Results for the year ended 30 June 2025

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION IN THE UNITED STATES OF AMERICA, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA.

6 October 2025

ALTERNATIVE INCOME REIT PLC

(the "Company" or the "Group")

Annual Report and Financial Statements for the year ended 30 June 2025

The Board of Directors of Alternative Income REIT PLC (ticker: AIRE), the owner of a diversified portfolio of UK commercial property assets predominantly let on long leases with index-linked reviews, is pleased to announce its annual report and financial statements for the year ended 30 June 2025.

Financial Highlights

At 30 June

For the year ended 30 June

A Alternative Performance Measure, please see the Annual Report for further details.

Financial Highlights 

· At the year end the Group is fully invested in 20 properties having acquired one property in the year.

· The net asset value ('NAV') increased 3.4% from 80.90 pence per share ('pps') to 83.64pps, mainly due to the increase in property values as a result of uplifts in rents following rent reviews.

· The dividend for the year of 6.2pps is in line with the Board's target annual dividend, and is a 5.1% increase on prior year's dividend of 5.9pps.

· Profit before tax of £7.3 million, equivalent to 9.02pps, is after a £2.0 million increase in the Group's property portfolio.

· The Group's portfolio benefits from having a strong tenant profile, being fully let, with all rent due from its tenants collected as it falls due and with over 90% of rent reviews being index linked.

· Loan to GAV of 36.9% and interest cover ratio ('ICR') of 599.8% give significant headroom on the lender's loan covenants.

Group Operational Overview

At the year end of 30 June 2025:

· The property portfolio had a fair value of £107.4 million across 20 properties (2024: £102.7 million across 19 properties).

· The European Public Real Estate Association ('EPRA') Net Initial Yield A ('NIY') was 7.1% (2024: 6.9%).

· 92.3% (2024: 95.8%) of rental income is inflation linked to the Retail Price Index or the Consumer Price Index.

· The property portfolio was fully let at both the current and previous year end.

· The weighted average unexpired lease term ('WAULT') was:

- 15.6 years to the earlier of break and expiry (2024: 16.5 years); and

- 17.2 years to expiry (2024: 18.4 years).

A Alternative Performance Measure, please see Annual Report for further details.

Income and expense during the year

· Rent recognised amounted to £7.9 million (2024: £7.4 million).

· A total of ten rent reviews took place during the year, which resulted in a combined rental uplift of £167,000, which represents a 2.2% increase on contracted rent across the portfolio.

Property transactions during the year

· One property was purchased during the year, namely Champneys Beauty School, part of the Champneys Tring Spa Resort in Tring, in December 2024 for a consideration of £2.5 million. The price reflects a net initial yield of 6.5% and, at purchase, had a weighted unexpired lease term of 14.9 years.

Significant changes to leases

· BGEN, one of the tenants at our St Helens industrial asset, has agreed to continue in occupation of their building for a further two years. In addition, a new five year lease, with annual RPI linked rent reviews was agreed at £63,750 per annum with BGEN for the adjacent land at St Helens on expiry of their previous lease.

· Active management continues with Pure Gym in London, re-gearing their lease to remove the tenant's break in 2027 with the lease extending to 2032. In Crawley, the lease to Petrogas Group UK Limited was assigned to Rontec Properties No 4 Limited, guaranteed by Rontec Roadside Retail Limited, one of the leading players in the UK forecourt industry.

Events after the reporting date

· The Group currently has borrowings of £41 million under a loan facility repayable on 20 October 2025 (the 'Loan') with Canada Life. The Board has secured long-term debt facilities with HSBC UK Bank plc (the 'New HSBC Bank Facilities'), as announced on 3 September 2025. The New HSBC Bank Facilities consist of both a fixed term loan of £31 million and a £10 million revolving credit facility, both on floating rates for a fixed term of five years with an option to extend by two years if mutually acceptable. Further details of the New HSBC Bank Facilities are contained in both the Chairman's Statement and Note 20 to the Consolidated Financial Statements - Events after the reporting date.

· Over the past few years the Group has maintained an enviable record of collecting 100% of its rent. Provided this remains the case and in the absence of any unforeseen circumstances, the Board has announced that it is targeting a dividend of no less than 5.6pps for the year ending 30 June 2026†. The resetting of this dividend target, which is lower than the previous year, is entirely due to increase in financing costs of the new facilities, which will rise significantly to approximately £2.2 million, as compared with £1.4 million in previous financial years.

† This is a target and not a formal dividend forecast or a profit forecast.

Simon Bennett, non-executive chairman of Alternative Income REIT PLC, comments:

"During the year under review, the portfolio value has increased by £4.7 million (2024: £4.3 million reduction) and at 30 June 2025 was valued at £107.4 million (2024: £102.7 million). On a like-for-like basis, the value of the Group's properties increased to £104.9 million from £102.7 million.

