Retail investors have another opportunity to participate in the IPO of a new real estate investment trust (REIT) which is heading for the UK stock market.
The launch of AEW UK Long Lease REIT follows on from the PRS REIT which we analyse in the new issue of Shares.
TARGETING 'UNDER-REPRESENTED' SECTORS
It is seeking to raise £150m to invest in sectors which it says are ‘underrepresented’ in institutional investor portfolios including leisure, healthcare, education, hotels, student accommodation, support living and automotive.
It plans to pay a quarterly dividend adding up to 5.5p per year once fully invested.
At the issue price of 100p this implies a 5.5% yield and there is an ambition to increase the dividend in line with inflation.
It notes the targeted sectors are closely aligned with long-term trends around demographics, technology, society and anticipated economic growth.
The aim is to construct a portfolio with a focus on capital preservation and weighted average lease time of 18 years. At least 85% of the rent from portfolio is expected to be linked to inflation.
Expected Timetable
| Prospectus is published | Mid May 2017 |
| IPO offer closes | Late May 2017 |
| Joins stockmarket | Early June 2017 |
Alex Short, director of the investment manager and portfolio manager of the company says: ‘Our target assets are characterised by having long, inflation linked leases, where we are also able to preserve capital value through detailed analysis and understanding of the real estate fundamentals.’
The investment manager AEW Global is one of the world’s largest real estate managers with more than €60 billion of assets under management.
Its AEW UK REIT (AEWU) trades at a 6.7% premium to its last reported net asset value.
