Since Joshua Liaw was appointed CEO of Elite UK REIT’s manager in May 2023, the REIT has undergone multiple key milestones, such as an expanded investment strategy and venturing into the Living Sector to unlock value within the REIT’s portfolio.
These initiatives have translated into a recovery of the REIT’s unit price, providing unitholders with a total return of 34.2% in 2025 (the REIT has a December year-end), including a price rise of 22% during the year. Since the start of 2026, Elite UK REIT has outperformed the FTSE REIT Index as its unit price is down 4% compared to the FTSE REIT Index, which has lost 7% amidst tensions in the Middle East.
Elite UK REIT is different from the S-REITs in that it is traded in UK pounds (GBP). Since March 16, the REIT can also be traded in Singapore dollars (SGD). Unitholders can opt to receive distributions per unit (DPU) in GBP or SGD or in the form of units. With all the assets in the UK, and DPU declared in GBP, the only hedges undertaken by the manager are interest rate hedges.
Unlike S-REITs, which look for diversification among their tenants, Elite UK REIT’s properties are mainly leased to various UK Government departments, the largest of which is the Department for Work and Pensions (DWP), contributing 92% of gross rental income in 2025. Last year, Elite UK REIT added another UK government tenant, the Department for Environment, Food and Rural Affairs (DEFRA), following an acquisition.
“We are fairly unique. Other than being listed in pounds currently, all assets are in the UK. None of the other REITs has a 100% exposure to the UK. Other than the GBP listing, a lot of our properties are rented to the UK Government. When you’re looking at 99% exposure to the UK Government, or to any government, we’re the only one out there. So that’s fairly unique as well,” Liaw says in a recent interview.
As at Feb 28, Elite UK REIT owned 148 properties in the UK valued at GBP463 million ($796 million).
When asked what his achievements were in 2025, Liaw says: “One was interest rates. I’m not going to claim credit for that.” He also attributes some of the gains to good luck.
“What we could do as a management team is to stay nimble and to react and to be prepared. Our total return was over 30% in 2025, but if you stretch that even further to around two years, our total return has been about 75%, which I think is quite a respectable performance,” notes Liaw.
Listening to investors
“When I first joined in 2023, this REIT was having quite a hard time. The first thing we did was to meet investors and equity analysts to hear what they want. A lot of them were actually very worried about the gearing,” says Liaw. In 2023, Elite UK REIT’s aggregate leverage shot up to almost the regulatory limit of 50%.
“One of the first things we did was an equity fund raising to bring down our gearing, and on the back of that, we then refinanced the loans with banks based in Asia. That has helped us to get on to a good start, not only with lower interest rates, but also with more favourable terms,” says Liaw. In December 2023, Elite UK REIT announced a preferential offer and raised GBP28 million.
Between 2023 and 2025, the REIT had also divested ten IPO properties at a 12% premium to valuation. Divestment proceeds and dilapidation settlements to date have amounted to almost GBP21 million and were largely used to reduce gearing to healthier levels.
In June 2025, the manager completed its first acquisition after the Covid-19 pandemic. The REIT acquired three government properties for GBP9.2 million, representing a 7.6% discount to the average of independent valuations, at a yield of 9.2%, higher than the portfolio’s prevailing yield of 9%. One of the properties, Merlin House, Carmarthen, brought in a new tenant, DEFRA, which is responsible for improving and protecting the natural environment and supporting the UK’s food and farming sectors.
The acquisition was partially funded by a private placement that raised GBP4 million through the issuance of 13.56 million units at GBP0.295 per unit, with the remaining funding from divestment proceeds and external bank borrowings.
“We had a small equity fundraise and a small acquisition in June last year. It was probably one of the smallest deals I’ve done in my career, but very well worth doing, because once we did that, our liquidity jumped. We managed to bring in quite a number of long-only and institutional investors into our register as well,” says Liaw.
By the end of 2025, Elite UK REIT’s net finance cost reduced by 11.8% y-o-y while borrowing costs fell by 20 basis points y-o-y to 4.7%. The net gearing ratio improved by 180 basis points y-o-y to 40.7%.
New tailwinds
On Feb 5, Elite UK REIT announced it had concluded negotiations and entered into new lease agreements with the Secretary of State for Housing, Communities and Local Government, who represents the REIT’s main tenant, the DWP. The lease agreements are for around 70% of the DWP-occupied properties, extending the weighted average lease expiry to 7.2 years on a pro forma basis, from 2.4 years previously, and materially de-risking expiries in 2028 from 95.7% of gross rental income to 32%. Negotiations are underway for the remaining 30% of DWP properties.
