15th Nov 2016 11:43
LONDON (Alliance News) - AEW UK REIT PLC on Tuesday said its portfolio valuation has increased since the end of its first half, which it said was a sign of its portfolio's "resilience to market uncertainty".
The property investor said its portfolio valuation increased to GBP125.9 million at the end of October from GBP125.5 million at the end of July. On a like-for-like basis, the portfolio valuation increased by 0.3% over the quarter, AEW said.
Its UK Core Property Fund valuation rose to GBP9.3 million at the end of October from GBP8.7 million at the end of its first half, though AEW said it has adopted a new valuation methodology since the end of its first half. Using the new valuation methodology, the portfolio valuation would have been GBP9.2 million at the end of its first half.
"We have now seen two valuation dates since the referendum result in June and are encouraged by how the value of the portfolio has stabilised and also by its resilience to market uncertainty," said Portfolio Manager Alex Short.
"Since July our valuers have removed their caveat reflecting a lack of post-Brexit transactional evidence from our valuations and have also applied a modest level of post-Brexit capital growth," Short added.
The group's net asset value per share rose to 95.47 pence from 94.57p at the end of July, and the company said its earnings per share increased 14% to 2.29p from 1.98p.
AEW's gross loan-to-value ratio was 19.6% at the end of the third quarter, down from 19.8%, and its net loan-to-value ratio was 12.1%, down from 16.7%.
The company pointed to the ongoing portfolio and asset management activity during the period. This included a GBP30,000 per annum uplift from the outstanding 2012 rent review at the Odeon Cinema in Southend, and the disposal of the vacant upper parts of its Sheffield property for GBP710,000.
"Across the portfolio we continue to see the occupier market remaining active, with robust levels of tenant demand," the portfolio manager said, noting that currently 40% of the portfolio's vacancy is under offer including units in Oxford, Sheffield and Salisbury.
Once completed, these lettings, with an income stream totalling over GBP400,000 per annum, will reduce the current portfolio vacancy to 3.5% of estimated rental value from 8.7%.
Shares in AEW were down 0.1% at 98.25p on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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