REG - Alternative Inc REIT - Results for the half year ended 31 December 2024
04/03/2025 07:00
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RNS Number : 1782Z Alternative Income REIT PLC 04 March 2025
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REPUBLIC OF SOUTH AFRICA.
4 March 2025
Alternative Income REIT plc
(the "Company" or the "Group")
INTERIM REPORT AND FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER
2024 (the "Period")
NAV increased 1.3% over the Period
For the Period: Share price total return of +11.8% and unaudited NAV total
return of +5.2%
On track to deliver target annual dividend of 6.2 pence per share (B) ("pps")
for the financial year ending 30 June 2025
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, is pleased to
announce its interim report and financial statements for the half year ended
31 December 2024 (the Period).
Simon Bennett, Non-Executive Chair of Alternative Income REIT plc, comments:
"The Company is on track to deliver on an annual dividend target of 6.2 pence
per share (B) ("pps") for the year ending 30 June 2025 (year ended 30 June
2024: 5.9 pps), which is expected to be fully covered subject to the continued
collection of rent from the Group's property portfolio as it falls due.
The Group completed the acquisition of the Champney's Beauty College, Tring
("Tring") for £2.72 million (gross of acquisition costs) in December 2024,
representing 2.4% of the portfolio valuation at 31 December 2024. Contracted
annualised rent grew by 1.5% in the Period, predominantly because of the
index-linked rent reviews in Salford, Brough and Solihull. This growth
excludes Tring and the rent-free period in respect of Pets at Home in
Droitwich. 91.5% of the leases within the portfolio are index-linked, with
35.2% of the contracted rental income reviewed annually.
At 31 December 2024, the Group owned 20 properties valued at £106.2 million
(30 June 2024: 19 properties: £102.7 million). During the half year the
valuation increased by £3.5 million, which included the acquisition of Tring
and on a like-for-like basis the Company's property values increased by £1.1
million or 1.0%. Most of this increase being from the Group's properties in
the industrial and retail warehouse sectors.
At 31 December 2024, the Group's unaudited Net Asset Value was £66.0 million,
or 81.94 pps (30 June 2024: £65.1 million, or 80.90 pps), representing a 1.3%
increase over the Period. When combined with the two interim dividends paid in
the Period of 3.175 pps, this produced an unaudited NAV total return for the
Period of 5.21%.
The Group's track record demonstrates a secure and increasing income stream.
The Group continues to benefit from low borrowing costs until October 2025,
when the current Canada Life senior loan matures. The Board has appointed a
debt adviser to assist with the refinancing and is confident that the
requisite financing will be achieved prior to October 2025, albeit at an
increased interest rate as compared to the current rate.
The Board remains confident that the Company is well-positioned for the
future, with a portfolio that continues to deliver secure, index-linked income
and has the potential for capital growth as the property market recovers."
Financial Highlights
At 31 December 2024 (the "Period End")
31 December 2024 30 June 2024
(unaudited) (audited) Change
Net Asset Value ('NAV') £66.0 million £65.1 million +1.3%
NAV per share 81.94p 80.90p +1.3%
Share price per share 70.60p 66.00p +7.0%
Share price discount to NAV (A) 13.8% 18.4% -4.6%
Investment property fair value (based on external valuation) £106.2 million (D) £102.7 million (D) +3.4%
Loan to gross asset value ('GAV') (A C) 37.4% 37.7%
Loan facility (C) £41.0 million £41.0 million
( )
For the half year ended 31 December 2024
2024 2023 Change
(unaudited) (unaudited)
EPRA earnings per share ('EPS') (A) 3.28p 2.75p +19.3%
Adjusted EPS (A) 3.26p 2.96p +10.1%
Total dividends per share 3.10p 2.85p +8.8%
Dividend cover (A) 105.2% 103.9% +1.3%
Dividend yield (annualised) (A) 8.8% 8.3%
Operating profit (including gain on sale of investment property but excluding £3.3 million £2.9 million +13.8%
fair value changes)
Profit before tax £3.4 million £0.6 million +466.7%
EPS per share 4.22p 0.80p +427.5%
Share price total return (A) 11.78% 15.69%
NAV total return (A) 5.21% 0.96%
Annualised gross passing rent £7.8 million £7.7 million +1.3%
Ongoing charges (annualised) (A) 1.48% 1.46% +2 bps
Financial Highlights Overview
· The NAV increase of 1.3% to 81.94 pps was primarily due to the £0.6 million
increase in the fair value of the investment properties, which in turn
reflected an increase in the wider UK real estate sector fuelled by interest
rate cuts and lower inflation. The remaining increase of £0.3 million arose
from an increase in the income of Virgin Active, Streatham.
· Dividends declared of 3.1 pps, an increase of 8.8% compared to the prior
Period, and reflect the Board's target annual dividend of at least 6.2 pps B
(2023: 5.9 pps) which is expected to be fully covered. Dividends for the
Period were covered 105.2% (2023: 103.9%) by earnings.
· The dividend yield A of 8.8% has increased when compared to the prior Period,
reflecting the increase in the dividend.
· The Company's share price of 70.60p increased 7.0% from the year end,
reflecting the narrowing of the Company's share price discount to NAV to 13.8%
from 18.4%.
· EPS of 3.28 pps for the Period, an increase of 19.3% from the prior Period.
The increase is largely due to a £0.6 million improvement in the fair value
noted above and a full six months of additional rental income following the
2023 acquisition of Virgin Active, Streatham.
· Loan to GAV of 37.4% and interest cover ratio of 597% gives significant
headroom on the lender's loan to value covenant of 60% and interest cover
covenant of 250%, based on the loan's interest rate of 3.19%. The Group's loan
matures on 20 October 2025 and the Board has appointed and is working with a
specialist debt adviser to ensure that suitable and sufficient refinancing is
achieved prior to the loan's maturity date, albeit at an increased rate
compared to the current interest rate.
(A) Considered to be an Alternative Performance Measure. Further details can
be found at the end of this section and full calculations are set out
following the financial statements.
(B) 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.
(C) The loan facility at 31 December 2024 of £41 million (30 June 2024: same)
is with Canada Life Investments, matures on 20 October 2025 and has a weighted
average interest cost of 3.19%.
(D) On a like-for-like basis, the fair value of the properties increased by
£1.1 million or 1.0% during the Period.
Operational Highlights
At the Group's Period End of 31 December 2024:
· The Group's property portfolio had a fair value of £106.2 million across 20
properties (30 June 2024: £102.7 million across 19 properties).
· Acquisition of Tring for £2.5 million (net of acquisition costs) in December
2024.
· EPRA Net Initial Yield (A) ('NIY') maintained at 6.9% (30 June 2024: 6.9%).
· 91.5% of the Group's contracted income is index-linked to the Retail Price
Index or the Consumer Price Index; 35.2% is reviewed annually.
· The assets were 100% let at the Period End and throughout the Period.
· The weighted average unexpired lease term ('WAULT') at the Period End was 16.1
years to the earlier of break and expiry (30 June 2024: 16.5 years) and 17.7
years to expiry (30 June 2024: 18.4 years).
Income and expense during the Period
· Rent recognised during the Period was £3.9 million (half year to 31 December
2023: £3.5 million). The number of tenants at the half year was 23 (31
December 2023: 22).
· All of the rent due during the Period has been collected.
· The portfolio had annualised gross passing rent of £7.7 million across 20
properties (31 December 2023: £7.7 million across 19 properties).
· Ongoing charges (annualised) at the Period end was 1.48%, a slight increase
from the comparable prior period (31 December 2023: 1.46%). This is as a
result of inflationary cost increases across the portfolio.
Post balance sheet highlights
· On 5 February 2025, the Board declared an interim dividend of 1.55 pps in
respect of the quarter ended 31 December 2024. This will be paid on 28
February 2025 to shareholders on the register at 14 February 2025 with an
ex-dividend date of 13 February 2025.
· In the next six-month period to 30 June 2025, 22% of the Group's income will
be reviewed (four annual index-linked rent reviews; one periodic index-linked
rent reviews (3 years since the previous review); and two lease expiries).
ENQUIRIES
Alternative Income REIT PLC
Simon Bennett - Chair via H/Advisors Maitland below
Martley Capital REIM Ltd +44 (0)20 4551 1240
Richard Croft
Jane Blore
Panmure Liberum Limited +44 (0)20 3100 2000
Alex Collins
Tom Scrivens
H/Advisors Maitland (Communications Advisor) 07747 113 930 / 020 7379 5151
James Benjamin aire-maitland@h-advisors.global
Billy Moran
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available at
www.alternativeincomereit.com (http://www.alternativeincomereit.com/) (1)
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 the alternative and specialist sectors.
The Company's investment adviser is Martley Capital Real Estate Investment
Management Limited ("Martley Capital"). Martley Capital Group is a
full-service real estate investment management platform whose activities cover
real estate investing, lending, asset management and investment advisory. It
has over 35 employees across five offices in the UK and Europe. The team
manages assets with a value of circa £900 million across 20 mandates (at 31
December 2024).
(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.
Chairman's Statement
Overview
I am pleased to present the unaudited half-yearly report of Alternative Income
REIT plc (the Company) together with its subsidiaries (the Group) for the half
year ended 31 December 2024.
During the period under review, the Company's portfolio increased in value
with the Group's net asset value rising by £0.9 million to £66.0 million (30
June 2024: £65.1 million), an increase on a par with benchmark property
indices and the Company's peer group.
91.5% of the Group's portfolio benefits from index-linked rent reviews, 35.2%
on an annual basis based on contracted rent. Combining this with a strong
balance sheet, modest overheads and low fixed borrowing costs until October
2025, helps ensure that the Company is well positioned to navigate
successfully through the current macroeconomic backdrop and to continue to
deliver attractive and secure income to our shareholders. The biggest risk
factor for the Group, aside from renewing of the Group's debt facilities by
October 2025, remains tenant default, although in recent years the Group has
an excellent record of rent collection.
Portfolio Performance
The fair value of the Group's property portfolio amounted to £106.2 million
across 20 properties (30 June 2024: £102.7 million across 19 properties). On
a like-for-like basis, the Company's property values increased by £1.1
million or 1.0% for the half year ended 31 December 2024. The portfolio had a
net initial yield of 7.1% at 31 December 2024 (30 June 2024: 7.1%), and a
WAULT to the first break of 16.1 years (30 June 2024: 16.5 years) and a WAULT
to expiry of 17.7 years (30 June 2024: 18.4 years).
