AEW UK REIT dividend remains uncovered as tenant administrations hit earnings
Management noted earnings were constrained by 28p due to Wilko and CJ Services both entering administration.
On Thursday (25 January), the £218m trust reported earnings per share for the quarter of 1.83p, which came short of the 2p dividend. Management noted earnings were constrained by 28p due to Wilko and CJ Services both entering administration.
«EPRA earnings per share have been negatively impacted by 28p due to two tenants entering administration during the period, without which the company's dividend would have been fully covered by earnings this quarter,» the trust said.
According to Numis, AEWU's 2p dividend, which is equivalent to an annualised yield of 8.3%, has not been covered by recurring earnings since before the Covid-19 pandemic.
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The trust said earnings are expected to increase following several upcoming lettings at a retail park in Coventry, which is expected to deliver an additional £535,000 of annual contracted rent roll within the next two quarters.
AEW UK REIT also reported a December net asset value of 103.53p, which represents a 2.3% decline over the quarter. The NAV total return fell 0.44%, reflecting a 1.6% like-for-like valuation fall for the portfolio.
According to portfolio manager Laura Elkin, this decline was «symptomatic of subdued deal flow» in the UK commercial property market.
The portfolio's offices (12% of portfolio) fell 2.5%, while high street retail (15%) values declined 1% and industrial assets (36%) fell a more modest 1%, mitigated by estimated rental value (ERV) growth.
The largest valuation drops were from the portfolio's other commercial assets —down 6.1%— largely due to sharp valuation corrections at
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