Elite UK REIT has reported a distribution per unit of 1.47 pence (2.47 cents) for its 2HFY2024, up 5.8% y-o-y. This brings its full-year distribution to 2.87 pence, up 5% over the preceding FY2023.
Revenue for its 2HFY2024 ended Dec 31, 2024 dipped by 1.7% y-o-y to GBP18.89 million while distributable income increased by 6.5% to GBP.927 million.
As at Dec 31, 2024, its net asset value per unit was GBP0.41, its gearing ratio was 42.5% and its interest coverage ratio was 2.5 times. Borrowing costs declined by around 30 basis points to 4.9% from 5.2% a year ago.
The REIT has no further refinancing requirements until 2027 and all its debt is sustainability-linked, bringing interest savings as the energy performance of its assets improves.
The REIT's portfolio occupancy increased 160 basis points to 93.9% from 92.3% a year ago and is set to improve further to 95.6% after the divestments of Hilden House, Warrington and St Paul’s House, Chippenham.
Joshua Liaw, CEO of the manager, calls 2024 a "monumental" year, where the REIT had an equity fundraising, refinanced its debt and diversified its sources of funding.
"With strategic capital management and interest rate optimisation, we were able to lower borrowing costs amidst a higher-for-longer interest rate environment," he says.
While most of the REIT's portfolio are buildings rented to the UK government to provide social services, Elite UK REIT is actively exploring new opportunities to "unlock latent value".
To this end, Peel Park in Blackpool is marked for "strategic repositioning" to be used as a data centre.
See also: LHN Group adds 45 new keys and 29 new facilities management contracts in 1QFY2025 business update
The REIT has applied for conversion of the land to data centre use and secured power supply for a potential hyperscale data centre.
"We hope to maximise value for unitholders by actively exploring the potential monetisation of the site after we receive planning approvals," says Liaw.
The REIT, meanwhile, is also looking out for new opportunities in asset classes such as student housing and built-to-rent residential to strengthen its portfolio.
Having said so, "government-tenanted properties remain an attractive investment proposition, and we are engaging with our tenants on early lease renewals ahead of the 2028 lease expiries, which we hope to provide more visibility on this year," adds Liaw.
