Good morning and welcome to the AEW UK REIT plc investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review your questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to Portfolio Manager Laura Elkin. Good morning.
Thanks, Alex, and good morning to everyone. You're joining us here on a rather rainy morning in London. Apologies that you don't have us on video this morning as we normally like to join. We've had a few IT issues this morning, but hopefully you can hear us loud and clear coming through old school via the phone. Just doing a recap on the company and starting with a summary of our strategy. During the last quarter, we passed through our 10-year anniversary, which is really exciting for us. Really great to have kind of reached that milestone for the company. 10 years of outperformance and 10 years of, of course, our very high dividend. Really pleased with that. We haven't yet got our official 10-year MSCI performance figures, so I'm afraid we'll have to show those to you next time.
The strategy that I'm running you through here is the same strategy that we have been running for the course of the last 10 years. That is based on value investment principles. What I'm going to do is I'm going to focus today on the investment criteria down the right-hand side of this page. That will really sort of give you hopefully a clearer picture of what we mean by value investment principles. All of that leads to, as I've just set out, our market-leading dividend of GBP 0.02 per share per quarter, which we have paid now for 39 consecutive quarters. Our total return that we're delivering as well being very strong, both against its listed peer group and against the wider U.K. commercial property market. Really pleased with our ongoing performance.
Just touching on these investment criteria, and as I said, these have been the same throughout the last 10 years. We are sector agnostic, and that means that we look across the whole of the U.K. commercial property market. We don't really have any constraints at all in terms of sectors. It means that at any point in any cycle, we can find value sort of reacting really to the sort of economic climate that we find and the occupier demands at that time, and of course, the investment pricing that we find at that time. Another part of this investment criteria that is absolutely key to us is location, location, location. This is something which really comes through in every single purchase that we make.
We are looking to buy high yields, but we won't be buying those high yields in locations that we don't believe they can be sustainable. We receive a significant number of investment asset introductions throughout the year, into the thousands. We analyze all of these. Some are very high level based on pricing, but it's those that deliver high yields in sustainable locations, in sustainable properties, and those are the ones that we're looking to target. We mentioned low book values here, and coming back to those value investment principles that I mentioned at the beginning, we think that this is really important to ensure optionality going through our business plans.
We like to buy our business plans with a plan A, a plan B, a plan C, because, of course, during a five to 10-year hold period, a multi-year hold period, really, we don't always know what's going to happen. We want to have various ways of leading to that high income that we pay out or that capital appreciation that you've come to know from our performance, different ways of delivering that to make sure that that is nailed on as it can be during, as I say, a multi-year hold period. Those are really, for me, the most important parts of our investment criteria.
Morning, everyone. Henry Butt here speaking. I'm just going to pick up this next slide, which is obviously a snapshot of the portfolio as at the end of the period, the 30th of June. Just first looking at the valuation, GBP 215.8 million. It was a fairly sort of quiet quarter in terms of valuation performance. However, we were up a smidge, 0.05%. We are yet to see the U.K.-wide valuation performance yet. The figures haven't been released, but we expect it to be a quiet quarter across the U.K. In terms of the valuation performance, it was mainly coming from our retail holdings that are on the High Street and our retail warehousing. That's mainly been driven by investor and occupier sentiment, really. You will appreciate that retail has had a tough time over the past 10 years with a move to e-commerce.
It is really good to see that retailers are committing themselves now to physical locations. High Streets have shortened, but they are very much alive and kicking the best properties in the best location and echoing Laura's message a couple of minutes ago. We are now seeing vacancy rates stable on the High Street, which have stabilized now for quite a while in retail warehousing and some really strong sales in Q1 of this year, which is really positive given that Q1 tends to be the quietest quarter of the year. It is expected that those retail sales will grow going into the year with potentially more rate cuts and increasing household income and more power to spend. It's really been a quarter of retail, and we are in general seeing a renaissance, in particular on the High Street.
