TIDMAIRE
RNS Number : 8188E
Alternative Income REIT PLC
01 November 2022
1 November 2022
Alternative Income REIT PLC
(the " Company " or " Group " or " AIRE ")
NET ASSET VALUE, DIVID DECLARATION AND PORTFOLIO VALUATION
UPDATE
New target annual dividend of at least 5.7p per share, a 3.6%
increase on the prior year
Remains well positioned to continue to deliver attractive,
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 30
September 2022.
Alan Sippetts, Non-Executive Chair of Alternative Income REIT
plc, comments:
"The Board is pleased to report another resilient performance
supported by our defensive portfolio, helping to underpin our
declaration of a first interim dividend of 1.375pps, that is fully
covered. In line with the Board's intention of paying a progressive
fully covered dividend, the Board has today set a new target
dividend of at least 5.7pps for the year ending 30 June 2023,
subject to stable rent flows, an increase of 3.6% on the prior year
dividend.
At 30 September 2022, the Company's unaudited net asset value
per share was 96.97 pence, representing a 0.6% increase over the
quarter. When combined with the 1. 375 pps dividend paid for the
quarter, this produces an unaudited NAV total return for the
quarter of 2.25 %. However, the Company's share price total return
has been impacted by the challenging wider market backdrop,
although our discount is one of the lowest in the UK REIT
sector.
Investors can take comfort that the Company continues to be well
positioned, benefitting from our well managed and resilient
portfolio, with growing contracted rents, 96% of which are linked
to inflation, together with having 100% of our debt fixed at a
favourable rate of 3.19% until October 2025 ."
Highlights
At 30 September At 30 June 2022 Change
2022 (unaudited) (audited)
Net Asset Value ("NAV") GBP78.1 million GBP77.6 million +0.6%
------------------ ---------------- -------
NAV per share 97.0p 96.4p +0.6%
------------------ ---------------- -------
Share price per share 65.3p 82.1p -20.5%
------------------ ---------------- -------
Share price discount to
NAV 32.7% 14.8% -17.9%
------------------ ---------------- -------
Loan to gross asset value
("GAV") (A) (B) 33.6% 33.7% -
------------------ ---------------- -------
Quarter ended Quarter ended Change
30 September 30 June 2022
2022 (unaudited) (audited)
EPRA earnings per share
(A) 1.5p 1.5p 0.0%
------------------ ----------------- --------
Adjusted earnings per
share (A) 1.4p 1.4p 0.0%
------------------ ----------------- --------
Dividend cover (A) 105.1% 86.3% +21.8%
------------------ ----------------- --------
Total dividends per share 1.4p 1.6p -12.5%
------------------ ----------------- --------
Dividend yield (A) 2.1% 2.0% +0.1%
------------------ ----------------- --------
Earnings per share 2.2p 4.4p -50.0%
------------------ ----------------- --------
Share price total return
(A) -18.5% 7.5% -26.0%
------------------ ----------------- --------
NAV total return (A) 2.3% 5.2% -2.9%
------------------ ----------------- --------
Investment property fair
value
(based on external valuation) GBP118.6 million GBP117.9 million +0.6%
------------------ ----------------- --------
Annualised passing rent GBP7.2 million GBP7.2 million 0.0%
------------------ ----------------- --------
Ongoing charges (A) (annualised) 1.5% 1.5% 0.0%
------------------ ----------------- --------
(A) Considered to be an Alternative Performance Measure.
(B) The loan facility at 30 September 2022 of GBP41.0 million
(30 June 2022: GBP41.0 million) with Canada Life Investments,
matures on 20 October 2025 and has a weighted average interest cost
of 3.19%.
Dividend Declaration, Earnings per share and Dividend Cover
The Board is pleased to declare an interim quarterly dividend of
1.375pps for the quarter ended 3 0 September 2022. This dividend
will be distributed as Property Income Distribution ("PID") and
will be paid on 25 November 2022 to shareholders on the register on
11 November 2022. The ex-dividend date will be 10 November
2022.
Having achieved the Company's target dividend of 5.5pps last
year the Board has set a new dividend target of 5.7pps for the year
ending 30 June 2023. This increase reflects the Board's intention
to pay a progressive dividend consistent with the Company's stated
aims.
