Good afternoon, ladies and gentlemen. Welcome to the AEW UK REIT Plc Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so. Before we begin, as usual, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the team from AEW UK REIT. Henry, good afternoon, sir.
Thank you very much, and good afternoon, everyone. Thank you for joining us today for our quarterly investor meet company presentation. Just to introduce myself, I'm Henry Butt. I'm the assistant portfolio manager. I have stepped in whilst Laura Elkin, the Portfolio Manager, is away off on maternity leave. Laura will be back in February next year. And this is George Elliott, my colleague, who works closely with me day in, day out on the portfolio. So just going on to the first slide, this is our usual sort of snapshot of kind of what we do at AEW. Our sort of catchphrase is high income and actively managed. We are value investors. And by that, what we mean is that we are looking to maximize income and unlock capital upside. And asset management is very important to us in driving our returns.
In terms of maximizing income, we have now paid out our two pence per share dividend consistently since Q1 2016, which is 36 consecutive quarters. And if I just touch on this quarter alone, we have added an extra just shy of GBP 600,000 per annum, which represents about 3.2% of the portfolio of income. And back in March, we added another GBP 500,000 of income through asset management. And in June, we added another GBP 220,000 of asset management. So, in the past nine months, we really have been doing a lot of asset management, which has been driving our income and driving our earnings. And that is the journey which has taken us back to being fully covered in terms of our dividend, and we'll touch on that later on in the presentation.
In terms of unlocking capital upside through asset management, we are delighted by our property return. We have an 8.9% annualized five-year property return to the 30th of June 2024, which is outperforming the benchmark by just shy of 7%. It's some really strong performance. One of the things that enables us to get this performance is we're not constrained by sectors. We won't follow the herd. We will look at properties on a case-by-case basis when we're buying investments. That means that we can really sort of look to buy in mispriced assets. Then just touching on the investment criteria here on the right-hand side of this slide, we're typically buying in U.K. core plus commercial properties. We focus on strong commercial locations with low levels of supply.
That low level of supply is important to us because it means that it feeds into driving rents. We're typically buying properties with net initial yields between 7% and 10%, low book values of GBP 74 a sq ft. Now, we always include this metric because it's important because if you compare it alongside the cost of constructing a property, whether that be an industrial or retail warehousing unit at GBP 100 a sq ft or residential offices at GBP 250 + GBP 74 per sq ft for investments, which are yielding around 8% with rental growth, is relatively really good value. And that is why we say we're value investors. We have a low average passing rent of GBP 7.07 across the entire portfolio, and that demonstrates the reversionary potential in the portfolio, which is 8.6% as of this quarter.
And in terms of the asset management and sort of looking at the bricks and mortar value, when we buy investments, not only are we looking for higher income, but we're looking to make sure that those investments are underpinned by alternative use values, whether that be a VP value in the case of an industrial unit, for example, if the tenant of a tenant were to vacate, you could sell that to an owner-occupier or alternative uses, for example, converting a vacant office building into students, which we have done in the past, vacant offices moving them into life sciences, which we've done in the past, or other sort of uses like hotel or residential, you know, being the obvious one. So we're delighted that we are being recognized by this performance as well.
We now won the Citywire Investment Award for four years on the trot, which is based on three-year NAV total returns. And this quarter, we were delighted to win the MSCI U.K. Property Investment Award as well, which is done on three-year property total returns. So this slide really is a bird's eye view of the company, and I'll just go through a lot of the sort of key metrics. So the valuation, GBP 215.6 million, it was up just shy of 3%, 2.94% to be exact this quarter. And that was principally driven by our retail warehousing assets. The retail warehousing sector was up 8.87%, and that was being driven by asset management. We carried out three new lettings at our retail warehouse parks in Dewsbury, Barnstaple and Coventry, and that was adding that GBP 600,000. So that really has sort of driven the value in that sector alone.
We saw some performance in the industrial sector, which was just up above 2%, and that was driven by actually rental growth rather than yield compression. However, I would say that with obviously one interest rate cut and other interest rate cuts anticipated, the expectation is actually that the industrial sector probably will have some quite good capital performance going forward. But more recently, we've seen performance from that sector through rental growth. I think it's probably worth just touching on the other sectors being office and high street retail, those two ones in particular. We've had quite a couple of quarters whilst we work on asset management plans. We've got some office refurbishments going on in Bristol and Bath, so the anticipation is to sort of work through those and hopefully we'll see some performance when those asset management initiatives come to fruition.