Over the past few years the Group has maintained an enviable record of collecting 100% of its rent. Provided this remains the case and in the absence of any unforeseen circumstances, the Board has announced that it is targeting a dividend of no less than 5.6pps for the year ending 30 June 2026† . The resetting of this dividend target, which is lower than the previous year, is entirely due to increase in financing costs of the new facilities.

The Group currently has borrowings of £41 million under a loan facility repayable on 20 October 2025 (the 'Loan') with Canada Life. As previously announced, the Board has secured new long-term debt facilities with HSBC UK Bank plc (the 'New HSBC Bank Facilities'). The New HSBC Bank Facilities consist of both a fixed term loan of £31 million and a £10 million revolving credit facility, both on floating rates for a fixed term of five years with an option to extend by two years, if mutually acceptable to both parties. The Group will use the amount drawn down under its New HSBC Bank Facilities to simultaneously repay its existing debt facilities in full.

The Group's index-linked portfolio, with its properties let on predominantly long dated and high yielding leases, has continued to perform relatively well, when compared with its peer group. On a macro level, it appears that the pathway for interest rates continues to be downwards. This should benefit the property market in general. This, in conjunction with the active asset management initiatives being undertaken by the Group and the successful refinancing of AIRE's banking facilities, give the Board confidence that the portfolio will continue to deliver an attractive yield as a result of its secure and growing rental income."

ENQUIRIES

The Company's LEI is 213800MPBIJS12Q88F71.

Further information on Alternative Income REIT PLC is available at www.alternativeincomereit.com1

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.

NOTES

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 index-linked rent review provisions.

Chairman's Statement

Overview

I am pleased to present the annual audited results of Alternative Income REIT PLC (the 'Company') together with its subsidiaries (the 'Group') for the financial year ended 30 June 2025.

The year under review was one characterised by a fall in consumer and business confidence, declining inflation, low rental growth and falling interest rates. These factors were reflected in the real estate sector, where transactions have been scarce, with both investors and occupiers cautiously playing a waiting game. This has proved to be beneficial for the Group. From an income standpoint, the economic environment has seen our portfolio continuing to perform well, benefiting from its long dated and high yielding leases with index-linked rental increases. The portfolio value has increased by £4.7 million (2024: £4.3 million reduction) and at 30 June 2025 was valued at £107.4 million (2024: £102.7 million). On a like-for-like basis, the value of the Group's properties increased to £104.9 million from £102.7 million.

The portfolio should continue to perform relatively well during a period of higher inflation, as 92.3% of its rental income is subject to index-linked reviews and 25.6% of rental income is not subject to any cap on rental increases. During the financial year, a total of 10 rent reviews took place, resulting in a combined rental uplift of £167,000, that represents a 2.2% increase on contracted rent across the Company's portfolio.

During the year, one property transaction completed, being the purchase of Champneys Beauty College in Tring, for a consideration of £2.5 million (net of acquisition costs).

The Board has been working, in conjunction with its debt adviser, to refinance the Group's existing debt. Largely as a result of AIRE's excellent track record in recent years, its outstanding record on rent collection and the very low Loan To Value ('LTV') of its portfolio, AIRE secured separate offers of long-term finance from several different lending institutions, all on a competitive basis.

Consequently, the Board announced on 3 September 2025 that the Group has secured new long-term debt facilities with HSBC UK Bank plc ('HSBC'). The facilities consisting of both a fixed term loan of £31 million and a £10 million revolving credit facility.

Together with the active asset management initiatives being undertaken, the Board considers that the portfolio will continue to deliver an attractive yield as a result of its secure and improving rental income. These, together with less volatile inflation and the anticipated continued downward trajectory of UK interest rates provides a stabilising background for the property market.

At the year end, the portfolio has maintained the net initial yield at 7.1% and a WAULT to the first break of 15.6 years and 17.2 years to expiry (30 June 2024: 16.5 and 18.4 years, respectively).

Refinancing of the Group's Debt

The Group today has a fully utilised £41.0 million loan facility with Canada Life, with a weighted average interest cost of 3.19%. This facility will be repaid on its due date of 20 October 2025. There are currently no penalties projected for repaying this existing loan facility.

As mentioned above, the Group has now secured new long term-debt facilities with HSBC ('New HSBC Bank Facilities') totalling £41 million, which are for a fixed term of five years from the date of drawdown, which can be extended on request by a further two years, should this be mutually acceptable to both parties. The New HSBC Bank Facilities consist of a fixed term loan of £31 million and a £10 revolving credit facility ('RCF').

Whilst there is no present intention, AIRE have the right, through an accordion mechanism, to request an increase in the size of the RCF by up to a further £10 million, over the course of the facility.

The Board is also pleased to report that the margin on the New HSBC Bank Facilities of 170 basis points (1.7% per annum) over SONIA (sterling overnight index average rate), represents a significant reduction in margin when compared with the Group's existing debt facilities, albeit against a backdrop of higher base interest rates, as set out below. In addition, the financial covenants in the New HSBC Bank Facilities represent improved terms to the Group, being based on a Loan to Value covenant which is not to exceed 60% and an Interest Cover Ratio to be greater than 160%.

