Alternative Income REIT PLC Rent collection update (7235S)

TIDMAIRE

RNS Number : 7235S

Alternative Income REIT PLC

13 July 2020

13 July 2020

Alternative Income REIT plc

(the " Company " or " Group ")

ROBUST RENT COLLECTION CONTINUING WITH AT LEAST 84% OF Q3 RENTS EXPECTED TO BE COLLECTED BY SEPTEMBER 2020

The Board of Directors of Alternative Income REIT plc (ticker: AIRE), the owner of a diversified portfolio of 19 UK commercial property assets let on long leases, is pleased to provide the following update on rent collection.

The Group's annual passing rent roll from its 21 tenants, after adjustment for the terms of the Travelodge Hotels Limited ("Travelodge") CVA, is GBP6.58 million. All of the percentages quoted below are based on the rents contractually due for the current quarter.

The Company's resilient and diversified portfolio that remains fully let predominantly on long, index-linked leases has delivered strong rent collection since the start of the COVID-19 pandemic. The Board expects that at least 84% of Q3 rents due will be collected by September 2020:

-- 89% of the quarterly rents, which represent 70.4% of the annual rent roll, have been collected, including the quarter rent from Meridian Steel Limited, whose rent free period ended on 23 June 2020.

-- The proportion of rents which are contractually due monthly is now 17.4% and, in addition, a small number of tenants, representing 12.2% of the annual rent roll, have been granted concessions for a limited period to settle their rent monthly. 72% of those who currently pay monthly have settled their July rents.

-- The Company remains in discussion with a small number of tenants, representing 11% of the rent roll, in respect of potential deferral of their rent payments in support of their near term cash flow requirements.

o Where realistic, the Group may continue to provide proportional assistance to those tenants whose operations remain materially impacted , whilst protecting its own position and its responsibility to shareholders . The Company will treat each case on its merit.

o To date, no rent free periods or rent adjustments, except for the Travelodge CVA, have been agreed across the portfolio.

o Tenants occupying the Group's assets in the education and leisure sectors represent the majority of those whose rents remain due .

On 24 April 2020, the Group announced that it had collected 82% of the quarterly rents which were due on the March 2020 rent quarter day, which represented 64% of the Group total rent roll. To date, 82% of all of the Group's Q2 2020 rents have been collected, with the remaining 18% the subject of negotiations.

The Group has headroom on both its loan to value and interest cover tests; the asset valuations and rental income of the 17 properties secured to Canada Life would need to fall by 29% and 36% respectively before breaching the loan covenants.

Travelodge CVA

The rent due from Travelodge in respect of the Group's hotel in Swindon represented c.5% of the Group's total annual rent roll before the CVA.

The terms of the CVA have the following effect:

-- The rent from Travelodge in respect of the period between March 2020 and 31 December 2020 will be 25% of the contractual rent and are payable monthly, instead of quarterly.

-- The Travelodge rent will revert to 7 0% of the contractual rent from 1 January 2021 to 31 December 2021, after which it will return to 100% of contractual rent.

-- The Company will be entitled to additional cash rental payments should THL exceed a level of baseline profitability being 66.7% of the amount by which cumulative Adjusted EBITDA for the financial years 2020, 2021 and 2022 exceeds GBP200 million.

-- The flexibility in the CVA terms allows the Company to break its lease with Travelodge, should it wish to do so , up to the end of November 2020. The Company wi ll adopt a proactive asset management strategy in this regard to maximise shareholder value.

-- The CVA provides the landlord with a 36 month lease extension option, which expires on 28 August 2020.

   --      The CVA does not allow Travelodge to terminate its lease. 

Steve Smith , Chairman of Alternative Income REIT plc, commented:

"We expect at least 84% of Q3 rents due to be collected by September 2020, reflecting the strength of our portfolio and underpinning the Group's resilient and defensive income. The Group remains well capitalised and we entered this period of uncertainty in a robust position supported by our low recurring annual overhead.

The appointment in May 2020 of M7 as the Company's Investment Adviser provides the Group with access to M7's significant expertise and resources. Our rent collection performance and financing structure are robust, and we look forward to making good strategic progress and creating value for our shareholders over both the short and medium term."

ENQUIRIES

 
 Alternative Income REIT PLC 
 Steve Smith - Chairman         via Maitland/AMO below 
                               ------------------------------ 
 
 Maitland/AMO (Communications 
  Adviser) 
                               ------------------------------ 
 James Benjamin                 [e-mail] 
                                 [phone] 
                               ------------------------------ 
 
 Cenkos 
                               ------------------------------ 
 Will Rogers                    [e-mail] 
                                 [phone] 
                               ------------------------------ 
 Rob Naylor                     [e-mail] 
                                 [phone] 
                               ------------------------------ 
 

The Company's LEI is 213800MPBIJS12Q88F71.

Further information on Alternative Income REIT PLC is available at www.alternativeincomereit.com (1)

About the Group

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, which help to underpin income distributions to shareholders with the potential for income and capital growth.

The Company's Investment Adviser is M7 Real Estate Limited ("M7"). M7 is a leading specialist in the pan-European, regional, multi-let real estate market. Majority owned by its senior managers, it has over 200 employees in 14 countries across Europe. The team manages over 830 properties with a value of circa EUR5 billion.

Notes

1 Neither the content of the Company's website, nor the content of 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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July 13, 2020 02:00 ET (06:00 GMT)