Alternative Income REIT (AIRE) has reported a 2.4% uplift in net asset value (NAV) in full year results to the end of June 2021.
NAV increased to 85.58p per share (from 83.58p) thanks to a 4.3% uplift in the valuation of its long-income property portfolio to £109.23m.
EPRA earnings for the year were 5.55p per share (2020: 5.42p) and adjusted earnings per share (reflecting cash earnings) was 5.07p. Total dividends of 5.14p were declared in the year (2020: 5.0p) and the board reaffirmed its target annual dividend of 5.5p, with full dividend cover expected, by September 2022.
Portfolio review
The group’s property portfolio consists of 19 assets with a fair value of £109.23m (2020: £104.76m). The portfolio is let to 22 tenants with a weighted average unexpired lease term (WAULT) of 17.8 years to the earlier of break and expiry (2020: 19.5 years) and 19.8 years to expiry (2020: 21.6 years).
As at 30 June 2021, the portfolio had gross passing rental income of £6.97m (2020: £6.79m), the vast majority (87.0%) of which is inflation linked to Retail Price Index (RPI) or Consumer Price Index (CPI).
To date, the group has collected 97.8% of all rent demanded since the beginning of the COVID-19 pandemic, with the remaining 2.2% due to be collected through payment plans throughout 2021 and 2022.
The group has a £41.0m loan facility with Canada Life Investments secured against 17 properties. As at 30 June 2021, the asset valuations and rental income of the 17 properties would need to fall by 18% and 24% respectively before breaching the Loan to Value and Income Cover Cash Trap covenants.
Alan Sippetts, chairman, said: “The fundamentals of certain property sectors in the UK appear robust and the group’s portfolio has proved resilient throughout the challenges of the COVID-19 pandemic, underpinned by robust rent collection and over 87% of our leases with inflation linked upwards only rent reviews. Furthermore, the company’s share price has substantially increased by 32.7% to 71 pence as at 30 June 2021 (as at 30 June 2020: 53.5 pence per share) narrowing the discount to our NAV.
“We are pleased therefore that we were able to declare an increased dividend to shareholders, which is testament to the board’s confidence in the long-term value we can deliver to our shareholders and underlines the continuing strength of the group’s collection of rent from our 100% let portfolio. Taken together with our robust balance sheet, much reduced overhead and with 87% of our portfolio’s leases with inflation linked upwards only rent reviews, the board remains confident that the group will provide attractive total returns to our shareholders principally in the form of fully covered dividends but also through other opportunistic initiatives, supported by our investment adviser.”
AIRE : Alternative Income REIT posts 2.4% NAV uplift