We have 32 properties now, down one from the previous quarter because we sold a multi-let industrial estate in Droitwich. The net initial yield of 8.09, reversion of 8.64, which is very important. That is the rental growth. That is what our asset managers have set out to go and try and achieve to move on the income, which obviously feeds through into our earnings and the dividends that we pay out. I mentioned those lettings in those retail warehousing assets earlier on. As a result, our vacancy rate has dropped this quarter from 9.4% in June to 6.77% this quarter. So it's good to see our vacancy rate falling. However, I always like to say that we quite don't mind having a sort of 5%-10% vacancy because it's quite good to have a bit of churn within the portfolio.
In terms of going after that reversion, you need a bit of churn. You need tenants vacating. You need the opportunities to do rent reviews, to move rents on, etc. So we don't mind a bit of void. The WALT of 4.5 years to break and 5.9 to expiry. As I said, that sort of is similar to the vacancy rate story. If there are lease events, that gives us the ability to add value and to move on rents. In terms of our debt position, it is unchanged. We have a GBP 60 million debt facility, which we have locked in until May 2027. We were delighted to have done that a year in advance to our previous facility, expiring and securing a very competitive rate of 2.96 all in, which is obviously very competitive given the debt environment that we are in.
We have GBP 6.2 million of capital for deployment. That's on top of our usual GBP 5 million buffer. Now, this might strike you as being quite a lot. It's probably more than we normally would have, but I think it's worth noting that a lot of this money has been allocated to asset management initiatives. As I said, we have a couple of office refurbishments planned in Bristol and Bath. We have just finished an industrial refurbishment of two units in Runcorn with a further refurbishment there. So a lot of this money is actually being attributed to asset management. And you will note that through our last couple of NAV announcements, we have been saying that the money has been allocated to these initiatives, and that is what's going to really drive income. And we're now seeing that with our return to dividend cover.
In terms of our NAV, GBP 172.76 million, which is up 2.96% since June. That is a NAV total return of 4.85%, which includes the two pence dividend that we pay. Our discount as at the 30th of December was 9.8%. That has narrowed more recently with our share price moving closer to a pound. I think we're standing at about GBP 0.99 today. Just to finish performance, I'm going to just quote the five-year ones here. So five-year annualized NAV total return and property total return of 9.6%, which is very strong. And then finally, before I hand over to George, in terms of our sector weightings, as I said, it's very organic. We don't chase a particular sector. We don't follow the herd. We're not looking to offload offices or offload high street retail. We actually feel that there's some really good value there.
We have about 35% in industrials, which has come down from its highest point of 60%, which was kind of during the pandemic where that sector was faring really well. That weighting has come down more recently because we've been selling out of lower yielding industrial assets, and what has happened is that we've recycled that into high yielding assets, which have tended to be mixed-use retail predominantly led assets, and that's why we've seen our retail exposure increase over the past year or so.
Thank you, Henry, and good afternoon, everybody, and many of you will probably be accustomed with this slide now. And what it seeks to demonstrate is a story of the company over the last 18 months or so. To refresh your memories, in the summer of 2022, we had sold GBP 40 million-odd worth of property, and since that time, we have been taking on a program of selling out of what were those lower yielding assets and reinvesting into higher yielding ones. We've noted a number of examples here, and you'll have seen separate RNS announcements for them in the past. For example, Lockwood Court and Euroway were sold for kind of a weighted average yield of around 6.2%-6.8%, whereas Mattel in Preston was around 9%.
But for this quarterly presentation, I wish to really draw your attention to the right side of this graph, and that's our recent performance. As Henry's already noted, fantastically, we are back to full dividend cover, something that I know many of you have articulated on our investor forums was very important to you. I think the thing that I really wanted to focus on in respect of this was Henry and I often detail themes such as value investment, active asset management strategy, total return focus. And what really is a demonstration of that is this graph. Naturally, when you are value investors, sometimes you will sell out of properties, you will crystallize profit, and there will be a passage of time where you're reinvesting those monies and deploying them into high yielding assets. And ultimately, this graph is showing what the benefit of that is.
