AEW UK REIT “actively exploring” ways to raise funds for 10-year real estate buying opportunity

21 November 2025

AEW UK (AEWU) real estate investment trust says commercial property capital values are “at their lowest point” in its 10-year history, providing the £165m top performer, which won a QuotedData Investors’ Choice award last month, with plenty of attractive opportunities if only it could raise more money.

At the end of September, AEWU had £13.2m of cash but aside from the £5m it keeps as a buffer, the rest has been earmarked for refurbishments and property improvements.

With the company maxed out on its £60m borrowing facility, chair Robin Archibald said the board was “actively exploring with its advisers” how to raise cash and grow the fund. 

Archibald said: “The investment manager has conviction in the current buying opportunities seen in the UK commercial real estate market, and believes that now is an ideal time to deploy capital, as property values are at their lowest point since the company’s IPO. 

He said AEW fund managers Laura Elkin and Henry Butt expect that “any acquisitions made in the near term would yield strong performance and shareholder returns in the future.”

All this could imply a share issue if the stock returns to trading to a small premium, or even a bid for a weaker rival in a sector that has already contracted from several mergers and acquisitions.

AEWU shares currently stand 1.9% below net asset value, the narrowest discount in a peer group where shares on average trail 23% below the value of their property investments.

Half-year results today showed AEWU’s NAV per share dipped just over a penny to 109p in the six months to 30 September as 4p of dividends, capital expenditure on its properties and falls in the value of some buildings, such as offices, weighed. 

With the quarterly dividends included, however, the company made a 2.7% total underlying investment return, down from 10% a year ago, with real estate transactions slowed by the uncertainty around next week’s delayed Budget. Buoyed by its strategy of buying higher-yielding, smaller assets, the total property return was 3.2%, ahead of the 3% of its MSCI real estate funds benchmark.

The dividend was once again slightly uncovered with earnings per share of 3.91p, down from 4.43p this time last year. However, the company has consistently maintained a 2p per share quarterly payout since launch in 2015, providing some reassurance on its commitment. 

Shareholders enjoyed a 11.4% total return as the shares recovered from April and closed their discount. Over one and 10 years AEWU currently leads the sector with 20.4% and 138.9% total returns. Over five it ranks second behind Schroder Real Estate (SREI) which has returned 100% and is being stalked by LondonMetric Property (LMP) which has bought an 11% stake.

The portfolio has 34 properties, the latest addition being the £11.1m acquisition of a the Freemans leisure park in Leicester which was bought with the proceeds of the sale of retail park in Coventry last December. 

Its biggest weighting of just over 37% is to industrial properties which saw a like for like 2.3% gain in the half year. High street retail, which accounts for 20.5% of assets, gained 1.2%, while retail warehouses rose 2.2% to make up 13.6% of the portfolio. Offices, the smallest sub-sector at 10.8%, fell 5.2% as the sector continues to struggle on a dearth of transactions. 

Written By QD News