Rent collection, Dividend Declaration and NAV
3 November 2021
Alternative Income REIT P LC
(the " Company " or " Group ")
RENT COLLECTION, DIVIDEND DECLARATION, NAV AND BUSINESS UPDATE
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, provides a trading and business update and declares an interim dividend for the quarter ended 30 September 2021 .
Alan Sippetts, Non-Executive Chairman of Alternative Income REIT plc, comments:
"We are pleased today to declare a fully covered interim quarterly dividend of 1.30 pence per share, a 4% increase on the 1.25 pence per share interim dividend paid for the same period last year, which is ahead of the annual rate of inflation. The Board continues to target an annual dividend of 5.5 pence per share with full dividend cover expected, all else being equal, by September 20221.
We continue to see very strong rent collection delivered from our resilient, 100% let portfolio, where 87% of the portfolio's leases have inflation linked upward only rent reviews. When combined with our robust balance sheet and modest overhead, this allows us to continue to deliver secure and attractive fully covered income returns and growth for our shareholders in a period of significant wider market uncertainty."
Rent collection
The current quarter's rents are split 80% quarterly and 20% monthly, and to date, the Group has collected 89.3% of the total due in the current quarter and this increases to 96.9% when account is taken for the tenants who are contracted to pay monthly. Of the remaining 3.1%, 2.8% will be recovered during Q4 2021 through monthly payments. Overall, for the current quarter, the Group expects to collect at least 99.7% of rent due.
Dividend declaration and update on Earnings per Share
The Board is pleased to declare an interim quarterly dividend of 1.30 pence per share for the quarter ended 30 September 2021, a 4% increase on the 1.25 pence per share interim dividend for the same period last year . This quarter's interim dividend will be paid as a Property Income Distribution ("PID") and will be paid on 26 November 2021 to shareholders on the register on 12 November 2021. The ex-dividend date will be 11 November 2021.
As disclosed in the Company's 2021 annual report, the Board has reaffirmed its target annual dividend of 5.5 pence per share with full dividend cover expected, all else being equal, by September 20221.
Unaudited EPRA EPS for the quarter ended 30 September 2021 were 1.59 pence per share, representing dividend cover for the quarter of 122% (year ended 30 June 2021: 5.55 pence per share; 108% cover).
The EPRA EPS includes accruals to reflect both the minimum contracted uplifts and the amortisation of loan arrangement fees and movements in the provision for impairment of trade receivables. Excluding these items from the Group's EPRA EPS, the unaudited adjusted cash earnings were 1.43 pence per share, reflecting 110% cash dividend cover for the quarter (year ended 30 June 2021: 5.07p; 99% cash dividend cover).
Property Valuation
At 30 September 2021, the independent fair valuation undertaken by Knight Frank of the Company's property portfolio was £111.23 million (30 June 2021: £109.23 million) a 1.83% quarter on quarter increase. The Group has seen an increase in its income quarter on quarter and the net initial yield on the Company's portfolio was 5.84%, compared with 5.93% on 30 June 2021.
The Company's retail warehousing, industrial and student housing assets saw value increases of between 4% and 6% quarter on quarter, driven by competitive transactions within these sectors. The Group's most recent acquisition, Droitwich Spa Retail Park, Droitwich, has increased 14.74% since its acquisition in December 2020. The Company's assets which saw values negatively impacted included our car showroom in Birmingham and our petrol filling station in Crawley, reflecting wider market weakness.
Net Asset Value
At 30 September 2021, the Company's unaudited net asset value ("NAV " ) was £70.68 million, 87.80 pence per share, reflecting growth of approximately 2.60% over the period due to increases during the quarter in portfolio valuation and income earned. The table below sets out for the movement in NAV during the quarter.
|
|
Pence per share |
£ million |
|
NAV at 30 June 2021 |
85.58 |
68.89 |
|
Valuation movement in property portfolio* |
2.26 |
1.82 |
|
Income earned for the period |
2.40 |
1.93 |
|
Expenses for the period |
(0.36) |
(0.29) |
|
Net finance costs for the period |
(0.44) |
(0.35) |
|
Interim dividend paid during the quarter ended 30 September 2021 |
(1.64) |
(1.32) |
|
NAV at 30 September 2021 |
87.80 |
70.68 |
* The quarter's increase in the independent fair valuation of £2.0 million has been reduced by £0.18 million to reflect the minimum contracted rental uplifts, resulting in a net valuation increase of £1.82 million.
The NAV attributable to the ordinary shares has been calculated under International Financial Reporting Standards as adopted by United Kingdom and incorporates both the Group's property portfolio individually valued on a 'Red Book' valuation basis as at 30 September 2021 and net income for the quarter, but does not include a provision for the interim dividend declared today (see above) for the quarter ended 30 September 2021.
The income earned for the period includes an accrual for the minimum contractual uplifts contained in the index linked leases. In the event that inflation is greater than these minimum contractual uplifts, the actual income will be greater than the income currently accrued.
Portfolio update
The Group remains fully invested, with a diversified portfolio of UK commercial property assets that are currently fully let, with a w eighted average unexpired lease term of 17.4 years (30 June 2021: 17.8 years) to the earlier of break and expiry and 19.6 years (30 June 2021: 19.8 years) to expiry.
87% (20 June 2021: 87%) of the portfolio's income stream is reviewed periodically, on an upward only basis, in line with inflation; with 65% and 22% of the portfolio indexed (subject to floors and caps) to RPI and CPI, respectively.
ENQUIRIES
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Alternative Income REIT PLC |
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Alan Sippetts - Chairman |
via Maitland/AMO below |
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M7 Real Estate Ltd Richard Croft |
+44 (0)20 3657 5500 |
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Panmure Gordon (UK) Limited |
+44 (0)20 7886 2500 |
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Alex Collins |
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Tom Scrivens |
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Chloe Ponsonby |
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Maitland/AMO (Communications Adviser) |
+44(0) 7747 113 930 |
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James Benjamin |
james.benjamin@maitland.co.uk |
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available at www.alternativeincomereit.com 2 .
1 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.
2 Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website or any other website, is incorporated into, or forms part of, this announcement nor, unless previously published on a Regulatory Information Service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.
NOTES
Alternative Income REIT PLC aims to generate a sustainable, secure and attractive income return for shareholders from a diversified portfolio of UK property investments, predominately in alternative and specialist sectors. The majority of the assets in the Group's portfolio are let on long leases which contain inflation linked rent review provisions.
The Company's investment adviser is M7 Real Estate Limited ("M7"). M7 is a leading specialist in the pan-European, regional, multi-tenanted real estate market. It has over 220 employees in 15 countries across Europe. The team manages over 570 properties with a value of circa €4.1 billion.
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