Property Transactions
On 2 December 2024, the Company completed the purchase of Tring for a net
consideration of £2.5 million. This property represented 2.4% of the Group's
portfolio capital valuation at 31 December 2024. The acquisition represented a
net initial yield of 6.5%. Following this acquisition, the Group is now fully
invested.
Dividends and Earnings
The Company declared increased interim dividends totalling 3.1 pps in respect
of the half year ended 31 December 2024 (half year ended 31 December 2023:
2.85 pps). Dividends declared for the Period are in line with the Board's
target annual dividend of at least 6.2 pps(A), which is expected to be fully
covered.
As set out in Note 8 to the Condensed Consolidated Financial Statements, these
dividends were covered by both the Group's EPRA Earnings(B) of 3.28 pps (31
December 2023: 2.75 pps), and by the Group's Adjusted EPS(B) (representing
cash) of 3.26 pps (31 December 2023: 2.96 pps). All dividends were paid as
Property Income Distributions.
Financing
At 31 December 2024, the Group had fully utilised its £41 million loan
facility with Canada Life Investments. The weighted average interest cost of
the Group's facility is 3.19% and the loan is repayable on 20 October 2025.
The Board has commenced its debt refinancing plan. As part of this, the Board
has appointed and is working with a specialist debt adviser to ensure that
suitable and sufficient refinancing is achieved prior to the loan's maturity
date, albeit that this will come with an increased interest rate compared to
that which the Group currently enjoys.
Discount
The discount of the Company's share price to NAV at 31 December 2024 reduced
from 18.4% (as at 30 June 2024) to 13.8%. The Board monitored the discount
level throughout the Period and has the requisite authority from shareholders
to both issue and buy back shares.
Future Growth and Outlook
The Board remains confident that the Company is well-positioned for the
future, with a resilient portfolio well-placed to continue to provide secure,
index-linked income with the potential for capital growth.
The Board has set an annual dividend target of at least 6.2 pps (B) for the
year ending 30 June 2025 (year ended 30 June 2024: 5.9 pps), which is expected
to be fully covered, subject to the continued collection of rent from the
Group's property portfolio as it falls due. During the six months until the
end of the current financial year, approximately 16.3% of the Group's income
will be subject to rent reviews or lease expiries, 15.5% as annual
index-linked rent reviews, and 0.8% lease expiry of storage land in St Helens.
I would like to thank our shareholders, my fellow Directors, the Investment
Adviser and our other advisers and service providers who have provided
professional support and services to the Group during the Period.
Simon Bennett
Chairman
3 March 2025
Key Performance Indicators ('KPIs')
KPI AND DEFINITION RELEVANCE TO STRATEGY PERFORMANCE
1. Net Initial Yield ('NIY') (B) The NIY is an indicator of the ability of the Group to meet its target 6.85%
dividend after adjusting for the impacts of leverage and deducting operating
Annualised rental income based on the cash rents passing at the balance sheet costs. at 31 December 2024
date, less non-recoverable property operating expenses, divided by the market
value of the property, increased with purchasers' costs estimated by the
Group's External Valuers.
(30 June 2024: 7.06%; 31 December 2023: 6.94%)
2. Weighted Average Unexpired Lease Term ('WAULT') to break and expiry The WAULT is a key measure of the quality of the portfolio. Long leases 16.1 years to break and 17.7 years to expiry
underpin the security of our future income.
The average lease term remaining to expiry across the portfolio, weighted by at 31 December 2024
contracted rent.
(30 June 2024: 16.5 years to break and 18.4 years to expiry; 31 December 2023:
16.6 years to break and 18.5 years to expiry)
3. Net Asset Value ('NAV') per share (1) Provides stakeholders with the most relevant information on the fair value of £65.96 million/ 81.94 pps
the assets and liabilities of the Group.
NAV is the value of an entity's assets minus the value of its liabilities. at 31 December 2024
(30 June 2024: £65.12 million, 80.90 pps and 31 December 2023: £65.7
million, 81.62 pps)
4. Dividend per share The Group seeks to deliver a sustainable income stream from its portfolio, 3.10 pps
which it distributes as dividends.
Dividends declared in relation to the period are in line with the stated for the half year ended 31 December 2024
dividend target as set out in the Prospectus at IPO. The Board's intention is
to ensure an increasing dividend in line with the Company's Investment
Objective. A target dividend for the year ended 30 June 2024 has been set at
5.9 pence per Ordinary Share. (year ended 30 June 2024: 5.90 pps; half year ended 31 December 2023: 2.85
pps)
5. Adjusted EPS (B) This reflects the Group's ability to generate earnings from the portfolio 3.26 pps
which underpins dividends.
Adjusted EPS from core operational activities, as adjusted for non-cash items. for the half year ended 31 December 2024
A key measure of a company's underlying operating results from its property
rental business and an indication of the extent to which current dividend
payments are supported by earnings. See Note 8 to the Condensed Consolidated
Financial Statements. (year ended 30 June 2024: 5.99 pps; half year to 31 December 2023: 2.96 pps)
6. Leverage (Loan-to-GAV) (B) The Group utilises borrowings to enhance returns over the medium term. 37.36%
Borrowings will not exceed 40% of GAV (measured at drawdown).
The proportion of the Group's assets that is funded by borrowings. at 31 December 2024
(30 June 2024: 37.67% and 31 December 2023: 37.49%)
(B) Considered to be an Alternative Performance Measure. Further details can
be found at the end of this section and full calculations are set out
following the financial statements.
EPRA Performance Measures
( )
Detailed below is a summary table showing EPRA performance measures (which are
all alternative performance measures) of the Group.
MEASURE AND DEFINITION PURPOSE PERFORMANCE
EPRA NIY (1) A comparable measure for portfolio valuations. This measure should make it 6.85%
easier for investors to judge themselves, how the valuation of two portfolios
Annualised rental income based on the cash rents passing at the balance sheet compare. at 31 December 2024
date, less non-recoverable property operating expenses, divided by the market
value of the property, increased with (estimated) purchasers' costs.
(30 June 2024: 6.94% and 31 December 2023: 6.94%)
EPRA 'Topped-Up' NIY (1) A comparable measure for portfolio valuations. This measure should make it 7.23%
easier for investors to judge themselves, how the valuation of two portfolios
This measure incorporates an adjustment to the EPRA NIY in respect of the compare. at 31 December 2024
expiration of rent-free periods (or other unexpired lease incentives such as
discounted rent periods and step rents). (30 June 2024: 7.29% and 31 December 2023: 7.31%)
EPRA NAV (2) Makes adjustments to IFRS NAV to provide stakeholders with the most relevant £65.96 million/ 81.94 pps
information on the fair value of the assets and liabilities within a real
Net asset value adjusted to include properties and other investment interests estate investment company with a long-term investment strategy. at 31 December 2024
at fair value and to exclude certain items not expected to crystallise in a
long-term investment property business.
(30 June 2024: £65.12 million, 80.90 pps and 31 December 2023: £65.70
million, 81.62 pps)
EPRA Net Reinstatement Value (2) A measure that highlights the value of net assets on a long-term basis. £72.87 million/ 90.52 pps
The EPRA NRV adds back the purchasers' costs deducted from the EPRA NAV and EPRA NRV for the half year ended 31 December 2024
deducts the break cost of bank borrowings.
(30 June 2024: £71.79 million/ 89.18pps and 31 December 2023: £72.42
million/ 89.96pps)
EPRA Net Tangible Assets (2) A measure that assumes entities buy and sell assets, thereby crystallising £65.96 million/ 81.94 pps
certain levels of deferred tax liability. The Group has UK REIT status and as
The EPRA NTA deducts the break cost of bank borrowings from the EPRA NAV. such no deferred tax is required to be recognised in the accounts. EPRA NTA for the half year ended 31 December 2024
As break costs were nil at the period end, the EPRA NTA is the same as the (30 June 2024: £65.12 million/80.90 pps and 31 December 2023: £65.70
EPRA NAV. million/81.62 pps)
EPRA Net Disposal Value (2) A measure that shows the shareholder value if assets and liabilities are not £65.96 million/ 81.94 pps
held until maturity.
The EPRA NDV deducts the break cost of bank borrowings from the EPRA NAV. EPRA NDV for the half year ended 31 December 2024
(30 June 2024: £65.12 million/80.90 pps and 31 December 2023: £65.70
million/81.62 pps)
EPRA Earnings/EPS (2) A key measure of a company's underlying operating results and an indication of £2.64 million/ 3.28 pps
the extent to which current dividend payments are supported by earnings.
Earnings from operational activities. EPRA earnings for the half year ended 31 December 2024
(30 June 2024: £4.74 million/ 5.89 pps and 31 December 2023: £2.21
million/2.75 pps)
EPRA Vacancy (1) A 'pure' percentage measure of investment property space that is vacant, based 0.00%
on ERV.
Estimated Rental Value ('ERV') of vacant space divided by ERV of the whole EPRA vacancy as at 31 December 2024
portfolio.
(30 June 2024: 0.00% and 31 December 2023: 0.00%)
EPRA Cost Ratio (1) A key measure to enable meaningful measurement of the changes in a company's 15.04%
operating costs.
Administrative and operating costs (including and excluding costs of direct EPRA Cost Ratio as at 31 December 2024. The ratio is the same both including
vacancy) divided by gross rental income. and excluding the vacancy costs.
(30 June 2024: 16.36% and 31 December 2023: 16.35%)
(1) The reconciliation of this APM is set out in the EPRA Performance Measures
Calculations section following the Notes to the Condensed Consolidated
Financial Statements.
(2) The reconciliation of this APM is set out in Note 8 of the Notes to the
Condensed Consolidated Financial Statements.
Investment Adviser's Report
Market Outlook
UK Economic Outlook
The UK economy exhibited weaker-than-expected performance in the latter half
of 2024. UK economic growth stalled in the third quarter and the first two
months of the fourth quarter of the year, with zero growth (A). This is worse
than the average growth seen in other G7 countries after the pandemic (B). The
Bank of England has subsequently halved its latest GDP growth forecast in
February 2025 to just 0.75% for the coming year (C).
