REG - AEW UK LongLeaseREIT - Half-year Report <Origin Href="QuoteRef">AEWL.L</Origin> - Part 3
21/02/2018 07:05
- Part 3: For the preceding part double click ID:nRSU4116Fb
of the Group's financial
liabilities based on contractual undiscounted payments.
31 December 2017 On demand£'000 <3 months£'000 3-12 months£'000 1-5 years£'000 >5 years £'000 Total £'000
Payables and accrued expenses - 1,247 - - - 1,247
Total - 1,247 - - - 1,247
17.5 Fair value of financial instruments
There is no material difference between the carrying amount and fair value of
the Group's financial instruments.
18. 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.
Subsidiaries
AEW UK Long Lease REIT plc as at 31 December 2017 owns 100% controlling stake
in AEW UK Long Lease REIT 2017 Limited and AEW UK Long Lease REIT Holdco
Limited respectively.
Directors
For the period 18 April 2017 to 31 December 2017, the Directors of the Group
are considered to be the key management personnel. Directors' remuneration is
disclosed in note 4.
Investment Manager
The Group is party to an Investment Management Agreement with the Investment
Manager, pursuant to which the Group 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
management fee which is calculated and accrued monthly at a rate equivalent to
0.75% per annum of NAV (excluding un-invested fund raising proceeds) and paid
quarterly. During the period 18 April 2017 to 31 December 2017, the Group
incurred £105,084 in respect of investment management fees and expenses of
which £105,084 was outstanding at 31 December 2017.
19. Events after reporting date
Dividend
On 24 January 2018, the Board declared its second interim dividend of 0.50
pence per share in respect of the period from 1 October 2017 to 31 December
2017. This is to be paid on 28 February 2018 to shareholders on the register
as at 2 February 2018. The ex-dividend date will be 1 February 2018.
Credit facility
The Group entered into a £30 million term loan facility with Canada Life
Investments on 5 January 2018.
The term facility is up to 35% loan to property value, provided on a portfolio
basis. The loan is fixed to October 2025 at a total rate of 3.05% per annum.
On 19 January 2018, the Group drew down on its £30m loan facility and used
£18.1 million (net of acquisition costs) on three property acquisitions.
Property acquisitions
The Group made three further acquisitions on 23 January 2018 for a combined
total of £18.1 million (net of acquisition costs).
The first two acquisitions are a set of two industrial units in Dudley and
Sheffield, bought for £10.1 million. Both properties are let to Meridian Metal
Trading Ltd and subject to five yearly rent reviews linked to RPI, with annual
uplifts between 1% and 4%. Together, the properties have a WAULT of 15 years
to expiry and reflects a net initial yield of 6.0%.
The Group also acquired Mercure City Hotel on Ingram Street, Glasgow for £8.0
million, The asset is let to Jupiter Hotels Limited, with annual rent reviews
linked to RPI. This property has a WAULT of 18.5 years and reflects a net
initial yield of 6.5%.
EPRA UNAUDITED PERFORMANCE MEASURES
Detailed below is a summary table showing the EPRA performance measures of the
Company
Measure and definition Purpose Performance
1. EPRA Earnings
Earnings from operational activities. A key measure of a company's underlying operating results and an indication of the extent to which current dividend payments are supported by earnings. £0.25 million/0.38 ppsEPRA earnings for the period 18 April 2017 to 31 December 2017
2. EPRA NAV
Net asset value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business. Makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment £74.28 million/92.27 ppsEPRA NAV as at 31 December 2017
strategy.
3. EPRA NNNAV
EPRA NAV adjusted to include the fair values of:(i) financial instruments;(ii) debt; and(iii) deferred taxes. Makes adjustments to EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company. £74.28 million/92.27 ppsEPRA NNNAV as at31 December 2017
4.1 EPRA Net Initial Yield ('NIY')
Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. 5.45%EPRA NIYas at 31 December 2017
purchasers' costs.
