Elite Commercial REIT derives more than 99% of its gross rental income by leasing its network of centrally located assets to the AA-credit rated UK Government1. These leases are signed with a diversified number of UK Government departments and agencies on a full repairing and insuring2 (“FRI”) basis.
About the Primary Occupier
Elite Commercial REIT’s primary occupier is the Department for Work and Pensions (“DWP”), which is the largest public service department responsible for administering the country’s state pension, welfare and child maintenance policy.
DWP contributed approximately 91.5% of the REIT’s annualised gross rental income as at 30 September 2022.
DWP is integral in supporting the UK’s social fabric as it delivers essential public services to the community. DWP dispensed £217 billion3 in benefits and pensions for the year ended 31 March 2022.
The labour market has remained tight, with the unemployment rate at 3.5% in the three months to August 2022 and vacancies at historically high levels. However, there are signs that labour demand has begun to ease4.
Whilst there remains a degree of uncertainty, DWP continues to be in the front line of UK’s Emergency Economic Response through Plan for Jobs5 which is helping the national recovery. The UK Government also launched a new Way to Work Campaign6 – a partnership between the government and employers to get 500,000 jobseekers into work by the end of June 2022 to fill a record number of vacancies, supporting job-ready people into the labour market and helping them progress in a career.
In 2021, the UK Government recruited 13,5007 work coaches to increase support for jobseekers and ensured that DWP’s Jobcentre Plus offices remained open during the country’s lockdowns. This serves as a testament to the uniquely resilient nature of DWP’s operations.
With 85.5% of DWP-leased properties designated as JobCentre Plus Offices, our properties continue to remain part of a crucial public infrastructure serving the UK and its citizens.
- A majority of the leases are signed by the Secretary of State for Levelling Up, Housing and Communities (formerly known as the Secretary of State for Housing, Communities and Local Government), which is a Crown Body.
- Under a full repairing and insuring lease, commonly known as triple net lease, the responsibility for the repair of the external and internal parts as well as the structure of the property is placed with the tenant.
- Gov.UK, Corporate report, DWP Annual Report & Accounts 2021 to 2022”, 28 July 2022.
- Bank of England Monetary Policy Summary, November 2022.
- Gov.UK, Plan for Jobs.
- UK Government, jobhelp, Way to Work: Helping 500,000 people into work.
- Gov.UK, Government delivers 13,500 Work Coaches to boost Britain’s Jobs Army, 29 March 2021.