Thirty four properties in the portfolio, and Leicester being the most recent acquisition. We'll touch on that purchase later on in the presentation. Again, an investment yield of 8.13%, a reversion of 8.87%, so 70.4 basis points between the two. That is what the asset management team here at AEW is focused on, going after that rental growth and driving that income. The portfolio has an average passing rent of GBP 7.30 per sq ft. We are starting off at a relatively low base, which illustrates the potential for income growth within the portfolio, which is obviously very important for earnings. The vacancy rate tends to yo-yo between about 10% and 5%. We're currently just shy of 7%. That vacancy is found in the Queen Square office in Bristol, where we are carrying out a refurbishment and are in the final stages of looking to get that space fully let.
We have some quite high vacancy at our industrial park in Wakefield. However, that is all in what is a physically and economically obsolete office block, which we are planning on demolishing and carrying out an IOS letting, which is industrial open storage. Once that is demolished, our vacancy rate will decrease. We have a bit of vacancy at our retail warehousing parks in Shrewsbury and Barnstaple, where we are in the latter stages of letting those units, and at Runcorn, which we've touched on in previous quarters, where we've carried out spec refurbishments of three units, one which we've let and two we are in the process of marketing. You'll appreciate that in these summer months, marketing does tend to slow down. We would expect to see a pickup in that letting activity in the autumn.
Cash and debt position is the same, GBP 60 million debt facility fixed until May 2027 at 2.96%. In terms of capital cash deployment, now that we have bought both Hitchin and Leicester following the sale of Coventry, we have no cash left to spend. We're fully invested, but do acknowledge that includes a normal cash buffer and cash allocated towards ongoing asset management initiatives. Finally, just touching on the pie charts on the right-hand side of this slide, industrial has decreased over the past two, three years or so, down from its peak at 60% to 37%. We have seen our retail sectors increase, where we've been doing some countercyclical buying and buying those assets where the pricing has been very attractive.
Just touching on what I've already said on this slide, it's great to see a renaissance in the retail, and we would look to hopefully benefit from that improving investor and occupier demand for that sector.
I was also just going to say, Henry, it's interesting that you focus there on the amount of interest that we have in some of our vacant units at the moment, because I think a couple of people have queried sort of since the announcement that we made a couple of weeks ago why our earnings for the quarter were a little bit lower than they have been at some points in the past. The answer to that question is that, of course, Leicester was bought towards the end of the quarter, so we haven't appreciated from a full quarter's of income there. Of course, we've got some really positive outlook on quite a few lettings coming up as well.
Thank you, Laura and Henry. This is George Elliot speaking. He's Fund Controller at the company. I'm just going to take you through a few performance slides now, the first of which focuses on our performance versus our peers. I feel this graph embodies everything that Henry and Laura have touched on and what is the output of this strategy and the intellect behind it. I think the first obvious comment to make is if I draw your eyes to the far right of this graph, you can see the time-out performance and actually degree of outperformance has actually been consistently widening now for, coming up to three years. For me, who in my role focuses on the finance performance of the company, what that tells me is not only is this strategy sustainable, but it also operates well in all market cycles.
You'll remember that coming out of the back of COVID, property valuations, etc., were doing very well, whereas they've been relatively muted for the last 18-odd months. Yet, despite that, we've continued to perform exceedingly well. There are a few reasons for this. One of, of course, is the consistency of the payments of our dividends, which is, to remind you, GBP 0.08 a year or GBP 0.02 per quarter. Also, as Henry and Laura have mentioned already, it's our asset management approach. It's the active nature of that. It's the fact that we aren't dependent on property churn in order to deliver performance, but we can actually invest in our own portfolio. Again, as Henry's just said there, we've got cash already allocated to further initiatives, which we would hope to further drive in our performance and outperformance indeed.
I think the last comment I'll make on this graph is in a kind of a point of intersection with our peers, kind of around 2019 and 2020. Laura has mentioned we've just reached the 10-year anniversary of the company. That point of intersection marks halfway through that journey around five years. When we look at property and when we kind of devise our asset management strategy for it, typically, that will kind of be on a five-year time horizon. To me, it's no surprise that the outperformance has started five years after we bought our initial glut of properties. It's overall to kind of emphasize the headline stats: an 11.4% five-year annualized net total return to the 31st of March and 6.6% outperformance of our nearest peer, which, given the performance of our peers recently, which you'll all be aware of, is no mean feat.
