company') is a closed ended Real Estate Investment Trust
('REIT') incorporated on 1 April 2015 and domiciled in the UK.
2. Accounting policies
2.1 Basis of preparation
These interim condensed unaudited financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the UK, and
should be read in conjunction with the Company's last financial statements for
the year ended 31 March 2025. These condensed unaudited financial statements
do not include all information required for a complete set of financial
statements proposed in accordance with IFRS as adopted by the UK ('IFRS').
However, selected explanatory notes have been included to explain events and
transactions that are significant in understanding changes in the Company's
financial position and performance since the last financial statements.
The financial information contained in this Interim Report and Financial
Statements for the six months
ended 30 September 2025 and the comparative information for the year ended 31
March 2025 does not constitute statutory accounts as defined in sections
435(1) and (2) of the Companies Act 2006. Statutory accounts for the year
ended 31 March 2025 have been delivered to the Registrar of Companies. The
Auditor reported on those accounts. Its report was unqualified and did not
contain a statement under section 498(2) or (3) of the Companies Act 2006.
The comparative figures disclosed in the condensed unaudited financial
statements and related notes have been presented for both the six month period
ended 30 September 2024 and year ended 31 March 2025 and as at 30 September
2024 and 31 March 2025.
These condensed unaudited financial statements have been prepared under the
historical-cost convention, except for investment property that have been
measured at fair value. The condensed unaudited financial statements are
presented in Sterling and all values are rounded to the nearest thousand
pounds (£'000), except when otherwise indicated.
The Company is exempt by virtue of section 402 of the Companies Act 2006 from
the requirement to prepare group financial statements. These financial
statements present information solely about the Company as an individual
undertaking.
2.2 Significant accounting judgements and estimates
The preparation of financial statements in accordance with IAS 34 requires the
Directors of the Company to make judgements, estimates and assumptions that
affect the reported amounts recognised in the financial statements. However,
uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or
liability in the future.
i) Valuation of investment property
The Company's investment property is held at fair value as determined by the
independent valuer on the basis of fair value in accordance with the
internationally accepted Royal Institution of Chartered Surveyors ('RICS')
Appraisal and Valuation Standards. Further detail in respect to the fair
valuations of investment property is included within Note 9.
2.3 Segmental information
The Board of Directors retains overall control of the Company but the
Investment Manager (AEW UK
Investment Management LLP) has certain authorities and fulfils the function of
allocating resource to,
and assessing the performance of the Company's operating segments and is
therefore considered to be the Chief Operating Decision Maker ('CODM'). In
accordance with IFRS 8, the Company considers each of its properties to be an
individual operating segment. The CODM allocates resources, and reviews the
performance of, the Company's portfolio on a property-by-property basis and
discrete financial information is available for each individual property.
These operating segments have similar economic characteristics and, as such,
are aggregated into one
reporting segment, being investment in property and property-related
investments in the UK.
2.4 Going concern
The Directors assessed the Company's ability to continue as a going concern,
which takes into consideration current economic uncertainty, as well as the
Company's cashflows, financial position, liquidity and borrowing facilities.
As at 30 September 2025, the Company had a cash balance of £13.20 million and
had sufficient headroom against its borrowing covenants. The Company's loan is
held with AgFe and is a £60.00 million facility with a five-year term. This
is priced as a fixed rate loan with a total interest cost of 2.959% and
associated 10% projected debt yield and 60% LTV covenants. The Company
reported an LTV of 28.05% at period end. This provides room for a £113.93
million (circa 53%) fall in portfolio valuation (for those assets within the
debt pool) before breaching the 60% hard LTV covenant. Moreover, based on the
£60.00 million of debt drawn as at period end, the Company had a projected
debt yield of 31.25%, comfortably in excess of the 10% covenant.
The Company benefits from a secure, diversified income stream from a tenancy
profile which is not overly reliant on any one tenant or sector, which reduces
risk. The Directors also noted that:
• The Company's rent collection has been strong, with over 95% of
contracted rent either having been collected, or payment plans agreed, for the
September 2025 quarter.
• Based on the contracted rent as at 30 September 2025, a reduction
of 68% in net rental income could be accommodated before breaching the debt
yield covenant in the Company's re-financed debt arrangements.
