InvestmentsAug 25 2017

Industrial growth drives returns for AEW Reit

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Industrial growth drives returns for AEW Reit

Strong performance from assets invested in industrial property helped AEW Reit increase its net asset value and announce a dividend of 2p per share for the quarter to the end of July 2017.

In this quarter, the dividend yield has returned to being fully covered by the cash flows generated by the trust.

AEW Reit has total assets of £130m, a dividend yield of 7.8 per cent and trades at a premium to net assets of 8.9 per cent, according to data from the Association of Investment Companies.

The net asset value of the trust increased to £119m, up slightly from the £118m in the previous quarter.

The manager of the trust, Alex Short, said that the industrial assets owned by the trust were the strongest performers in the portfolio.

Over the past quarter, she invested in industrial assets in Deeside, Runcorn and Peterborough.

She commented that, despite the political uncertainty engendered by the UK general election in June, and the economic uncertainty of the UK leaving the European Union, the rental market remains “resilient”.

However even with the success of the trust’s investments in industrial assets to date, Ms Short said she intends to diversify the exposure of the trust into other areas of the property market including retail.

She said: “Over recent weeks we have seen an increased number of attractive opportunities in the retail and office sectors and we therefore expect that future acquisitions will represent a more balanced spread of property sectors, rather than being concentrated in the industrial sector as we have seen over past quarters.

"In line with our strategy we continue to focus on finding future acquisitions which will deliver an attractive return from a well-diversified regional portfolio.”