UK unemployment ticked up to 4.4% in the three months to November 2024,
surpassing the low rates of the past two years (D). While wages continued to
climb annually at 5.6% in November (E), fuelling inflationary pressures, this
growth is anticipated to moderate in 2025 (F). Businesses worry that the
Government's national insurance policy will hinder hiring and increase prices.
The British Chambers of Commerce increased their 2025 unemployment forecast to
4.5%, citing rising employment costs and youth unemployment concerns.
Inflationary pressures continued to mount in December 2024, with the Consumer
Price Index ('CPI') exceeding the 2% target rate. CPI increased 2.5%
year-on-year, up from 1.7% in September 2024 (G). Service sector inflation,
particularly in labour-intensive industries, remains a significant driver, at
4.4% in December. Looking ahead, concerns persist regarding inflation levels
in 2025. KPMG predicts only a slight decrease to 2.4%, anticipating that
higher operating costs will be passed through to consumers.
The Bank of England's base rate remained at 5.25% for a year before the first
cut in August 2024 to 5.00%. A second cut to 4.75% in November 2024
significantly undershot market expectations of multiple rate reductions. In
February 2025, the Monetary Policy Committee lowered the bank base rate to
4.50%, but while inflation concerns are rising, markets still anticipate
another 50 basis point reduction in 2025 (H). Major financial institutions
like BlackRock, J.P. Morgan, Goldman Sachs and Morgan Stanley predict more
aggressive cuts, and many expect the rate to bottom out at around 3.5% by 2026
(I).
Economic sentiment has weakened significantly in recent months. A survey by
the Office for National Statistics found that 12% of businesses surveyed in
January 2025 now expect a decline in performance over the next year, a
significant increase from 7% in June 2024 (J). Consumer confidence, as
measured by the GfK index, has also plummeted, falling from -14 in June 2024
to -22 in January 2025 (K).
The UK economy faces several challenges, including the risk of stagflation,
rising unemployment and the potential impact of government policies on
inflation. Increased government borrowing costs and the possibility of further
tax increases add to the uncertainty. However, positive signs include
projected GDP growth, driven in part by a strong services sector, and
anticipated outperformance of the EU economy in 2025. These factors suggest
potential for improvement. Careful policymaking will be essential to
consolidate these gains and stabilise the economy.
Sources:(A) ONS (2025), Gross Domestic Product (GDP);(B) UK Parliament (2025),
GDP international comparisons: Economic indicators;(C) Bank of England (2025),
Monetary Policy Report - February 2025;(D) ONS (2025), Unemployment rate (aged
16 and over, seasonally adjusted);(E) ONS (2025), Average weekly earnings in
Great Britain: January 2025;(F) British Chambers of Commerce, BCC Economic
Forecast;(G) ONS (2025), CPI Annual Rate 00: All Items 2015=100;
(H)Morningstar (2025), Bank of England Makes Third Rate Cut in Six Months;(I)
Morningstar (2025), How Much Will The Bank of England Cut Interest Rates in
2025?;(J) ONS (2025), Business Insights and Conditions Survey (BICS);(K) UK
Parliament (2025), Business and consumer confidence: Economic indicators.
UK Real Estate Outlook
In 2024, the UK's commercial property investment performance was significantly
impacted by rising interest rates, economic uncertainty and high inflation.
Despite the headwinds, UK investment volume saw its strongest investment
figures in Q4 since Q3 2022 with £13.1bn transacted, bringing the annual
total for 2024 to £46.3bn, up 24% on 2023 (A). On the occupier side,
increased operating costs affected the ability of businesses to expand or
relocate. Economic uncertainty and rising operating costs led to cautious
business investment decisions, stalling growth and relocation, with many
companies delaying or downsizing expansion plans and prioritising flexible
leases.
Following the two interest rate cuts in late 2024, investor confidence in the
UK property market improved. This is reflected in a rise of capital values
during Q3 2024 across all sectors for the first time in over two years, a
trend which continued in Q4 2024 (B). Yields stabilised across all property
types in 2024 with just a 10bps fluctuation in the All Property transaction
yield from the prior year, ending 2024 at 6.28%. Positive sentiment persists
across most sectors in 2025 and, with anticipated interest rate cuts, yields
should compress further, attracting greater investor interest. CBRE forecasts
a 15% increase in market activity (C), while Colliers predicts double-digit
total returns of 11% as investors explore more value-add opportunities (D).
During 2024, the UK property market witnessed diverse performance across the
sectors. The living sector, encompassing residential, student, and healthcare,
emerged as the most attractive asset class for investors, with a substantial
£18.26bn invested during 2024. This strong performance was driven by robust
rental demand fuelled by housing shortages, a growing student population, and
an aging demographic. While the number of deals remained high, investment
volume in the industrial sector decreased compared to the 2021 boom with few
larger value deals taking place. Concerns around oversupply in some markets
have slowed speculative development. However, opportunities remain for
investors who can identify markets with high demand and limited supply. The
industrial sector continues to demonstrate healthy rental growth, averaging
3.5%-5.5% per annum.
UK REITs saw widely varying performances in 2024. Even with increasing student
enrolment, student housing REITs struggled. Unite Group's share price dropped
19.8% and Empiric Student Property's 8.4%, likely impacted by high starting
share prices and negative reports on university finances (E). Bucking the
trend, Hammerson, the retail-anchored REIT, showed a modest 3.9% gain.
Overall, the FTSE EPRA Nareit UK Index, the benchmark for UK REITs, was down
11.7% for the year (F). Rising borrowing costs and Government bond yields
created an unfavourable risk-reward profile for many investors. Outflows from
open-ended property funds persisted throughout 2024, with nearly £1bn
withdrawn from UK-domiciled funds that directly invest in UK property (G).
This trend was accompanied by widening discounts to net asset value. Despite
these challenges and the changing economic landscape, opportunities remain for
investors, including AIRE, who are targeting the best-performing sectors,
given their strong underlying fundamentals. Furthermore, improved market
sentiment and valuations in 2025 could potentially reverse the negative trends
seen in 2024.
The UK commercial property market is undergoing a significant transformation,
requiring resilience and innovation for future success. Recent challenges have
necessitated a fundamental reassessment of industry practices, demanding
creative investment strategies, bold occupier choices, and the agility to
adapt to rapidly evolving market demands. Moving forward, interdisciplinary
collaboration will be essential to unlocking value and fostering sustainable
growth within the sector.
Sources:(A) LSH (2025), UKIT Q4 2024: Q4 Caps Year of Extremes for UK
Investment Market;(B) MSCI (2024), UK Data;(C) CBRE (2024), UK Real Estate
Market Outlook 2025;(D) Colliers (2024), Forecasts for 2025;(E) Citywire
(2025), Why Reits saw 'dramatic decline' to end 2024 - and what next?; (F)
LSEG (2024), FTSE EPRA Nareit UK Index Factsheet;(G) Morningstar (2024), UK
Property Investors Have Another Painful Year.
Portfolio Activity
The following transactions were undertaken during the Period:
On 2 December 2024, the Company completed the purchase of Tring for a net
consideration of £2.5 million. This property represented 2.4% of the Group's
portfolio capital valuation at 31 December 2024. The acquisition represented a
net initial yield of 6.5% and is fully let to Champneys Tring Limited and
provides treatment and training rooms for the leisure sector within the estate
of the Champneys Tring Spa Resort. The lease does not expire until 2039 with 5
yearly index-linked rent reviews. The property has previously been granted
planning consent for change of use to residential use. This asset provides
increased diversity within the alternative sectors of education and leisure
with the valuation underpinned by the living sector.
The following asset management initiatives were undertaken during the Period:
· Rent Reviews: A total of five rent reviews took place during the
Period with a combined uplift of £118,839 with an average increase in
contracted rent of 4.8%. The portfolio showed an increase of 1.5% on a
like-for-like basis.
· A further rent review for the care home in Bristol was completed
at £490,989 per annum reflecting an increase of 3.6% during the period
between the half year and the date of this report.
· Negotiations are in progress in respect of lease regears and
renewals with many tenants including Meridian Steel, B&M, Dore Metals and
BGEN. The Company is working with its tenants to improve the environmental
sustainability of the portfolio and updated one EPC this period, resulting in
an improvement in the energy efficiency of the asset at no capital cost to the
Company.
NAV Movements
Half year ended Half year ended Year ended
31 December 2024 31 December 2023 30 June 2024
Pence per share £ million Pence per £ million Pence per £ million
share share
NAV at beginning of period/ year 80.90 65.12 84.16 67.75 84.16 67.75
Change in fair value of investment property 0.94 0.76 (2.70) (2.17) (3.71) (2.98)
Income earned for the period/year 5.23 4.21 4.64 3.73 9.82 7.90
Gain on sale of property - - 0.75 0.60 0.74 0.60
Finance costs for the period/year (0.88) (0.71) (0.88) (0.71) (1.75) (1.41)
Other expenses for the period/year (1.07) (0.86) (1.01) (0.81) (2.17) (1.75)
Dividends paid during the period/year (3.18) (2.56) (3.34) (2.69) (6.19) (4.99)
NAV at the end of the year 81.94 65.96 81.62 65.70 80.90 65.12
Valuation
At 31 December 2024, the Group owned 20 assets valued at £106.2 million (30
June 2024: 19 assets, £102.7 million) following the acquisition of Tring for
£2.5 million (net) on 2 December 2024.