The Board intend to take advantage of the lower interest rates on AIRE's existing debt facilities, until these facilities are repaid on 20 October 2025. The Group will use the amount drawn down under its New HSBC Bank Facilities to simultaneously repay its existing debt facilities in full.

Dividends and Earnings

During this financial year, the Company declared four interim dividends totalling 6.2 pence per share ('pps') (30 June 2024: 5.9pps), which is in line with the previously announced dividend target of 6.2pps (30 June 2024: 5.9pps), representing a 5.1% increase on the previous year. I am pleased to report that these dividends were covered by cash earnings.

As set out in Note 8 to the Consolidated Financial Statements, dividends were covered by the Group's Adjusted EPS (representing cash) of 6.72pps (2024: 5.99pps). All dividends were paid as Property Income Distributions ('PIDs').

Historically the Board has paid dividends in four instalments each financial year. The Board intends to continue with this practice by making dividend payments in November, February, May and August each year. In order to do this, all dividends need to be declared and paid as interim dividends. The Board, however, recognises that this precludes shareholders from having the opportunity to vote on a final dividend. Recognising this, and although not required to do so, Resolution 8 in the AGM notice gives shareholders the opportunity to vote on this dividend policy.

Over the past few years, including during the global COVID pandemic, AIRE has maintained an enviable record of collecting 100% of its rent. Provided this remains the case, and in the absence of any other unforeseen circumstances, the Board is targeting a dividend of no less than 5.6† pps for the year ending 30 June 2026. The resetting of this dividend target, which is lower than the previous year, is entirely due to the increase in financing costs on the new facilities, which will rise significantly to approximately £2.2 million, compared with £1.4 million in previous financial years.

† This is a target and not a formal dividend forecast or a profit forecast.

Discount

The discount of the share price to NAV at 30 June 2025 narrowed to 11.5% (30 June 2024: 18.4%). The Board monitors the discount level throughout the year and has the authority to both issue and buy back shares. Although these powers have not been used to date, the Board believes these authorities are important powers for it to have available, if required, and therefore recommends that shareholders vote in favour of their continuance at the forthcoming AGM.

Investment Policy

The change in the Group's Investment Policy was approved by shareholders at the November 2024 AGM and all references to the Group Investment Policy within this Annual Report relate to the updated policy, which included revised sector allocation limits and minimum portfolio targets (including WAULT and inflation-linked rent thresholds). Investors

should refer to the changes outlined in the 2024 Annual Report for full details.

AGM

The Company will hold its AGM at 10:00am on Monday 10 November 2025 at the offices of JTC, The Scalpel 18th Floor, 52 Lime Street, London EC3M 7AF. As usual, the Investment Adviser will give a presentation on the Group prior to proceeding with the formal business of the AGM.

I always welcome engagement with shareholders, who should be aware that, if they are unable to attend in person, they can submit questions to the Board by emailing the Company Secretary at [email protected] or by writing to me at the Group's registered office, namely, Alternative Income REIT PLC, The Scalpel 18th Floor, 52 Lime Street, London EC3M 7AF.

Outlook

The Group's index-linked portfolio, with its properties let on predominantly long dated and high yielding leases, has continued to perform relatively well, when compared with its peer group. In the coming financial year, approximately 44.6% of the Group's income will be subject to rent reviews (36.4% as annual index-linked rent reviews and the remaining 8.2% being periodic three or five yearly index-linked rent reviews).

On a macro level, it appears that the pathway for interest rates continues to be downwards. This should benefit the property market and in conjunction with the active asset management initiatives being undertaken by the Group and the successful refinancing of AIRE's banking facilities. These factors give the Board confidence that the portfolio will continue to deliver an attractive yield as a result of its secure and growing rental income.

I would like to take this opportunity to thank my colleagues on the Board, the Investment Adviser, the Company Secretary and our other advisers and service providers, who have provided professional support and services to the Group during this financial year. The Group has a good team, to whom a large proportion of the Company's success can be attributed.

Simon Bennett

Chairman

3 October 2025

Business Model and Strategy

Business Model

Alternative Income REIT PLC is a real estate investment trust listed on the closed-ended investment funds category of the Official List of the Financial Conduct Authority ('FCA') and traded on the Main Market of the London Stock Exchange. As part of its business model and strategy, the Group has maintained and intends to maintain its UK REIT status.

The Company is governed by a Board of non-executive directors (the 'Board') and has no employees. The Board is responsible for determining the Company's investment objective and investment policy. Like many other REITs and investment companies, the day-to-day management and administration of the Company is outsourced by the Board to third party providers, including Martley Capital Real Estate Investment Management Limited ('Martley Capital') as Investment Adviser, Langham Hall Fund Management LLP as AIFM and JTC Limited as Company Secretary.

