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

Alternative Income REITAnnouncement

06/08/2025 07:00

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RNS Number : 1035U  Alternative Income REIT PLC  06 August 2025

6 August 2025

Alternative Income REIT PLC

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

NET ASSET VALUE, DIVIDEND DECLARATION AND PORTFOLIO VALUATION UPDATE

TO 30 JUNE 2025

Board's target of a total annual dividend of 6.2pps for the year ended 30 June
2025(†) has been met,

an increase of 5.1% on the prior year target of 5.9pps

Unaudited NAV total return for the quarter of 2.5%

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 30 June 2025.

 

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

 

"The Board is pleased to announce that it has met its annual dividend target
of 6.2 pence per share ('pps') for the year ended 30 June 2025, following the
declaration today of a fourth interim dividend of 1.55 pps for the quarter
ended 30 June 2025. The target dividend is covered by cash earnings.

 

The Group's portfolio benefits from being fully let, with all of the rent from
its tenants being collected when falling due, and with over 90% of rent
reviews being index linked. At 30 June 2025, the Group's unaudited NAV was
£67.3 million, 83.6 pps, representing a 0.6% increase over the previous
quarter. When combined with the 1.55 pps dividend paid in the quarter, this
produces an unaudited NAV total return for the quarter of 2.5%.

 

The Group will continue to benefit from the low borrowing costs on its
existing £41m loan facilities until October 2025. As previously reported, the
Board secured offers of re-financing from six separate banks and institutional
debt providers.  The Group has now agreed terms on its new long term
facilities and continues to work, with its advisers, to finalise the
documentation. The Board remains confident that the requisite re-financing
will be completed shortly and I look forward to providing a further update at
that time."

 

 

Overview of Key Financials

                                            At 30 June 2025  At 31 March 2025  Change

                                            (unaudited)      (unaudited)
 Net Asset Value ("NAV")                    £67.3 million    £66.9 million     +0.6%
 NAV per share                              83.6p            83.0p             +0.6%
 Share price per share                      74.0p            68.5p             +8.0%
 Share price discount to NAV                11.5%            17.5%             -6.0%
 Investment property fair value             £107.4 million   £107.0 million    +0.4%

 (based on external valuation)
 Loan to gross asset value ("GAV") (A) (B)  36.9%            37.1%

 

                                   Quarter ended    Quarter ended     Change

                                   30 June 2025     31 March 2025

                                   (unaudited)      (unaudited)
 EPRA earnings per share (A)       1.6p             1.7p              -5.9%
 Adjusted earnings per share (A)   1.6p             1.7p              -5.9%
 Dividend cover (A)                101.3%           107.7%            -6.5%
 Total dividends per share         1.55p            1.55p             -
 Dividend yield (annualised)(A)    8.4%             9.1%              -0.7%
 Earnings per share                2.1p             2.6p              -19.2%
 Share price total return (A)      10.3%            -0.8%             +11.1%
 NAV total return (A)              2.5%             3.2%              -0.8%
 Annualised passing rent           £8.1 million     £7.8 million      +2.3%
 Ongoing charges (A) (annualised)  1.6%             1.5%              +0.1%

(A) Considered to be an Alternative Performance Measure.

(B) The loan facility at 30 June 2025 of £41.0 million (31 March 2025: £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 fourth interim dividend of 1.55pps for the
quarter ended 30 June 2025.  This dividend crystalises the Board's annual
dividend target of 6.2pps for the year and this represents an increase of 5.1%
on the previous year's target of 5.9 pps. This fourth interim dividend will be
distributed as Property Income Distribution ("PID") and will be paid on 29
August 2025 to shareholders on the register on 15 August 2025. The ex-dividend
date will be 14 August 2025.

 

The Adjusted EPS was 1.6pps for the quarter (31 March 2025: 1.7pps). The
dividend cover for the quarter decreased  to 101.3% (31 March 2025: 107.7%).

