TIDMAIRE
RNS Number : 7235S
Alternative Income REIT PLC
13 July 2020
13 July 2020
Alternative Income REIT plc
(the " Company " or " Group ")
ROBUST RENT COLLECTION CONTINUING WITH AT LEAST 84% OF Q3 RENTS
EXPECTED TO BE COLLECTED BY SEPTEMBER 2020
The Board of Directors of Alternative Income REIT plc (ticker:
AIRE), the owner of a diversified portfolio of 19 UK commercial
property assets let on long leases, is pleased to provide the
following update on rent collection.
The Group's annual passing rent roll from its 21 tenants, after
adjustment for the terms of the Travelodge Hotels Limited
("Travelodge") CVA, is GBP6.58 million. All of the percentages
quoted below are based on the rents contractually due for the
current quarter.
The Company's resilient and diversified portfolio that remains
fully let predominantly on long, index-linked leases has delivered
strong rent collection since the start of the COVID-19 pandemic.
The Board expects that at least 84% of Q3 rents due will be
collected by September 2020:
-- 89% of the quarterly rents, which represent 70.4% of the
annual rent roll, have been collected, including the quarter rent
from Meridian Steel Limited, whose rent free period ended on 23
June 2020.
-- The proportion of rents which are contractually due monthly
is now 17.4% and, in addition, a small number of tenants,
representing 12.2% of the annual rent roll, have been granted
concessions for a limited period to settle their rent monthly. 72%
of those who currently pay monthly have settled their July
rents.
-- The Company remains in discussion with a small number of
tenants, representing 11% of the rent roll, in respect of potential
deferral of their rent payments in support of their near term cash
flow requirements.
o Where realistic, the Group may continue to provide
proportional assistance to those tenants whose operations remain
materially impacted , whilst protecting its own position and its
responsibility to shareholders . The Company will treat each case
on its merit.
o To date, no rent free periods or rent adjustments, except for
the Travelodge CVA, have been agreed across the portfolio.
o Tenants occupying the Group's assets in the education and
leisure sectors represent the majority of those whose rents remain
due .
On 24 April 2020, the Group announced that it had collected 82%
of the quarterly rents which were due on the March 2020 rent
quarter day, which represented 64% of the Group total rent roll. To
date, 82% of all of the Group's Q2 2020 rents have been collected,
with the remaining 18% the subject of negotiations.
The Group has headroom on both its loan to value and interest
cover tests; the asset valuations and rental income of the 17
properties secured to Canada Life would need to fall by 29% and 36%
respectively before breaching the loan covenants.
Travelodge CVA
The rent due from Travelodge in respect of the Group's hotel in
Swindon represented c.5% of the Group's total annual rent roll
before the CVA.
The terms of the CVA have the following effect:
-- The rent from Travelodge in respect of the period between
March 2020 and 31 December 2020 will be 25% of the contractual rent
and are payable monthly, instead of quarterly.
-- The Travelodge rent will revert to 7 0% of the contractual
rent from 1 January 2021 to 31 December 2021, after which it will
return to 100% of contractual rent.
-- The Company will be entitled to additional cash rental
payments should THL exceed a level of baseline profitability being
66.7% of the amount by which cumulative Adjusted EBITDA for the
financial years 2020, 2021 and 2022 exceeds GBP200 million.
-- The flexibility in the CVA terms allows the Company to break
its lease with Travelodge, should it wish to do so , up to the end
of November 2020. The Company wi ll adopt a proactive asset
management strategy in this regard to maximise shareholder
value.
-- The CVA provides the landlord with a 36 month lease extension
option, which expires on 28 August 2020.
-- The CVA does not allow Travelodge to terminate its lease.
Steve Smith , Chairman of Alternative Income REIT plc,
commented:
"We expect at least 84% of Q3 rents due to be collected by
September 2020, reflecting the strength of our portfolio and
underpinning the Group's resilient and defensive income. The Group
remains well capitalised and we entered this period of uncertainty
in a robust position supported by our low recurring annual
overhead.
The appointment in May 2020 of M7 as the Company's Investment
Adviser provides the Group with access to M7's significant
expertise and resources. Our rent collection performance and
financing structure are robust, and we look forward to making good
strategic progress and creating value for our shareholders over
both the short and medium term."
ENQUIRIES
Alternative Income REIT PLC
Steve Smith - Chairman via Maitland/AMO below
------------------------------
Maitland/AMO (Communications
Adviser)
------------------------------
James Benjamin james.benjamin@maitland.co.uk
+44(0) 20 7379 5151
------------------------------
Cenkos
------------------------------
Will Rogers wrogers@cenkos.com
+44(0) 20 7397 1920
------------------------------
Rob Naylor rnaylor@cenkos.com
+44(0) 20 7397 1922
------------------------------
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT PLC is available
at www.alternativeincomereit.com (1)
About the Group
Alternative Income REIT PLC aims to generate a sustainable,
secure and attractive income return for shareholders from a
diversified portfolio of UK property investments, predominately in
alternative and specialist sectors. The majority of the assets in
the Group's portfolio are let on long leases which contain
inflation linked rent review provisions, which help to underpin
income distributions to shareholders with the potential for income
and capital growth.
The Company's Investment Adviser is M7 Real Estate Limited
("M7"). M7 is a leading specialist in the pan-European, regional,
multi-let real estate market. Majority owned by its senior
managers, it has over 200 employees in 14 countries across Europe.
The team manages over 830 properties with a value of circa EUR5
billion.
Notes
1 Neither the content of the Company's website, nor the content
of any website accessible from hyperlinks on its website or any
other website, is incorporated into, or forms part of, this
announcement nor, unless previously published on a Regulatory
Information Service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in the Company.
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END
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