AEW UK REIT laments UK economy as net asset value falls (2024)

Alliance News 2 July, 2024 | 1:21PM

(Alliance News) - AEW UK REIT PLC on Tuesday said it saw "signs of some green shots" looking ahead, as it reported a decline in net asset value for its latest financial year.

The real estate investment trust said its net asset value per share edged down 2.6% to 102.73 pence at March 31, when its financial year ended, from 105.48p a year prior.

NAV total return was positive 4.98% for the just-ended financial year, swung from negative 5.93% a year prior.

The company's EPRA net initial yield stood at 8.02% as at March 31, up from 7.65% a year prior.

AEW UK said that the financial year "was a challenging period for the UK economy, which continued to impact the commercial property investment market. The higher interest rate environment has suppressed investor demand, contributing to downward pressure on valuations.

"This has been exacerbated by low transaction volumes and distressed sales, leading to a lack of evidence on which valuers can base their valuations."

The company maintained its total dividend at 8.00 pence per share.

Looking ahead, AEW UK noted "signs of some green shoots, with commercial property yields across the UK Monthly MSCI index stabilising".

Chair Mark Burton said: "The outlook for commercial property values is more positive than it has been for the past year, and we believe that the company is well positioned to continue to add value for shareholders."

AEW UK REIT shares were 1.7% higher at 88.60 pence each on Tuesday afternoon in London.

By Tom Budszus, Alliance News slot editor

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