Investment Objective

The investment objective of the Group is to generate a secure and predictable income return, sustainable in real terms, whilst at least maintaining capital values, in real terms, through investment in a diversified portfolio of UK properties, predominantly within the alternative and specialist sectors.

Investment Policy

In order to achieve the investment objective, the Group invests in freehold and long leasehold properties across the whole spectrum of the UK property sector. The Group's emphasis is on alternative and specialist property sectors in order to access the attractive value and capital preservation qualities which such sectors offer.

The Group invests in properties that can generate predictable income streams through long leases which have contractual exposure to inflation rates, focussing on properties which have the ability to deliver secure income and preserve capital value, with an attractive entry yield.

The Group will supplement this with active asset management initiatives for certain properties.

Permitted sectors include, but are not limited to the following, subject at all times to the assessment of their appeal and specific asset investment opportunities: healthcare; leisure; hotels and serviced apartments; education; automotive; car parks; residential; supported living; student accommodation; logistics; storage; communications; supermarkets (within the alternative and specialist real estate sectors). In addition, permitted sectors include: offices; shopping centres; retail and retail warehouses; and industrial (being defined as 'Traditional' real estate sectors), subject to the limitations on sector exposure below.

The Group is not permitted to invest in land assets, including development land which does not have a development agreement attached, agriculture or timber.

Each investment must enable the portfolio to comply with the following minimum targets at the time of investment:

· a weighted average unexpired lease term ('WAULT') in excess of ten years;

· at least 75% of the gross passing rent being from leases with rent reviews linked to a commonly used measure of inflation (typically RPI or CPI);

· at least 50% of the gross asset value ('GAV') of properties being in alternative and specialist sectors; and

· over 90% of properties being freehold or very long leasehold (over 100 years).

Whilst each acquisition is made on a case-by-case basis, properties typically offer the following characteristics:

· a value of between £2 million and £30 million;

· existing tenants with strong business fundamentals and profitable operations;

· depth of tenant/operator demand;

· alternative use value;

· current passing rent close to or below rental value; and

· long-term demand drivers, including demographics, use of technology or built-for-purpose real estate.

The Group may invest in commercial properties or portfolios of commercial property assets which, in addition, include ancillary or secondary utilisations.

The Group may invest in corporate and other entities that hold property and the Group may also invest in conjunction with third-party investors.

The Group may engage in full or partial interest rate hedging or use derivatives to seek to mitigate the risk of interest rate increases as part of the Group's portfolio management.

Investment limits

The Group will invest and manage its assets with the objective of spreading investment risk through the following:

· Investment in a single property limited to 15% of GAV (measured at the time of investment).

· Exposure to a single tenant covenant will be limited to 15% of GAV.

· The Group may commit up to a maximum of 10% of its GAV (measured at the point of capital commitment) in development activities.

· Investment in unoccupied and non-income producing assets will, at the time of investment, not exceed 5% of Estimated Rental Value ('ERV').

The Group will not invest in other closed-ended investment companies.

If the Group invests in derivatives for the purposes of efficient portfolio and cash management, the total notional value of the derivatives at the time of investment will not exceed, in aggregate, 20% of GAV.

Borrowings

The Group may utilise borrowings with a view to enhancing returns over the medium term. Borrowings, where utilised will be on a limited recourse basis for each investment on all or part of the total portfolio and will not exceed 40% of GAV (measured at drawdown) of each relevant investment or of the portfolio.

Dividend Policy

It is the directors' intention to pay dividends in line with the Company's investment objective with interim dividends payable by four instalments quarterly in November, February, May and August in respect of each financial year to June. Additionally, the dividend policy allows for the payment of further interim dividends should compliance with the REIT rules require.

Key Performance Indicators

EPRA Performance Measures

The EPRA performance measures of the Group follow. All are Alternative Performance Measures.

1 The reconciliation of this APM is set out in Note 8 of the Notes to the Consolidated Financial Statements.

2 The reconciliation of this APM is set out in the EPRA Performance Measures Calculations section following the Notes to the Consolidated Financial Statements.

Investment Adviser's Report

Market Outlook

UK Economic Outlook

The UK economy, after a strong 0.7% growth in Q1 2025, has faced consecutive monthly contractions in Q2 2025 which caused growth to reduce by 0.3% in the quarter, driven by reductions in production and construction, and the onset of a US-driven trade warA. Though Q1 GDP was 4.2% above pre-pandemic levels (placing 5th in the G7)B, the Office of Budget Responsibility ('OBR') halved its 2025 GDP growth forecast to 1.0%, and independent forecasts reduced to 1.1%C. Despite this, the OBR remains optimistic, upgrading longer-term growth forecasts from 2026-2029.

UK unemployment continued its upward trend, reaching 4.7% in the three months to June 2025 - the highest level since August 2021D. This rise follows sharp increases in payroll taxes and a 6.7% increase to the national minimum wage. Despite, wages continuing to outpace inflation, unemployment is nearing a four-year high which is reducing wage growth to 5.0% in Q2 2025E; this rate is predicted to fall further to 4.2% for the entirety of 2025F. Reflecting these concerns, the British Chambers of Commerce raised their 2025 unemployment forecast to 4.7% in September, citing rising employment costs and worries about youth unemployment.

UK inflation, as measured by the Consumer Price Index ('CPI'), rose sharply to 3.8% in July, being the greatest increase since January 2024 and significantly exceeding the 2% target. This increase, more than double that seen in September 2024 of 1.7%, was anticipated by the OBR for mid-2025, primarily due to Ofgem's price cap increase amid higher energy costs and increases in food costs. Despite concerns, the OBR predicts this uplift will be temporary, with the rate falling to 3.1% by December 2025 and returning to target in Q2 2026.

Interest rates have been on a gradual downward trajectory since the August 2023 peak of 5.25%, with the Bank of England implementing three cuts so far in 2025, bringing the base rate down to 4.00%. This rate was cut at the August meeting despite signs that UK inflation might be persisting. ING forecasts an additional rate cut in November, which would further cut the rate to 3.75% by year-end, with a further two cuts expected in 2026, bringing the rate to 3.25%.

Economic sentiment among both businesses and consumers has seen modest, albeit notable, improvements throughout the first half of 2025. An Office for National Statistics ('ONS') survey in June 2025 revealed that the proportion of businesses anticipating a performance decline over the next year edged down to 11%, a positive shift from 12% in JanuaryG. Consumer confidence, as measured by the GfKH index, also experienced an uplift, rising encouragingly from -22 in January 2025 to -18 in June 2025I.

All of the above reflect a challenging environment, further complicated by a US-sparked trade war and rising employment costs. Despite this, consumer confidence has shown modest improvements. Through global geopolitical events and domestic policy decisions remain crucial factors shaping the UK's economic trajectory.

Sources:AONS (2025), Gross Domestic Product (GDP); BUK Parliament (2025), GDP international comparisons: Economic indicators; CHM Treasury (2025), Forecasts for the UK economy;DONS (2025), Unemployment rate (aged 16 and over, seasonally adjusted);EONS (2025), Average weekly earnings in Great Britain: June 2025;FBritish Chambers of Commerce, BCC Economic Forecast; GONS (2025), Business Insights and Conditions Survey (BICS); HGrowth from Knowledge Index; IUK Parliament (2025), Business and consumer confidence: Economic indicators

UK Real Estate Outlook

The UK real estate market showed mixed signals in the first half of 2025. While the latter half of 2024 saw transaction volumes recover to a two-year high, H1 2025 experienced a 28% drop in deal volume, reaching only £18.1 billion and falling below the long-term trendA. This decline was primarily due to a shortage of large-scale transactions, even though the number of deals remained relatively stable. An exception was Blackstone's acquisition of the Arch Co portfolio, the UK's largest transaction since mid-2022. The "flight to quality" continues to dominate the occupier market, with businesses prioritizing properties that boast strong Environmental, Social and Governance ('ESG') credentials and high energy efficiency. This, coupled with reduced speculative development, is fuelling increases in prime rents. Despite ongoing challenges like high operating costs and economic uncertainty, which are leading to cautious investment, the availability of flexible leases is offering occupiers crucial adaptability.

Despite ongoing economic uncertainty and market volatility, the outlook for real estate has significantly improved over the past year. CBRE's European Investor Intentions survey reveals that three-quarters of investors anticipate a market rebound by year-end, and 90% expect their purchasing activity to either increase or remain stable, injecting crucial liquidity and bolstering confidenceB. This positive sentiment is supported by a 0.9% increase in capital value across all property types in H1 2025, alongside a 12bps inwards shift for yieldsC. The improved market conditions, coupled with the ING's prediction of two further rate cuts, is likely to drive further yield compression, intensifying competition for assets and pushing prices higher in the transaction market. Investors saw a total return of 4.2% in H1, and Colliers forecasts a strong 9.8% total return for the yearD. Considering the relative stability of real estate compared to equities, particularly given potential global trade tariffs, this outlook presents a highly attractive proposition for global investment.

The UK real estate investment landscape shifted significantly in 2024, with the living sector leading the way by attracting £18.26 billion. Even with a slower first half, its appeal held strong, seeing a surge in deal activity, largely driven by overseas buyers. Investors are increasingly eyeing operational and alternative asset classes, with 75% actively exploring areas like real estate debt, purpose-built student accommodation, data centres, and life science assets. Despite strong investor preference for the industrial and logistics sector, its H1 2025 volume plummeted to £2.9 billion, well below trend, mirroring the broader market's decline in large-scale transactions. Interestingly, retail emerged as the top-performing sector in H1 2025 and is expected to maintain this over the next five years. Shopping centres and retail warehouses are forecast to generate impressive total annual returns of 10.9% and 9.4% respectively. This growth is fuelled by evolving retail concepts that cater to experiential consumer demand, coupled with limited new development due to the structural shift away from traditional retail, resulting in low vacancy rates and strong rental growth potential.

The UK REIT market experienced a strong recovery in the first six months of 2025, with the FTSE EPRA Nareit UK Index rising by 11.8%, a significant rebound from the 11.7% decline in 2024E. This positive trend saw over 76% of listed UK REITs realise share price gains. Investments in the Living space performed exceptionally well, dominating the top performers. KCR Residential REIT led the way, and key players in the care home market also contributed strongly, with Assura REIT and Target Healthcare REIT placed amongst the top five performers. AIRE also saw a positive movement, increasing by 5% to 74.0pps in the first half of the year

The UK commercial property market is undergoing a significant transformation, requiring resilience and innovation for future success. Recent challenges have necessitated a fundamental reassessment of industry practices, demanding creative investment strategies, bold occupier choices, and the agility to adapt to rapidly evolving market demands. Moving forward, interdisciplinary collaboration will be essential to unlocking value and fostering sustainable growth within the sector.

Sources:ALSH (2025), UKIT Q2 2025; BCBRE (2025), European Investor Intentions Survey 2025;CMSCI (2025), UK Monthly Data;DColliers (2025), Real Estate Investment Forecasts Quarter 2 2025;EFTSE Russell Factsheet (2025), FTSE EPRA Nareit UK Index

Portfolio Activity During the Year

The following asset management initiatives were undertaken during the year:

· The acquisition of Champneys Beauty School, part of the Champneys Tring Spa Resort in Tring, in December 2024 for £2.5 million completed the investment of the net proceeds of previous Group asset disposals. The price reflects a net initial yield of 6.5% and, at purchase, had a weighted unexpired lease term of 14.9 years.

· BGEN, one of the tenants of our St Helens industrial asset, has agreed to continue in occupation of their building for a further two years. In addition, a new five year lease, with annual RPI linked rent reviews was agreed at £63,750 per annum with BGEN for the adjacent land at St Helens on expiry of their previous lease.

· Active management continues with Pure Gym in London, re-gearing their lease to remove the tenant's break in 2027. Their lease now extends to 2032. In Crawley, the lease to Petrogas Group UK Limited was assigned to Rontec Properties No 4 Limited, guaranteed by Rontec Roadside Retail Limited, one of the leading players in the UK forecourt industry.

NAV Movements

Valuation

At 30 June 2025 the Group owned 20 property assets (2024: 19) and the portfolio was valued at £107.4 million (2024: £102.7 million).

Summary by Sector at 30 June 2025

Summary by Geographical Area at 30 June 2025

1 The ERV (%) in the summary by sector and geographical area is calculated using the precise unrounded ERV figures, not the rounded ERV (£m).

The table below illustrates the weighting of the Group's contracted rental income, based on the type of rent review associated with each lease.

% of Passing Rent by Rent Review Type

% of Passing Rent by Review Frequency

% of Passing Rent by Cap Band

Property Portfolio at 30 June 2025

Top Ten Tenants at 30 June 2025

\* The WAULT calculations includes an additional three years reflecting a landlord's option to extend until 31 May 2044.

*\* This WAULT calculation, which considers income solely from the top ten tenants, differs from the portfolio-wide WAULT of 15.6 years.

Tenancy Schedule

*Ground rents less than £150 per annum.

Environmental, Social and Governance Report

The Group recognises that Environmental, Social and Governance ('ESG') matters are of utmost importance to sustainable investment and a focus for the business and investor community. The Group is committed to understanding how best to consider ESG factors in all facets of its business, from business strategy to investment decisions and company operations.

In order to meet investors' expectations, the Group and its advisers adopt both financial and non-financial strategies to drive long-term value with an innovative yet disciplined and conscientious approach to ESG in respect of the property portfolio management including but not limited to:

Environmental

Social

· Commitment to occupier engagement.

· Encourage improvements to each asset such as installing defibrillators & electrical charging points.

· Provision of regular training and awareness to all managers on issues, such as wellbeing and mental health.

Governance

· Client checks being completed on all tenants as well as new suppliers and contractors.

· Regular tenant engagement and inspections to ensure assets are used as agreed within leases.

· Effective tracking of legislative requirements to assess and monitor risks and opportunities.

The Group is limited in its ability to influence ESG factors for the Group's properties as the properties are fully let on commercial full repairing leases in accordance with the Group's strategy to hold long leases.

Diversity

As an externally managed business, the Company does not have any employees or office space. As such, the Group does not operate a diversity policy with regards to any administrative, management and supervisory functions. A description of the Board's policy on director diversity can be found in the Corporate Governance Report of the Annual Report.