• Based on the property valuation at 30 September 2025, the Company
had room for a £113.93 million fall in portfolio valuation before breaching
the maximum LTV hard covenant in the Company's re-financed debt arrangements.
• The Company's cash flow can also be significantly managed through
the adjustment of dividend payments, to the extent that this does not breach
the REIT regime requirements for distributions.
Taking this into consideration, the Directors have reviewed a number of
scenarios over 12 months from the date of approval of these financial
statements, including a worst-case plausible downside scenario which makes the
following assumptions:
• a reduction in net rental income of 30%;
• no new lettings or renewals, other than those where terms have
already been agreed;
• a 20% fall in property valuations; and
• no new acquisitions or disposals.
In the above scenario, the Company is forecast to generate a positive cash
flow before dividend payments, however it would generate a cash flow much
lower than its target dividend of 8 pps per annum. Moreover, the Company is
forecast to pass the debt yield covenant during the 12-month period with a
minimum projected yield of 20%, compared with the limit of 10%, assuming that
no repayments of the facility were to be made.
Given the Company's substantial headroom against its borrowing covenants, the
Directors believe that the Company is well placed to manage its financing and
business risks. The Directors are confident that the Company will have
sufficient funds to meet its liabilities as they fall due for at least 12
months from the date of approval of the financial statements and therefore the
financial statements have been prepared on a going concern basis.
2.5 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are consistent with those applied within the Company's
Annual Report and Financial Statements for the year ended 31 March 2025.
3. Rental and other income
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Rental income 9,530 9,565 18,328
Insurance income 589 611 1,194
Service charge income 399 661 2,436
Other property income 17 8 13
Turnover rents - - 526
Dilapidation income received - 68 180
Total rental and other property income 10,535 10,913 22,677
Other income - 1,056 1,082
Total rental and other income 10,535 11,969 23,759
4. Property operating expenses
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Other property expenses 817 249 1,191
Recoverable insurance expense 589 611 1,194
Recoverable service charge expense 399 661 2,436
Non-recoverable service change expense (18) 502 997
Total property operating expenses 1,787 2,023 5,818
5. Other operating expenses
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Investment management fee 732 729 1,379
Operating costs 525 542 973
Audit remuneration 118 120 237
Directors' remuneration 88 84 160
ISRE 2410 review (interim review fee) - 36 36
Total other operating expenses 1,463 1,511 2,785
6. Taxation
Period from Period from Year
1 April 2025 to 1 April 2024 to ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Tax charge comprises:
Corporation tax payable - 313 68
Prior year over accrual - - (42)
Total tax charge - 313 26
Analysis of charge in the period
Profit before tax 4,714 16,638 24,370
Theoretical tax at UK corporation tax standard rate of 25% (30 September 2024: 4,159
25%; 31 March 2025: 25%)
1,179 6,093
Adjusted for:
Exempt REIT income (1,550) (2,031) (3,570)
Non taxable investment losses/ (gains) 371 (2,128) (2,523)
Corporation tax payable - 313 68
Prior year over accrual - - (42)
Total - 313 26
7. Earnings per share and NAV per share
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
Earnings per share:
Total comprehensive income (£'000) 4,714 16,325 24,344
Weighted average number of shares 158,424,746 158,424,746 158,424,746
Earnings Per Share (basic and diluted) (pence) 2.98 10.30 15.37
EPRA earnings per share: 4,714 16,325 24,344
Total comprehensive income (£'000)
Adjustment to total comprehensive income:
Change in fair value of investment property (£'000) 1,465 (7,031) (6,861)
Realised gain on disposal of investment property (£'000) 21 (1,482) (3,230)
Other income - (1,056) -
Corporation tax charge on other income - 264 -
Total EPRA Earnings (£'000) 6,200 7,020 14,253
EPRA earnings per share (basic and diluted) (pence) 3.91 4.43 9.00
NAV per share:
Net assets (£'000) 172,820 172,761 174,443
Ordinary Shares 158,424,746 158,424,746 158,424,746
NAV per share (pence) 109.09 109.05 110.11
Earnings per share amounts are calculated by dividing profit for the period
attributable to ordinary equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the period.