The gross rental income represented by the lease agreements remains at GBP24.3 million. However, for the 1,092,133 sq ft that have been extended to April 2038, and the 410,834 sq ft extended to April 2035, there will be CPI-linked rent reviews on April 1, 2033. The REIT has agreed to a one-time contribution of GBP9.5 million over 2026 to 2028, which will be deployed at properties undergoing major asset enhancement initiatives (AEI) led by the DWP.
The lease extension has a positive impact on valuations. As a result, Elite UK REIT’s valuation rose by 9.1% to GBP463 million as at February compared to its end-FY2025 valuation, and by more than 11.3% higher compared to its end-FY2024 valuation. Based on the new post-lease agreement, pro forma net asset value is GBP0.46 versus GBP0.40 as at end-2025, while pro forma aggregate leverage and net gearing drop to 39.4% and 37.3%, respectively. This compares with an aggregate leverage of almost 50% in 2023, the year Liaw was appointed CEO.
“We view this as a positive inflexion point for Elite, underscoring management’s disciplined execution of value-accretive initiatives. The extension of DWP leases meaningfully de-risks near-term income, while planning approvals and asset repositioning initiatives (including potential PBSA conversions) enhance embedded optionality within the portfolio. Collectively, these efforts should support a sustained NAV re-rating over the medium term,” notes DBS Research in an update note.
New sectors
In April 2024, Elite UK REIT expanded its investment strategy to include non-government tenancies in non-discretionary sectors such as student housing and Build-to-Rent (BTR) residential. “When some vacant properties are given back to us by the tenant, we can either rent them out or sell them. Having a strategy to be able to convert some of these assets into student housing or residential units gives us another tool in our toolbox to deal with this situation. We have used that as a risk mitigant, but also a way to grow the REIT organically as well,” adds Liaw.
“We’ve got a very interesting model. We receive government-based rent, and our portfolio is essentially a long-term landbank with a cash flow. This landbank, when we are ready, can be converted into other uses, as we’ve done in the last couple of years.”
In July 2025, Elite UK REIT announced it had received planning approval from the local authority for the conversion of Lindsay House, a former government-leased property in Dundee, Scotland, into a 170-bed purpose-built student accommodation (PBSA) property. Elite UK REIT’s manager signed a development management agreement with mys Living, a Scotland-based development manager and PBSA operator, to manage the development of the proposed PBSA.
“Last year, we put in an application for a change of use for one of our previous office buildings. This is in Dundee, and we have then gotten planning approval sometime in July last year to convert it into a student accommodation that’s well on the way. We’re targeting to open for business in September next year, so that’s quite soon,” says Liaw.
In November, Elite UK REIT announced its manager had completed a positive pre-planning consultation for Cambria House, Cardiff, aimed at exploring its conversion into purpose-built student accommodation. “We are also taking another property forward in Cardiff for student accommodation. We have gotten positive pre-planning feedback,” he adds.
On Feb 12, Elite UK REIT announced it had received planning permission for a proposed data centre development at Peel Park, Blackpool, located on approximately 37 acres of freehold land. The approval permits the development of a data centre on an approximately 20-acre plot at Peel Park, Blackpool, next to existing office buildings, which remain leased to the DWP.
The data centre building on the proposed data centre development site can be up to 14m in height, with a rooftop cooling structure rising to 20m. The site is also expected to encompass a substation compound, a security office, and associated plant, infrastructure, parking, drainage and landscaping.
“We’re extremely happy that we’ve gotten the planning approval, and we have been offered power for that piece of land; the power and land are very precious in the UK. But we also understand the constraints of our capital and the constraint of the 10% development cap for S-REITs,” says Liaw.
Peel Park has since seen a GBP18.8 million (82%) uplift in value since the end of 2023 after securing planning approval for conversion into an 80MW data centre and obtaining power for the land. “The asset presents a clear opportunity for value crystallisation, either through divestment or via a capital partner, with proceeds potentially redeployed into higher-yielding acquisitions,” DBS notes.
In the UK, REITs do not have a cap on development activities, unlike the regulations for S-REITs, which place a cap of 10% of the REIT’s portfolio value. “In the UK, REITs can and do benefit from development activities,” adds Liaw.
At any rate, Liaw says the REIT is likely to partially divest Peel Park to a data centre owner-operator. “If I went out to tell investors that we plan to build a data centre, they would want to know whether we are going to raise capital, and everybody would be very nervous. I need to be quite honest that this is a one-off opportunity. It will make a lot more sense for us to monetise the opportunity by selling it eventually.”
In another candid exchange, when asked about competition, Liaw says he sees the banks as competition for capital. “The three local banks pay out a lot of dividends, and they also have growth. REITs have faced challenges in the last couple of years because of interest rates, but now with lower rates, maybe it’s time to grow.”
He says he wants to position Elite UK REIT as a dividend play with government-based income, which is very stable. “We have growth coming from some of these opportunities, because this is a landbank with cash flow,” adds Liaw.
