AEW UK REIT PLC on Wednesday said its annual net asset value had fallen alongside a swing to a loss in a ‘tumultuous’ macro-economic and political climate, but was confident it can build on its positive track record once market sentiment has improved.
AEW UK REIT is a London-based real estate investment trust focused on UK regional commercial property.
The company said its NAV at March 31 was 105.48 pence per share, down from 120.63p on the same date last year. Chair Mark Burton said NAV had grown again in the first quarter of the current financial year, but did not provide figures.
The stock was down 2.2% at 100.20p per share on Wednesday afternoon in London.
Over the year ended March 31 AEW UK REIT’s NAV total return was negative 5.8%, which Burton attributed to a decline in UK commercial property value amid ‘a tumultuous period on the UK political scene and for the wider economy’, namely Liz Truss’ brief tenure as UK Prime Minister. Burton said the negative return was ‘disappointing’ but also was ‘testament to the defensive nature of the company’s strategy’.
The company declared a total annual dividend of 8.00p per share, unchanged from the previous year.
AEW UK REIT swung to a pretax loss of £11.3 million from a £46.7 million profit the year before. It said this included a £30.0 million loss arising from changes to the fair values of investment properties, compared with a £32.3 million gain the year before.
Earnings per share also plummeted to negative 7.15p from 29.47p. Cash at March 31 totalled £14.3 million, up from £6.8 million at the same time in 2022. Meanwhile its property portfolio at March 31 was valued at £213.8 million, down from £240.2 million, both times across 36 properties.
AEW UK REIT said its shares finished the year trading at a 12.7% discount, but that this was significantly better than the average discount of 28.1% seen across the UK diversified REIT peer group.
‘The investment manager has continued to actively manage AEWU’s portfolio over the past year, outperforming the benchmark in all sectors and trading at the narrowest discount of all UK diversified REITs,’ commented Burton. ‘The manager’s successful asset management initiatives and timely disposal of five properties during the period maximised the value of key assets and has crystallised capital growth, with the sale proceeds being reinvested into more attractive, higher yielding properties.’
He added: ‘We are pleased that NAV per share has grown in the latest quarter and are confident that the Company’s track record of outperformance, robust positioning and the reliable payment of an eight pence annual dividend for the past seven consecutive years will stand it in good stead once market sentiment recovers.’
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