Elite UK REIT posted a distributable income of £19.3 million for the year ended 31 Dec 2025, up 4.6 % year-on-year, as interest-saving measures offset softer rental-related income and repositioning costs.

Revenue in FY2025 edged up 1.3 % YoY to £38.0 million, while net property income slipped 3.7 % to £36.0 million after asset-repositioning expenses and lower dilapidation settlements. Adjusted net property income, which strips out one-off items, eased 1.4 % to £34.4 million. Distribution per unit rose 5.6 % to 3.03 pence, based on a 95 % payout ratio; no payment timetable was disclosed.

Weaker property income was partly cushioned by a 20-basis-point fall in average borrowing costs to 4.7 % and a 1.8-percentage-point improvement in net gearing to 40.7 %. Portfolio value increased 2.0 % to £424.7 million, helped by the June acquisition of three government-leased assets and higher valuations at Peel Park, Blackpool, which climbed 22 % to £40.0 million amid plans for an AI-enabled data-centre development.

Government-leased properties contributed the bulk of rental revenue, with new £24.3 million lease agreements for Department for Work and Pensions (DWP) assets extending the weighted average lease expiry to 7.2 years and cutting 2028 expiry exposure to 32.0 % of gross rent. CPI-linked rent reviews are embedded from April 2033, and no break options apply during the initial terms.

Headwinds included £1.4 million in asset-repositioning costs at Peel Park and two living-sector conversion projects—Lindsay House in Dundee and Cambria House in Cardiff—that weighed on near-term income but are expected to add student-housing revenue once completed.

Strategic priorities for 2026 centre on completing the student-accommodation conversions, progressing the planned data-centre scheme at Peel Park and maintaining a hedged debt profile; 85 % of interest exposure was fixed or hedged at end-2025.

Chief executive officer Joshua Liaw said the trust had “laid a solid foundation” through balance-sheet optimisation, a longer lease profile and selective acquisitions. He noted that trading liquidity has doubled since these initiatives and emphasised the manager’s focus on “mission-critical properties offering attractive recession-proof yields” amid a UK macro-environment of easing but still-elevated inflation and a 3.75 % Bank of England base rate.

Looking ahead, management expects the combination of government-backed income, CPI-linked rent reviews and ongoing value-creation projects to support stable distributions despite persistent economic uncertainty and a 5.1 % national unemployment rate.