REG - Alternative Inc REIT - NAV, Dividend Declaration and Portfolio Valuation

Alternative Income REITAnnouncement

08/05/2025 14:00

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RNS Number : 9268H  Alternative Income REIT PLC  08 May 2025

8 May 2025

Alternative Income REIT PLC

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

NET ASSET VALUE, DIVIDEND DECLARATION AND PORTFOLIO VALUATION UPDATE

TO 31 MARCH 2025

Declares an interim dividend of 1.55 pence per share ("pps") for the quarter
ended 31 March 2025

The target annual dividend remains at 6.2pps for the year ending 30 June
2025(†), an increase of 5.1% on the prior year' of 5.9pps

Dividend cover of 107.7% for the quarter

Unaudited NAV total return for the quarter of 3.2%

Resilient portfolio well-placed to continue to provide secure, index-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 index-linked rent reviews, provides a
trading and business update and declares an interim dividend for the quarter
ended 31 March 2025.

 

Simon Bennett, Non-Executive Chair of Alternative Income REIT plc, comments:

 

"The Company continues to pay a fully covered dividend in line with the 2025
annual dividend target of 6.2pps†, which represents an increase of 5.1% over
the previous year (30 June 2024: dividends of 5.9pps). The dividend cover for
the quarter was 107.7%. The annual dividend target remains subject to the
continued collection of rent from the Group's portfolio as it falls due.

 

At 31 March 2025, the Group's unaudited NAV was £66.9 million, 83.0pps,
representing a 1.3% increase over the previous quarter. When combined with the
1.55pps dividend paid in the quarter, this produces an unaudited NAV total
return for the quarter of 3.2%.

 

 

The Group continues to benefit from low borrowing costs until October 2025,
when the Group's current debt facilities mature. As a result of the Group's
excellent track record in recent times and the low loan to value of its
portfolio, proposals of long term finance were secured from six separate debt
providers in a timely fashion. The Board continues to work actively to
finalise these discussions and is confident that the requisite financing will
be achieved prior to October 2025. I look forward to reporting further on
AIRE's progress in the coming months."

 

 

 

Overview of Key Financials

                                            At 31 March 2025  At 31 December   Change

                                            (unaudited)       2024

                                                              (unaudited)
 Net Asset Value ("NAV")                    £66.9 million     £66.0 million    +1.3%
 NAV per share                              83.0p             81.9p            +1.3%
 Share price per share                      68.5p             70.6p            -3.0%
 Share price discount to NAV                17.5%             13.8%            +3.7%
 Investment property fair value             £107.0 million    £106.2 million   +0.8%

 (based on external valuation)
 Loan to gross asset value ("GAV") (A) (B)  37.1%             37.4%

 

                                   Quarter ended     Quarter ended        Change

                                   31 March 2025     31 December 2024

                                   (unaudited)       (unaudited)
 EPRA earnings per share (A)       1.7p              1.7p                 -
 Adjusted earnings per share (A)   1.7p              1.7p                 -
 Dividend cover (A)                107.7%            110.3%               -2.6%
 Total dividends per share         1.55p             1.55p                -
 Dividend yield (annualised)(A)    9.1%              8.8%                 +0.3%
 Earnings per share                2.6p              2.2p                 +18.2%
 Share price total return (A)      -0.8%             -0.5%
 NAV total return (A)              3.2%              2.7%                 +0.5%
 Annualised passing rent           £7.8 million      £7.8 million         -
 Ongoing charges (A) (annualised)  1.5%              1.5%                 -

(A) Considered to be an Alternative Performance Measure.

(B) The loan facility at 31 March 2025 of £41.0 million (31 December 2024:
£41.0 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 a third interim dividend of 1.55pps for the
quarter ended 31 March 2025, which is in line with the Company's dividend
target of 6.2pps for the year ending 30 June 2025(†), which represents an
increase of 5.1% over the previous year. This interim dividend will be
distributed as Property Income Distribution ("PID") and will be paid on 30 May
2025 to shareholders on the register on 16 May 2025. The ex-dividend date will
be 15 May 2025.

 

The Adjusted EPS was 1.7pps for the quarter (31 December 2024: 1.7pps),
consistent with the previous quarter. The dividend cover for the quarter
marginally decreased to 107.7% this quarter (31 December 2024: 110.3%).

 

Refinance of the Group's Borrowing Facilities

 

The Group currently benefits from low borrowing costs on its £41 million
facility, which has a weighted average interest cost of 3.19% and matures in
October 2025. This debt facility was put in place in June 2017, when the Group
was originally listed on the London Stock Exchange.

