Strategy and Value Creation
The Manager is focused on delivering sustainable growth and returns to Unitholders over the long term.
Our Competitive Strengths
Quality Assets with Strong Fundamentals
Our portfolio of 155 quality commercial assets is primarily leased to a AA-rated tenant on full repairing and insuring lease terms with superior WALE.
Primary Occupier of a Resilient Nature
The UK Government’s DWP is naturally a resilient occupier as it administers crucial welfare, pensions and child maintenance policy serving over 23 million claimants. To this end, our assets provide crucial infrastructure for DWP to serve the community.
Strong Financials with Enhanced Flexibility
Our proactive approach towards capital management ensures our strong financial position and provides us with enhanced financial flexibility to pursue attractive growth opportunities.
Proactive Manager with Proven Track Record
The collective wealth of experience and knowledge of our employees in investment and management of real estate assets, finance and investor relations is integral to the REIT’s long-term growth and value creation.
Strong Sponsors with Alignment of Interest
Our Sponsors’ interests are aligned with Unitholders through their holdings in Elite Commercial REIT. We are able to leverage our Sponsors’ real estate expertise, financial strength and potential ROFR assets.
Attractive Market with Demonstrated Resilience
The highly liquid UK real estate market continues to demonstrate long-term resilience and attract international investors based on the country’s transparent real estate framework and open approach to foreign investment.
Our Approach to Value Creation
The Manager seeks to deliver sustainable and growing returns through the following strategies:
Acquisition Growth Strategy
- Employ a rigorous research-driven selection process to identify value-accretive commercial properties to generate attractive cash flows and yields
- Leverage our Sponsors’ Right Of First Refusal pipeline of quality UK commercial assets
- Harness the extensive expertise and network of our Sponsors and our team in the UK to source for quality acquisitions
- Adopt a long-term investment approach to enhance future income and capital growth
Active Asset Management Strategy
- Proactive engagement to build strong relationships with tenants
- Focus on improving tenant mix and optimising lease profiles to increase stability of income and realise cost efficiencies
- Identify potential property enhancements or redevelopment opportunities to enhance income streams
- Divest under-performing assets to redeploy capital and optimise the performance of our portfolio
Prudent Capital Management Strategy
- Prudent management of Aggregate Leverage Ratio and Interest Coverage Ratio coupled with proactive management of financing sources to optimise financial flexibility
- Employ an appropriate mix of debt and equity to finance acquisitions and asset enhancements
- Optimise borrowing costs and employ all-in borrowing cost hedging strategies
- Continuous monitoring of exposure to risk with a view to maximise risk-adjusted returns to Unitholders
FY2021 Value Creation
- Completed maiden acquisition of 58 centrally located quality assets to increase the REIT’s portfolio by 60% to 155 properties
- Yield-accretive acquisition increased net internal area by 1.3 million sq ft to 3.9 million sq ft
- Diversified tenant base with seven new government occupiers including the Ministry of Defence, HM Revenue and Customs, HM Courts and Tribunals Service, as well as Home Office
- Portfolio valued at £500.1 million as at 31 December 2021
- Amount generated for distribution of £24.5 million, up 65.2% from £14.8 million in FY 20201
- Total DPU of 5.43 pence, up 22.3% from 4.44 pence in FY 20201
- Distribution yield of 8.2% based on the closing unit price of £0.665 as at 31 December 2021
- Successful technical listing of Elite UK Commercial Holdings Limited on The International Stock Exchange from 26 August 2021 to enhance tax efficiencies
- Consistently outperformed IPO projections for the past eight consecutive quarters
Active Asset Management and Enhancement
- Portfolio occupancy at 100% throughout 2021
- Strong relationship with AA-rated UK Government tenants continue to guarantee resilient cash flow
- Consistent success in advance rental collection since listing despite lockdowns and challenging business conditions
- Landmark lease re-gearing optimised lease profile and enhanced income visibility, ensuring that 83.1% of portfolio by GRI2 run free of lease break options to 2028 and benefit from current inflation-linked rent escalations from April 2023
Sustainability and Corporate Governance
- Embarked on first sustainability collaboration with main occupier in February 2022 - a 3-year £14.67 million investment to improve sustainability and energy efficiency across DWP-occupied assets, in line with the UK Government’s national climate agenda of achieving net zero carbon emissions by 2050
- Included in the SGX Fast Track Programme for listed issuers which recognises companies for high standards of corporate governance and good compliance track record
- Ranked joint 6th out of 45 REITs and Business Trusts in its debut on the 5th Governance Index for Trusts 2021
- Won a Bronze in global ARC Awards 2021
Prudent Capital Management
- Aggregate leverage of 42.4%
- All-in borrowing cost3 of 2.4%
- 63.2% of debt on fixed rates
- Interest cover of 6.0 times
- 60.8% of assets are unencumbered
- Bestowed Excellence in Tax Management and Optimisation Award at the FutureCFO Excellence Awards 2022 for future-proofing the REIT’s tax structure via an innovative and landmark restructuring
- FY 2020 refers to the financial period from 6 February 2020 (Listing Date) to 31 December 2020.
- Based on annualised gross rental income for the financial year ended December 2021, taking into account the portfolio maiden acquisition completed on 9 March 2021.
- Includes amortisation of debt-related transaction costs.