Employees

The Group has no employees and accordingly no requirement to report separately in this area as the management of the portfolio has been delegated to the AIFM and Investment Adviser.

The AIFM and Investment Adviser are equal opportunities employers who respect and seek to empower each individual and the diverse cultures, perspectives, skills and experiences within their workforce.

Human Rights

The Group is not within the scope of the Modern Slavery Act 2015 because it has not exceeded the turnover threshold and therefore no further disclosure is required in this regard.

Business Relationships

As well as the critical day-to-day portfolio management, the Group has service providers that ensure the smooth running of the Group's activities. The Group's key service providers are listed in the Annual Report, and the Management Engagement Committee ('MEC') annually review the effectiveness and performance of these service providers, taking into account any feedback received.

The Group, AIFM and Investment Adviser and other third-party service providers maintain high standards of business conduct by acting in a collaborative and responsible manner with all business partners that protects the reputation of the Group as a whole.

Greenhouse Gas Emissions

As an investment company, the Group's own direct environmental impact is minimal and greenhouse gas ('GHG') emissions are negligible. The GHG emissions in relation to the Group's property portfolio is disclosed below.

The Group has followed UK Government environmental reporting guidelines and used the UK Government 2025 greenhouse gas reporting conversion factors for company reporting to identify and report relevant GHG emissions over which it has Operational Control (where data is available) for the 12-month period to 30 June 2025.

An independent consultancy specialising in the application of sustainability in commercial real estate was appointed to calculate the GHG statement and provide verification on the approach used.

Scopes

GHG emissions have been reported against the following 'Scopes', as defined by the GHG Protocol and where relevant:

Scope 1 (not relevant to AIRE): Direct emissions from owned vehicles, controlled boilers and fugitive emissions from air conditioning systems under landlord control.

Scope 2: Indirect emissions from electricity purchased by the Company and consumed within real estate assets owned by the Company.

Scope 3: Indirect emissions from electricity and gas purchased/consumed within AIRE assets, by tenants, where the tenant is counterparty to the energy supply.

Statement of GHG Emissions

The table below sets out the emissions per sector and for the Group overall in the year ended 30 June 2025. The approach taken follows guidance provided by the GHG Reporting Guidelines and EPRA Best Practice Recommendations of Sustainability Reporting 2024.

*Like-for-like requires 24 months of data for the current and previous reporting year (July 2023 - June 2025). Both assets provided 24 months of data therefore like-for-like calculations were possible.

Statement of Energy Usage

The table below sets out the energy use per sector and for the Group overall. The approach follows guidance provided by the GHG Reporting Guidelines (DESNZ, 2025) and the EPRA Best Practice Recommendations on Sustainability Reporting 2024.

*Whilst the kWh usage is low, the high increase in usage reflects rectifications to faults in specific lights in the common parts of the retail park. All the lights are now working and usage is expected to be stable in future.

Intensity Ratios

In addition to reporting relevant absolute GHG emissions (per scope and per sector), the Group has chosen to report intensity ratios, where appropriate. An intensity measure is reported for assets within the like-for-like portfolio, where:

- No major renovation or refurbishment has taken place i.e. affecting more than 50% of the building by area or number of occupants

- Occupancy is at least 75%

- At least 24 months data is available

- Emissions reported relate to an indoor area

Whilst no landlord meters reflect the above criteria for an intensity metric, the Group has applied an intensity figure for one asset, Pocket Nook, where the landlord procures the energy and directly recharges this to the tenant. An intensity metric has not been produced for Droitwich Spa retail park on the basis that the landlord-controlled meter does not reflect the above criteria (emissions reported relate to an indoor area).

No normalisation factors have been considered for this annual report.

Assurance Statement

The Group's GHG emissions have been calculated and verified by an independent third-party in accordance with the principles of ISO 14064. A full copy of the methodology used, including scope, source or data and conversion factors, is available on request.

Property Portfolio ESG Activity

During the year ended 30 June 2025, the Group has worked closely with its tenants to encourage improvements in ESG activities within the property portfolio.

Two new EPC's ratings have been carried out for BGEN in St Helens which fell from C68 to E121 due to changes in EPC grading for gas heating and for Salvation Army, Swindon which improved from D93 to B31 as a result of tenant's internal refurbishment works.

Following inspections by EPC assessors, works identified at four properties to improve EPC levels are due for completion in the year to 30 June 2026 including new LED lighting, replacement of an oil-fired boiler, solar panels and installation of secondary glazing. The costs of other enhancements will be also be borne by the occupiers. EPCs will be updated once works have been concluded.

Other than the changes for BGEN's and Salvation Army's EPC rating and the introduction of the new acquisition at Tring (C) the changes within the graph above are as a result of changes to relative ERV levels particularly in rating D where ERVs for assets in Salford and Dudley have seen increases.

