REG - Alternative Inc REIT - Acquisition of state-of-the-art car showroom

Alternative Income REITAnnouncement

31/01/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220131:nRSe0648Aa&default-theme=true

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 £5 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 £5.5 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 £270,000 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 £5.5
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                     +44 (0)20 3657 5500

 Richard Croft

 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 (http://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 €5.1 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQFFFELLDIIVIF