Elite UK REIT (MXNU) H1 2024 earnings summary

Executive summary

• Portfolio consists of 150 UK commercial buildings, with 143 occupied and nearly 90% serving as Jobcentre Plus; over 99% of revenue from UK government leases.

• Portfolio value rose 0.6% to £415 million as of 30 June 2024, driven by positive leasing and asset management.

• Completed a £28 million preferential offering in January 2024, fully subscribed and used to repay loans, enlarging the equity base.

• All debt due 2024–2026 refinanced as sustainability-linked loans, with no refinancing required until 2027.

• Revised investment strategy in May 2024 to broaden asset scope to include the Living Sector and changed name to Elite UK REIT.

Financial highlights

• 1H 2024 revenue was £18.6 million, down 0.6% year-over-year; net property income fell 4.7% to £18.7 million.

• Distributable income for 1H 2024 was £9.2 million; DPU at 1.40 pence, down 19.5% year-over-year (adjusted DPU down 2.1%).

• Net asset value per unit at £0.41 as of 30 June 2024; price-to-book ratio 0.6x.

• Profit after tax rose 20.6% year-over-year to £10.8 million.

• Aggregate leverage at 43.4% per regulatory calculation.

Outlook and guidance

• No refinancing risk until 2027 following recent loan facility agreements.

• Portfolio to broaden into defensive sectors such as student housing and Build-to-Rent residential.

• Manager expects continued stable income, supported by government-backed leases and advance rent collection.

• Labour government’s policy agenda and homebuilding focus expected to support demand for social infrastructure and living sector assets.

• Management targets sub-40% long-term gearing and continued proactive asset management.