Summary by Sector at 31 December 2024
Annualised
gross
Market Occupancy WAULT to passing
Number of Valuation Value by ERV break rent ERV ERV
Sector Properties (£m) (%) (%) (years) (£m) (£m) (%)
Industrial 4 26.0 24.5 100.0 23.5 1.8 1.8 24.2
Healthcare 3 16.9 15.9 100.0 24.0 1.3 1.1 15.7
Automotive & Petroleum 3 14.8 13.9 100.0 11.5 1.1 1.0 13.5
Hotel 2 12.9 12.2 100.0 12.5 0.9 0.8 11.5
Residential 1 10.8 10.2 100.0 16.6 0.8 0.8 11.3
Leisure 3 10.4 9.8 100.0 9.0 0.7 0.8 10.6
Retail Warehouse 1 5.4 5.1 100.0 4.3 0.5 0.4 5.3
Power Station 1 4.6 4.3 100.0 7.2 0.3 0.3 4.5
Education 2 4.4 4.1 100.0 16.5 0.3 0.3 3.4
Total/Average 20 106.2 100.0 100.0 16.1 7.7 7.3 100.0
Summary by Geographical Area at 31 December 2024
Annualised
gross
Market Occupancy WAULT to passing
Geographical Number of Valuation Value by ERV break rent ERV ERV
Area Properties (£m) (%) (%) (years) (£m) (£m) (%)
West Midlands 4 26.2 24.7 100.0 10.1 2.1 1.9 26.9
The North West & Merseyside 2 22.5 21.2 100.0 34.2 1.5 1.4 19.0
Rest of South East 5 21.7 20.5 100.0 8.8 1.5 1.4 19.2
South West 2 12.2 11.4 100.0 21.5 0.9 0.9 11.8
London 3 10.4 9.8 100.0 9.0 0.7 0.8 10.6
Eastern 2 7.1 6.7 100.0 9.6 0.5 0.4 6.2
Yorkshire and the Humber 2 6.1 5.7 100.0 17.2 0.5 0.5 6.3
Total 20 106.2 100.0 100.0 16.1 7.7 7.3 100.0
Top Ten Occupiers at 31 December 2024
Tenant Property Annualised gross passing rent (£'000) % of Portfolio Total Annualised gross passing rental
Mears Group Plc Bramall Court, Salford 809 10.5%
Prime Life Ltd Prime Life Care Home, Brough & Solihull 781 10.1%
Meridian Steel Ltd Grazebrook Industrial Estate, Dudley & Sheffield 769 9.9%
Motorpoint Ltd Motorpoint, Birmingham 568 7.3%
Virgin Active Health Clubs Ltd Virgin Active, London 521 6.7%
Premier Inn Hotels Ltd Premier Inn, Camberley 504 6.5%
Handsale Ltd Silver Trees, Bristol 474 6.1%
Travelodge Hotels Ltd Duke House, Swindon 403 5.2%
B&M Bargains Droitwich Spa Retail Park, Droitwich 364 4.7%
Biffa Waste Services Ltd Pocket Nook Industrial Estate, St Helens 352 4.6%
Top Ten Total 5,545 71.6%
Lease Expiry Portfolio at 31 December 2024 - to the earlier of break or lease
expiry
Year Expiring passing rent pa (£'000) Cumulative (£'000)
2025 64
64
2026 -
64
2027 913
977
2028 420
1,397
2029 364
1,761
2030 -
1,761
2031 -
1,761
2032 864
2,625
2033 614
3,239
2034 521
3,760
2035 -
3,760
2036 -
3,760
2037 849
4,609
2038 -
4,609
2039+ 3,140
7,749
Interim Management Report and Directors' Responsibility Statement
Interim Management Report
The important events that have occurred during the period under review, the
key factors influencing the financial statements and the principal risks and
uncertainties for the remaining half year of the financial year are set out in
the Chairman's Statement and the Investment Adviser's Report above.
The principal risks and uncertainties of the Company are set out in the Annual
Report and Financial Statements for the year ended 30 June 2024 (the '2024
Annual Report') on pages 24 to 29 and in Note 18.
Risks faced by the Company include, but are not limited to, tenant default,
portfolio concentration, property defects, the rate of inflation, the property
market, property valuation, illiquid investments, environment, breach of
borrowing covenants, inability to refinance the current loan facility, failure
of service providers, dependence on the Investment Adviser, ability to meet
objectives, Group REIT status, political and macroeconomic events, disclosure
risk, and regulatory change (including in relation to climate change). The
Board takes account of emerging risks, including climate change, as part of
its risk management assessment.
The Board is of the opinion that these principal risks are equally applicable
to the remaining six months of the Group's financial year, as they were to the
six months being reported on.
Related Party Transactions
There have been no changes to the related parties shown in Note 20 of the 2023
Annual Report that could have a material effect on the financial position or
performance of the Company or Group. Amounts payable to the Investment Adviser
in the six months being reported are shown in the unaudited Condensed
Consolidated Statement of Comprehensive Income.
Going Concern
This report has been prepared on a going concern basis. Note 2 sets out the
Board's considerations in coming to this conclusion.
Directors' Responsibility Statement
The Directors confirm that to the best of our knowledge:
· the condensed consolidated set of financial statements has been
prepared in accordance with the UK-adopted IAS 34 'Interim Financial
Reporting';
· the interim management report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being
an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed consolidated of
financial statements; and a description of the principal risks and
uncertainties for the remaining half of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the financial year and that have materially affected the financial position or
performance of the Company during that period; and any changes in the related
party transactions described in the 2023 Annual Report that could do so.
As at the date of this report the Directors of the Company are Simon Bennett,
Stephanie Eastment and Adam Smith all of whom are non-executive Directors.
For and on behalf of the Board
Simon Bennett
Chairman
3 March 2025
Condensed Consolidated Statement of Comprehensive Income
For the half year ended 31 December 2024
Half year Half year Year
ended ended ended
31 December 31 30
December June
2024 2023 2024
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Income
Rental and other income 3 4,210 3,735 7,900
Property operating expense 4 (354) (302) (680)
Net rental and other income 3,856 3,433 7,220
Other operating expenses 4 (512) (510) (1,066)
Operating profit before fair value change and gain on sale 3,344 2,923 6,154
Change in fair value of investment properties 10 759 (2,169) (2,983)
Gain on disposal of investment property 10 - 598 598
Operating profit 4,103 1,352 3,769
Finance expenses 6 (705) (709) (1,412)
Profit before tax 3,398 643 2,357
Taxation 7 - - -
Profit and total comprehensive income attributable to shareholders 3,398 643 2,357
Earnings per share (basic and diluted) 8 4.22p 0.80p 2.93p
8 3.28p 2.75p 5.89p
EPRA EPS (basic and diluted)
Adjusted EPS (basic and diluted) 8 3.26p 2.96p 5.99p
All items in the above statement are derived from continuing operations.
The accompanying notes 1 to 18 form an integral part of these Condensed
Consolidated Financial Statements.
Condensed Consolidated Statement of Financial Position
For the half year ended 31 December 2024
As at As at As at
31 December 2024 31 December 30 June
(unaudited) 2023 2024
(audited)
(unaudited)
Notes £'000 £'000 £'000
Assets
Non-current Assets
Investment properties 10 102,566 99,896 99,083
Current Assets
Receivables and prepayments 11 4,277 6,603 6,464
Cash and cash equivalents 2,913 2,877 3,292
Total current assets 7,190 9,480 9,756
Total Assets 109,756 109,376 108,839
Liabilities
Current Liabilities
Payables and accrued expenses 12 (2,913) (2,900) (2,890)
Interest bearing loans and borrowings 13 (40,880) - -
Total current liabilities (43,793) (2,900) (2,890)
Non-current Liabilities
Interest bearing loans and borrowings 13 - (40,776) (40,828)
Total Liabilities (43,793) (43,676) (43,718)
Net Assets 65,963 65,700 65,121
Equity
Share capital 17 805 805 805
Capital reserve 67,875 75,417 70,431
Retained earnings (2,717) (10,522) (6,115)
Total capital and reserves attributable to equity holders of the Company 65,963 65,700 65,121
Net Asset Value per share (basic and diluted) 8 81.94p 81.62p 80.90p
EPRA Net Tangible Asset per share (basic and diluted) 8 81.94p 81.62p 80.90p
The accompanying notes 1 to 18 form part of these Condensed Consolidated
Financial
Statements.
The Condensed Consolidated Financial Statements were approved by the Board of
Directors on 3 March 2025 and were signed on its behalf
by:
Simon
Bennett
Chairman
Company number: 10727886
Condensed Consolidated Statement of Changes in Equity
For the half year ended 31 December 2024
Share Capital Retained earnings Total
capital reserve equity
Notes £'000 £'000 £'000 £'000
For the half year ended
31 December 2024 (unaudited)
Balance at 30 June 2024 805 70,431 (6,115) 65,121
Total comprehensive income attributable to shareholders - - 3,398 3,398
Dividends paid 9 - (2,556) - (2,556)
Balance at 31 December 2024 805 67,875 (2,717) 65,963
For the half year ended
31 December 2023 (unaudited)
Balance at 30 June 2023 805 75,417 (8,472) 67,750
Total comprehensive income attributable to shareholders - - 643 643
Dividends paid 9 - - (2,693) (2,693)
Balance at 31 December 2023 805 75,417 (10,522) 65,700
For the year ended
30 June 2024 (audited)
Balance at 30 June 2023 805 75,417 (8,472) 67,750
Total comprehensive income attributable to shareholders - - 2,357 2,357
Dividends paid 9 - (4,986) - (4,986)
Balance at 30 June 2024 805 70,431 (6,115) 65,121
The accompanying notes 1 to 18 form an integral part of these Condensed
Consolidated Financial Statements.
Condensed Consolidated Statement of Cash Flows
For the half year ended 31 December 2024
Half year ended Half year Year
31 December ended ended
2024 31 December 30 June
(unaudited) 2023 2024
(unaudited) (audited)
Notes £'000 £'000 £'000
Cash flows from operating activities
Profit before tax 3,398 643 2,357
Adjustment for:
Finance expenses 6 705 709 1,412
Gain on disposal of investment property 10 - (598) (598)
Change in fair value of investment properties 10 (759) 2,169 2,983
Operating results before working capital changes 3,344 2,923 6,154
Change in working capital
Decrease/(increase) in other receivables and prepayments 2,187 (2,410) (2,271)
Increase in other payables and accrued expenses 23 149 139
Net cash generated from operating activities 5,554 662 4,022
Cash flows from investing activities
Purchase of investment property 10 (2,724) (5,304) (5,304)
Net proceeds from disposal of investment property 10 - 7,382 7,382
Net cash (used in)/generated from investing activities (2,724) 2,078 2,078
Cash flows from financing activities
Finance costs paid (653) (654) (1,306)
Dividends paid 9 (2,556) (2,693) (4,986)
Net cash used in financing activities (3,209) (3,347) (6,292)
Net decrease in cash and cash equivalents (379) (607) (192)
Cash and cash equivalents at beginning of period/year 3,292 3,484 3,484
Cash and cash equivalents at end of period/ year 2,913 2,877 3,292
The accompanying notes 1 to 18 form an integral part of these Condensed
Consolidated Financial Statements.