Henry also noted previously the awards we've won, the Citywire Award for NAV performance and the MSCI Award for property performance. And ultimately, we would not have achieved those were it not for those disposals and then strategic following acquisitions. I suppose some specific events have driven our underlying performance recently. We've had some fantastic wins in long-standing arrears recoveries from some somewhat tricky tenants. And what really that is symptomatic of is much of the pain over the last 18 months, much of that instability in the economic environment that's impacted tenants' financial security. We're kind of seeing wane away now. And that further is contributing to earnings. So not only have Henry and his team delivered really excellent top-line performance in growing our rental income, but also in terms of the cost base and things like bad debt writings, etc., we're seeing those start to narrow.
Ultimately, that is a reflection of what is a really high-quality, stabilized portfolio. Thanks, everybody. Now, dividend cover, always a hot topic. I've touched on it. Again, you will see in those kind of more recent bars, the last three or four, yes, there was a period of time where we were covering those dividends with those profits crystallized on profitable sales. And as you'll see in our most recent financial year to March 2024, that has chiefly been covered by earnings. Now, naturally, the logical conclusion is based on this core's performance, and I see no reason for that trend not to continue. One would hope that that kind of margin of what needs to be covered or topped up by profits will continue to narrow, which for the financial sustainability of the company and its dividend is really encouraging.
This slide, again, I feel is a real testament to a lot of those themes that I noted earlier. Again, I'm probably going to sound like a bit of a broken record. We've talked about these in previous presentations, but ultimately, our ability to cover our dividend with profitable sales is not by luck. It's a demonstrated behavior. You'll see this graph that shows all the disposals the company has made since incorporation. As you can see, a vast majority of those have been profitable. The subheading here, kind of a 36% average sale price to purchase premium, which is a really, really strong result. The last kind of element to touch on this slide is you'll see there's a few red bars here.
And what those really are a reflection of, and these are actually very small assets in comparison to these large ones we made profits on, is that sometimes when the asset management story is finished for a property, we will make the decision to sell out of that property and redirect those proceeds into more higher yielding assets with profit potential. I've always been a huge fan of this graph, which touches on our NAV performance compared to our peer group. A few key themes that actually run off since last quarter is I talked in the previous quarter about this kind of outperformance and the degree of it widening. That is still continuing to occur. You can see kind of on that far right of the graph, our outperformance margin is actually increasing. And really, to me, looking at the finances of this company, what does that tell me?
It tells me that our strategy, our active asset management strategy, the fact that we've been able to invest in our own performance, drive rental income growth in it, as Henry has said, as opposed to being dependent on buying new properties or churn, has meant that we've been able to grow our NAV base in what has been actually a very difficult time for the market. The only other kind of key theme I always pick up on this slide is that kind of point of intersection in early 2020. That isn't a coincidence. The business, as you know, was incorporated in 2015. And typically, for many of our properties, they kind of have a five-year business plan that we will set out to achieve upon purchase.
As you can see here, it's at that point in time in 2020, five years after the business started, that we really started to realize the gains from our asset management initiatives in both capital performance and income growth. We are seeing more and more of that in recent times, as Henry has touched on. This table is a more granular breakdown of a variety of performance metrics against our peer group. I mean, great themes to pick out on this are as at June. I mean, we're still waiting for the NAV data from a lot of our peers, but as at June, we delivered the highest NAV returns across all the time periods shown here. Share price returns have been more interesting.
Of course, many of you are aware about M&A activity in the sector, and that has somewhat skewed share prices in the short term for some of our peers. But when I look at this, I'm always focusing on the longer term, which when I look at a real estate investment trust as an asset class, I'm thinking about long-term performance. Has it been sustainable? And as you can see here, by far, we have delivered the highest five-year share price total return. And we've already touched on themes of dividend yield. Our dividend yield at the moment is still in excess of 8%, which is really attractive. And that's with a narrowing discount. As you were noting in previous quarter, that was in excess of 9%. So I still feel the company's presenting a very compelling case.
