AEW UK REIT (LSE:AEWU) reported a slight increase in unaudited net asset value to £173.47 million, or 109.32 pence per share, as at 31 December 2025. This translated into a quarterly NAV total return of 2.05%, achieved despite a 0.33% like-for-like fall in portfolio valuations, which nonetheless compared favourably with the wider UK property market.
The board announced a further interim dividend of 2.00 pence per share for the quarter, extending the trust’s record to 41 consecutive quarterly distributions. On an annualised basis, this represents a yield of 7.4%. EPRA earnings per share improved to 2.36 pence, supported by a resilient tenant base, lower bad debts and management fees, and successful asset management initiatives. Notable examples included a value-accretive lease regear at Barnstaple Retail Park and a profitable disposal of an asset in Hitchin.
Sector performance across the portfolio was mixed. Strength in retail warehousing helped offset softer conditions in the industrial and office segments. Financially, the trust continues to benefit from a low fixed cost of debt of 2.959% extending to 2027 and a conservative loan-to-GAV ratio of around 25%. The share price has remained close to NAV, following limited treasury share reissuance at a premium, reflecting ongoing investor confidence. With balance sheet capacity intact, AEW UK REIT retains flexibility to deploy capital into refurbishments and selective acquisitions. A one-year shareholder total return of 15.3% further highlights the trust’s relative resilience in a challenging property environment.
Looking ahead, the company’s outlook is underpinned by improving financial strength, including a move to zero reported debt, and a strong rebound in earnings in the latest year. The investment case is supported by an attractive income profile, combining a high dividend yield with a reasonable earnings multiple. These positives are partly offset by weaker cash flow relative to reported profits in 2025 and a history of uneven results, while technical indicators currently point to a broadly neutral trading setup.
More about AEW UK REIT
AEW UK REIT plc is a London-listed real estate investment trust with a diversified, value-oriented portfolio of 34 UK commercial properties spanning industrial, retail, office and leisure sectors. The trust focuses on delivering income-led returns through active, counter-cyclical asset management and operates with a relatively conservative balance sheet, characterised by low-cost, fixed-rate debt and an emphasis on maintaining a sustainable and attractive dividend for shareholders.
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