Taking you to this next slide, really, what is the underlying derivative of our net performance? Of course, much of it is our direct property performance, and that's what this slide focuses on. Again, to reiterate what Laura's just said, I'm expecting to receive our 10-year MSCI performance figures actually next week. We will be able to present those to you in the next iteration of this presentation. Despite that, looking at these bars here, again, a few key indicators for me. Firstly, if we look at kind of like the five-year and seven-year annualized performance, you'll note that actually our performance and the degree of outperformance is highly consistent. For me, why is that important? Again, it highlights the consistency of the strategy and the sustainability of its performance, which also shows me that it's not a thematic company.
Many of you will remember the days of industrials booming during COVID and their valuations doing very well. For us, we kind of maintained our strategy of being diversified, and this is really why. It's enabled that consistent performance and prevented volatility in it. Of course, it's that which has enabled the consistency of our dividend. Lastly, for me, what's really important is over every time period you're viewing here: six months, 12 months, three years, five years, and seven years. We have outperformed our benchmark and the MSCI benchmark and also by a significant degree. It's that that levers, of course, to winning last year the MSCI award for three-year annualized property total return. Again, just to highlight those key statistics at the top of this graph, we have a five-year property total outperformance of 7.7%, unsurprisingly, relatively in line with our net outperformance against our peers.
Very impressive and very encouraging, was certainly dedicated to maintaining this. This will probably be a mix of the three of us talking about this slide, but while I'm still on the topic here, also key to our property performance and our net total return performance is the intellect and decision-making behind when we dispose of an asset. What this graph shows is every property we have disposed of in chronological order since the company's inception. You can see Central Six Retail Park on the far right, our most recent disposal. Before I hand over to Henry Butt to talk about some examples of these and the reasoning behind them, I think it's important to note that much of why we have performed as well as we have is that we have a very disciplined approach to property disposals.
I never normally wish to draw attention to the negatives, but for me, on this graph, they're very important. At times, sometimes a property has come to the end of the road, and one has to be disciplined in saying, "Okay, we've done all the asset management initiatives we can on that property. We've driven it as far as we can, and actually now is the time to cut the losses, so to speak, and reinvest those proceeds into high-yielding properties," of which I'm sure Henry Butt will talk through for the rest of the presentation. Handing back to Laura and Henry.
Yeah, I mean, just touching on some of these, obviously, of course, we've covered them up in previous presentations. I suppose, you know, George has touched on the red bars. I'll touch on some of the blue. Coventry obviously being the most recent disposal, selling about GBP 10 million more than what we acquired the site for. You would have seen actually in our most recent announcement that the remainder, the rump of that property, the Triangle site, the council and their JV with Friargate has actioned that option to take that office. That asset will no longer be a part of the portfolio going forward. If you look at sort of Milton Keynes and Leeds and Bradford, more recent sales, that's a very good example of the selling out of industrials for yields in the low 6%.
Obviously, subsequently, we've reinvested that into high-yielding properties over the course of the past two years, which Coventry actually was one of them with a relatively low and short hold period for us. Out of the DP warehouse in Deeside, obviously producing no income. We took the decision at that time not to do a specced refurbishment and capture rent and growth and then sell the asset, having let the property, but to sort of skip that and just sell to an owner-occupier at what was a premium to DP at a price that was close to what the investment value would have been had we done the work, not factoring in the cost of doing the refurbishment.
Again, South Kirkby, Basingstoke and Moorside, Swinton, which sit to the left-hand side of Oxford, more industrial sales, selling out of lower-yielding assets at a time when the sector was very hot and reinvesting into high-yielding assets. Again, finally, Eastpoint Oxford, the one that sticks out like a sore thumb, bought that for GBP 8.2 million, yielding 9%. Did see that income drop off throughout the whole period, but in doing so, we secured an alternative use, life sciences and healthcare, and that enabled us to crystallize the very successful sale at GBP 29 million. Finally, George has touched on the red bars. I think we obviously went through an asset management process with those assets. We also continue to remind you that alternative uses and underwriting our investments with alternative uses and having the optionality to take assets to different uses is very important.