Notes to the Condensed Consolidated Financial Statements
For the half year ended 31 December 2024
1. Corporate Information
Alternative Income REIT plc (the "Company") is a public limited company and a
closed ended Real Estate Investment Trust ('REIT') incorporated on 18 April
2017 and domiciled in the UK and registered in England and Wales. The
registered office of the Company is located at The Scalpel, 18(th) Floor, 52
Lime Street, London EC3M 7AF.
The Company's Ordinary Shares were listed on the Official List of the FCA and
admitted to trading on the Main Market of the London Stock Exchange on 6 June
2017.
2. Accounting policies
2.1 Basis of preparation
These condensed consolidated interim financial statements for the half year
ended 31 December 2024 have been prepared in accordance with International
Accounting Standard ("IAS") 34 'Interim Financial Reporting'. These do not
include all the information required for annual financial statements, and
should be read in conjunction with the Group's last annual consolidated
financial statements for the year ended 30 June 2024 (the "2024 Annual
Financial Report").
These condensed consolidated financial statements have been prepared under the
historical cost convention, except for investment properties that have been
measured at fair value. The condensed consolidated financial statements are
presented in Sterling, which is the Group's presentational and functional
currency, and all values are rounded to the nearest thousand pounds, except
where otherwise shown.
The financial information in this report does not constitute statutory
accounts within the meaning of section 434-436 of the Companies Act 2006, and
has not been audited nor reviewed by the Company's auditor. The financial
information for the year ended 30 June 2024 has been extracted from the
published accounts that have been delivered to the Registrar of Companies, and
the report of the auditor was unqualified and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
Basis of consolidation
The condensed consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries (the 'Group'). Subsidiaries are
the entities controlled by the Company, being Alternative Income Limited and
Alternative Income REIT Holdco Limited. IFRS 10 outlines the requirements for
the preparation of consolidated financial statements, requiring an entity to
consolidate the results of all investees it is considered to control. Control
exists where an entity is exposed to variable returns and has the ability to
affect those returns through its power over the investee.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation. Accounting policies of the subsidiaries are consistent with the
policies adopted by the Company.
New standards, amendments and interpretations
Standards effective from 1 July 2024
Certain new accounting standards and interpretations have been published that
are not mandatory for annual periods beginning after 1 July 2024 and early
application is permitted; however, the Group has not early adopted the new or
amended standards in preparing these condensed consolidated financial
statements:
• Lack of Exchangeability - Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates (Effective 1 January 2025)
There are other new standards and amendments to standards and interpretations
which have been issued that are effective in future accounting periods, and
which the Group has decided not to adopt early. None of these are expected to
have a material impact on the condensed consolidated financial statements of
the Group.
2.2 Significant accounting judgements and estimates
The condensed consolidated financial statements have been prepared on the
basis of the accounting policies, significant judgements, estimates and key
assumptions as set out in the notes to the 2024 Annual Financial Report, and
are expected to be applied consistently for the year ending 30 June 2025.
No changes have been made to the Group's accounting policies as a result of
the amendments and interpretations which became effective in the period as
they do not have a material impact on the Group. Full details can be found in
the 2024 Annual Financial Report.
2.3 Segmental information
Each property held by the Group is reported to the chief operating decision
maker. In the case of the Group, the chief operating decision maker is
considered to be the Board of Directors. The review process for segmental
information includes the monitoring of key performance indicators applicable
across all properties. These key performance indicators include Net Asset
Value, Earnings per Share and valuation of properties. All asset cost and
rental allocations are also reported by property. The internal financial
reports received by the Directors cover the Group and all its properties and
do not differ from amounts reported in the financial statements. The Directors
have considered that each property has similar economic characteristics and
have therefore aggregated the portfolio into one reportable segment under the
provisions of IFRS 8.
2.4 Going concern
The condensed consolidated financial statements have been prepared on a going
concern basis.
The robust financial position of the Group, its cash flows, liquidity position
and borrowing facilities are described in the financial statements and the
accompanying notes.
The Investment Adviser on behalf of the Board has projected the Group's cash
flows for the period up to 31 March 2026, challenging and sensitising inputs
and assumptions to ensure that the cash forecast reflects a realistic outcome
given the uncertainties associated with the current economic environment. A
longer-term projection covering the period to 30 June 2028 had also been
carried out to ascertain the impact of the refinancing and future leasing
assumptions on the Group's cash flow. The scenarios applied were designed to
be severe but plausible, and to take account of the availability of mitigating
actions that could be taken to avoid or reduce the impact or probability of
the underlying risks.
The Group's debt of £41m matures on 20 October 2025 and the Group has
reported full compliance with its loan covenants to date. Based on cash flow
projections, the Directors expect the Group to continue to remain compliant.
The headroom of the loan to value covenant is significant and any reduction in
property values that would cause a breach would be significantly more than any
reduction currently envisaged.
The Board has commenced its debt refinancing plan given that the Group's
borrowings are due to be repaid on 20 October 2025. The Board has appointed
a specialist debt adviser with the expertise, knowledge and demonstrable
potential lender accessibility to secure refinancing for the Group.
Accordingly, the Board has a reasonable expectation to believe that the Group
can refinance its debt by 20 October 2025 at an aggregate finance cost and on
terms acceptable to the Board, taking into account the investment objective of
the Company which has been reflected in the cash forecast.
Based on the above, the Board believes that the Group has the ability and
adequate resources to continue in operational existence for the foreseeable
future, being at least twelve months from the date of approval of the
financial statements.
New standards, amendments and interpretations
Standards effective from 1 July 2024
Certain new accounting standards and interpretations have been published that
are not mandatory for annual periods beginning after 1 July 2024 and early
application is permitted; however, the Group has not early adopted the new or
amended standards in preparing these condensed consolidated financial
statements:
• Lack of Exchangeability - Amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates (Effective 1 January 2025)
There are other new standards and amendments to standards and interpretations
which have been issued that are effective in future accounting periods, and
which the Group has decided not to adopt early. None of these are expected to
have a material impact on the condensed consolidated financial statements of
the Group.
2.2
Significant accounting judgements and estimates
The condensed consolidated financial statements have been prepared on the
basis of the accounting policies, significant judgements, estimates and key
assumptions as set out in the notes to the 2024 Annual Financial Report, and
are expected to be applied consistently for the year ending 30 June 2025.
No changes have been made to the Group's accounting policies as a result of
the amendments and interpretations which became effective in the period as
they do not have a material impact on the Group. Full details can be found in
the 2024 Annual Financial Report.
2.3
Segmental information
Each property held by the Group is reported to the chief operating decision
maker. In the case of the Group, the chief operating decision maker is
considered to be the Board of Directors. The review process for segmental
information includes the monitoring of key performance indicators applicable
across all properties. These key performance indicators include Net Asset
Value, Earnings per Share and valuation of properties. All asset cost and
rental allocations are also reported by property. The internal financial
reports received by the Directors cover the Group and all its properties and
do not differ from amounts reported in the financial statements. The Directors
have considered that each property has similar economic characteristics and
have therefore aggregated the portfolio into one reportable segment under the
provisions of IFRS 8.
2.4
Going concern
The condensed consolidated financial statements have been prepared on a going
concern basis.
The robust financial position of the Group, its cash flows, liquidity position
and borrowing facilities are described in the financial statements and the
accompanying notes.
The Investment Adviser on behalf of the Board has projected the Group's cash
flows for the period up to 31 March 2026, challenging and sensitising inputs
and assumptions to ensure that the cash forecast reflects a realistic outcome
given the uncertainties associated with the current economic environment. A
longer-term projection covering the period to 30 June 2028 had also been
carried out to ascertain the impact of the refinancing and future leasing
assumptions on the Group's cash flow. The scenarios applied were designed to
be severe but plausible, and to take account of the availability of mitigating
actions that could be taken to avoid or reduce the impact or probability of
the underlying risks.
The Group's debt of £41m matures on 20 October 2025 and the Group has
reported full compliance with its loan covenants to date. Based on cash flow
projections, the Directors expect the Group to continue to remain compliant.
The headroom of the loan to value covenant is significant and any reduction in
property values that would cause a breach would be significantly more than any
reduction currently envisaged.
The Board has commenced its debt refinancing plan given that the Group's
borrowings are due to be repaid on 20 October 2025. The Board has appointed
a specialist debt adviser with the expertise, knowledge and demonstrable
potential lender accessibility to secure refinancing for the Group.
Accordingly, the Board has a reasonable expectation to believe that the Group
can refinance its debt by 20 October 2025 at an aggregate finance cost and on
terms acceptable to the Board, taking into account the investment objective of
the Company which has been reflected in the cash forecast.
Based on the above, the Board believes that the Group has the ability and
adequate resources to continue in operational existence for the foreseeable
future, being at least twelve months from the date of approval of the
financial statements.
3. Rental and other income
Half year ended Half year Year
31 December ended ended
2024 31 December 30 June
(unaudited) 2023 2024
(unaudited) (audited)
£'000 £'000 £'000
Gross rental income 3,869 3,691 7,331
Spreading of minimum contracted future rent-indexation 114 (138) 74
Spreading of tenant incentives - rent free periods (47) (61) (49)
Other property income - 2 2
Gross rental income (adjusted) 3,936 3,494 7,358
Service charges and direct recharges (see note 4) 274 241 542
Total rental and other income 4,210 3,735 7,900
All rental, service charges and direct recharges and other income are derived
from the United Kingdom.
4. Operating expenses
Half year Half year Year
ended ended ended
31 December 31 December 30 June
2024
2024 2023
(audited)
(unaudited) (unaudited)
£'000 £'000 £'000
Property operating expenses 80 61 138
Service charges and direct recharges (note 3) 274 241 542
Provision for impairment of trade receivables - - -
Property operating expenses 354 302 680
Investment adviser's fee 180 180 360
Auditor's remuneration 47 41 85
Operating costs 226 233 508
Directors' remuneration (note 5) 59 56 113
Other operating expenses 512 510 1,066
Total operating expenses 866 812 1,746
Total operating expenses (excluding service charges and direct recharges) 592 571 1,204
Half year ended Half year ended Year
31 December 2024 31 December 2023 ended
(unaudited) (unaudited) 30 June
2024
(audited)
£'000 £'000 £'000
Audit
Statutory audit of Annual Report and Accounts 41 36 73
Statutory audit of Subsidiary Accounts 6 5 12
Total fees due to auditor 47 41 85
Moore Kingston Smith LLP has not provided any non-audit services to the Group.
