Rent collection, Dividend Declaration and NAV
5 May 2021
Alternative Income REIT Plc
(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 31 March 2021.
The current quarter's rents are split 80% quarterly and 20% monthly and, to date, the Group has collected 87.9% of this quarter's rent with 10.3% contractually due during the remainder of the quarter. The remaining 1.8% of this quarter's rent due is subject to concessions, which are in the process of being formalised.
Since the start of the pandemic, the Group has collected 97.2% of rent due (with deferment agreed in respect of the 2.8% outstanding). However, despite the progressive easing of lockdown restrictions, the Board recognises that the remainder of 2021 is likely to be particularly challenging for the hotel and leisure sector as capacity restrictions continue.
Dividend declaration and update on Earnings per Share
The Board declares today an interim dividend of 1.25 pence per share for the quarter ended 31 March 2021 (quarter ended 31 December 2020: 1.00 pence/share). The dividend which will be a Property Income Distribution will be paid on 28 May 2021 to shareholders on the register on 14 May 2021. The ex-dividend date will be 13 May 2021.
Unaudited EPRA earnings per share ("EPRA EPS") for the quarter ended 31 March 2021 were 1.56 pence per share, representing dividend cover for the quarter of 125% (quarter to 30 December 2020: 1.32 pence per share; 132% 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 114% cash dividend cover for the quarter (quarter ended 31 December 2020: 1.26 pence per share; 126% cash dividend cover).
At 31 March 2021, the independent fair valuation undertaken by Knight Frank of the Company's property portfolio was £108.73 million (31 December 2020: £108.53 million). The net initial yield on the Company's portfolio was 5.94% (31 December 2020: 5.53%), reflecting increases in the passing rents from the Group's hotels.
Net Asset Value
At 31 March 2021, the Company's unaudited net asset value ("NAV") was £68.53 million, 85.13 pence per share, (31 December 2020: £68.16 million, 84.68 pence per share). See the table below for the movement in NAV during the quarter.
Analysis of Movement in NAV
Movement during the quarter
Pence per share
NAV at 31 December 2020
Valuation movement in property portfolio*
Income earned for the period
Expenses for the period
Net finance costs for the period
Interim dividend paid during the quarter ended 31 March 2021
NAV at 31 March 2021
* The quarter's increase in the independent fair valuation of £0.20 million has been reduced by £0.12 million to reflect the minimum contracted rental uplifts and £0.16 million of acquisition costs capitalised during the quarter, resulting in a net valuation decrease of £0.08 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 31 March 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 31 March 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.
The Group remains fully invested, with a diversified portfolio of UK commercial property assets that are currently fully let, with a weighted average unexpired lease term of 18.04 years (31 December 2020: 18.28 years) to the earlier of break and expiry and 20.06 years (31 December 2020: 20.30 years) to expiry.
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.
Alan Sippetts, Non-Executive Chairman of Alternative Income REIT plc, comments:
"The Board remains confident that the Group can provide attractive total returns to our shareholders principally in the form of fully covered dividends. These will be delivered from our 100% let, fully invested portfolio from which we continue to collect strong levels of rent, supported by our robust balance sheet and modest overhead, which should together drive further value for our shareholders."
Alternative Income REIT PLC
Alan Sippetts - Chairman
via Maitland/AMO below
M7 Real Estate Ltd
+44 (0)20 3657 5500
Panmure Gordon (UK) Limited
+44 (0)20 7886 2500
Maitland/AMO (Communications Adviser)
+44(0) 7747 113 930
The Company's LEI is 213800MPBIJS12Q88F71.
Further information on Alternative Income REIT plc is available at www.alternativeincomereit.com1.
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. Majority owned by its senior managers, it has over 220 employees in 15 countries across Europe. The team manages over 600 properties with a value of circa €4.0 billion.
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.