AEW UK REIT PLC Number of Ordinary Shares 158,774,746 158,774,746 158,774,746 158,774,746 158,774,746 NAV per share 93.12p 100.99p 93.13p 93.12p 93.13p
1 EPRA Net Tangible Assets ('EPRA NTA') and EPRA Net Disposal Value ('EPRA NDV') are calculated using property values in line with IFRS, where values are net of Real Estate Transfer Tax ('RETT') and other purchasers' costs. RETT and other purchasers' costs are added back when calculating EPRA Net Reinstatement Value ('EPRA NRV') and have been estimated at 6.6% of the net valuation provided by Knight Frank. 10. Dividends paid
Year ended Year ended
31 March 2021 31 March 2020
Dividends paid during the year GBP'000 GBP'000
Represents four interim dividends of 2.00 pps each 12,691 12,125
Year ended Year ended
31 March 2021 31 March 2020
Dividends relating to the year
GBP'000 GBP'000
Represents four interim dividends of 2.00 pps each 12,684 12,269 Dividends paid during the year relate to Ordinary Shares only. 11. Investments
11.a) Investment property
31 March 2021
Investment Investment 31 March
property property Total 2020
freehold leasehold GBP'000 Total
GBP'000 GBP'000 GBP'000
UK investment property
As at beginning of the year 147,400 41,900 189,300 197,605
Purchases and capital expenditure in the year 5,977 6 5,983 358
Disposals in the year - (22,006) (22,006) -
Revaluation of investment properties 7,373 (1,650) 5,723 (8,663)
Valuation provided by Knight Frank 160,750 18,250 179,000 189,300
Adjustment to carrying value for lease incentive debtor (3,340) (2,941)
Adjustment for lease obligations* 683 683
Total investment property 176,343 187,042
Classified as:
Investment property held for sale# 7,251 -
Investment property 169,092 187,042
176,343 187,042
Change in fair value of investment property
Change in fair value before adjustments for lease incentives 5,723 (8,663)
Adjustment for movement in the year:
in value of lease incentive debtor (399) (781)
5,324 (9,444)
Gains realised on disposal of investment property
Net proceeds from disposals of investment property during the year 29,049 44
Fair value at beginning of period (22,006) -
(7,043) 44
* Adjustment in respect of minimum payment under head leases separately included as a liability within the Statement of Financial Position.
# 225 Bath Street, Glasgow, has been classified as held-for-sale as contracts to sell the property were exchanged in October 2020 and it is expected that the transaction will be completed within the next 12 months.
Valuation of investment property
Valuation of investment property is performed by Knight Frank LLP, an accredited external valuer with recognised and relevant professional qualifications and recent experience of the location and category of the investment property being valued.
The valuation of the Company's investment property at fair value is determined by the external valuer on the basis of market value in accordance with the internationally accepted RICS Valuation - Professional Standards (incorporating the International Valuation Standards).
The determination of the fair value is based upon the income capitalisation approach. This approach involves applying capitalisation yields to current and future rental streams net of income voids arising from vacancies or rent-free periods and associated running costs. These capitalisation yields and estimated rental values are based on comparable property and leasing transactions in the market using the valuer's professional judgement and market observation. Other factors taken into account in the valuations include the tenure of the property, tenancy details, capital values of fixtures and fittings, environmental matter and the overall repair and condition of the property.
11.b) Fair value measurement hierarchy
The following table provides the fair value measurement hierarchy for investments:
Significant observable Significant unobservable
Quoted prices in active markets inputs inputs Total
(Level 1)
(Level 2) (Level 3) GBP'000
GBP'000
GBP'000 GBP'000
Assets measured at fair
value
31 March 2021
- -
Investment property
176,343 176,343
31 March 2020
- - 187,042 187,042
Investment property Explanation of the fair value hierarchy:
Level 1 - Quoted prices for an identical instrument in active markets;
Level 2 - Prices of recent transactions for identical instruments and valuation techniques using observable market data; and
Level 3 - Valuation techniques using non-observable data.
There have been no transfers between Level 1 and Level 2 during either period, nor have there been any transfers in or out of Level 3.
Sensitivity analysis to significant changes in unobservable inputs within Level 3 of the hierarchy
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy of the entity's portfolio of investment property are: 1. ERV
2) Equivalent yield
Increases/(decreases) in the ERV (per sq ft per annum) in isolation would result in a higher/(lower) fair value measurement. Increases/(decreases) in the discount rate/yield in isolation would result in a lower/(higher) fair value measurement.
The significant unobservable inputs used in the fair value measurement, categorised within Level 3 of the fair value hierarchy of the portfolio of investment property are as follows:
Fair Value Valuation Significant
Range
Class GBP'000 Technique Unobservable Inputs
31 March 2021
ERV GBP0.50 - GBP75.00
179,000 Income capitalisation
Investment property* Equivalent yield 5.76% - 10.37%
31 March 2020
ERV GBP0.50 - GBP105.00
189,300 Income capitalisation
Investment Property* Equivalent yield 5.71% - 10.54% * Valuation per Knight Frank LLP.
Where possible, sensitivity of the fair values of Level 3 assets are tested to changes in unobservable inputs against reasonable alternatives.
Gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value hierarchy are attributable to changes in unrealised gains or losses relating to investment property held at the end of the reporting period.
With regards to investment property, gains and losses for recurring fair value measurements categorised within Level 3 of the fair value hierarchy, prior to adjustment for rent free debtor and rent guarantee debtor where applicable, are recorded in profit or loss.
Change in ERV Change in equivalent yield
GBP'000 GBP'000 GBP'000 GBP'000
Sensitivity analysis +5% -5% +5% -5%
31 March 2021
Resulting fair value of investment property
183,818 168,394 170,487 187,847
31 March 2020
197,146 180,075 179,906 199,956
Resulting fair value of investment property
Change in ERV Change in equivalent yield
GBP'000 GBP'000 GBP'000 GBP'000
Sensitivity analysis +10% -10% +10% -10%
31 March 2021
Resulting fair value of investment property (MORE TO FOLLOW) Dow Jones Newswires
June 24, 2021 02:03 ET (06:03 GMT)
