TIDMAIRE
RNS Number : 5172A
Alternative Income REIT PLC
03 February 2022
3 February 2022
Alternative Income REIT PLC
(the " Company " or " Group ")
RENT COLLECTION, DIVID DECLARATION, NAV AND BUSINESS UPDATE
The Board of Directors of Alternative Income REIT PLC (ticker:
AIRE), the owner of a diversified portfolio of UK commercial
property assets, predominantly let on long leases with
inflation-linked rent reviews, provides a trading and business
update and declares an interim dividend for the quarter ended 31
December 2021.
Alan Sippetts, Non-Executive Chairman of Alternative Income REIT
plc, comments:
"Our resilient portfolio provides secure, long dated and
indexed-linked income and remains well placed to deliver further
value. This is demonstrated by the strong increases in our
like-for-like property valuation and unaudited NAV, growing income
and continuing very strong rent collection figures, with 100% of
rent due expected to be collected in the current quarter.
Further enhanced income and capital growth are expected to be
delivered to shareholders from our portfolio with 93% of our leases
linked to inflation, with the potential for further enhancement
from asset management initiatives, opportunistic transactions and
as the market continues to improve. Together with the Company's
modest overhead and strong balance sheet, t he Company is
increasingly well positioned to deliver attractive, inflation
protected fully covered dividends and capital growth to our
shareholders."
Rent collection
The rents for the current quarter ending March 2022 are split
83% quarterly and 17% monthly, and to date, the Group has collected
93.3% of the total due in the current quarter and this increases to
99.0% when account is taken for the tenants who are contracted to
pay monthly. The remaining 1.0% is expected to be recovered during
the remainder of Q1 2022. Overall, for the current quarter, the
Group expects to collect 100% of rent due.
Dividend declaration and update on Earnings per Share
The Board is pleased to declare an interim quarterly dividend of
1. 30 pence per share for the quarter ended 31 December 2021 (
quarter ended 30 September 2021: 1.30 pence per share; quarter
ended 31 December 2020: 1.00 pence per share) . This quarter's
interim dividend will be paid as a Property Income Distribution
("PID") and will be paid on 28 February 2022 to shareholders on the
register on 11 February 2022. The ex-dividend date will be 10
February 2022.
As previously announced in the Company's AGM statement on 30
November 2021, the Board confirms that the Company remains on track
to deliver on its target annual dividend of 5.5 pence per share
with full dividend cover expected, all else being equal, by
September 2022(1) .
Unaudited EPRA EPS for the quarter ended 31 December 2021 were
1.68 pence per share, representing dividend cover for the quarter
of 129% ( quarter ended 30 September 2021: 1.59 pence per share,
122% cover; year ended 30 June 2021: 5.55 pence per share; 108%
cover).
The EPRA EPS includes accruals to reflect both the minimum
contracted uplifts and the amortisation of loan arrangement fees
and movements in the provision for impairment of trade receivables.
Excluding these items from the Group's EPRA EPS, the unaudited
adjusted cash earnings were 1.37 pence per share, reflecting 105 %
cash dividend cover for the quarter (q uarter ended 30 September
2021: 1.43 pence per share, 110% cash dividend cover; year ended 30
June 2021: 5.07 pence per share, 99% cash dividend cover).
Property Valuation
As at 31 December 2021, the Group's property portfolio had a
fair value of GBP107.73 million across 18 properties (31 December
2020 : GBP108.53 million across 19 properties). To compare the
valuation of the Group's 18 properties on a like-for-like basis
(i.e. excluding the Audi showroom in Huddersfield sold on 1
December 2021), the fair value of the Group's property portfolio as
at 31 December 2021 was GBP107.73 million (31 December 2020: GBP
103.03 million), resulting in a 4.6% like-for-like increase year on
year . On a like-for-like basis, the fair value of the Group's
property portfolio as at 30 September 2021 was GBP105.93 million,
resulting in a 1.7% like-for-like increase over the quarter.
As at 31 December 2021, the net initial yield on the Company's
portfolio was 5.71%, compared with 5.84% on 30 September 2021.