EPRA EPRA EPRA
NTA NRV NDV
As at 30 September 2025 £'000 £'000 £'000
IFRS NAV attributable to shareholders 172,820 172,820 172,820
Real estate transfer tax(1) - 14,259 -
Adjustment for the fair value of bank borrowings (2,152)
- -
At 30 September 2025 172,820 187,079 170,668
Number of Ordinary Shares 158,424,746 158,424,746 158,424,746
NAV per share 109.09 118.09 107.73
EPRA EPRA EPRA
NTA NRV NDV
As at 30 September 2024 £'000 £'000 £'000
IFRS NAV attributable to shareholders 172,761 172,761 172,761
Real estate transfer tax(1) 14,232 -
-
Adjustment for the fair value of bank borrowings - - (3,625)
At 30 September 2024 172,761 186,993 169,136
Number of Ordinary Shares 158,424,746 158,424,746 158,424,746
NAV per share 109.05p 118.03p 106.76p
EPRA EPRA EPRA
NTA NRV NDV
As at 31 March 2025 £'000 £'000 £'000
IFRS NAV attributable to shareholders 174,443 174,443 174,443
Real estate transfer tax and other purchasers' costs(1) 13,500
- -
Adjustment for the fair value of bank borrowings - - (2,927)
At 30 September 2025 174,443 187,943 171,516
Number of Ordinary Shares 158,424,746 158,424,746 158,424,746
NAV Per share 110.11 118.63 108.26
Earnings per share amounts are calculated by dividing profit for the period
attributable to ordinary equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the period.
( )
(1) EPRA NTA and EPRA NDV are calculated using property values in line with
IFRS, where values are net of Real Estate Transfer Tax ('RETT') and other
purchasers' costs. RETT and other purchasers' costs are added back when
calculating EPRA NRV and have been estimated at 6.6% of the net valuation
provided by CBRE/ Knight Frank.
8. Dividends paid
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
Dividends paid during the period £'000 £'000 £'000
Represents two/two/four interim dividends of 2.00 pps each 6,337
6,337 12,674
Period from Period from
1 April 2025 to 1 April 2024 to Year ended
30 September 30 September 31 March
2025 2024 2025
Dividends relating to the period £'000 £'000 £'000
Represents two/two/four interim dividends of 2.00 pps each 6,337
6,337 12,674
Dividends paid relate to Ordinary Shares. The Statement of Cash Flows for
dividends paid includes £266,000 withholding tax paid which was payable at 31
March 2025 and excludes £nil withholding tax which is payable at 30 September
2025.
9. Investments
9.a) Investment property
Period from 1 April 2025 to
30 September 2025 (unaudited)
Investment Investment Total Period from
properties properties £'000 1 April 2024 Year ended
freehold leasehold to 30 September 31 March
£'000 £'000 2024 2025
(unaudited) (audited)
Total Total
£'000 £'000
UK Investment property
As at beginning of period 168,495 36,050 204,545 210,690 210,690
Purchases in the period 12,038 - 12,038 - 10,533
Capital expenditure in the period 543 384 927
2,024 2,802
Disposals in the period - - - (4,750) (26,893)
Revaluation of investment property 349 (1,809) (1,460)
7,671 7,413
Valuation provided by CBRE
181,425 34,625 216,050 215,635 204,545
Adjustment to carrying value for lease incentive debtor
(4,044) (4,391) (4,303)
Adjustment for lease obligations* 187 187 187
Total Investment property
212,193 211,431 200,429
Classified as:
Investment property held for sale(**) 469 24,793 -
Investment property 211,724 186,638 200,429
212,193 211,431 200,429
Change in fair value of investment property
Change in fair value before adjustments for lease incentives (1,460) 7,671 7,413
Adjustment for movement in the period:
in value of lease incentive debtor (5) (640) (552)
(1,465) 7,031 6,861
Gains realised on disposal of investment property
Net proceeds from disposals of investment property during the period***
(21) 6,232 30,123
Fair value at beginning of period - (4,750) (26,893)
(Losses) / gains realised on disposal of investment property
(21) 1,482 3,230
* Adjustment in respect of minimum payment under head leases separately
included as a liability within the Statement of Financial Position.
** A vacant office block at 114-120 Bancroft, Hitchin has been classified as
held for sale as at 30 September 2025.
*** Net proceeds include deductions for topped up rents and rent free periods
of £nil (30 September 2024: £19,000, 31 March 2025: £1,642,000).