We can skip by this slide because it's just a graphical representation, but as you can see, our dividend is still really strong in comparison to our peers. And now we come on to property performance. As Henry noted, we were delighted to recently be awarded the MSCI listed property award for U.K. property. And that was for the highest three-year annualized total property performance. Now, as you can see here, across all time periods, we have vastly outperformed the benchmark. And this is really demonstrating the output of Henry and his team's work in both capital and income terms, which we'll come on to a bit later. For me, what is most encouraging is looking at the five-year and seven-year bars here, you can see that our performance, both in terms of on our own and in comparison to the benchmark, is very consistent.
Now, what that tells me is there isn't huge volatility in our performance. We've consistently given this outperformance, and hence the award we've won. And lastly, what this graph looks at is over the last 12 months, again to June 2024, as we're still waiting for the September MSCI data, we have outperformed the benchmark in all sectors. Now, interestingly, industrials were the only sectors you can see here that's delivered positive capital performance. Now, what that tells me is that actually our outperformance in more recent times on a property basis is due to our income return. Now, what that really is, again, is a reflection of the active asset management approach. It's delivering that rental income growth that Henry spoke about earlier, and it's also being mindful of our cost base and also targeting much of our organizational effort towards that.
I'm really, really encouraged by our property performance, which feeds into our NAV performance, which one would hope it has done in more recent times to feed into our share price performance. Thank you, Henry.
This slide just touches on our most recent disposal. It's been a less busy period for us in terms of sales and purchases, which obviously we've touched on at length already. We have announced previously that we have sold this asset because we had a delayed completion. Just to sort of go over it again, it's a multi-let industrial estate. We bought it back in December 2015, the GBP 5.62 million, GBP 30 a sq ft. Remember that point I made earlier about its comparison in terms of its investment value to what it would cost to rebuild this asset, excluding the value of the land.
We bought it off a 10.4% net initial yield. So exactly what we want in terms of its income profile and paying out that dividend. We've held it for a number of years, you'll see, just shy of 10. I think what has changed is that it was single-let to one tenant called Egbert Taylor, who actually had downsized and consolidated into one large unit on the estate. What we had been doing over the last couple of years is getting those units relet. We did that and achieved a new GBP 272,000 worth of rent. There's quite a sort of crude expression in property called fillet and flog it. In this instance, we got these units let to an array of smaller tenants.
We didn't really have that much appetite to spend more money on this property in terms of refurbishments going forward, which were probably an inevitability in two, three years' time. What we decided to do with sort of a bit of momentum gathering in the industrial sector is we decided to sort of cash out our chips and sort of roll the dice and see where the investment market for this would be. We actually had a couple of special purchasers from local high-net-worth come forward and offered some really good prices. We ended up achieving a sale price of 33% of the March valuation. Now, it's the March valuation that is relevant because we exchanged ahead of the June valuation, which meant the exchange price was factored into June valuation. Hence why we're looking back as far as March.
Delivering a 9% IRR to the company. Now, we're not sort of an IRR-driven strategy, but that's a pretty solid return all round. Yeah, just one of our more recent assets. We've decided to sell, as I said, because we kind of felt like we'd done the asset management and it was time to move on. Now, just touching on a bit of the retail warehousing asset management that we've been doing over the past six months or so. We got two sort of main deals across the line in the quarter that we're reporting. The first is a new letting to Tenpin in Dewsbury in Yorkshire. Previously, the unit was let to Mecca Bingo, and there was a conversation initially about them staying for five years, but they decided to go prematurely ahead of their lease expiry.
We managed to agree an early surrender with them and a dilapidation settlement at about GBP 285,000, dilapidation settlement. Now, what we've done is we have secured a new letting to Tenpin, a strong covenant. We've taken a 25-year lease. It's worth noting that there is a break after 17 and a half years at a rent of GBP 378,470, which breaks back to GBP 13.59 per sq ft versus an ERV that we had when the unit became vacant of GBP 8 a sq ft. So we talk about the reversionary potential in the portfolio that is based on ERVs. In this instance, we have achieved the letting well ahead of ERV. So that sort of implies that there's even potentially more reversion in the portfolio as long as we can sort of outperform our ERVs.