Following the easing of Covid-19 related lockdown restrictions,
the Group has experienced valuation increases during 2021 for its
leisure and hotel assets, two asset classes that were hit hard by
the pandemic, and increases more widely across its retail
warehousing, industrial and student housing assets, with the
portfolio benefiting from rental uplifts. There is further
potential for yield compression as trading and the market generally
improves, and opportunities from rental increases as 93% of the
portfolio's leases are linked to inflation .
Net Asset Value
At 31 December 2021, the Company's unaudited net asset value
("NAV " ) was GBP72.75 million, 90.38 pence per share, (30
September 2021: GBP70.68 million, 87.80 pence per share) reflecting
growth of approximately 2.94% over the period due to increases
during the quarter in portfolio valuation and income earned.
The table below sets out for the movement in NAV during the
quarter.
Pence per GBP million
share
NAV at 1 October 2021 87.80 70.68
---------- ------------
Valuation movement in property portfolio* 2.08 1.67
---------- ------------
Income earned for the period 2.42 1.94
---------- ------------
Expenses for the period (0.29) (0.24)
---------- ------------
Net finance costs for the period (0.45) (0.35)
---------- ------------
Gain on sale of property 0.12 0.10
---------- ------------
Interim dividend paid during the quarter
ended 31 December 2021 (1.30) (1.05)
---------- ------------
NAV at 31 December 2021 90.38 72.75
---------- ------------
* The quarter's increase in the independent fair valuation of
GBP1.80 million has been reduced by GBP0.13 million to reflect the
minimum contracted rental uplifts, resulting in a net valuation
increase of GBP1.67 million.
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards as adopted by
United Kingdom and incorporates both the Group's property portfolio
individually valued on a 'Red Book' valuation basis as at 31
December 2021 and net income for the quarter, but does not include
a provision for the interim dividend declared today (see above) for
the quarter ended 31 December 2021.
The income earned for the period includes an accrual for the
minimum contractual uplifts contained in the index linked leases.
In the event that inflation is greater than these minimum
contractual uplifts, the actual income will be greater than the
income currently accrued.
Portfolio update
As at 31 December 2021, t he Group's assets were 99.7% let (31
December 2020: 100% let) with final terms on the remaining 0.3%
agreed with Bgen Ltd for a higher rent in respect of an area of
land at St Helens, which was vacated during Q4 2021 .
The weighted average unexpired lease term ("WAULT") as at 31
December 2021 was 18.2 years to the earlier of break and expiry (31
December 2020: 18.3 years) and 20.2 years to expiry (31 December
2020: 20.3 years).
93% (30 September 2021: 87%) of the portfolio's income stream is
reviewed periodically, on an upward only basis, in line with
inflation; with 70% and 23% of the portfolio indexed (subject to
floors and caps) to RPI and CPI, respectively.
As announced on 31 January 2022, the Company completed the
acquisition of the Volvo car showroom in a prime location on the A4
Bath Road, Slough for GBP5 million, in an off-market transaction.
The price reflects a net initial yield of 5.00% and a discount to
replacement costs. This acquisition redeploys the net proceeds from
the Group's disposal, announced on 30 November 2021, of its Audi
car showroom in Huddersfield for GBP5.5 million, with a materially
longer lease term.
ENQUIRIES
Alternative Income REIT PLC
Alan Sippetts - Chairman via Maitland/AMO below
M7 Real Estate Ltd
Richard Croft +44 (0)20 3657 5500
Panmure Gordon (UK) Limited +44 (0)20 7886 2500
Alex Collins
Tom Scrivens
Chloe Ponsonby
Maitland/AMO (Communications Adviser) +44(0) 7747 113 930
James Benjamin aire-maitland@maitland.co.uk
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available
at www.alternativeincomereit.com (2) .
1 This is a target only and not a profit forecast. There can be
no assurance that the target will be met and it should not be taken
as an indicator of the Company's expected or actual results.
2 Neither the content of the Company's website, nor the content
on 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.
NOTES
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.
The Company's investment adviser is M7 Real Estate Limited
("M7"). M7 is a leading specialist in the pan-European, regional,
multi-tenanted real estate market. It has over 220 employees in 15
countries across Europe. The team manages over 570 properties with
a value of circa EUR4.3 billion.
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END
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