Company Update: 19 November 2025
Sustained DPU Growth Supported By Accretive Acquisitions
- Continued DPU growth and strong occupancy. 9M25 distributable income rose 6.2% YoY to £14.8mn, supporting a 9.4% YoY increase in DPU to 2.33 pence. Portfolio occupancy improved to 98.6%, excluding PBSA redevelopment sites, driven by rental reversions at Salford, Billingham and Edinburgh, as well as contributions from the three accretive government-leased acquisitions totalling £9.2mn completed in June 2025.
3Q25 Results: Maintaining Momentum
Revenue rose 1.0% YoY to £28.3mn, supported by rental reversions and the £9.2mn acquisition of Priory Court, Custom House and Tŷ Merlin. Net property income declined 0.5% due to repositioning costs, but distributable income rose 6.2% YoY to £14.8mn, driving a 9.4% DPU growth to 2.33 pence. Management highlighted continued discipline in treasury and cost management alongside lease regear discussions for 2028 expiries.
Proactive Portfolio Management
The total value of portfolio stood at £419.7mn across 148 assets as of 30 Sep 2025. Following the accretive £9.2mn acquisitions and earlier divestments of vacant assets, occupancy reached 98.6%, while WALE was 2.7 years due to upcoming lease expiries. Elite is actively engaging the DWP to regear leases ahead of 2028 maturities alongside the planning application on the Peel Park data-centre development and PBSA pipeline to diversify earnings.
Valuation & Action
We reiterate our OUTPERFORM rating of Elite UK REIT with a raised target price of £0.407. Our DDM valuation uses 2.0% terminal growth rate and an 8.5% cost of equity. Elite UK REIT’s government-anchored leases, prudent capital management and pipeline diversification underpin sustainable returns and NAV resilience.
Risks
Lease renewal uncertainty, high-interest rate environment and construction and planning risks.