Now, typically, when you carry out these longer lettings to lesser tenants that have higher fit-out costs, the reviews tend to be linked to CPI rather than having open market reviews. So we've got CPI reviews here now with a 1% collar and a 3% cap. So we pretty much can track the rental growth every five years with this tenant occupation. And you will appreciate, though, that quite a lot of money was spent on the property in order to facilitate this letting. And quite often, we have investors say, "Crikey, that's quite a bit of money to put up front to secure this letting." And we can get our head around that because actually they're paying a very full rent and they're taking a longer term and they're investing a lot of their own money in the asset.
That really sort of gets us comfortable with doing this letting. We saw some really strong valuation performance this quarter from this asset. As we continue to pay the next two installments of CapCon, we would expect to see some further valuation performance as well as money is spent on the building with Tenpin opening their store we anticipate in February next year. Moving on to Barnstaple, Barnstaple Retail Park. We had Sports Direct vacate their unit, and we quite quickly managed to relet this unit to Farmfoods on a 15-year lease with a break in year 10 at a rent equivalent ERV in this instance of GBP 125,000, GBP 130,000 for similar rent to the rent that we achieved to Tenpin in Dewsbury and probably worth noting that the unit is smaller and Dewsbury was a leisure letting rather than a retail letting.
Typically, retail lettings will have higher rents, especially when they're on smaller units. That's just a little bit of sort of background to those ERVs. In this instance, it's a retailer. It's not a leisure operator. There's less fit-out costs. They're taking shorter lease terms. There's open market reviews in the fifth and tenth years. There was a lot less incentive here. We carried out some refurbishment to the unit, which we expect to recover from Sports Direct through dilapidations to the previous tenant. A nice letting to do. The unit is fully let again. Yeah, it's basically exactly sort of what we like to do.
As I said, going back to that churn, it's quite nice to have tenants vacating because then you have the option to improve your assets through refurbishments and bringing in new tenants who spend their own capital on the properties. So to conclude, continued growth in NAV per share and a dividend covered by EPRA earnings for the second consecutive quarter. We're delighted by that and long may it continue. Quarterly earnings growth of GBP 0.0175-GBP 0.0217 on an underlying basis since June 2023. As George said, we had a lot of disposals back then. It's taken us a time to get that money reinvested to really see the benefit of those new investments and to focus on asset management in the existing portfolio, which has led us to build those earnings back to where we are today. Asset management, in terms of driving income, is also very important.
Mitigating void costs. When we have a void, not only are you losing out on the income, but there are void costs. So you can be paying rates. You can be paying service charge, insurance. So actually filling those vacant units has a sort of double whammy in terms of driving earnings. We remain sort of aware of kind of what's going on in the economic background, but perhaps sometimes when you have tenants that fall in difficult times, that is an opportunity. We've alluded to the refurbishments we're carrying out in Runcorn where the previous tenant was paying a rent of GBP 6.50 per sq ft. We feel like we can really better those rents. So it does present opportunities as well.
I said we had quite a high cash weighting, which was being allocated towards asset management, but also it's worth mentioning that that is in an interest-bearing bank account. So we're getting some income from that, which is obviously naturally feeding into our earnings performance. Low capital values per sq ft, as I said, GBP 74 sq ft, which means we've got some really good sort of foundations in terms of being able to drive value relatively low, which shows that there's value to go after. Reversionary potential with a reversion yield of 8.6% in the portfolio. We have a great track record still of crystallizing gains on sales, a 36% average sale to purchase price premium, with Droitwich being a nice premium to the March valuation. And again, we always like to sort of blow our trumpet on that low cost of debt, 2.96% fixed until May 2027.
Thank you very much.
Thank you .
Perfect. Henry, George, if I may just jump back in there. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the right-hand corner of your screen. But just while the team take a few moments just to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Guys, as you can see there, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions.
But guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that would be great. Thank you.
Sure. So we have a question here. Please, can you resist requests to increase the dividend? I prefer to see a stronger dividend cover and growing NAV from reinvestment. Well, sort of on that point, obviously, as I said, we're delighted to get back to full cover. We are going to sort of very much focus on doing what we have been doing. It's worth noting that we pay the highest gross dividend amongst our peers. So it's already high, but it's also worth noting that obviously dividend policy is a decision of the board rather than us, the investment manager. Another question here.