5. Directors' remuneration
Half year ended Half year ended Year
31 December 2024 31 December 2023 ended
(unaudited) (unaudited) 30 June
2024
(audited)
£'000 £'000 £'000
Directors' fees 53 51 102
Tax and social security 6 5 11
Total directors' remuneration 59 56 113
The Group had no employees during the period/year.
6. Finance Expenses
Half year ended Half year ended Year
31 December 2024 31 December 2023 ended
(unaudited) (unaudited) 30 June
2024
(audited)
£'000 £'000 £'000
Interest payable on loan (note 13) 653 653 1,304
Amortisation of finance costs (note 13) 52 52 104
Other finance costs - 4 4
Total 705 709 1,412
7. Taxation
Half year ended Half year ended Year
31 December 2024 31 December 2023 ended
(unaudited) (unaudited) 30 June
2024
(audited)
£'000 £'000 £'000
Tax charge comprises:
Analysis of tax charge in the period/ year
Profit before tax 3,398 643 2,357
Theoretical tax charge/(refund) at UK corporation average tax rate of 25% (31 849 161 589
December 2023 and 30 June 2024: 25%)
Effects of tax-exempt items under REIT regime (849) (161) (589)
Total - - -
The Group maintained its REIT status and as such, no deferred tax asset or
liability has been recognised in the current period/year.
Factors that may affect future tax charges
Due to the Group's status as a REIT and the intention to continue meeting the
conditions required to retain approval as a REIT in the foreseeable future,
the Group has not provided deferred tax on any capital gains or losses arising
on the revaluation or disposal of investments.
8. Earnings per share (EPS) and Net Asset Value (NAV) per share
Half year ended Half year ended Year
31 December 2024 (unaudited) 31 December 2023 (unaudited) ended
30 June
2024
(audited)
Earnings per share*
Total comprehensive income (£'000) 3,398 643 2,357
Weighted average number of shares (number) 80,500,000 80,500,000 80,500,000
Earnings per share (basic and diluted) 4.22p 0.80p 2.93p
EPRA EPS (£'000):
Total comprehensive income 3,398 643 2,357
Adjustment to total comprehensive income:
Change in fair value of investment properties (759) 2,169 2,983
Gain on disposal of investment property - (598) (598)
EPRA earnings (basic and diluted) 2,639 2,214 4,742
EPRA EPS (basic and diluted) 3.28p 2.75p 5.89p
Adjusted EPS:
EPRA earnings (basic and diluted) (£'000) - as above 2,639 2,214 4,742
Adjustments:
Rental income recognised in respect of guaranteed fixed rental uplifts 52 (74)
(£'000)
(113)
Rental income recognised in respect of rent free periods (£'000) (Note 3) 61 49
47
Amortisation of finance costs (£'000) (Note 6) 52 52 104
Adjusted earnings (basic and diluted) (£'000) 2,625 2,379 4,821
Adjusted EPS (basic and diluted)** 3.26p 2.96p 5.99p
*Adjusted EPS is a measure used by the Board to assess the level of the
Group's dividend payments. This metric adjusts EPRA earnings for non-cash
items in arriving at an adjusted EPS as supported by cash flows.
**Earnings per share are calculated by dividing profit for the period/year
attributable to ordinary equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the period/year.
Half year ended Half year ended Year
31 December 2024 (unaudited) 31 December 2023 (unaudited) ended
30 June
2024
(audited)
NAV per share:
Net assets (£'000) 65,963 65,700 65,121
Ordinary Shares (Number) 80,500,000 80,500,000 80,500,000
NAV per share 81.94p 81.62p 80.90p
EPRA Net Reinvestment Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net
Disposal Value (NDV)
EPRA NRV EPRA NTA and EPRA NDV
At 31 December 2024
Net assets value (£'000) 65,963 65,963
Purchasers' cost (£'000) 6,903 -
Break cost on bank borrowings (£'000) - -
72,866 65,963
80,500,000 80,500,000
Ordinary Shares (Number)
Per share measure 90.52p 81.94p
EPRA NRV EPRA NTA and EPRA NDV
At 31 December 2023
Net assets value (£'000) 65,700 65,700
Purchasers' cost (£'000) 6,716 -
Break cost on bank borrowings (£'000) - -
72,416 65,700
Ordinary Shares (Number) 80,500,000 80,500,000
Per share measure 89.96p 81.62p
EPRA NRV EPRA NTA and EPRA NDV
At 30 June 2024
Net assets value (£'000) 65,121 65,121
Purchasers' cost (£'000) 6,672 -
Break cost on bank borrowings (£'000) - -
71,793 65,121
80,500,000 80,500,000
Ordinary Shares (Number)
Per share measure 89.18p 80.90p
9. Dividends
All dividends were paid as Property Income Distributions.
Half year Half year Year
ended ended ended
31 31 December 30
December June
2024 2023 2024
(unaudited) (unaudited) (audited)
Quarter Ended Dividend £'000 £'000 £'000
Rate
Dividends in respect of year ended 30 June 2023
4(th) dividend 30-Jun-23 1.920p - 1,545 1,545
Dividends in respect of year ended 30 June 2024
1(st) dividend 30-Sep-23 1.425p - 1,148 1,147
2(nd) dividend 31-Dec-23 1.425p - - 1,147
3(rd) dividend 31 Mar-24 1.425p - - 1,147
4(th) dividend 30-Jun-24 1.625p 1,308 - -
Dividends in respect of year ending 30 June 2025
1(st) dividend 30-Sep-24 1.550p 1,248 - -
Total dividends paid 2,556 2,693 4,986
4(th) dividend for quarter ended 30-Jun-23 1.920p - (1,545) (1,545)
2(nd) dividend for quarter ended 31-Dec-23 1.425p - 1,146 -
4(th) dividend for quarter ended 30-Jun-24 1.625p (1,308) - 1,308
2(nd) dividend for quarter ended 31-Dec-24 1.550p 1,248 - -
Total dividends payable in respect of the period/year 2,496 2,294 4,749
Total dividends payable in respect of the period/year 3.10p 2.85p 5.90p
Dividends declared after the period/year end are not included in the Condensed
Consolidated Financial Statements as a liability.
The difference between the amount disclosed above and dividends paid as shown
in the Condensed Consolidated Statement of Cash Flows for year ended 30 June
2024 relates to withholding tax.
On 5 February 2025, the Board declared an interim dividend of 1.55 pps in
respect of the quarter ended 31 December 2024. This will be paid on 28
February 2025 to shareholders on the register at 14 February 2025 with an
ex-dividend date of 13 February 2025.
10. Investment properties
Freehold Leasehold Half year Half year
Investment Investment
Properties
Properties
ended 31 ended 31 Year ended
December December 30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
Total Total Total
£'000 £'000 £'000 £'000 £'000
UK Investment properties
At the beginning of the period/year 71,050 31,600 102,650 107,025 107,025
Acquisitions during the period/year - 2,724 5,304 5,304
2,724
Disposals during the period/year - - - (6,784) (6,784)
Change in fair value of investment properties 426 400 (2,220) (2,895)
826
Valuation provided by Knight Frank LLP 102,650
74,200 32,000 106,200 103,325
Adjustment to fair value for minimum rent indexation of lease income (note 11) (3,634) (3,429) (3,567)
Total investment properties 102,556 99,896 99,083
Change in fair value of investment properties
Change in fair value before adjustments for lease incentives and lease 826 (2,220) (2,895)
obligations
Movement in lease obligations - (62) (63)
Adjustment to spreading of contracted future rent indexation and tenant (67) 113 (25)
incentives
759 (2,169) (2,983)
Disposal and acquisition of investment property
On 2 December 2024, the Group completed the acquisition of Tring for a total
cost of £2.7 million, including acquisition costs.
On 18 December 2023, the Group completed the acquisition of the Virgin Active
in Ockley Road, Streatham for total cost of £5.3 million (net of top up rent
of £0.19 million).
The property known as Mercure Hotel was sold in August 2023 for £7.5 million
as shown in the reconciliation below of the gain recognised on disposal
through the Condensed Consolidated Statement of Comprehensive Income; the gain
on disposal includes changes in fair value of the investment property and
minimum rent indexation spreading recognised in previous periods.
Half year Half year Year
ended ended ended
31 December 31 December 30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Gross proceeds on disposal - 7,500 7,500
Selling costs - (118) (118)
Net proceeds on disposal - 7,382 7,382
Carrying value - (6,784) (6,784)
Gain on disposal of investment property - 598 598
Valuation of investment properties
Valuation of investment property is performed by Knight Frank LLP, an
accredited external valuer with recognised and relevant professional
qualifications and recent experience of the location and category of the
investment property being valued. The valuation of the Group's investment
property at fair value is determined by the external valuer on the basis of
market value in accordance with the internationally accepted RICS Valuation -
Professional Standards (incorporating the International Valuation Standards).
The determination of the fair value of investment property requires the use of
estimates such as future cash flows from assets (such as lettings, tenants'
profiles, future revenue streams, capital values of fixtures and fittings,
plant and machinery, any environmental matters and the overall repair and
condition of the property) and yield applicable to those cash flows.
Fair value measurement hierarchy
IFRS13 'Fair Value Measurement' specifies the fair value hierarchy and as
explained in Note 2.6 of the Company's 2024 Audited Financial Statements, the
Directors have classified the Company's property portfolio as Level 3. This
reflects the fact that inputs to the valuation are not based on observable
market data.
11. Receivables and prepayments
31 December 31 December 30
June
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Receivables
Trade debtors 316 254 252
Less: Provision for impairment of trade receivables (2) (2) (2)
Other debtors* 192 2,621 2,428
506 2,873 2,678
Spreading of minimum contracted future rent indexation 3,319 3,080 3,205
Spreading of tenant incentives - rent free periods 315 349 362
3,634 3,429 3,567
Tenant deposit asset (note 12) 118 118 118
Other prepayments 19 183 101
137 301 219
Total receivables and prepayments 4,277 6,603 6,464
*Other debtors as at 31 December 2023 mainly represent net proceeds from the
sale of Mercure Hotel of £2,155,000 (30 June 2024: £2,155,000) being held by
the external lender, Canada Life Investments. These proceeds were used to
acquire Tring in December 2024.
