AEW is aiming to raise £125m via an initial public offering for a new REIT – AEW UK REIT – with dealings on the London Stock Exchange due to commence on 12 May.
The vehicle is seeking to invest in regional properties with a value of £5m to £15m and provide a dividend yield of 8-9%.
Dexion Capital is acting as sponsor, financial adviser and sole bookrunner.
The REIT will be able to invest up to 10% of its net assets in AEW’s UK Core Property Fund and up to 10% of its assets can be development opportunities.
The investment vehicle will have a maximum gearing level of 25%.
AEW will receive a management fee of 0.9% of the company’s net asset value, excluding uninvested proceeds. The listing process will cost £2.5m.
Once the initial equity is invested the REIT will look to raise more capital, should investor appetite exist, but at a smaller level.
The REIT’s board will consist of three senior real estate professionals.
Mark Burton, who is also a board member at Norges Bank, the Norwegian sovereign wealth fund, will be non-executive chairman; Bim Sandhu, who is currently chief executive of developer Santon Group; and James Hyslop, a consultant to AEW.
Hyslop has previously worked with UBS and is also on the investment committees of Columbus UK Real Estate and Gresham Property.
The investment management staff will include AEW Europe chief executive Rob Wilkinson and managing director Richard Tanner.
AEW UK believes that the REIT will offer similar returns to its Core Property Fund but with more liquidity, therefore appealing to a broader investor base.