That theme sort of kind of underpinned the sales of these two assets. Glasgow, which was an office, which through time with sort of the sector and having a structural change became a little bit more peripheral. We ended up selling that to a student developer. Blackpool Retail obviously has had its woes, but there were upper parts there which were of interest to the buyer there. That enabled us to sell those assets despite them not being our best examples of what we've done in the course of the past 10 years. I'm going to hand over to Laura, who's going to just touch on the current investment markets and sort of the buying opportunity that we're seeing in the U.K. currently.
Thanks, guys. Yeah, this slide, really the best way I think of showing you what we think is a very strong opportunity at the moment here in U.K. commercial real estate. As you can see from tracking this red line, which shows average capital values, we are at the lowest point in the value lifecycle since our IPO. That's a really exciting thing to be able to say to you because we absolutely believe in the strength of our pipeline and the opportunities that we can acquire out there in the market at the moment. We can see that values haven't recovered since the Conservative mini-budget in late 2022. This is expected to happen as interest rates start to fall and as the U.K. investment market starts to normalize. This is the greatest buying opportunity I think we've seen during the lifecycle of the company.
Given some of the great successes that we've had, as Henry has just shown you on the previous slide, and some of what we believe are genuinely exciting things that we've done to some of our assets during the last 10 years, it is really quite exciting for us to be able to sit here to you today and show you this slide, which is really representative of our pipeline. When we talk about this slide, a lot of people say, "Gosh, well, why don't you go out and sell a lot of your assets so that you can appreciate from this great buying opportunity?" Of course, is it a great buying opportunity in general? It tends to be a less strong selling opportunity. That is why that is not a particularly relevant strategy across the portfolio very widely at the moment.
With a lot of our assets, we continue to work through specific business plans. A lot of our assets are simply not at the point in their lifecycle that we would like to let go of them. However, there are some specific circumstances around assets. Coventry that we sold at the end of last year, we very much were able to maximize the value of that asset and will have, and now by the time that we've invested those proceeds into other high-yielding assets, have achieved both capital appreciation and income appreciation through going through that process. I'm not saying that, you know, we cannot achieve best value from any sale at the moment, but that's more of a comment that's applicable to sales across the board. It is a very good time to be buying U.K. real estate, but less good perhaps for sellers.
Here, we're just showing you the inverse of this. Of course, at a time when there are lower values, this is generally the case that we would be able to access high yields. That's absolutely what we're seeing today. This pipeline that we can access at the moment, represented by these average values here in U.K. commercial property, not only the lowest values, but also the highest yields that we've seen available since the IPO of this company. For a company that is looking to pay out a high level of income, this is again a very exciting opportunity. Really, why is all of this happening? One of the reasons is because the U.K. investment market has been experiencing less competition, fewer players, much lower transaction volumes since that Conservative mini-budget in September 2022. With fewer participants in the market, there's less transparency around pricing. There is more mispricing.
As value investors, that is absolutely what we want to see—times when we can acquire properties out of line with their long-term fundamentals, and then we can actively manage them. Handing back to Henry, who will talk about Leicester, our latest acquisition.
Thanks, Laura. Yeah, here's Leicester in sort of roughly eight-acre site, just a stone's throw away from Leicester City Centre, which is one of the fastest growing U.K. urban areas, which is obviously very positive. We bought the property for GBP 11.15 million, GBP 103 per sq ft, and a 10.6% net initial yield, with their reversion to come with upcoming rent reviews. Just touching on that, cap value per sq ft, GBP 103 per sq ft. These are modern, purpose-built units, which could very easily be moved into alternative uses. That cap value per sq ft would be less than what it would cost to build these units, so some really good value there. Also, typically, when you buy these sort of city centre leisure and retail parks, they've got a very low site coverage.
There's an opportunity to add value through potentially building other units on this site, notably maybe a hotel. There's the potential for some EV charging or maybe a drive-through restaurant pod. Currently, the property is let to Odeon, Mecca Bingo, Nando's, and a Spirit Pub [Company], which is a strong trading Pub, naturally being located next to Leicester City's football club and the rugby stadium as well. Odeon trades very strongly here, and the property was entirely refurbished to Odeon's Luxe standard a couple of years ago. We really got deep in our DD here, and that gave us the confidence to buy this asset. Same can be said actually for the Mecca Bingo as well. We understand that there are other operators who would be keen to potentially take that Mecca Bingo. Two very strong trading leisure assets, throwing off a really cracking yield for the company.
