AEW UK REIT back in black as rental income grows

AEW UK REIT has returned to profit in the year ending 31 March, posting rental income growth and an improved vacancy rate across its portfolio. AEW said it would continue to seek potential opportunities for M&A to grow the company, citing “considerable corporate activity” within the listed property sector. The REIT made a pretax profit of nearly £9.1m, recovering from a £11.3m loss in the previous year. Its portfolio was valued at £210.7m across 33 properties, down from £213.8m across 36 in the year to March 2023. Net asset value per share stood at 102.73p, compared with 105.48p in March last year. Rental income grew to £19.9m during the year, from £17.1m, with the manager citing a boost from new leases and rent reviews. The company delivered a 4.98% NAV total return to shareholders. The EPRA vacancy rate for the portfolio stood at 6.4% in March, compared with 7.8% last year. During the year, the investment manager sold lower-yielding assets and recycled the capital into “higher-yielding, earnings-accretive properties”. It made five disposals and bought two properties. Mark Burton, chairman of AEW UK REIT, said the outlook for commercial property values was “more positive than it has been for the past year”.