Elite UK REIT bolsters portfolio with €60m expansion

Elite UK REIT Management has acquired five UK government-leased properties for £31.9 mln (€37.5 mln) and a £19.0 mln (€22.4 mln) conversion of Lindsay House in Dundee into student accommodation.

Joshua Liaw

The acquisition, made through Elite UK REIT's subsidiary Elite Kist Limited, includes five properties currently occupied by UK government bodies such as HMRC and the DWP. These properties offer long lease terms and are expected to generate £2.6 mln (€3.1 mln) in annual gross rental income. This move will increase the portfolio's valuation by approximately 7% to £492.1 mln (€579.8 mln). The acquisition aligns with the REIT's strategy to secure stable, counter-cyclical income and benefit from CPI-linked rent reviews, with 46% of its portfolio featuring such reviews post-acquisition. It also strengthens tenant diversification and maintains exposure to the UK Government's strong credit quality.

Additionally, Elite UK REIT will invest £19.0 mln (€22.4 mln) to transform Lindsay House in Dundee, Scotland, into a 170-bed purpose-built student accommodation. This five-storey building, strategically located near Abertay and Dundee Universities, will offer student studios and communal facilities. This conversion is expected to further increase distribution yield and DPU, while managing net gearing effectively.

The expansion will be financed through a combination of £30.7 mln (€36.2 mln) from existing debt, £8.9 mln (€10.5 mln) in new units issued to Elite UK Commercial Fund III, and a private placement aiming to raise £7.4 mln (€8.7 mln). The acquisition is pending approval from Unitholders at an upcoming extraordinary general meeting.

Joshua Liaw, Elite UK REIT CEO, said: “We believe that in an environment marked by continued macroeconomic volatility, the pairing of government-leased properties and living sector assets in our portfolio will enhance the resilience of our distributions to Unitholders. The Proposed Acquisition reinforces our portfolio with essential UK infrastructure assets that are underpinned by long-term, government-backed revenue, while conversion works at Lindsay House would position the property to be the REIT’s first purpose-built student accommodation, with completion ahead of Academic Year 2027. These are aligned with the Manager’s commitment to delivering sustainable yield for Unitholders.”