TIDMAIRE
RNS Number : 9747H
Alternative Income REIT PLC
02 August 2023
2 August 2023
Alternative Income REIT PLC
(the " Company " or " Group " or " AIRE ")
NET ASSET VALUE, DIVID DECLARATION AND PORTFOLIO VALUATION
UPDATE
TO 30 JUNE 2023
Total annual dividend of 6.045pps for the year ended 30 June
2023,
an increase of 9.9% on the prior year
Resilient portfolio well-placed to continue to provide secure,
inflation-linked income with the potential for capital growth
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 3 0
June 2023.
Simon Bennett, Non-Executive Chair of Alternative Income REIT
plc, comments:
"The Board is pleased to declare a fourth interim dividend of
1.92 pence per share ("pps") for the quarter ended 30 June 2023. As
a result, the dividend target of 5.70pps for the year ended 30 June
2023 has been met. In addition, the Board has agreed to distribute
to shareholders an extra 0.345pps in respect of non-rental income
that has been received in the year following the successful
settlement of a historical legal case. This brings the total annual
dividend to 6.045pps, an increase of 9.9% on the 5.50pps annual
dividend declared in the prior year. The total annual dividend is
106.3% covered by cash earnings.
The Group's portfolio composition delivers income growth each
quarter (1.86% Q2 2023) due to the 97% inflation linked rent review
profile, with 45% of this rental income reviewed annually. Our
portfolio is 100% let with an enviable track record of 100% rent
collection at the due dates. Whilst many commercial real estate
portfolios, and businesses in general, are struggling with the
impact of rising debt costs on their profitability, the Group
benefits from the security of a fixed low rate of 3.19% until
October 2025.
The second quarter of 2023 has been relatively secure with the
value of the Group's portfolio increasing by GBP0.3 million or 0.3%
to GBP107 million (31 March 2023: GBP106.7 million) over the
period, and our portfolio's net initial yield remaining unchanged
at 6.6%. This quarter's valuation growth has come from the
industrial and retail warehouse sectors driven by growth in their
rent and underlying ERVs. At 30 June 2023, the Group's unaudited
NAV increased 0.7% over the quarter to GBP67.8 million or 84.2pps,
due to the increase in the portfolio valuation. When combined with
the dividend paid for the quarter, this produces an unaudited NAV
total return for the quarter of 2.4%.
We continue to actively manage the portfolio, and this quarter
we successfully completed a lease renewal with Pets at Home at the
Droitwich Retail Park, three rent reviews and two fixed rental
uplifts. Working closely with our occupiers, we have an active
programme of analysing EPC recommendations to drive ESG initiatives
and EPC improvements across the portfolio.
Looking to the future, for the period to 30 September 2023, 20%
of the Group's income will be reviewed, one annual index-linked
rent review and two periodic index-linked rent reviews, with five
years since the previous reviews. The Board remains confident that
the Company is well-positioned for the future, with a resilient
portfolio well-placed to continue to provide secure,
inflation-linked income with the potential for capital growth.
"
Overview of Key Financials
At 30 June At 31 March Change
2023 2023
(unaudited) (unaudited)
Net Asset Value ("NAV") GBP67.8 million GBP67.3 million +0.7%
----------------- ----------------- --------
NAV per share 84.2p 83.5p +0.7%
----------------- ----------------- --------
Share price per share 64.7p 67.2p -3.7%
----------------- ----------------- --------
Share price discount to
NAV 23.1% 19.6% +3.5%
----------------- ----------------- --------
Investment property fair
value
(based on external valuation) GBP107.0 million GBP106.7 million +0.3%
----------------- ----------------- --------
Loan to gross asset value
("GAV") (A) (B) 36.8% 37.0%
----------------- ----------------- --------
Quarter ended Quarter ended Change
30 June 2023 31 March 2023
(unaudited) (unaudited)
EPRA earnings per share
(A) 1.7p 1.6p +8.2%
--------------- --------------- --------
Adjusted earnings per
share (A) 1.6p 1.5p +2.6%
--------------- --------------- --------
Dividend cover (A) 81.8% 110.9% -29.1%
--------------- --------------- --------
Total dividends per share 1.92p 1.375p +39.6%
--------------- --------------- --------
Dividend yield (annual)
(A) (C) 9.4% 8.8% +0.6%
--------------- --------------- --------
Earnings per share 2.0p 0.6p +245.1%
--------------- --------------- --------
Share price total return
(A) -1.7% +2.8%
--------------- --------------- --------
NAV total return (A) +2.4% +0.7%
--------------- --------------- --------
Annualised passing rent GBP7.6 million GBP7.5 million +1.3%
--------------- --------------- --------
Ongoing charges (A) (annualised) 1.4% 1.5% -0.1bps
--------------- --------------- --------
(A) Considered to be an Alternative Performance Measure.
(B) The loan facility at 30 June 2023 of GBP41.0 million (31
March 2022: GBP41.0 million) with Canada Life Investments, matures
on 20 October 2025 and has a weighted average interest cost of
3.19%.
(C) The ratio of Group's annual dividends per share divided by
the Group's share price for the period.
Dividend Declaration, Earnings Per Share and Dividend Cover
The Board is pleased to declare a fourth interim quarterly
dividend of 1.92pps for the quarter ended 3 0 June 2023. This
dividend will be distributed as a Property Income Distribution
("PID") and will be paid on 25 August 2023 to shareholders on the
register on 11 August 2023. The ex-dividend date will be 10 August
2023.