 

Refinance of the Group's Borrowing Facilities

 

The Group will continue to benefit from the low borrowing costs on its
existing £41m loan facilities, which has a weighted average interest cost of
3.19% and matures in October 2025. The current Bank of England interest rate
is 4.25% and as a result the Group's finance costs, which amounted to
approximately £1.4m for the year ended 30 June 2025 will rise significantly
in this financial year. This increase in cost will, when the new facilities
are drawn down, mean that there will be a reduction in distributable income.

 

As previously reported, the Board secured offers of re-financing from six
separate banks and institutional debt providers in good time. The Group has
now agreed terms on its new long term facilities and continues to work, with
its advisers, to finalise the documentation. The Board remains confident that
the requisite re-financing will be completed shortly.

 

Property Portfolio

 

The Group's portfolio benefits from being fully let, with all of the rent from
its tenants being collected when falling due, and with over 90% of rent
reviews being index linked and continues to provide a secure and growing
rental income stream. At 30 June 2025, the Group owned 20 properties (31 March
2025: 20 properties) valued at £107.4million (31 March 2025: £107.0
million). At 30 June 2025, the Net Initial Yield on the Group's portfolio was
7.1% (31 March 2025: 7.1%) and the Group's assets remain fully let. The
weighted average unexpired lease term at 30 June 2025 was 15.6 years to the
earlier of break and expiry (31 March 2025: 15.9 years) and 17.2 years to
expiry (31 March 2025: 17.5 years).

 

The Group's contracted annual rent increased by 0.4% during the quarter (31
March 2025: 0.2%). The increase was due to annual indexation rent review of
three leases to Meridian in Dudley and Sheffield. 92.3% of leases in the
portfolio are index-linked, with 36.4% of the contracted rental income
reviewed annually. Active management of the portfolio continued this quarter:
BGEN, one of the tenants at the Group's St Helens industrial property, has
taken a new five-year lease, with annual RPI linked rent reviews, at £63,750
per annum on the land adjacent to their industrial unit on the estate. In
Crawley, prior to an index-linked rent review in July 2025, the lease to
Petrogas Group UK Limited has been assigned to the Rontec Group, one of the
leading players in the UK forecourt industry.

 

Progress is also being made with various asset management initiatives, and as
a consequence the Estimated Rental Value of the Group's property assets has
risen again by 0.30% this quarter (31 March 2025: 0.27%). In the current
quarter to 30 September 2025, 13.2% of the Group's income will be reviewed
with one annual index-linked rent review and one 3 yearly indexed rent review.

 

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

 

At 30 June 2025, the Group's unaudited NAV was £67.3 million, 83.6pps (31
March 2025: £66.9 million, 83.0pps), representing a 0.6% 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 2.5% (31 March 2025: 3.2%). Over
the quarter, the Company's share price increased by 8.0% to 74.0pps,
reflecting a substantial decrease in the discount from 17.5% to 11.5%.

 

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

 

                                           Pence per share  £ million
 NAV at 31 March 2025                      83.0             66.9
 Valuation movement in property portfolio  +0.5             +0.4
 Income earned for the period              +2.5             +2.1
 Expenses for the period                   -0.4             -0.4
 Net finance costs for the period          -0.4             -0.4
 Interim dividend paid during the quarter  -1.6             -1.3
 NAV at 30 June 2025                       83.6             67.3

 

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 June 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 the collection of all the rent due for
the quarter ended 30 June 2025. Over 90% of the portfolio's contracted rent is
payable quarterly in advance with the remainder payable monthly in advance.

 

† 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
 Billy Moran                                            aire-maitland@h-advisors.global

 Rachel Cohen

 Daisy Padovan

 

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 secure and predictable income
return, sustainable in real terms, whilst at least maintaining capital values,
in real terms, through investment in a diversified portfolio of UK properties,
predominantly within 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 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 circa 35
employees across five offices in the UK and Europe. The team manages assets
with a value of circa £900 million across 23 mandates (at 30 June 2025).

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