Valuation of investment property
Valuation of investment property is performed by CBRE, an accredited external
valuer with recognised and relevant professional qualifications and recent
experience of the location and category of the investment property being
valued.
The valuation of the Company's investment property at fair value is determined
by the external valuer on the basis of market value in accordance with the
internationally accepted RICS Valuation - Professional Standards
(incorporating the International Valuation Standards).
The determination of the fair value is based upon the income capitalisation
approach. This approach involves applying capitalisation yields to current and
future rental streams net of income voids arising from vacancies or rent-free
periods and associated running costs. These capitalisation yields and
estimated rental values are based on comparable property and leasing
transactions in the market using the valuer's professional judgement and
market observation. Other factors taken into account in the valuations include
the tenure of the property, tenancy details, capital values of fixtures and
fittings, environmental matter and the overall repair and condition of the
property.
9.b) Fair value measurement hierarchy
The following table provides the fair value measurement hierarchy for
non-current assets:
Quoted prices
in active Significant Significant
markets observable unobservable
(Level 1) inputs inputs
Assets measured at fair value £'000 (Level 2) (Level 3) Total
£'000 £'000 £'000
30 September 2025
Investment property - - 212,193 212,193
30 September 2024
Investment property - - 211,431 211,431
31 March 2025
Investment property - - 200,429 200,429
Explanation of the fair value hierarchy:
Level 1 - Quoted prices for an identical instrument in active markets;
Level 2 - Prices of recent transactions for identical instruments and
valuation techniques using observable market data; and
Level 3 - Valuation techniques using non-observable data.
There have been no transfers between Level 1 and Level 2 during either period,
nor have there been any transfers in or out of Level 3.
Sensitivity analysis to significant changes in unobservable inputs within
Level 3 of the hierarchy
The significant unobservable inputs used in the fair value measurement
categorised within Level 3 of the fair value hierarchy of the entity's
portfolios of investment properties are:
1) ERV
2) Equivalent yield
Increases/(decreases) in the ERV (per sq ft per annum) in isolation would
result in a higher/(lower) fair value measurement. Increases/(decreases) in
the discount rate/ yield in isolation would result in a lower/(higher) fair
value measurement.
The significant unobservable inputs used in the fair value measurement,
categorised within Level 3 of the fair value hierarchy of the portfolio of
investment property are:
Significant unobservable inputs
Weighted
Average ERV
(per sq ft per Weighted
Fair Value ERV range annum) Average
£'000 (per sq ft per Equivalent Equivalent
Sector annum) Yield range Yield
As at 30 September 2025
Industrial 80,415 £3.74 - £10.00 £5.24 6.80% - 10.13% 8.16%
Retail 73,600 £0.00 - £21.38 £13.39 7.00% - 11.64% 8.30%
Office 23,325 £1.16 - £15.38 £27.97 9.01% - 9.50% 9.27%
Alternatives 38,710 £0.16 - £42.48 £17.79 8.55% - 13.73% 9.32%
Portfolio* 216,050 £0.00 - £42.48 £12.72 6.80% - 13.73% 8.99%
As at 30 September 2024
Industrial 75,825 £0.00 - £41.00 £4.58 6.82% - 10.93% 7.61%
Retail 85,490 £0.00 - £85.00 £11.48 6.85% - 11.12% 8.31%
Office 25,250 £8.50 - £39.98 £21.92 8.61% - 8.98% 8.80%
Alternatives 29,070 £0.00 - £41.04 £10.84 7.68% - 9.66% 8.52%
Portfolio** 215,635 £0.00 - £85.00 £7.63 6.82% - 11.12% 8.37%
As at 31 March 2025
Industrial 78,600 £0.50 - £10.00 £4.60 6.83% -10.94% 8.14%
Retail 72,450 £4.00 - £94.00 £11.74 7.09% - 10.88% 8.61%
Office 24,600 £8.50 - £40.00 £21.93 8.60% - 8.99% 8.81%
Alternatives 28,895 £8.50 - £42.43 £10.86 7.54% - 9.58% 8.43%
Portfolio** 204,545 £0.50 - £94.00 £7.57 6.83% - 10.94% 8.42%
* Fair value per CBRE.
