IN BRIEF: AEW UK buys 'high-yielding' retail asset in 'affluent' town

AEW UK REIT PLC - Leeds, England-based real estate investment trust - Announces completion of its purchase of a freehold high-street retail asset in Hitchen, an ‘affluent commuter town’ north of London, for £10.0 million. Says the price reflects an ‘attractive’ 8.31% net initial yield and a £213 per square foot capital value. Property provides 46,905 square feet of space across 12 retail units and an office building. AEW says the retail units ‘are fully let to a strong line-up of 12 tenants, with recent leasing activity evidencing the strength of the location’. Tenants include Marks & Spencer PLC, Next Holdings Ltd and Vodafone Ltd. AEW says the acquisition demonstrates its ‘swift and ongoing redeployment of sale proceeds from the recent disposal of Central Six Retail Park in Coventry, with a significant amount of the remaining proceeds also under exclusive negotiation’.

Portfolio Manager Laura Elkin says: ‘We are delighted to have purchased this well-located asset at a day one yield that will enhance the company’s earnings. Completing this acquisition marks a significant milestone in our strategy to reinvest capital generated from the recent successful [Coventry] sale...We continue to actively monitor a pipeline of attractive potential investments, and believe the company is well positioned to focus on the growth of the portfolio should the right earnings accretive opportunities arise.’

Current stock price: 101.88 pence

12-month change: up 18%

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