As I said, purpose-built modern units, these also could be taken to alternative uses. You could see this potentially being a last-mile logistics or trade counter location. Leicester's obviously well known for its education, so students could potentially be here. An asset that we really like, doing exactly what we want day one, throwing off some great income with potential for rental growth, but lots of options up our sleeve in the medium to long term. Laura mentioned that we are coming, we've had our 10-year anniversary, and this slide really shows the performance and the track record of the strategy over the years. Moving from 2017 to 2025 from left to right. I suppose the main themes with this chart, which you'll appreciate, there's quite a lot going on here, but you'll also sort of acknowledge that the portfolio has had an active 10 years.
I think the main themes really are first is the consistency of the income. That is the blue bar, which runs across here. You can see that income has been pretty consistent, and that is obviously what has enabled us to pay out the GBP 0.08 dividend now for 10 years, GBP 0.02 per quarter for 39 consecutive quarters. Secondly, we're really touching some sort of countercyclical buying and selling. We were buying retail and offices at a time that values looked very attractive there. We bought industrials at a time when we'd seen very little rental growth and higher yields in sort of secondary industrials and have done really well selling out of those. More recently, we have been buying again in the High Street and some really cracking office locations and bars. That countercyclical buying and, of course, selling is massively important to the total return theme of the company.
Also, diversification. In recent years, there has been a theme that people want to be very sector-specific. However, diversification in the portfolio has enabled us to drive this total return. At times when some sectors are performing less strongly, others perform more strongly. That is exactly where we want to be. It means we can sort of roll with the punches and really sort of decide how we drive this performance. Finally, sort of asset management and alternative uses. We really get on the skin of our assets, and we are not relying on yield compression to sort of drive values and total return. We are adding income. We are adding value through asset management, and the alternative uses is very much a part of that. Giving Oxford is the sort of very obvious example of an alternative use securing a really, really successful sale.
This is, I think, a very meaningful slide. Please do have a dive into it and just see kind of where that performance has come from the past 10 years. That's all from me. I'm going to hand back to Laura, who's going to conclude the presentation. Thank you very much.
Thanks, Henry. I think hopefully that's been a useful summary. As Henry said, the slides that we presented today are available on the platform. Please do come back and have a look because we know that sometimes we put quite a lot on our slides, particularly that one that Henry's just presented, which gives an awful lot of detail into how we feel that we have been able to generate this long-term outperformance. Please do go back and have a look. I would also direct anyone towards our website who's interested in learning more about the company. We show our full portfolio of assets on our website. Of course, you can access all of the latest news, access videos like this, access some further content as well, and of course, all of our corporate documents.
If you are seeking any further information on the company, then I would draw your attention there as well. Just to conclude, we are really pleased with the company's position at the moment, passing through 10 years. To see that 10 years achieving the level of outperformance that we have, we feel incredibly grateful to have been on this journey and excited about the future because when we look at this pipeline and the really strong proposition that we think the U.K. commercial property market presents today, we also feel very excited about the performance that we think we can generate in future periods. Alex, do you want us to go straight into the Q&A?
Sorry, Laura, I hadn't reached out. Go ahead.
That's all right. No worries. I'm noticing a couple of questions here from investors asking us about dividend growth. Yes. Quite rightly so, with the U.K. REIT structure requiring us to pay out 90% of our income as dividends, of course, if we are at a point with the company where we have grown our income to that kind of level, then yes, it's almost a kind of regulatory certainty that we would need to pay this out to our shareholders. We focus on driving income and driving total return. Driving income is not our only objective. We are very much focused on both of those things. Another thing I'd just sort of add on that is that we do think that the GBP 0.02 per quarter today still looks attractive when looking at the kind of U.K. investment companies' landscape.
We are aware that, of course, other companies are growing their dividends. I think if we reached a point where we felt that our own dividend was not so competitive at a time in the future, then yes, again, that would be a reason to review that policy. As where we are at today, our board are happy with where they set the dividend at present.