** Fair value per Knight Frank LLP.
Where possible, sensitivity of the fair values of Level 3 assets are tested to
changes in unobservable inputs to reasonable alternatives.
Gains and losses recorded in profit or loss for recurring fair value
measurements categorised within Level 3 of the fair value hierarchy are
attributable to changes in unrealised gains or losses relating to investment
property and investments held at the end of the reporting period.
With regards to both investment property and investments, gains and losses for
recurring fair value measurements categorised within Level 3 of the fair value
hierarchy, prior to adjustment for rent free debtor and rent guarantee debtor,
where applicable, are recorded in profit and loss.
The tables below set out a sensitivity analysis for each of the key sources of
estimation uncertainty with the resulting increase/(decrease) in the fair
value of investment property.
Change in ERV Change in equivalent yield
£'000 £'000 £'000 £'000
Sensitivity Analysis +5% -5% +5% -5%
30 September 2025 219,233 201,436 199,266 222,483
30 September 2024 224,460 206,878 204,730 227,675
31 March 2025 213,044 196,182 194,227 215,985
Change in ERV Change in equivalent yield
£'000 £'000 £'000 £'000
Sensitivity Analysis +10% -10% +10% -10%
30 September 2025 228,275 192,608 189,249 236,035
30 September 2024 233,300 198,157 194,828 241,066
31 March 2025 221,537 187,827 184,841 228,686
Change in ERV Change in equivalent yield
£'000 £'000 £'000 £'000
Sensitivity Analysis +15% -15% +15% -15%
30 September 2025 237,363 183,838 180,109 251,188
30 September 2024 242,253 189,504 185,791 256,036
31 March 2025 230,146 179,541 176,276 242,887
10. Receivables and prepayments
- Non Current 30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Receivables
Lease incentive debtor 3,738 3,991 3,956
Total 3,738 3,991 3,956
- Current 30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Receivables
Rent agent float account 7,247 4,624 5,635
Rent receivable 1,295 1,310 1,287
Recoverable service charge receivable 684 1,299 1,156
Other receivables 487 2,052 251
Recoverable insurance receivable 237 684 166
Completion proceeds due on sale of property
- - 350
Allowance for expected credit losses (512) (445) (459)
9,438 9,524 8,386
Lease incentive debtor* 306 400 347
9,744 9,924 8,733
Prepayments
Property related prepayments 1,637 1,388 495
Other prepayments 125 75 53
1,762 1,463 548
Total 11,506 11,387 9,281
The aged debtor analysis of receivables is as follows:
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Less than three months due 7,683 8,964 6,610
Between three and six months due 1,755 560 1,776
Total 9,438 9,524 8,386
The Company applies the IFRS 9 simplified approach to measuring expected
credit losses using a lifetime expected credit loss provision for trade
receivables. To measure expected credit losses on a collective basis, trade
receivables are assessed on an individual tenant-by-tenant basis. The risk of
credit loss applied to each tenant is assessed based on information including,
but not limited to: external credit ratings; financial statements; press
information; previous experience of losses or late payment; discussions with
the property manager and the tenant.
The expected credit loss provision as at 30 September 2025 was £512,000 (30
September 2024: £445,000, 31 March 2025: £459,000). No reasonably possible
changes in the assumptions underpinning the expected credit loss provision
would give rise to a material expected credit loss.
The movement in the allowance for impairment in respect of trade receivables
during the period was as follows:
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Opening provision for impairment of trade receivables
459 2,177 2,177
Increase/(decrease) during the period/year 348 (350) (338)
Unused amounts reversed (18) (119) (92)
Movement in provision for impairment during the period/year
330 (469) (430)
Prior year receivable written off during the period/year as uncollectible
(277) (1,263) (1,288)
53 (1,732) (1,718)
At the end of the period/year 512 445 459
11. Interest bearing loans and borrowings
Bank borrowings drawn
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
At the beginning of the period 60,000 60,000 60,000
Interest bearing loans and borrowings 60,000 60,000 60,000
Unamortised loan arrangement fees (172) (281) (227)
At the end of the period 59,828 59,719 59,773
Repayable between two and five years 60,000 60,000 60,000
Bank borrowings available but undrawn in the period - - -
Total facility available 60,000 60,000 60,000
The Company has a £60.00 million (31 March 2024: £60.00 million) credit
facility with AgFe, a leading independent asset manager specialising in
debt-based investments. As of 30 September 2025, the Company had utilised
£60.00 million (31 March 2024: £60.00 million). The loan is a fixed rate
loan with a total interest cost of 2.959% and has a five year term, maturing
in May 2027.
