This article is from the Australian Property Journal archive
ALE Property Group posted a full year distributable profit of $30.4 million up 7.5% on last year, thanks to an increase in rental revenue.
Rental revenue increased from $60.2 million to $61.4 million following rent reviews with ALH which resulted in 36 properties’ rents increasing on average by 1.7% for 43 of the 86 properties, whilst 43 properties remain subject to independent determination and may increase or decrease by up to 10%.
The FY20 result was also helped by substantially lower one-off rent review expenses of $0.6 million compared to $3.1 million in the corresponding period.
ALE announced a full year distribution of 20.90 cents per security which is unchanged from last year, and will be 49.42% tax deferred.
Directors’ valuations of 86 properties increased by 0.9% to $1,174.2 million following an independent assessment of 82 of the 86 properties. ALE’s weighted average adopted yield reduced from 5.09% to 5.08%.
ALE said the licenced hotel industry has been significantly impacted by the COVID-19 pandemic with ALH closing all 86 hotels owned by ALE in line with government health directions on 23 March 2020. But ALH continued to trade from 66 BWS and 23 Dan Murphy’s owned by ALE.
“Today, ALH’s operations at the hotels remain subject to a range of restrictions across the different states,” the group said.
Looking ahead, ALE said FY21 rent determination could very well see rents decrease by up to 10%.
“ALE’s current view is that the total passing rent is materially less than the uncapped rents. That said, the extent of the difference between passing and uncapped rent is not evenly spread across the portfolio.
“For the remaining 43 properties subject to determinations the rents may increase or decrease by up to 10%,” the group said.
Although the rent determination results will be back dated to 4 November 2018 by a one-off payment. The current rent is $61.5 million and under worst case scenario, it will fall to $59.1 million but on the flip side, under best case, rents could rise to $64.9 million.
As a result, ALE’s FY21 distributable profit is expected to be impacted by a range of factors rent review and determination results.