The aged debtor analysis of receivables which are past due but not impaired is
as follows:
31 December 31 December 30
June
2024 2023 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Less than three months due 488 2,885 2,672
Between three and six months due 19 (12) 6
Total 507 2,873 2,678
12. Payables and accrued expenses
31 December 2024 (unaudited) 31 December 2023 (unaudited) 30 June
2024 (audited)
£'000 £'000 £'000
Deferred income 1,673 1,556 1,665
Other creditors 420 548 429
Accruals 390 353 401
Loan interest payable (note 13) 256 258 256
Tenant deposit liability (note 11) 118 118 118
Trade creditors 56 67 21
2,913 2,900 2,890
13. Interest bearing loans and borrowings
31 December 2024 (unaudited) 31 December 2023 (unaudited) 30 June 2024 (audited)
£'000 £'000 £'000
Facility drawn at the beginning of the period/ year 41,000 41,000 41,000
Unamortised finance costs brought forward (172) (276) (276)
Amortisation of finance costs in the period/year 52 52 104
At end of period/ year 40,880 40,776 40,828
Repayable within 1 year 41,000 - -
Repayable between 1 and 2 years - 41,000 41,000
Repayable between 2 and 5 years - - -
Total at end of the period/ year 41,000 41,000 41,000
As at 31 December 2024, the Group had utilised all of its £41 million fixed
interest loan facility with Canada Life Investments and was geared at a loan
to Gross Asset Value ('GAV') of 37.4% (31 December 2023: 37.5%, 30 June 2024:
37.7%). The weighted average interest cost of the Group's facility is 3.19%
and the facility is repayable on 20 October 2025. Interest expense incurred
during the period amounted to £0.65m (30 June 2024: £1.31m, 31 December
2023: £0.65m), £0.26m of which is outstanding (30 June 2024: £0.26m, 31
December 2023: £0.26m).
31 December 2024 (unaudited) 31 December 2023 30 June 2024 (audited)
(unaudited)
£'000 £'000 £'000
Reconciliation to cash flows from financing activities
At beginning of the period/ year 40,828 40,724 40,724
Non-cash changes
Amortisation of finance costs 52 52 104
Total at end of the period/ year 40,880 40,776 40,828
14. Lease obligations
There were no legal obligations at 31 December 2024 (31 December 2023: nil and
30 June 2024: nil).
15. Commitments
15.1. Operating lease commitments - as lessor
The Group has 20 commercial properties with 34 units in its investment
property portfolio as set out above. These non-cancellable leases have a
remaining term of between 3 months and 110 years, excluding ground leases.
Future minimum rentals receivable under non-cancellable operating leases as at
31 December 2024 are as follows:
31 December 31 December 30 June
2024 2023 (unaudited) 2024
(unaudited) (audited)
£'000 £'000 £'000
Within one year 7,432 7,449 6,839
After one year, but not more than two years 6,355 7,470 6,528
After two years, but not more than three years 5,989 7,454 6,331
After three years, but not more than four years 5,795 6,889 5,746
After four years, but not more than five years 5,848 6,456 5,826
After five years, but not more than ten years 26,597 29,947 27,129
After ten years, but not more than fifteen years 20,010 21,845 20,398
More than fifteen years 46,008 51,668 47,712
Total 124,034 139,178 126,509
There were no material contingent rents recognised as income for all period
presented.
15.2. Capital commitments
There were no capital commitments at 31 December 2024 (31 December 2023: none
and 30 June 2024: none).
15.3. Financial commitments
There were no commitments at 31 December 2024 (31 December 2023: nil and 30
June 2024: nil).
16. Investments in subsidiaries
The Company has two wholly owned subsidiaries as disclosed below:
Name and company number Country of registration and incorporation Date of incorporation Principal activity Ordinary Shares
of £1 held
Alternative Income REIT Holdco Limited (Company number 11052186) England and 7 November 2017 Real Estate Company 73,158,502
Wales
Alternative Income Limited England and 4 May 2017 Real Estate Company 73,158,501
Wales
(Company number 10754641)
Alternative Income REIT plc at 31 December 2024 owns 100% controlling stake of
Alternative Income REIT Holdco Limited.
Alternative Income REIT Holdco Limited holds 100% of Alternative Income
Limited.
Both Alternative Income REIT Holdco Limited and Alternative Income Limited are
registered at 1 King William Street, London, United Kingdom, EC4N 7AF.
17. Issued share capital
Ordinary Shares issued and fully paid of 80,500,000 shares at a nominal value
of £0.01 per share. This remains unchanged for all period presented.
18. Transactions with related parties
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions.
Directors
Directors of the Group are considered to be related parties. Directors'
remuneration is disclosed in note 5.
Investment Adviser
Martley Capital Real Estate Investment Management Ltd
As reported in the Company's 2024 Annual Report, the Group's investment
adviser was changed on 15 March 2024 from M7 Real Estate Limited ('M7') to
Martley Capital Real Estate Investment Management Ltd ('Martley Capital'). The
appointment of Martley Capital was by way of a deed of novation of the Group's
Interim Investment Advisory agreement dated 14 March 2020 (as amended with
Deed of Variation dated 21 February 2021) with minor changes thereto but
leaving the parties on substantially the same terms and at an unchanged fee.
The annual management fee is calculated at a rate equivalent of 0.50% per
annum of NAV (subject to a minimum fee of £90,000 per quarter), payable
quarterly in advance. During the six months ended 31 December 2024, the Group
incurred £180,000 (year ended 30 June 2024: £360,000 of which £253,000 was
paid to M7 and £107,000 was paid to Martley Capital; and 6 months to 31
December 2023: £180,000 was paid to M7) in respect of investment adviser's
fees. No amounts were outstanding at 31 December 2024, 30 June 2024 and 31
December 2023.
EPRA Performance Measures (unaudited)
EPRA Yield calculations At 31 At 31 December At 30
December June
2024 2023 2024
£'000 £'000 £'000
Investment properties wholly owned:
- by Company 1,875 1,875 1,875
- by Alternative Income Limited 104,325 101,450 100,775
Total - note 10 106,200 103,325 102,650
Allowance for estimated purchasers' costs 6,903 6,716 6,672
Gross completed property portfolio valuation B 113,103 10,041 109,322
Annualised gross passing rent 7,749 7,645 7,596
Annualised property outgoings (5) (5) (5)
Annualised net rents A 7,744 7,640 7,591
Add: notional rent expiration of rent-free periods or other lease incentives 408 379
431
Topped-up net annualised rent C 8,175 8,048 7,970
EPRA NIY* A/B 6.85% 6.94% 6.94%
EPRA "topped-up" NIY C/B 7.23% 7.31% 7.29%
*The NIY calculation is the same calculation as that for EPRA NIY
EPRA Cost Ratios Half year Half year ended Year
ended ended
31 December 31 December 30 June
2024 2023 2024
£'000 £'000 £'000
Include:
EPRA Costs (including direct vacancy costs) A 592 571 1,204
- note 4
Direct vacancy costs - - -
EPRA Costs (excluding direct vacancy costs) B 592 571 1,204
Gross rental income - note 3 C 3,936 3,494 7,358
EPRA Cost Ratio** A/C 15.04% 16.34% 16.36%
(including direct vacancy costs)
EPRA Cost Ratio B/C 15.04% 16.34% 16.36%
(excluding direct vacancy costs)
**Due to the timing of the Mercure Hotel disposal, and the subsequent
Streatham acquisition, the rental income has decreased in the half year ended
31 December 2023. This has resulted in the above increase to the EPRA cost
ratio.
EPRA Vacancy rate Half year ended 31 December 2024 Half year ended Year ended
£'000 31 December 30 June
2023 2024
£'000 £'000
Annualised potential rental value of vacant premises A - - -
Annualised potential rental value for the completed property portfolio B 7,295 6,841 6,948
EPRA Vacancy rate A/B 0% 0% 0%
Alternative Performance Measures (APMs)
APMs are numerical measures of the Group's current, historical or future
performance, financial position or cash flows, other than financial measures
defined or specified in the applicable financial framework. The Group's
applicable financial framework is IFRS. The Directors assess the Group's
performance against a range of criteria which are reviewed as particularly
relevant for a closed-end REIT.
Discount
The discount is the amount by which the share price is lower than the net
asset value per share, expressed as a percentage of the net asset value per
share.
31 December 2024 31 December 30 June
2023 2024
NAV per Ordinary share (note 8) A 81.94 81.62 80.90p
Share price B 70.60 71.50 66.00p
Discount (A-B)/A 13.84% 12.40% 18.42%
Dividend Cover
The ratio of Group's Adjusted EPS divided by the Group's dividends payable for
the relevant period/ year.
31 December 2024 31 December 30 June
2023 2024
Adjusted EPS (note 8) A 3.26p 2.96p 5.99p
Dividend per share (note 9) B 3.10p 2.85p 5.90p
Dividend cover A/B 105.16% 103.86% 101.53%
Dividend Yield
The percentage ratio of the Company's declared dividends for the financial
year (or historic declared dividends if dividends are yet to be declared for a
year) per share divided by the Company's share price at the period/year end.
31 December 31 December 30 June
2024 2023 2024
Annual dividend target*/payable A 6.20p 5.90p 5.90p
Share price B 70.60p 71.50p 66.00p
Dividend yield A/B 8.78% 8.25% 8.94%
* The Board had set a target dividend for the year ended 30 Jun 2024 of 5.90p.
As explained in the 2024 Annual Report's Chairman's Statement on page 6, a
higher dividend was paid for the year in order to pay sufficient dividends as
a PID in order to meet tax requirements, and to distribute to shareholders the
extra income received in that year.
Loan to GAV
Loan to GAV measures the value of loans and borrowings utilised (excluding
amounts held as restricted cash and before adjustments for issue costs)
expressed as a percentage of the Group's property portfolio (as provided by
the valuer) and the fair value of other assets.
