TIDMAIRE
RNS Number : 0648A
Alternative Income REIT PLC
31 January 2022
31 January 2022
Alternative Income REIT PLC
("AIRE", the "Company" or the "Group")
ACQUISITION OF STATE-OF-THE-ART CAR SHOWROOM IN PRIME LOCATION
IN SLOUGH, LET TO VOLVO ON A LONG LEASE WITH INDEXED-LINKED
RENTS
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, is pleased to announce that the
Company has completed the acquisition of the Volvo car showroom in
a prime location on the A4 Bath Road, Slough (the "Asset") for GBP5
million (net of acquisition costs to the Company), in an off-market
transaction. The price reflects a net initial yield of 5.00% and a
discount to replacement costs. The Asset has been acquired with a
weighted unexpired lease term of over 15 years.
The acquisition of the Asset 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.
The lease of the Asset, which expires in March 2037, is subject
to five-yearly upward only rent reviews linked to RPI. The reviews
contain a collar of 1.5% pa and a cap of 3.5% pa. The Asset has a
passing rent topped up by the vendor to GBP270,000 pa (equivalent
current ERV pa level) until the next rent review, which is due on
17 March 2022.
The Asset is fully let to Volvo Car UK Limited, which forms part
of the Volvo Group, which is ultimately owned by Zhejiang Geely
Holdings Group, a Chinese multinational automotive manufacturing
company. The property is wholly sub-let and occupied by Endeavour
Automotive Limited, which has a strong and established trading
track record in a structurally supported sub-sector.
The Asset is in a prime location, a short distance from Slough
Trading Estate and just north-west of Slough town centre, and with
a prominent frontage onto the Bath Road. Slough is a large London
commuter town located approximately 22 miles west of central London
with excellent road, rail and airport connectivity, and the town
has the UK's highest concentration of headquarters of global
companies outside of London. The town occupies a strategic location
with excellent road connections, with the M4 running immediately to
the south, M25 to the east and M40 to the north. The Asset is
situated in an automotive/light industrial cluster that has
attracted a number of major occupiers including Alpha Romeo, Fiat,
Mini, Mercedes, SEAT and Jeep.
The Asset, constructed in 2016, comprises a total of 14,955 sq
ft of purpose-built state-of-the-art dealership space across ground
and first floor on the c.1.03 acre site. The Asset benefits from
ample car display spaces to the front and side elevations, fenced
off spaces for parking, and incorporates rooftop solar PV.
This transaction is the Company's second investment introduced
by its Investment Adviser M7 Real Estate Limited ("M7"), following
the Company's highly accretive acquisition of Droitwich Spa Retail
Park, announced in December 2020.
Alan Sippetts, Chairman of Alternative Income REIT plc,
commented:
"We are pleased to redeploy the net proceeds from the disposal
of our Audi car showroom asset in Huddersfield that completed on 1
December 2021 for GBP5.5 million by acquiring this Asset in a prime
location, let to a strong tenant covenant on a long lease with
index-linked rent reviews. The Asset is expected to further
diversify, strengthen and lengthen the profile of the Group's
income and provide a robust, resilient, indexed-linked long term
income return, which is also expected to benefit from enhanced
income and capital growth.
The Board continues to believe firmly that the Group is well
positioned given its diversified and fully let portfolio that
delivers secure, long-term and indexed-linked income flow, combined
with its continuing very strong rent collection, robust balance
sheet and modest, well controlled overhead. The Board remains
confident that the Company is 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) ."
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 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, 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-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) 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.
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END
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