TIDMAIRE
RNS Number : 9386N
Alternative Income REIT PLC
04 February 2021
4 February 2021
Alternative Income REIT PLC
(the " Company " or " Group ")
RENT COLLECTION, NAV AND DIVID DECLARATION
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, provides a
trading and business update and declares an interim dividend for
the quarter ended 31 December 2020 .
Rent collection
In respect of the March, June and September 2020 rent quarters,
the Group has collected 91.4% of rents due and payment plans are in
place in respect of the remaining 8.6%.
The current quarter's rents are split 80% quarterly and 20%
monthly. By the end of January 2021, the Group had collected 80.4%
of its December 2020 quarter's rent and agreed, or is in the
process of agreeing, rent concessions with the remaining 19.6%.
Whilst the Group's stance on rent concessions has generally been
to agree, where warranted, to deferrals, limited rent free periods
now being considered on a case-by-case basis where value can be
added to the property through lease extensions or regearing. The
Board recognises that the first half of 2021 is likely to be
particularly challenging for the hotel and leisure industries.
Earnings per Share, Valuation and Net Asset Value
Unaudited EPRA earnings per share ("EPRA EPS") for the quarter
ended 31 December 2020, were 1.32 pence per share, representing
dividend cover for the quarter of 132% (quarter to 30 September
2020: 2.12 pence per share; 170% cover).
The EPRA EPS includes accruals to reflect the minimum contracted
uplifts, the spreading of rent free periods, an adjustment for the
amortisation of loan arrangement fees and movement in the provision
for impairment of trade receivables. Excluding these items from the
Group's EPRA EPS, the unaudited adjusted cash earnings were 1.26
pence per share, reflecting 126% cash dividend cover for the
quarter (quarter ended 30 September 2020: 1.92 pence per share;
154% cash dividend cover, but this included the gain on the
disposal of the Wet 'n' Wild Water Park, North Shields ("Wet 'n'
Wild " ) , which represented 0.39 pence per share).
As at 31 December 2020, the independent fair valuation
undertaken by Knight Frank of the Company's property portfolio was
GBP108.53 million, including GBP4.75 million for the property at
Droitwich Spa Retail Park ("Droitwich") acquired in early December
2020 (30 September 2020: GBP101.76 million). The net initial yield
on the Company's portfolio was 5.53% (30 September 2020:
5.76%).
The Company's unaudited net asset value ("NAV " ) was GBP68.16
million, 84.68 pence per share at 31 December 2020, (30 September
2020: GBP67.52 million, 83.88 pence per share). See the table below
for NAV movement during the quarter.
Analysis of Movement in NAV
Movement during the quarter Pence per share GBP million
NAV at 30 September 2020 83.88 67.52
---------------- ------------
Valuation change in property portfolio* 0.73 0.59
---------------- ------------
Income earned for the period 2.30 1.85
---------------- ------------
Expenses for the period (0.40) (0.32)
---------------- ------------
Provision for impairment of trade
receivables (0.14) (0.11)
---------------- ------------
Net finance costs for the period (0.44) (0.36)
---------------- ------------
Interim dividend paid during the
quarter ended 31 December 2020 (1.25) (1.01)
---------------- ------------
NAV at 31 December 2020 84.68 68.16
---------------- ------------
* The quarter's increase in the independent fair valuation of
GBP0.76 million was reduced by GBP0.17 million to reflect the
minimum contracted rental uplifts and the rent frees in the
quarter, resulting in a net valuation change in the quarter of
GBP0.59 million.
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards as adopted by the
European Union and incorporates both the Group's property portfolio
individually valued on a 'Red Book' valuation basis at 31 December
2020 and net income for the quarter, but does not include a
provision for the interim dividend (see below) for the quarter
ended 31 December 2020.
The income earned for the period includes an accrual for the
minimum contractual uplifts defined within the index linked leases.
In the event that inflation is greater than these minimum
contractual uplifts, the actual income will be greater than that
currently accrued.
Dividend
The Board declares today an interim dividend of 1.00 pence per
share for the quarter ended 31 December 2020 . The dividend will be
paid on 26 February 2021 to shareholders on the register on 12
February 2021. The ex-dividend date will be 11 February 2021. The
dividend will be a Property Income Distribution.
A quarter of the Group's rent is derived from the hotel and
leisure industry, which has been particularly adversely affected by
the COVID-19 related lockdown measures enforced during 2020 and,
indeed, most remain closed. As a result, the Group currently has
arrears from this sector equal to c.8.0% of its 2020 rents, which,
when combined with the remedial work that the Group completed in
December 2020 to ensure that its property in Swindon conforms with
current Building Regulations, has impacted the Group's cash
position, resulting in a lower dividend declared today in respect
of the final quarter of 2020. The Board continues to target a
resumption of a fully covered annual dividend of 5.5 pence per
share(1) , all else being equal, by September 2022.
Portfolio
Following the acquisition of Droitwich in early December 2020,
the Group is now fully invested, holding a diversified portfolio of
UK commercial property assets that are currently fully let, with a
w eighted average unexpired lease term of 18.3 years (30 September
2020: 19.2 years) to the earlier of break and expiry and 20.3 years
(30 September 2020: 21.4 years) to expiry.
The Droitwich acquisition reinvested the proceeds from the sale
of Wet 'n' Wild, at a yield of 7.95%, materially higher than both
the 6.0% exit yield on Wet 'n' Wild and the Group's latest
portfolio valuation yield of 5.53%.
87 % of the portfolio's income stream is reviewed periodically,
on an upward only basis, in line with inflation; with 65% and 22 %
of the portfolio indexed (subject to floors and caps) to RPI and
CPI , respectively.
Shareholder engagement
As announced on 1 December 2020, and in line with its commitment
set out in the results of the Annual General Meeting announcement
on 26 November 2020, the Board is continuing to engage in an open
and transparent dialogue with shareholders and expects to provide
an update later this month.
ENQUIRIES
Alternative Income REIT PLC
Steve Smith - 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 james.benjamin@maitland.co.uk
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available
at www.alternativeincomereit.com (2)
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. Majority owned by its senior
managers, it has over 200 employees in 14 countries across Europe.
The team manages over 835 properties with a value of circa EUR5.1
billion.
1 T his 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.
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(END) Dow Jones Newswires
February 04, 2021 02:00 ET (07:00 GMT)
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