If I was to start a few comments to that as well. I suppose if we look at the dividend in both yield as well as just the gross payment amount, the business is a kind of GBP 170 million- GBP 175 million business. I think sometimes, you know, we talk about GBP 0.02 and GBP 0.08, and it doesn't really sound that emphatic. If you look at that on an annual basis, there's GBP 14.4 million leaving this company every year in that dividend of what is a GBP 170 million- GBP 175 million business. That is huge. If we look at kind of the, when I obviously spend a lot of my time benchmarking ourselves against our peers, not only is it very compelling from a yield basis, only through the strength of our own share price are we at a sub-8% dividend yield.
Where there was share price weakness in the wider market only a few months ago, our yield exceeded 9%. The gross payment amount of GBP 0.08 is also, annually, one of the highest in this entire country. I appreciate that investors, you're always going to look for dividend growth. I'd really like to remind, I sometimes have to remind ourselves and our board, as well as kind of our investor base, that actually what we have been doing, especially during times like COVID, where we're one of the only market players not to cut our dividends, has been extraordinary. It's very easy to get used to something that is already really good. Of course, we would always wish to grow earnings and grow our dividend, but let's not forget how competitive it has been and how competitive it still continues to be.
Thanks, George. Just picking up a few other questions. Somebody has asked, what do we think of the new government policy of banning upward-only rent reviews? Is that considered to affect us going forward? Yes. It's not a policy that we're particularly concerned about. One of the major reasons for this is that U.K., and not just within this company, but across the whole U.K. commercial property market, leases have been shortening now quite significantly for some number of decades, to the point today where average lease lengths in both the retail markets and the office markets average only four years. Traditionally, in U.K. commercial property, you would see upward-only rent reviews taking place every five years. Obviously, if the average lease length is shorter than that when it's granted, it would not even contain a rent review clause anyway. That is for the majority of leases in those sectors.
We've also seen trends in both of those sectors, with retail towards turnover leases and also in offices too, now given the sort of rather difficult period that that sector has been through in recent years. That, on top of the fact that we also often favor shorter leases in this strategy, we very much like to have those real conversations with our tenants that we can get only at lease end. As I think you might have heard me say quite a number of times, if we believe that we have bought the right asset in the right location for the right price, then we are more than happy to have those open market conversations every couple of years in order to keep driving income and keep driving capital from our properties. In short, it's not a policy that we're concerned about.
Another question asking if we had to have any cladding issues to resolve, and I'm guessing this is a throwback to the sort of construction issues around particularly residential buildings over a certain height with flammable cladding. The answer to that is just that we don't. We don't have any particularly tall buildings. We don't have any residential buildings. We don't have any buildings with this type of cladding on where it would be impractical on value. Do you want to take the Leicester question, Henry?
Yes, we've had a question on Leicester saying, "On the Leicester asset, the cinema is a large part of the asset. Repurposing the cinema would come at huge expense as the internal configuration is very restrained to cinema operators. What alternatives have you considered for this unit, specifically given poor performance of cinema since COVID?" I think it's fair to say that there have been headwinds for the cinema sector, most notably with lots of people watching films and shows on platforms like Netflix and Amazon and Paramount or what may it be. When I presented the slide, I think it's important to sort of realize that we did some really, really in-depth due diligence on this asset. The cinema trades very strongly and being one of the Odeon's top quartile traders.
It's also probably worth noting that Leicester has a high Asian population, and there is the Bollywood sector, and the cinema benefits from that showing Bollywood films as well. In terms of repurposing, I appreciate that cinemas do obviously have all the tiered seating, and that can be expensive in repurposing. Yes, we very much do consider alternative uses, but this cinema has had a vast amount of money spent on it in terms of luxing it to have full recliner seats. We very much do see it as having a long-term future as a cinema for Leicester. When I was talking about kind of alternative uses and repurposing, I think it would be more relevant to the Mecca Bingo, which actually sits adjacent to what was a car dealership.
Also, alternative use in terms of the low site coverage being roughly around 20% and being able to add alternative uses onto the site. Previously, I've talked about kind of agglomeration economies, where you have a wider variety of tenants which naturally have a stronger pull to people to the property. I.e., if there was a hotel on this site, that is only going to benefit the cinema. It is definitely something that has been praised and considered as part of our acquisition process. For now, we feel very strongly about the current occupational performance of this asset and going into the medium and long term.