The Adjusted EPS was 1.45pps for the quarter (June 2022:
1.38pps), reflecting 105.07% dividend cover.
Property Valuation
At 30 September 2022, the Group's property portfolio, comprising
19 assets, had a fair value of GBP118.6 million, representing a
0.6% increase over the quarter (30 June 2022: GBP117.9
million).
At 30 September 2022, the Net Initial Yield on the Group's
portfolio was 5.73%, compared with 5.70% at 30 June 2022.
Against a downward trend in property investment values across
the wider market, the Group's portfolio has continued to show
resilience, with a slight overall increase in capital values. The
portfolio continues to show strong income growth through a
combination of annual and regular inflation-linked reviews, with
the September 2022 annualised passing rent rising to GBP7.3 million
per annum once agreed rent reviews are documented, an increase of
1.4% quarter on quarter.
The Group's long dated, inflation-linked resilient portfolio is
expected to continue to provide downside protection. With heady
inflation levels already seen in the past months, valuers have and
are expected to continue to have confidence in future rental growth
from those properties with rent reviews later in 2022 and 2023, and
so they have held or improved values for certain of the portfolio's
properties this quarter. Against this backdrop, some of the Group's
industrial and retail warehouse property valuations have seen
valuations fall by circa 3-5% over the quarter. The exception to
this is at Pocket Nook Industrial Estate, St Helens (+9.3%) where
the Secretary of State has committed to stay in the driving test
centre for a further 10 years with an uncapped RPI review in
2023.
Net Asset Value
At 30 September 2022, the Company's unaudited NAV was GBP78.06
million, 96.97pps (30 June 2022: GBP77.60 million, 96.40pps)
representing a 0.6% increase over the quarter, due to increases in
the portfolio valuation and net income.
When combined with the 1.375pps dividend paid for the quarter,
this produces an unaudited NAV total return for the quarter of
2.25% (30 June 2022: 5.19%).
The table below sets out the movement in NAV during the
quarter.
Pence per GBP million
share
NAV at 1 July 2022 96.40 77.60
---------- ------------
Valuation movement in property portfolio 0.66 0.53
---------- ------------
Income earned for the period 2.50 2.01
---------- ------------
Expenses for the period (0.55) (0.43)
---------- ------------
Net finance costs for the period (0.44) (0.36)
---------- ------------
Interim dividend paid during the quarter
ended 30 June 2022 (1.60) (1.29)
---------- ------------
NAV at 30 September 2022 96.97 78.06
---------- ------------
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 September 2022 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 September 2022, t he Group's assets are 100% let (30 June
2022: 100%). The weighted average unexpired lease term at 30
September 2022 was 17.3 years to the earlier of break and expiry
(30 June 2022: 17.5 years) and 19.1 years to expiry (30 June 2022:
19.4 years).
96 % (30 June 2022: 96%) of the portfolio's income stream is
reviewed periodically on an upward only basis, in line with
inflation (51% annually); with 69% and 27% of the portfolio in
flation -linked (subject to floors and caps) to RPI and CPI,
respectively. The remaining 4 % of the portfolio's incom e stream
is subject to Open Market Value reviews or expiries .
Contracted annualised rent increased by 1.25% this quarter , due
to rent reviews at Crawley (+9.3%), Salford (+9.4%) and Swindon
(+24%).
Over the next 12 month period, 68% of the Group's income will be
reviewed (eight annual index-linked rent reviews and six periodic
index-linked rent reviews (3 or 5 years since the previous
reviews)).
Rent Collection
Rent collection remains resilient with 100% expected for the
September 2022 quarter. The rents for the December 2022 quarter are
split 84 % payable quarterly in advance and 16 % payable monthly in
advance.
ENQUIRIES
Alternative Income REIT PLC
Alan Sippetts - Chairman via H/Advisors Maitland
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
H/Advisors Maitland (Communications Advisor) +44(0) 7747 113 930
James Benjamin aire-maitland@h-advisors.global
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 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 225 employees in 15
countries across Europe. The team manages over 580 properties with
a value of circa EUR5.8 billion.
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END
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(END) Dow Jones Newswires
November 01, 2022 03:00 ET (07:00 GMT)
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