Are there any potential benefits to be gained through merging with another REIT? Well, as George said, there's been a lot of activity in the sector. And of course, we have our eyes peeled for opportunities. But it's also just worth noting that we would only ever really look to a merger, an M&A activity if it was for the benefit of our shareholders. And that is the most important thing. But naturally, we would love to grow because we do remain small. So we will continue to look at opportunities.
We've covered the different questions.
What is that one? I can sort them with you.
Yeah. So we've got a question from Sarah G that says, "In your two new lettings to bowling operators, you gave capital contribution to one and a rent-free period to the other. What are the benefits and downsides of each approach?" I suppose the first obvious comment to make is that CapCon is an upfront cash cost. So from a cash flow perspective, it is more taxing. I, of course, exist in the accounting world, and so both actually from the accounting perspective, they have the same impact. You're spreading those incentives over the life of the lease, which ultimately feeds into what our EPS is. I suppose from a commercial perspective, with you and your team, Henry, what would lead you to offer a CapCon in favor of a rent-free or vice versa?
It's a funny one, really. I mean, it's always very much dependent on kind of what the tenant wants. As I said, I think it's more typical that tenants who are taking shorter leases would rather a rent-free incentive or a tenant renewing.
However, when you have a tenant who is coming in and spending a vast amount of money on the property, for example, Tenpin, who are coming in and putting in a multi-lane bowling alleys and Laser Quest and bars and F&B and stuff like that, they want money to be able to invest in the property. So you do typically see it upfront in capital contributions. And they actually can be staged as well. So a rent-free period would typically go on over a number of months. Whereas in terms of the CapCon, you might pay some of it or a quarter of it, half of it when you complete the lease.
But then because you obviously want to see the tenant actually committing to doing those works, you would perhaps pay the second half when the works are proceeded or the second third when the works are proceeded, and then the final third when the property is open and functioning, which is the case in Tenpin.
Got a question here from Roy El that's got two elements to it. So the first part is, what's the process of reconsolidation? The process of reconsolidation continues. What role might AEW play in this? And the second part is, if you were to refinance a GBP 60 million debt today, what would it cost? I mean, we've touched on the first point already.
I think the only addition I would make to Henry's response about reconsolidation and M&A activity is it is very much a part of our day-to-day work at the moment is looking and assessing at these opportunities. I think to shareholders, one thing I wish to reassure you of is that this is not something we are passive in respect to. It's something that we actively are looking at all the time. But as Henry says, the first prerequisite for doing anything of that nature is that it must be for the benefit of our shareholders. Now, there are potentially opportunities out there. The REIT world is, well, unfortunately, an ever-increasing smaller space in terms of the number of actors in that. But yes, it is something that we look at.
In terms of the role we might play, I don't wish to speculate, but given the strong performance of the company, I would like to think that we could very much be on, if we were to play a role, that we would be on the front foot of that and the architect of it, and in terms of refinancing the debt now, what would it cost? I mean, among our other AEW funds outside of the REITs, none of us have refinanced recently, so I can't give an exact figure of what our current lenders are sort of offering, nor do I wish to speculate on debt markets, but I would assume something around the 5% mark would probably seem somewhat sensible. Of course, it totally depends on, well, the budget towards the end of this week and what happens with monetary policy.
Probably worth mentioning, we have an in-house debt team at AEW, and they very much have their finger on the pulse as to what's going on in the debt markets. And I mentioned when I was touching on the debt facility that we decided to refinance a year ahead of our previous facility with R BSI expiring. Our debt teams knew what was coming, knew the storm that was coming, and they said, "Guys, we really recommend you sort of locking in something now rather than waiting 12 months." So we have a close eye on that, and we're very fortunate to have an in-house debt team.
And to add to that as well, there's a question here by Charles H about how we're going to manage refinancing risk. I think one important point to note is that AEW, as a wider business amongst all its funds, has a very close relationship with some lenders. So certain funds might actually use the same lender. Now, that is commercially to our advantage. And actually, often we can get advantageous rates. As you can see, our all-in rate of 2.96% is very compelling, with our provider being AgFe, and actually, AgFe loans to some of the other AEW UK funds as well. So we have that to our benefit. And that is something that we would actively use to mitigate our risk. Another question.