The Company has a target gearing of 35% Loan to NAV. As at 30 September 2025,
the Company's gearing was 34.72% Loan to NAV (31 March 2025: 34.40%).
At 30 September 2025 the fair value of the loan was £57,848,000 (30 September
2024: £56,375,000, 31 March 2025: £57,070,000).
12. Payables and accrued expenses
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Deferred income 5,135 4,887 3,991
Other creditors 1,562 2,221 1,423
Accruals 897 1,389 1,257
Recoverable service charge payable 178 85 266
Recoverable insurance payable 33 31 109
Total 7,805 8,613 7,046
13. Lease obligation as lessee
Leases as lessee are capitalised at the lease's commencement at the present
value of the minimum lease payments. The present value of the corresponding
rental obligations are included as liabilities.
The following table analyses the present value of the minimum lease payments
under non-cancellable
finance leases:
30 September 30 September 31 March
2025 2024 2025
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Current 13 13 13
Non Current 174 174 174
Total 187 187 187
14. Issued share capital
There was no change to the issued share capital during the period. The number
of ordinary shares allotted, called up and fully paid remained 158,774,746 of
£0.01 each, of which 350,000 ordinary shares were held in treasury.
On 1 October 2025, the Company sold from treasury 150,000 of its ordinary
shares for cash at a price of 109.41 pence per ordinary share. As at 1 October
2025, there were 158,574,746 ordinary shares in issue and 200,000 ordinary
shares held in treasury.
15. Transactions with related parties
As defined by IAS 24 Related Party Disclosures, parties are considered to be
related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial or operational
decisions.
For the six months ended 30 September 2025, the Directors of the Company are
considered to be the key management personnel. Directors' remuneration is
disclosed in note 5.
The Company is party to an Investment Management Agreement with the Investment
Manager, pursuant to which the Company has appointed the Investment Manager to
provide investment management services relating to the respective assets on a
day-to-day basis in accordance with their respective investment objectives and
policies, subject to the overall supervision and direction of the Board of
Directors.
Under the Investment Management Agreement, the Investment Manager receives a
quarterly management fee which is calculated and accrued monthly at a rate
equivalent to 0.9% per annum of NAV (excluding uninvested proceeds from
fundraising).
During the period from 1 April 2025 to 30 September 2025, the Company incurred
£732,000 (six months ended 30 September 2024: £729,000) of investment
management fees and expenses of which £368,437 was outstanding at 30
September 2025 (31 March 2025: £335,510).
16. Events after reporting date
Dividend
On 23 October 2025, the Board declared its second interim dividend of 2.00 pps
in respect of the period from 1 July 2025 to 30 September 2025. The dividend
payment will be made on 28 November 2025 to shareholders on the register as at
31 October 2025. The ex-dividend date was 30 October 2025.
Property Sale
On 14 October 2025, the Company completed the sale of a 5,225 sq. ft. vacant
office block, located to the rear of 114-120 Bancroft, being the main retail
parade acquired by the Company in March 2025 for £10 million (£213 psf) /
8.31% NIY.
Issue of shares from treasury
On 1 October 2025, the Company sold from treasury 150,000 of its ordinary
shares for cash at a price of 109.41 pence per ordinary share.
FURTHER INFORMATION
The financial information contained in these interim results does not
constitute full statutory accounts as defined in section 435 of the Companies
Act 2006. The half-yearly report for the period ended 30 September 2025 has
been neither audited nor reviewed by the Company's Auditor. Statutory accounts
for the year ended 31 March 2025 have been delivered to the Registrar of
Companies. The Auditor reported on those accounts. Its report was unqualified
and did not contain a statement under section 498(2) or (3) of the Companies
Act 2006.
The unaudited half yearly results for the period ended 30 September 2025 will
also be available today on www.aewukreit.com.
It will also be submitted shortly to the Financial Conduct Authority's
National Storage Mechanism and will be available for inspection
at data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) in accordance with
DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
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.
LEI: 21380073LDXHV2LP5K50
END
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