- 3Q26 distributable income rose 7.1% YoY, mainly attributable to lower property expenses (down 47.4% to £0.47mn). It’s leases are Full Repairing and Insuring (FRI) leases, where the tenant is responsible for the full maintenance and repair of the property. We believe the drop is attributed to sale of the largely vacant Ladywell House, Edinburgh in Mar26, and lower repositioning related expenses compared to 3Q25.
- Peel Park data centre sale is on track for 1H27 launch. Planning approval and a 120 MVA power allocation are secured for the site (valuation: £44.0mn as at Feb26). Management plans to launch the sale in 1H27, once National Grid confirms it can transmit power to the local network. We believe DWP, which occupies the adjacent building, may need the property beyond its 2028 lease expiry, which could provide continued rental income alongside the sale.
- We maintain BUY with lower DDM-based TP of £0.40 (prev. £0.41). We increase our cost of equity by 25 bps to reflect a higher interest rate environment. There are no changes to our forecast. Elite is trading at a 10.2% FY26e dividend yield, and a P/NAV of 0.64x. One of the larger assets that DWP may not renew is Glasgow Benefits Centre (valued at £4.35mn as of Feb26). It has strong potential for PBSA development, as it is situated near Glasgow Caledonian University (c. 22,205 students, with 22.7% international students), and a nomination agreement could provide more predictable rental income. Elite trades in GBP under MXNU and in SGD under MENU tickers.
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