4.2 EPRA 'Topped-Up' NIY
This measure incorporates anadjustment to the EPRA NIY inrespect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents). A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. 6.73%EPRA 'Topped-Up' NIYas at 31 December 2017
5. EPRA Vacancy
Estimated Market Rental Value ('ERV') of vacant space divided by ERV of the whole portfolio. A "pure" (%) measure of investment property space that is vacant, based on ERV. 0%EPRA vacancyas at 31 December 2017
6. EPRA Cost Ratio
Administrative and operating costs (including and excluding costs of direct vacancy) divided by gross rental income. A key measure to enable meaningful measurement of the changes in a company'soperating costs. 61.90%EPRA Cost Ratio as at31 December 2017
Calculation of EPRA Net Initial Yield and 'topped-up' Net Initial Yield
31 December 2017 £'000
Investment property - wholly-owned 71,419
Allowance for estimated purchasers' costs 4,856
Gross up completed property portfolio valuation 76,275
Annualised cash passing rental income 4,166
Property outgoings (5)
Annualised net rents 4,161
Rent expiration of rent-free periods and fixed uplifts 971
'Topped-up' net annualised rent 5,132
EPRA Net Initial Yield 5.45%
EPRA 'topped-up' Net Initial Yield 6.73%
EPRA Net Initial Yield ('NIY') basis of calculation
EPRA NIY is calculated as the annualised net rent, divided by the gross value
of the completed property portfolio.
The valuation of grossed up completed property portfolio is determined by our
external valuers as at 31 December 2017, plus an allowance for estimated
purchasers' costs. Estimated purchasers' costs are determined by the relevant
stamp duty liability, plus an estimate by our valuers of agent and legal fees
on notional acquisition. The net rent deduction allowed for property outgoings
is based on our valuers' assumptions on future recurring non-recoverable
revenue expenditure.
In calculating the EPRA 'topped-up' NIY, the annualised net rent is increased
by the total contracted rent from expiry of rent-free periods and future
contracted rental uplifts.
Calculation of EPRA Vacancy Rate
31 December2017£'000
Annualised potential rental value of vacant premises -
Annualised potential rental value for the completed property portfolio 4,265
EPRA Vacancy Rate 0%
Calculation of EPRA Cost Ratios
31 December2017£'000
Administrative/operating expenses per IFRS income statement 412
EPRA Costs (including and excluding direct vacancy costs) 412
Gross Rental Income 666
EPRA Cost Ratio (including direct vacancy costs) 61.90%
EPRA Cost Ratio (excluding direct vacancy costs) 61.90%
COMPANY INFORMATION
Share Register Enquiries
The register for the Ordinary Shares is maintained by Computershare Investor
Services PLC. In the event of queries regarding your holding, please contact
the Registrar on 0370 889 4069 or email: web.queries@computershare.co.uk.
Changes of name and/or address must be notified in writing to the Registrar,
at the address shown below. You can check your shareholding and find practical
help on transferring shares or updating your details at
www.investorcentre.co.uk.
Share Information
Ordinary £0.01 Shares 80,500,000
SEDOL Number BDVK708
ISIN Number GB00BDVK7088
Ticker/TIDM AEWL
Share Prices
The Company's Ordinary Shares are traded on the Main Market of the London
Stock Exchange.
Annual and Interim Reports
Copies of the Interim Report will be available from the Company's website.
Provisional Financial Calendar
31 December 2018 Half-year end
February 2018 Announcement of interim results
30 June 2018 Year end
September 2018 Announcement of annual results
October 2018 Annual General Meeting
Dividends
The following table summarises the amounts recognised as distributions to
equity shareholders in the period:
£
Interim dividend for the period 18 April 2017 to 30 September 2017 (payment made on 30 November 2017) 402,500
Interim dividend for the period 1 October 2017 to 31 December 2017 (payment to be made on 28 February 2018) 402,500
Total 805,000
DirectorsSteve Smith* (Non-executive Chairman)George Henshilwood* (Non-executive Director)Jim Prower* (Non-executive Director)Alan Sippetts* (Non-executive Director) DepositaryLangham Hall UK Depositary LLP5 Old BaileyLondonEC4M 7BA
Registered Office6th Floor65 Gresham StreetLondonEC2V 7NQ AdministratorLink Alternative Fund Administrators LimitedBeaufort House51 New North RoadExeterEX4 4EP
Investment ManagerAEW UK Investment Management LLP33 Jermyn StreetLondonSW1Y 6DNTel: 020 7016 4880Website: www.aewuk.co.uk Company SecretaryLink Company Matters Limited6th Floor65 Gresham StreetLondonEC2V 7NQ
Property ManagerWorkman LLPAlliance House12 Caxton StreetLondon SW1 0QS RegistrarComputershare Investor Services PLCThe PavilionsBridgwater RoadBristolBS13 8AE
Corporate BrokerFidante Capital1 Tudor StreetLondonEC4Y 0AH AuditorKPMG LLP15 Canada SquareLondonE14 5GL
Legal Adviser to the CompanyGowling WLG (UK) LLP4 More London RiversideLondonSE1 2AU ValuerKnight Frank LLP55 Baker StreetLondonW1U 8AN
* Independent of the Investment Manager.
This information is provided by RNS
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