AEW UK REIT - Overview
AEW UK REIT (AEWU) offers one of the highest yields in the AIC UK Commercial Property sector (10.8%), having so far managed to maintain its dividend in 2020 despite the impact of the coronavirus. The 2p-a-quarter payout is achieved by exploiting inefficiencies in smaller assets, regional locations and shorter lease lengths which are often overlooked by peers. This allows the managers to buy assets at high yields and generate capital growth by taking advantage of optionality, such as asset management or change of use. AEWU is managed by Alex Short and Laura Elkin at AEW UK, the UK arm of one of the largest real-estate managers in the world. The AEW UK team have over 20 years’ experience investing in property for institutional clients in private funds, and launched AEWU in 2015 as a diversified commercial-property strategy. They are backed by a large team of investment professionals, asset-management specialists and support staff. This year has seen huge disruption to the commercial-property sector from the lockdown. However, as discussed in the Dividend section, AEWU’s rent collection has held up reasonably well so far, and the board has paid the 2p dividend for the first two quarters of 2020. Clearly there will be more challenges to come, but dividend cover was at 90.5% for Q2 with cash on hand to reinvest. Nevertheless, the discount sits at c. 20% versus a sector average of c. 12.5%. This is despite strong NAV total-return performance since launch and the dividend having so far been maintained. The trust faces a continuation vote at the AGM in September.
AEW UK Reit
24 Jul 20
First quarter of 2020
The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.
AEWU CREI CSH BOOT INL HLCL THRL SUPR RESI RGL DIGS GTR SOHO PHP EBOX ASLI UTG AGR UAI BLND UANC CAL SHED CWD WHR EPIC WKP GRI YEW HMSO PCA INTU NRR
21 Apr 20