The Board is pleased to report that the dividend target of
5.70pps for the year ended 30 June 2023 has been met. The fourth
interim dividend declared includes an additional 0.345pps in
respect of non-rental income received in the year, more details of
which were provided in the half-yearly report. This brings the
total dividend for the year to 6.045pps, representing a 9.9%
increase on the previous year's total dividend of 5.50pps .
The Adjusted EPS increased 2.6% over the quarter to 1.57pps (31
March 2023: 1.53pps) giving a total of 6.43pps for the year (2022:
5.55pps), an increase of 15.9%. The dividend cover for the quarter
was 81.8% (31 March 2023: 110.9%) and 106.3% for the year (2022:
101.3%).
Property Valuation
At 30 June 2023, the Group's property portfolio, comprising 19
assets, had a fair value of GBP107.0 million, representing a 0.3%
increase from the last quarter (31 March 2023: GBP106.7 million).
At 30 June 2023, the Net Initial Yield on the Group's portfolio
remained secure at 6.6% (31 March 2023: 6.6%).
The repricing of the property investment market in the latter
half of 2022 has given way to a period of relative stability in the
first half of 2023, although transactional activity remains
limited. With a further increase in interest rates anticipated over
the summer, certain sectors of the property market are bracing
themselves for further falls in value. The development and
secondary market are already seeing another significant repricing,
which is tending to mirror the rising cost of debt. The Group's
portfolio is relatively insulated from this movement, as it
benefits from being 100% let, with 100% collection of rent due, 97%
inflation linked rent review profile and long dated fixed low rated
debt, providing secure, growing income.
Over the past year, the value of the Group's portfolio has
reduced by a total of GBP10.9 million or 9.2%. Once again, AIRE has
outperformed relative to most other commercial real estate
portfolios, as demonstrated by MSCI who have reported a fall in
their Monthly (All-Property) Index of 21% over the same period.
Net Asset Value, Share price and Share price discount to NAV
At 30 June 2023, the Group's unaudited NAV was GBP67.8 million,
84.2pps ( 31 March 2023: GBP67.3 million, 83.5pps), representing a
0.7% increase over the quarter, due to the increase in the
portfolio valuation. When combined with the 1.92pps dividend paid
for the quarter, this produces an unaudited NAV total return for
the quarter of 2.4% ( 31 March 2023: 0.7%).
The share price decreased by 3.7% to 64.7pps and the share price
total return for the quarter was -1.7%. The Company's share price
discount to NAV was 23.1% at the period end.
The table below sets out the movement in NAV during the
quarter.
Pence per
share GBP million
NAV at 31 March 2023 83.5 67.3
---------- ------------
Valuation movement in property portfolio 0.3 0.2
---------- ------------
Income earned for the period 2.7 2.2
---------- ------------
Expenses for the period (0.5) (0.4)
---------- ------------
Net finance costs for the period (0.4) (0.4)
---------- ------------
Interim dividend paid during the quarter
ended 31 March 2023 (1.4) (1.1)
---------- ------------
NAV at 30 June 2023 84.2 67.8
---------- ------------
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards as adopted by the
United Kingdom and incorporates both the Group's property portfolio
individually valued on a 'Red Book' basis at 30 June 2023 and net
income for the quarter but does not include a provision for the
interim dividend declared today (see above).
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
At 30 June 2023, t he Group's assets are 100% let (31 March
2023: 100%). The weighted average unexpired lease term at 30 June
2023 was 17.0 y ears to the earlier of break and expiry ( 31 March
2023: 16.7 years) and 18.9 years to expiry ( 31 March 2023: 18.6
years).
In aggregate, 97.0 % (31 March 2023 : 96%) of the portfolio's
income stream is reviewed periodically (45% annually) on an upward
- only, inflation linked basis, subject to floors and caps. 71% of
these reviews are linked to RPI and 26% to CPI. The remaining 3 .
0% of the portfolio's income stream is subject to fixed uplifts or
expiries.
Contracted annualised rent increased by 1.9% this quarter , due
to annual RPI rent reviews at Dudley & Sheffield (+4.0%) and
fixed uplifts to the rents for BGEN Limited in St. Helens (+9. 4 %)
. The Group completed a lease renewal with Pets at Home in May 2023
in the Droitwich Retail Park for a further 5 years. The contracted
rent is GBP112,500 per annum with a 9-month rent free period given
by way of an incentive.
Over the period to 30 September 2023, 20 % of the Group's income
will be reviewed ( one annual index-linked rent review and two
periodic index-linked rent reviews (5 years since the previous
reviews)).
Rent Collection
Rent collection remains resilient with 100% expected for the
June 2023 quarter. The rents for the June 2023 quarter are split
82.8 % payable quarterly in advance and 17.2 % payable monthly in
advance.
ENQUIRIES
Alternative Income REIT PLC
S imon Bennett - Chai rman via H/Advisors Maitland below
M7 Real Estate Ltd
Richard Croft
Jane Blore 020 3657 5500
Panmure Gordon (UK) Limited 020 7886 2500
Alex Collins
Tom Scrivens
H/Advisors Maitland (Communications
Advisor) 07747 113 930 / 020 7379 5151
James Benjamin aire-maitland@h-advisors.global
Rachel Cohen
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT PLC is available
at www.alternativeincomereit.com (1) .
(1) 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 index
linked rent review provisions.
The Company's asset manager is M7 Real Estate Limited ("M7"). M7
is a leading specialist in the pan-European, regional,
multi-tenanted real estate market. It has over 230 employees in 15
countries and territories. The team manages over 620 assets with a
value of circa EUR6.9 billion (as at 30 June 2023).
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END
DIVDZGGRVMFGFZM
(END) Dow Jones Newswires
August 02, 2023 02:00 ET (06:00 GMT)
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