REG - Alternative Inc REIT - Acquisition of Virgin Active in Streatham

Alternative Income REITAnnouncement

19/12/2023 07:00

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RNS Number : 2211X  Alternative Income REIT PLC  19 December 2023

 

19 December 2023

Alternative Income REIT PLC

("AIRE", the "Company" or the "Group")

 

ACQUISITION OF A PREMIER LEISURE CLUB IN THE AFFLUENT SUBURBAN LOCATION OF
STREATHAM IN SOUTH-WEST LONDON LET TO VIRGIN ACTIVE ON A LONG LEASE WITH
UNCAPPED INDEX-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 index-linked rent reviews, is pleased to
announce that the Company has completed the acquisition of the Virgin Active
leisure club in an affluent suburban location in Streatham, in South-West
London (the "Asset") for £5.1 million (net of acquisition costs to the
Company). The price reflects a net initial yield of 9.8% and a discount to
replacement cost.

 

The acquisition of the Asset redeploys the majority of the net proceeds from
the Group's disposal of the Mercure Hotel, Glasgow for £7.5 million, at a
higher initial yield. The Group expects to invest the remainder of the
proceeds in Q1 2024.

 

The Asset has been acquired with an unexpired lease term of over 10 years,
which is subject to five-yearly upward only uncapped rent reviews linked to
RPI. The Asset has a passing rent topped up by the vendor to £390,121 pa
(equivalent current ERV pa level) until the next rent review, which is due on
29 September 2024.

 

The Asset is fully let to Virgin Active Health Clubs Limited and is guaranteed
by Virgin Active Health Club Holdings Limited, part of the Virgin Active
Group. The club is trading well in this location just off Streatham High Road,
benefitting from a densely populated residential area and the hybrid work
ethos. The area, which is well served by public transport, is vibrant with a
strong residential market, a variety of shops and restaurants and areas of
public open space.

 

The Asset which occupies a third of an acre site, was originally the Streatham
Squash Club and was significantly extended in 1999 and refurbished in 2009
when an additional storey was added. The building comprises a total of 24,587
sq ft of purpose-built leisure facility over three floors. The Asset's third
floor gym enjoys panoramic views over Greater London.

 

Simon Bennett, Chairman of Alternative income REIT plc, commented:

"We are pleased to have acquired for £5.1 million the Virgin Active in
Streatham, South-West London, which is a premier leisure club that is trading
well in an excellent location and is let on a long lease with uncapped
index-linked rent reviews. The price reflects a net initial yield of 9.8% and
a discount to replacement cost. This acquisition redeploys part of the net
proceeds from the Group's disposal of the Mercure Hotel, Glasgow at a higher
initial yield, and we expect to invest the remainder of the proceeds in Q1
2024.

 

The Board remains confident that the Group is well positioned, given its
diversified and fully let portfolio that delivers secure, long-term and
index-linked income flow."

 

ENQUIRIES

 Alternative Income REIT PLC
 Simon Bennett - Chairman               via H/Advisors Maitland below

 M7 Real Estate Ltd                     +44 (0)20 3657 5500

 Richard Croft

 Jane Blore

 Panmure Gordon (UK) Limited            +44 (0)20 7886 2500
 Alex Collins
 Tom Scrivens

 Maitland/AMO (Communications Adviser)  aire-maitland@h-advisors.global
 James Benjamin                         +44(0) 7747 113 930

 Rachel Cohen                           +44 (0)20 7379 5151

 

The Company's LEI is 213800MPBIJS12Q88F71.

 

Further information on Alternative Income REIT plc is available at
www.alternativeincomereit.com (http://www.alternativeincomereit.com/) *

 

*    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 14 countries and territories. The team
manages over 610 assets with a value of circa €6.9 billion (at 30 September
2023).

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