AEW UK REIT (AEWU) Q1 2025 earnings summary

Executive summary

• NAV increased to GBP 167.79 million (105.91p per share) as at 30 June 2024, up 3.10% from March, with a five-year total property return of 8.9% to March 2024, outperforming the MSCI benchmark by 6.8%.

• Consistent GBP 0.02 per share dividend paid for 35 consecutive quarters since Q1 2016.

• Portfolio valued at GBP 215.8 million, up 2.4% this quarter, driven by retail warehousing and industrial gains.

• EPRA earnings per share rose to 2.26p, up from 1.88p in the previous quarter, with underlying earnings at 1.92p, 96% covered.

• Asset management initiatives and disposals, notably Oak Park, Droitwich, contributed to income and valuation growth.

Financial highlights

• NAV of GBP 167.79 million, up 3.1% since March; 5.04% total NAV return including dividend.

• Portfolio fair value at quarter-end was GBP 215.77 million.

• Share price rose from GBP 0.853 (June 3) to GBP 0.94, with a 19.46% discount to NAV at quarter-end.

• Net initial yield at 8.19%, reversionary yield at 8.65%, and vacancy rate increased to 9.36% due to lease disclaimers.

• Dividend yield above 9%, leading peers by at least 1.5%.

Outlook and guidance

• Expectation of continued asset recycling: selling lower-yielding assets and reinvesting in higher-yielding opportunities.

• Anticipate further sales and acquisitions in the next six months, with focus on mispriced office and leisure sectors.

• Dividend policy remains unchanged, with intention to continue 2.00p quarterly payments, subject to review.

• Management expects further capital and income growth from ongoing asset management and market stabilization post-election.

• Market expected to present more opportunities as transaction volumes pick up post-summer.