 

Much has changed in the world in the last eight years, not least the level of
interest rates. Over this period of time, the Bank of England interest rate
has increased considerably from 0.25% at the time of the original listing to
4.25%, following the announcement by the Bank of England earlier today. As a
result, finance costs for the Group, which for the year ending 30 June 2025
will amount to approximately £1.4 million, will rise significantly when the
Group's new debt facilities are drawn down, with a commensurate reduction in
distributable income.

 

The Board has been working, in conjunction with its debt advisers, to replace
the Group's existing debt facilities. As a result of the Group's excellent
track record in recent times and the low loan to value of its portfolio,
proposals of long term finance were secured from six separate debt providers
in a timely fashion. The Board continues to work actively to finalise these
discussions and is confident that the requisite financing will be achieved
prior to October 2025. The Board expects to be able to provide a further
update in the coming months.

 

Property Portfolio

 

The Group's portfolio continues to provide a secure and growing rental income
stream and continues to be resilient in the face of recent market
fluctuations. The portfolio continues to be fully let, with all rent
collections being made on their due date. In addition, 91.5% of the Group's
contracted rental income benefits from having index-linked rent reviews and
35.4% of this is reviewed on an annual basis.

 

At 31 March 2025, the Group owned 20 properties (31 December 2024: 20
properties) valued at £107.0million (31 December 2024: £106.2 million). The
total increase in valuation for the quarter ended 31 March 2025 amounted to
0.8%.

 

At 31 March 2025, the Net Initial Yield on the Group's portfolio was 7.1% (31
December 2024: 7.1%) and the Group's continues to be fully let. The weighted
average unexpired lease term at 31 March 2025 was 15.9 years to the earlier of
break and/or expiry (31 December 2024: 16.1 years) and 17.5 years to expiry
(31 December 2024: 17.7 years).

 

The Group's contracted annualised rent increased by 0.2% during the quarter to
31 March 2025 (31 December 2024: 2.6%). This was principally due to the annual
indexation rent review of the lease to Handsale in Bristol.  Active
management of the portfolio continues this quarter; BGEN, one of the tenants
at our St Helens industrial asset, is remaining in occupation of the land
adjacent to their unit, under a tenancy at will, pending agreement of a new
lease. In Crawley, the lease to Petrogas Group UK Limited is being assigned to
their new corporate purchaser trading as EG On the Move, prior to rent review
negotiations in July 2025. Discussions continue with another occupier for a
surrender and simultaneous new lease; whilst conversations progress with three
other tenants considering re-gearing leases, removing tenant breaks and
extending lease lengths.

 

Net Asset Value, Share Price and Share Price Discount to NAV

 

At 31 March 2025, the Group's unaudited NAV was £66.9 million, 83.0pps (31
December 2024: £66.0 million, 81.9pps), representing a 1.3% increase over the
previous quarter.

 

When combined with the 1.55pps dividend paid in the quarter, this produces an
unaudited NAV total return for the quarter of 3.2% (31 December 2024: 2.7%).
Over the quarter, the Company's share price decreased by 3.0% to 68.5pps,
reflecting an increase in the discount from 13.8% to 17.5%.

 

The table below sets out the movement in NAV during the quarter.

 

                                           Pence per share  £ million
 NAV at 31 December 2024                   81.9             66.0
 Valuation movement in property portfolio  +1.0             +0.8
 Income earned for the period              +2.7             +2.2
 Expenses for the period                   -0.5             -0.4
 Net finance costs for the period          -0.5             -0.4
 Interim dividend paid during the quarter  -1.6             -1.3
 NAV at 31 March 2025                      83.0             66.9

 

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 31 March 2025 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.

 

Rent Collection

 

Rent collection remains resilient with full collection of rent due for the
quarter ended 31 March 2025. 90.5% of the portfolio's contracted rent is
payable quarterly in advance, with the remainder payable on a monthly in
advance basis.

 

† This is a target and not a formal dividend forecast or a profit forecast

 

ENQUIRIES

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

 Martley Capital Real Estate Investment Management Ltd  020 4551 1240

 Richard Croft

 Jane Blore

 Panmure Liberum Limited                                020 3100 2000
 Alex Collins
 Tom Scrivens

 H/Advisors Maitland (Communications Advisor)           07747 113 930 / 020 7379 5151
 James Benjamin                                         aire-maitland@h-advisors.global

 Rachel Cohen

 Billy Moran

 

The Company's LEI is 213800MPBIJS12Q88F71.

 

Further information on Alternative Income REIT PLC is available at
www.alternativeincomereit.com (about:blank) (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, with a particular focus on alternative and specialist
real estate 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 Martley Capital Real Estate Investment
Management Limited ("Martley Capital"). Martley Capital is a full-service real
estate investment management platform whose activities cover real estate
investing, lending, asset management and fund management. It has over 35
employees across five offices in the UK and Europe. The team manages assets
with a value of circa £865million across 23 mandates (at 31 March 2025).

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