The team at Alternative Income REIT plans to change the firm’s seven-year old investment mandate, arguing that the existing policy is now out of date.
Announcing annual results for the year to 31 June – which saw it return to profit with a bottom line of £2.4m – the REIT said its existing investment policy, put in place in 2017, includes “highly restrictive requirements”.
“Many of these restrictions were required to differentiate the company’s investment policy from that of other investment vehicles managed by the company’s former investment manager,” it added. “The board believes that in light of this, and following significant changes to the property markets since launch, that the company will be better placed to deliver added value to shareholders with a changed investment policy which better serves the company’s investment objective of generating predictable income returns whilst maintaining capital values by means of investment in a diversified UK portfolio.”
The changes will include a reduction in the minimum WAULT of the portfolio from 18 to 10 years, a reduction in the percentage of leases required to be linked to inflation from 85% to 75% of gross passing rent, and a reduction in the requirement for properties to be in non-traditional sectors from 70% to at least 50%.
The REIT added that it has also “taken the opportunity to simplify the language used in the investment policy, to make it far easier to understand”.
The changes will be put to a shareholder vote at the REIT’s annual general meeting on 12 November.
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