REG - Alternative Inc REIT - New Banking Arrangements and Dividend Target

Alternative Income REITAnnouncement

03/09/2025 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250903:nRSC7337Xa&default-theme=true

RNS Number : 7337X  Alternative Income REIT PLC  03 September 2025

3 September 2025

 

Alternative Income REIT PLC

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

 

NEW BANKING ARRANGEMENTS AND DIVIDEND TARGET FOR THE YEAR ENDED 30 JUNE 2026

 

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
details of its new banking arrangements and dividend target for the year
ended 30 June 2026.

 

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

"I am delighted to be able to announce that AIRE has secured new long term
debt facilities with HSBC UK Bank plc ("HSBC"). The facilities, consisting of
both a fixed term loan of £31 million and a £10 million revolving credit
facility, are on competitive terms.

Over the past few years, including during the global COVID pandemic, AIRE has
maintained an enviable record of collecting 100% of the rent. Provided that
this remains the case, and in the absence of any other unforeseen
circumstances, the Board are targeting a dividend of no less than 5.6† pence
per share ("pps") for the year ending 30 June 2026 (30 June 2025: 6.2pps)."

 

NEW BANKING FACILITIES

As previously reported, AIRE currently benefits from low borrowing costs on
its £41 million debt. This debt facility was put in place when the Group was
originally listed on the London Stock Exchange in June 2017. The facility has
a weighted average interest cost of 3.19% and matures on 20 October 2025.

The Board has been working, in conjunction with its debt advisers, to
refinance the Group's existing debt. Largely as a result of AIRE's excellent
track record in recent years, its outstanding record on rent collection and
the very low loan to value of its portfolio, AIRE secured separate offers of
long term finance from several different lending institutions, all on a
competitive basis.

Consequently, the Board is delighted to be able to announce that it has
secured long term debt facilities with HSBC UK Bank plc ("HSBC"). The
facilities consist of both a fixed term loan of £31 million (the "Term Loan")
and a £10 million revolving credit facility ("RCF"), collectively referred to
as the "New HSBC Bank Facilities".  The term of the New HSBC Bank Facilities
is a fixed term of five years from the date of drawdown, which can be extended
on request by a further two years, should this be mutually acceptable to both
parties.

Whilst there is no present intention, AIRE have the right, through an
accordion mechanism, to request an increase in the size of the RCF by up to a
further £10 million, over the course of the facility. The Board are also
pleased to report that the margin on the New HSBC Bank Facilities of 170 basis
points (1.7% per annum) over SONIA (sterling overnight index average rate),
represents a significant reduction in margin when compared with the Group's
existing debt facilities, albeit against a backdrop of higher base interest
rates, as set out below.

The Board intend to take advantage of the lower interest rates on AIRE's
existing debt facilities, until these facilities are due for repayment on 20
October 2025. The Group will use the amount drawn down under its New HSBC Bank
Facilities to simultaneously repay its existing debt facilities in full.

 

NEW DIVIDEND TARGET FOR THE YEAR ENDING 30 JUNE 2026

Much has changed since the Group took out its current debt facilities in 2017,
not least the cost of borrowing. The Bank of England interest rate, which at
the time was 0.25%, has increased considerably. Following the announcement
last month, the current Bank of England interest rate is 4%. As a result, the
finance costs for the Group's current financial year ending on 30 June 2026
will rise significantly to approximately £2.2 million, compared with £1.4
million in previous financial years.

Whilst there will be some mitigation to this figure, principally from the
increase in rents from AIRE's property portfolio, this rise in costs will
reduce the Group's distributable income. Over the past few years, including
during the global COVID pandemic, AIRE has maintained an enviable record of
collecting 100% of the rent.

Provided that this remains the case and in the absence of any other unforeseen
circumstances, the Board are targeting a dividend of no less than 5.6†pps
for the year ending 30 June 2026 (30 June 2025: 6.2pps).

The Board presently expect that a further announcement regarding the payment
of the first of these interim dividends, will be made in line with the Group's
usual timetable for such announcements in October 2025.

 

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

 

ENQUIRIES

 Alternative Income REIT PLC
 Simon Bennett - Chair                              Via AIRE's Company Secretary, Hanway Advisory:  0207 409 0181 or by email:
                                                    hanwayadvisory@jtcgroup.com

 Martley Capital Real Estate Investment Management  020 4551 1240

 Richard Croft

 Jane Blore

 Panmure Liberum Limited                            020 3100 2000
 Alex Collins
 Tom Scrivens

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 ON AIRE

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.

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  MSCFLFIAATIFIIE