Quality Tenant Base Backed by AA-rated Credit Strength

The quality of the tenant base in Elite REIT's portfolio helps ensure that Elite REIT remains resilient through economic cycles.

More than 99% of Elite REIT's FY2023 gross rental income1 is derived from the UK Government2, backed by AA-rated sovereign credit strength, providing financial stability and income certainty. The credit strength of the tenant enabled Elite REIT to consistently collect rental three months in advance, in full and on time, ensuring stable cashflows. Leases are signed with a diversified mix of UK Government departments and agencies on a full repairing and insuring3 (“FRI”) basis, providing insulation in a rising inflation and rising energy prices environment.

Our Primary Occupier Delivers Essential Public Services

Elite REIT's primary occupier is the Department for Work and Pensions (“DWP”), which is the UK Government's largest public service department responsible for administering the country's state pension, welfare and child maintenance policy.

The DWP is integral in supporting the UK's social fabric as it delivers essential public services to the community. The DWP served over 22 million4 claimants in the year to February 2023, dispensing over £230 billion5 in benefits and pensions in FY2022/23.

DWP contributed approximately 93.2% of Elite REIT's gross rental income as at 31 December 2023.

Although labour demand had begun to ease, the labour market remained tight6. While still being under pre-pandemic rates, the unemployment rate had been on the rise for the first half of 2023 and fairly stable at 4.2% for the second half7. Vacancies continue to fall all the way to December 20237, but the vacancies-to-unemployment ratio remained at a very elevated level6.

The DWP also aims to commit more to helping people over the age of 50 by giving extra personalised work coaching as part of their Universal Credit claims5. This initiative, having started since February 2023 across all Jobcentre Plus, allows the DWP to more accurately identify the core setbacks that these people face regarding employment.

Moreover, in light of the upward movement of global prices caused by Covid-19 as well as the invasion of Ukraine, the DWP has been on the frontlines giving critical support to the nation's social stability. Through their new support programmes and plans, the DWP has helped countless people, especially those with disabilities or employment challenges, to either return to employment for those who need it, or to enjoy their deserved retirement8.

With 88.2% of the DWP-occupied properties designated as Jobcentre Plus offices, our properties continue to remain part of the crucial public infrastructure serving the UK society.

  1. As at 31 December 2023.
  2. A majority of the leases are signed by the Secretary of State for Levelling Up, Housing and Communities, which is a Crown Body.
  3. 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 for occupied assets.
  4. Gov.UK, National statistics, DWP benefits statistics: August 2023, 15 August 2023.
  5. Gov.UK, Corporate report: DWP annual report and accounts 2022 to 2023, 7 August 2023.
  6. Bank of England, Monetary Policy Report, Monetary Policy Committee, February 2023.
  7. Office for National Statistics, Labour market overview, UK: January 2024, 16 January 2024.
  8. Gov.UK, Corporate report: DWP annual report and accounts 2022 to 2023, Secretary of State's Foreword, 6 July 2023.
  9. As of October 2023. Data.gov.uk. Workforce Management Information, Department for Work and Pensions October 2023.
  10. Parliament of UK, Research Briefing: Disabled people in employment, House of Commons Library, 19 June 2023.
  11. Parliament of UK, Report: Written evidence from the Tinder Foundation (FJP0082), June 2016.
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