Acquisition of industrial building in Peterborough

27 July 2017

AEW UK REIT plc

AEW UK REIT acquires industrial building in Peterborough

AEW UK REIT plc (LSE: AEWU) (the "Company"), which owns a diversified portfolio of 32 regional UK commercial property assets, announces the acquisition of a c.182,000 sq ft single-let industrial building in Peterborough, for c.£5.7 million, reflecting a Net Initial Yield of 8.64% and a capital value of c.£31 per sq ft.

The asset, which is located within the Eastern Industrial Estate, is fully let to Walstead Investments Limited for a term of just under 4 years to expiry. The passing rent of £2.88 per sq ft is low in comparison to some of the recent lettings in the city and the immediate sub region.

Eastern Industrial Estate is a well-established estate in the Fengate area and comprises a mix of industrial units, offices, trade counters and a number of car showrooms. The estate is well located for access to the national motorway network, being approximately 1 mile off the A1139, which provides access to junction 17 of the A1(M).

Commenting on the deal, Alex Short, the Company's Portfolio Manager at AEW UK Investment Management LLP, said, "Peterborough has seen robust occupational performance over the past 24 months with overall vacancy levels for properties over 150,000 sq ft falling below 4%. The acquisition pricing is attractive as it is supported by the asset's underlying vacant possession value which is an important metric for the protection of downside risk."

ABOUT AEW UK REIT

AEW UK REIT plc (LSE: AEWU) aims to deliver an attractive total return to shareholders by investing predominantly in smaller commercial properties (typically less than £10 million), on shorter occupational leases, in strong commercial locations across the United Kingdom. The Company was listed on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange on 12 May 2015, raising £100.5m. Since IPO it has raised a further £23m.

Since its IPO in May 2015, AEWU has invested a total of £150 million across 32 regional commercial property assets. It is currently invested in office, retail, industrial and leisure assets, with a focus on active asset management, repositioning the properties and improving the quality of the income stream. Whilst occupational demand in strategic locations remains, securing tenants on shorter leases allows AEWU to crystallise value through rent reviews and lease re‐gears.

AEWU is currently paying a dividend of 8p per share p.a. and targets a total annual return, over the medium term, in excess of 12% on the IPO issue price, net of all fees.

Real estate investment specialist AEW UK Investment Management LLP is a joint venture between the UK management team, which together has an average of 25 years of real estate experience, and AEW, which has €25.5 billion of European real estate assets under management. AEW UK Investment Management LLP has a strong and expert asset management team, with a proven record of identifying and delivering value from real estate assets across all sectors.

www.aewukreit.com