Elite Commercial REIT has reported distributable income of £24.5 million ($44.83 million) for FY2021 ended Dec 31, 2021, a 65.2% y-o-y surge.
Actual revenue for the full year was £34.7 million ($63.49 million), surging 65.7% compared to FY2020.
FY2021 distribution per unit (DPU) of 5.43 pence is 22.3% higher than FY2020, which translates to a distribution yield of 8.2%.
For the period 2HFY2021, Elite Commercial REIT reported actual revenue of £18.8 million and distributable income of £13.4 million, surpassing 2HFY2020 by 61.7% and 60.2% respectively.
The first and only UK-focused S-REIT owes its 2021 results to its maiden acquisition of 58 UK commercial properties on March 9 last year.
The yield-accretive acquisition increased the REIT’s exposure to London assets and also diversified its occupier mix to other government agencies such as the Ministry of Defence, National Records of Scotland, Her Majesty’s Courts and Tribunals Service, National Resources of Wales and Environment Agency, reads a Feb 21 press release.
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As at Dec 31, 2021, the REIT has £500.1 million in portfolio value, with 155 office assets. 150 properties are on freehold tenures and five properties are on long leasehold tenures.
The REIT’s portfolio remains 100% occupied as at Dec 31, 2021, with 99.9% of rent for the period of three months to March 2022 collected in advance and within seven days of the due date. Weighted average lease expiry (WALE) stands at 6.0 years.
Total debt stands at £225.6 million, while gearing is at 42.4%. The REIT has some £26 million in available debt headroom.
Despite increasing inflation rate in the UK, the properties have built-in inflation-linked rental escalation clauses, says Elite Commercial REIT, presenting potential upside at the upcoming rent review in the fifth year of the leases, with new rental rates starting in April 2023.
The rental uplift is based on the UK Consumer Price Index (CPI), subject to an annual minimum increase of 1.0% and maximum of 5.0% on an annual compounding basis from Apr 1, 2018 to March 31, 2023.
Meanwhile, the REIT’s wholly-owned subsidiary — Elite UK Commercial Holdings Limited (ECHL) — listed on The International Stock Exchange (TISE) on Aug 26 last year.
This technical listing qualifies ECHL as a UK REIT group, and Elite Commercial REIT claims it will reap several tax-saving benefits, thereby future-proofing the REIT’s capital structure.
In addition, the REIT rolled out its distribution reinvestment plan last year, which provides unitholders an opportunity to elect receiving new units in the REIT in lieu of cash distributions. Through the DRP, unitholders can increase their holdings in Elite Commercial REIT without incurring brokerage fees, stamp duties (if any) and other related costs.
As at 9.23am, units in Elite Commercial REIT are trading flat at 66.5 pence.