So we've got a question from FM. Which sector are you going to look to invest in? e.g. offices, retail, industrials for value? Well, we don't chase a particular sector. We have an in-house investment team. We do stock selection. Well, I do stock selection twice a week. And we see an array of properties across all the sectors. And we're not in any way going after a particular sector. I think it would be quite nice to buy an industrial asset because I feel that the rental growth story more recently has been very compelling. And I also feel that we will see some yield tightening going forward. So it'd be quite nice to sort of board that train at the right time again. Obviously, the sector got absolutely whacked when interest rates started to increase, and obviously, developers withdrew from the market. So I think it would be quite nice to sort of maybe buy a new industrial asset and do a bit of asset management on that. I mean, more recently, we have been buying retail assets, good chunks of high street retail, maybe mixed use with some offices above in good towns and cities.
So we bought in Greater London and Bromley and in Bath. But yeah, I mean, it's a bit of a mixed bag. When you're looking at stock selection, you can go and chase yield a little bit. And that typically might be more in retail warehousing, high street retail. Or you could look to invest in lower yielding kit, maybe the industrials. But there is quite a good rental growth story there. Whereas in the retail sector, the rents tend to have rebased a little bit more recently. But as I say, it's very sort of case-by-case basis. We're sector agnostic, and we will always look at the underlying sort of value of those assets.
So sometimes you can be looking at asset and stock selection and think, "Okay, this ticks the boxes in terms of its income profile and potential rental growth." And then we'll go back to look at how it breaks back to a square foot value, and we'll think, "Yikes, actually, in terms of its alternative use value, there's a lot of value locked into the leases here, and we need to make sure that we've got a good underwrite to alternative uses."
There's a good question here from Martin P., which says, "Will your ongoing charges disclosure be reduced now that the FCA has changed the rules of disclosure?" Now, I'm not sure how many of you on this call are aware of this, but very recently, there's been a somewhat chaotic disruption into how investment trusts like ourselves present our costs in things like our key information document and things called EMTs, which are basically cost disclosure documents.
Now, we've received advice on this both from a legal perspective and from our corporate advisor, Panmure Liberum, and really, different market participants are making different choices. Some are just showing nil for all their costs, which we didn't really agree with, and so the position we have landed on and as a compromise is, you will likely be accustomed to seeing the Ongoing Charges Ratio disclosed in our annual reports. That is the number we have decided to include in our EMT, which the likes of Hargreaves Lansdown use for the basis of their cost disclosures on their platform, etc. It's an ever-evolving landscape at the moment. There's a lot of senior figures in the industry currently debating the matter, so as and when further guidance is given, we may amend what we have done.
But for now, I would place predominant attention on the ongoing charges figures that we disclose in our half-year and full-year reports. Lastly, a question from Charles O. It might be appropriate to pay off some debts, and it is unlikely to be possible to refinance on such good terms as presently enjoyed. Of course, that's potentially something we may consider doing. I can possibly comment on what we're going to do with our debt or what the debt environment is going to be like three years from now or two and a half years when our debt runs up. What I will say is, if that is the sensible thing to do, then of course, it is something we would consider.
The basic math is that if we can obtain a return using that money that exceeds whatever might be the refinance rate, then it is still financially the optimal decision generally and on a simple basis to keep having that debt. But yes, that is absolutely something we will consider. I think that is all the questions.
Absolutely. Henry, George, thank you. That's great. And thank you very much indeed for being so generous of your time and addressing all of those questions that came in for investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform.
But Henry, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that would be great.
Yes, thank you. Well, thanks all for joining us again today, and thank you for your questions. I hope we've given you a fruitful update and you are sort of buoyed by the recent performance. Obviously, as George and I said, it's good to see NAV growth per share and a dividend cover for a second consecutive quarter. And I'd say that's the rewards from the asset management that we've been doing over the past six months. And yeah, we will continue to look to do that going forward. So thanks again, and see you all in the new year.
Henry, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session? You'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of AEW UK REIT plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.