Someone has asked a question about, "We have around 28% of our portfolio in the southwest and sort of why that area has been particularly selected as having that sort of weighting of investment within it." I'd first of all pick that up by saying that we don't aim for any particular weighting in one geographical area. We generally aim to be sort of diversified across geographies. We don't set out to sort of focus on a particular geography unless there is, of course, a specific pricing reason to do that. I guess I'd just sort of summarize and say, therefore, that most of our assets are acquired on a very much bottom-up basis. It is just that we have found more opportunity in that area. It's not us sort of particularly saying that we think that that is one of the strongest economical areas of the U.K.
We do absolutely believe in the economic viability of the southwest. It's just the combination of that with the advantageous pricing that we found there over the last 10 years, particularly, I'd say, in cities such as Bristol & Bath. We are countercyclical buyers. If others aren't picking up opportunities in those areas that we believe are particularly strong, then we will absolutely look to take advantage of that. Quite a few others asking about if we have any intentions to do any share issuance as well. Some of you will have seen the announcement we made during the quarter about our successful application with the London Stock Exchange for a block listing. This is simply just a permission for us to issue shares at some point in the future if there is enough demand.
We have also discussed in some of our corporate announcements that we would like to issue new shares to meet this attractive pipeline as well. Of course, all of this very much depends on investor demand. If such levels are there, then that is what we would like to do in the future. Of course, we can only do that at levels where the share price is supportive.
Question here from Paul W about Queen Square and the refurbishment, asking if the entire property is vacant. No, it's not the entire property. It's about 11,000 sq ft of that property. We've already proceeded with the refurbishment of, I'd say, 2/3 to 3/4 of that 11,000 sq ft space to Cat A specification. A smaller section of the office has recently come back with a tenant called Candine vacating, where we secured a dilapidation settlement of about GBP 50,000. We're in the process of stripping that space out with a view to then coordinating a Cat A refurb with a Cat B refurb. I can't really reveal too much this quarter because we're in the short strokes of negotiations with regards to dovetailing that refurbishment work with a letting. There will probably, I would say, be an announcement about that deal in the following quarter.
I'll just pick up one last question here. Someone's asking how much cash we have available for investment. We currently don't have any cash really available for investment. We have kept a couple of million back for capital expenditure projects, sorry. We have made two big acquisitions since selling the Central Six Retail Park in Coventry, and those are Hitchin and Leicester. We are fully invested as we stand today. Somebody has asked, "Which sectors of the market are we most interested in?" Our policy is sector agnostic. We're finding a lot of opportunity, actually, across sectors at the moment, going back to that comment I made earlier about sort of general U.K. market pricing. I'd say the concentrations of those are often sitting in High Street Retail and in leisure as well.
Just going back to those comments that Henry was making earlier about Odeon, it's quite common that perhaps other large investment houses might make sort of sector-wide calls where they would simply look to sell down leisure, and therefore, there might be a significant amount of leisure assets hitting the market. There is a negative perception around the trade of some cinemas at the moment. It is the case that some of them, or even a lot of them, may close. We don't believe that all cinemas will close. If we have acquired the ones that trade the strongest in viable locations for the right kind of pricing, then we also believe in their ongoing viability for alternative use as well. That's how we will be continuing to look at those opportunities.
That's great, Laura, Henry, George, if I may just jump back in there and thank you for addressing all those questions from investors today. The company can review all questions submitted today, and we will publish those responses on the Investor Meet Company platform. Laura, before I redirect investors to provide you with their feedback, which is particularly important to the company, could I please ask you for a few closing comments?
Yeah, thank you. Just to say a big thank you to everyone for joining us today and for the questions as well. As I said earlier, please do hop on our website if you're ever seeking further information. Yes, you know, we think it's a really exciting time for the company. Hopefully, after today's call, investors feel both very that we've passed on a lot of knowledge about what we're doing in the company at the moment, but also equally excited about the opportunity for ourselves and the U.K. commercial property markets as well.
Fantastic. Laura, Henry, George, thank you once again for updating investors today. Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure 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 and good morning to you all.