Sign in Subscribe
Real estate investment trusts

Alternative Income REIT Posts 3.9% Drop in Net Asset Value

Strategic Insights

— 1 min read

Alternative Income REIT's annual results to 30 June 2024 show a 3.9% drop in net asset value (NAV) to 80.9p, primarily due to an outward yield movement in its property portfolio. Despite this, the company's share price total return was 11.6%, narrowing the share price discount to NAV from 23.1% to 18.4%. Dividends in the year totalled 5.9p, in line with the board's 2024 target annual dividend, but 2.4% below the level in 2023.

Key Takeaways:

  • Alternative Income REIT's NAV dropped 3.9% to 80.9p in annual results to 30 June 2024, primarily due to an outward yield movement in its property portfolio.
  • The portfolio value decreased by 4.0% to £102.7m, while NAV total return was 3.5% and share price total return was 11.6%.
  • Dividends in the year totalled 5.9p, in line with the board's 2024 target annual dividend, but 2.4% below the level in 2023.
  • Loan to value increased slightly to 37.7% (from 36.8%), with significant headroom on the lender's loan to value covenant of 60%.
  • Interest cover ratio of 611.3% is well above the covenant of 250%.
  • The £41m loan matures on 20 October 2025 and is fixed at a weighted average interest cost of 3.19%.
  • Proposed changes to investment policy include reducing the minimum WAULT of the portfolio from 18 to 10 years, reducing the percentage of leases required to be linked to inflation from 85% to 75%, and reducing the requirement for properties to be in alternative and specialist sectors from 70% to at least 50%.
  • The changes will be put to shareholders at the company's upcoming annual general meeting (AGM) on 12 November.

Statistics:

  • NAV: 80.9p (down 3.9% from previous year)
  • Portfolio value: £102.7m (down 4.0% from previous year)
  • Loan to value: 37.7% (up from 36.8%)
  • Interest cover ratio: 611.3% (well above covenant of 250%)
  • Loan maturity date: 20 October 2025
  • Loan amount: £41m
  • Interest cost: 3.19%
  • Interim dividends: 5.9p (total of four payments)
  • Previous year's interim dividend: 6.045p (total of four payments)

Sources:

  • Association of Investment Companies press release
  • Alternative Income REIT annual results to 30 June 2024
  • Simon Bennett, non-executive chairman of Alternative Income REIT

Read more