31 December 2024 31 December 30 June
2023 2024
Borrowings (£'000) A 41,000 41,000 41,000
Total assets (£'000) B 109,756 109,376 108,839
Loan to GAV (A/B) 37.36% 37.49% 37.67%
Ongoing Charges
The ongoing charges ratio is the total for all operating costs expected to be
regularly incurred expressed as a percentage of the average quarterly NAVs of
the Group for the financial period/year. Note that the ratio for 31 December
is based on actual ongoing charges to 31 December and forecast ongoing charges
to the following June (shown as annualised in the below calculation).
31 December 2024 31 December 30 June
2023 2024
Other operating expenses for the half year / year (£'000) A 512 509 1,066
Ongoing charges- annualised where required (£'000) B 970 975† 968†
Average net assets (£'000) C 65,542 66,725 66,436
Ongoing charges ratio B/C 1.48% 1.46% 1.46%
† Non-recurring legal and professional costs have been excluded in the
annualised amount for the period/year presented.
* The Board had set a target dividend for the year ended 30 Jun 2024 of 5.90p.
As explained in the 2024 Annual Report's Chairman's Statement on page 6, a
higher dividend was paid for the year in order to pay sufficient dividends as
a PID in order to meet tax requirements, and to distribute to shareholders the
extra income received in that year.
Loan to GAV
Loan to GAV measures the value of loans and borrowings utilised (excluding
amounts held as restricted cash and before adjustments for issue costs)
expressed as a percentage of the Group's property portfolio (as provided by
the valuer) and the fair value of other assets.
31 December 2024
31 December
2023
30 June
2024
Borrowings (£'000)
A
41,000
41,000
41,000
Total assets (£'000)
B
109,756
109,376
108,839
Loan to GAV
(A/B)
37.36%
37.49%
37.67%
Ongoing Charges
The ongoing charges ratio is the total for all operating costs expected to be
regularly incurred expressed as a percentage of the average quarterly NAVs of
the Group for the financial period/year. Note that the ratio for 31 December
is based on actual ongoing charges to 31 December and forecast ongoing charges
to the following June (shown as annualised in the below calculation).
31 December 2024
31 December
2023
30 June
2024
Other operating expenses for the half year / year (£'000)
A
512
509
1,066
Ongoing charges- annualised where required (£'000)
B
970
975†
968†
Average net assets (£'000)
C
65,542
66,725
66,436
Ongoing charges ratio
B/C
1.48%
1.46%
1.46%
† Non-recurring legal and professional costs have been excluded in the
annualised amount for the period/year presented.
Share Price and Net Asset Value (NAV) Total Return
Share price and NAV total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against FTSE EPRA Nareit UK and FTSE Small Cap,
respectively.
Share price NAV
Opening at 30 June 2024 A 66.00p 80.90p
Closing at 31 December 2024 B 70.60p 81.94p
Return C=(B/A)-1 6.97% 1.29%
Dividend reinvestment * D 4.81% 3.92%
Total shareholder return C+D 11.78% 5.21%
Opening at 30 June 2023 A 64.70p 84.16p
Closing at 31 December 2023 B 71.50p 81.62p
Return C=(B/A)-1 10.51% (3.02%)
Dividend reinvestment * D 5.18% 3.98%
Total shareholder return C+D 15.69% 0.96%
Opening at 30 June 2023 A 64.70p 84.16p
Closing at 30 June 2024 B 66.00p 80.90p
Return C=(B/A)-1 2.01% (3.87%)
Dividend reinvestment* D 9.58% 7.36%
Total shareholder return C+D 11.59% 3.49%
* Share price total return involves reinvesting the net dividend in the share
price of the Company on the date on which that dividend goes ex-dividend. NAV
total return involves investing the net dividend in the NAV of the Company
with debt at fair value on the date on which that dividend goes ex-dividend.
Company Information
Share Register Enquiries
The register for the Ordinary Shares is maintained by Computershare Investor
Services PLC. In the event of queries regarding your holding, please contact
the Registrar on 0370 707 1874 or email: web.queries@computershare.co.uk.
Changes of name and/or address must be notified in writing to the Registrar,
at the address shown below. You can check your shareholding and find practical
help on transferring shares or updating your details at
www.investorcentre.co.uk. Shareholders eligible to receive dividend payments
gross of tax may also download declaration forms from that website.
Share Information
Ordinary £0.01 shares 80,500,000
SEDOL Number BDVK708
ISIN Number GB00BDVK7088
Ticker/TIDM AIRE
Share Prices
The Company's Ordinary Shares are traded on the Main Market of the London
Stock Exchange.
Frequency of NAV publication
The Group's NAV is released to the London Stock Exchange on a quarterly basis
and is published on the Company's website www.alternativeincomereit.com
(http://www.alternativeincomereit.com) .
Annual and Interim Reports
Copies of the Annual and Half-Yearly Reports are available from the Group's
website.
Financial Calendar
30 June Year end
September Announcement of annual results
November Annual General Meeting
31 December Half-yearly period end
Quarterly dividends are paid in November, February, May and August for each
financial year.
Glossary
Alternative Investment Fund Manager or AIFM or Investment Manager Langham Hall Fund Management LLP.
Company Alternative Income REIT plc.
Contracted rent The annualised rent adjusting for the inclusion of rent subject to rent-free
periods.
Earnings Per Share ('EPS') Profit for the period attributable to equity shareholders divided by the
weighted average number of Ordinary Shares in issue during the period.
EPRA European Public Real Estate Association, the industry body representing listed
companies in the real estate sector.
Estimated Rental Value ('ERV') The external valuer's opinion as to the open market rent which, on the date of
the valuation, could reasonably be expected to be obtained on a new letting or
rent review of a property.
External Valuer An independent external valuer of a property. The Group's External Valuer is
Knight Frank LLP.
Fair value The estimated amount for which a property should exchange on the valuation
date between a willing buyer and a willing seller in an arm's length
transaction after proper marketing and where parties had each acted
knowledgeably, prudently and without compulsion.
Fair value movement An accounting adjustment to change the book value of an asset or liability to
its fair value.
FCA The Financial Conduct Authority.
Gross Asset Value ('GAV') The aggregate value of the total assets of the Group as determined in
accordance with IFRS.
Gross Passing Rental Income The gross passing rent is the rent roll at the reporting date, taking account
of any in-place rent free incentives or step rents on a straight-line basis
over the following 12-month period.
IFRS International financial reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union. On 31 December 2020
EU-adopted IFRS was brought into UK law and became UK-adopted international
accounting standards, with future changes to IFRS being subject to endorsement
by the UK Endorsement Board.
Investment Adviser or Martley Capital Martley Capital Real Estate Investment Management Limited
IPO The admission to trading on the London Stock Exchange's Main Market of the
share capital of the Company and admission of Ordinary Shares to the premium
listing segment of the Official List on 6 June 2017.
Lease incentives Incentives offered to occupiers to enter into a lease. Typically this will be
an initial rent-free period, or a cash contribution to fit-out. Under
accounting rules the value of the lease incentive is amortised through the
Consolidated Statement of Comprehensive Income on a straight-line basis until
the lease expiry.
The value of loans and borrowings utilised (excluding amounts held as
restricted cash and before adjustments for issue costs) expressed as a
percentage of the combined valuation of the property portfolio (as provided by
the valuer) and the fair value of other investments.
Loan to Value ('LTV')
Net Asset Value ('NAV') Net Asset Value is the equity attributable to shareholders calculated under
IFRS.
Net Asset Value per share Equity shareholders' funds divided by the number of Ordinary Shares in issue.
Net equivalent yield Calculated by the Group's External Valuers, net equivalent yield is the
internal rate of return from an investment property, based on the gross
outlays for the purchase of a property (including purchase costs), reflecting
reversions to current market rent and items as voids and non-recoverable
expenditure but ignoring future changes in capital value. The calculation
assumes rent is received annually in arrears.
Net Initial Yield ('NIY') The initial net rental income from a property at the date of purchase,
expressed as a percentage of the gross purchase price including the costs of
purchase.
Initial yield does not include cost of purchase.
Net rental income Rental income receivable in the period after payment of ground rents and net
property outgoings.
Ordinary Shares The main type of equity capital issued by conventional Investment Companies.
Shareholders are entitled to their share of both income, in the form of
dividends paid by the Company, and any capital growth.
pps Pence per share.
REIT A Real Estate Investment Trust. A company which complies with Part 12 of the
Corporation Tax Act 2010. Subject to the continuing relevant UK REIT criteria
being met, the profits from the property business of a REIT, arising from both
income and capital gains, are exempt from corporation tax.
Reversion Increase in rent estimated by the Company's External Valuers, where the
passing rent is below the ERV.
Share price The value of a share at a point in time as quoted on a stock exchange. The
Company's Ordinary Shares are quoted on the Main Market of the London Stock
Exchange.
Weighted Average Unexpired Lease Term ('WAULT') The average lease term remaining for first break, or expiry, across the
portfolio weighted by contracted rental income (including rent-frees).
Shareholder Information
Directors
Simon Bennett (Independent non-executive Chairman)
Stephanie Eastment (Independent non-executive Director)
Adam C Smith (non-executive Director)
Company Website
https://www.alternativeincomereit.com/ (http://www.aewukllreit.com)
Registered Office
The Scalpel
18th Floor
52 Lime Street
London
EC3M 7AF
Company Secretary
Hanway Advisory Limited
The Scalpel
18th Floor
52 Lime Street
London
EC3M 7AF
AIFM
Langham Hall Fund Management LLP
1 Fleet Place
8(th) Floor
London
EC4M 7RA
Depositary
Langham Hall UK Depositary LLP
8th Floor
1 Fleet Place
London
EC4M 7RA
Legal Adviser to the Company
Travers Smith LLP
10 Snow Hill
London
EC1A 2AL
Investment Adviser and Administrator ('Investment Adviser')
Martley Capital Real Estate Investment Management Limited
2 Dyott Street
London
WC1A 1DE
Property Manager
Mason Owen and Partners Limited
7(th) Floor
20 Chapel Street
Liverpool
L3 9AG
Valuer
Knight Frank LLP
55 Baker Street
London
W1U 8AN
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Auditor
Moore Kingston Smith LLP
9 Appold Street
London
EC2A 2AP
Corporate Broker
Panmure Liberum Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Communications Adviser
H/Advisors Maitland
3 Pancras Square
London
N1C 4AG
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