In the histogram above, the highest EPC rating of E applies to Unit 14 Provincial Park, Sheffield where the tenant is considering the cost efficiency of replacing their oil-fired boiler to electric and Unit 2 Pocket Nook, St Helens. Here the nature of the open-ended industrial process does not conform to EPC standard assessment, an exemption can be sought. The remaining properties in the portfolio have an EPC rating of D or above. More than half of the portfolio, at 52.8%, fall between A and B.

Section 172(1) statement

The following disclosure describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006, in promoting the success of the Company for the benefit of members as a whole.

This section describes how the Board has regard to the likely consequences of any decision in the long term, the need to foster the Company's business relationships with suppliers, customers and others, the desirability of the Company maintaining a reputation for high standards of business conduct, and the need to act fairly as between members of the Company. The Company does not have any employees and therefore s172(1)(b) is not applicable to the Company. The impact of the Company's operations on the community and the environment is set out more fully in the Environmental, Social and Governance section above.

Principal Decisions

Principal decisions are those that have a material impact to the Group and its key stakeholders. In taking these decisions, the directors considered their duties under section 172 of the Act.

Dividend and Dividend Policy

Given the Company's Investment Objective, dividends are a key matter for the Board to consider and have a material impact on shareholders, as a key stakeholder. For the year ended 30 June 2025, the Board declared four interim dividends totalling 6.2pps (2024: 5.9pps), representing a 5.1% increase on the previous year.

Subsequent to the year end, further to the securing of refinancing of the Group's £41 million debt, the Board has announced a year ending 30 June 2026 target dividend of at least 5.6 pps†. This reflects the increased financing costs of the new debt, whilst being set at a level that meets the Group's investment objective, and was declared following consultation with the Group's major shareholders.

As last year, the Board paid four interim dividends at quarterly intervals to provide shareholders with a consistent and timely income stream. However, this dividend policy means shareholders do not have the opportunity to vote on a final dividend. Consequently, the Board is once again inviting shareholders to vote on the Company's dividend policy at the Annual General Meeting.

Property Transactions

In the year the Group acquired the Champneys Beauty School, part of the Champneys Tring Spa Resort in Wigginton, Tring for £2.5 million (net of acquisition costs to the Company). The price reflects a net initial yield of 6.5% and was acquired with a weighted unexpired lease term of 14.9 years. The acquisition reinvested the remaining proceeds from the Group's last property disposal.

Debt Refinancing

The Board considered the Company's financing and its available routes for refinancing its debt, with the Canada Life £41 million senior loan due to mature on 20 October 2025. In Q4 2025 the Board appointed Panmure Liberum as its debt adviser to assist with the refinancing. Subsequent to the year end the Board announced that it has secured £41 million of long term debt facilities with HSBC UK Bank Plc. Details of the new debt facilities are contained in both the Chairman's Statement and Note 20 to these financial statements.

† This is a target and not a formal dividend forecast or a profit forecast

Principal Risks and Uncertainties

The Group's assets consist of UK commercial property. Its principal risks are therefore related to the commercial property market in general, but also to the particular circumstances of the individual properties and the tenants within the properties.

The Board has overall responsibility for reviewing the effectiveness of the system of risk management and internal control which is operated by the AIFM and, where relevant, the Investment Adviser. The Group's ongoing risk management process is designed to identify, evaluate and mitigate the risks the Group faces.

The Board undertakes a semi-annual risk review with the assistance of the Audit Committee, to assess the adequacy and effectiveness of the AIFM's, and where relevant the Investment Adviser's, risk management and internal control systems.

The Board has carried out a robust assessment of the principal and emerging risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity.

An analysis of the principal risks and uncertainties is set out in the table below. This does not purport to be exhaustive as some risks are not yet known and some risks are currently not deemed material but could turn out to be material in the future.

Emerging Risks

The Board takes account of and considers emerging risks as part of its risk management assessment.

Going Concern

The Group has considered its cash flows, financial position, liquidity position and borrowing facilities.

In particular, the Group's unrestricted cash balance at the year end was £3.1 million (2024: £3.3 million). The Group has no capital commitments or contingent liabilities. However, the Group has borrowings of £41 million under a loan facility repayable on 20 October 2025 (the 'Loan'). The Board has been working, in conjunction with its debt advisers, to refinance the Group's existing borrowings and subsequent to the year end the Board announced that it has secured long term debt facilities with HSBC (the 'New HSBC Bank Facilities'). The New HSBC Bank Facilities consist of both a fixed term loan of £31 million and a £10 million revolving credit facility, both on floating rates and on a fixed term of five years with an option to extend by two years if mutually acceptable. Details of the new debt facilities are contained in both the Chairman's Statement and Note 20 to these financial statements. The latter includes covenant details, all of which will be carefully monitored in accordance with the Group's risk management procedures and policies.

In respect of the Loan, the Group is permitted to utilise up to 40% of GAV measured at drawdown with a Loan to GAV of 36.9% at 30 June 2025. Therefore, the Group had headroom against its borrowing covenant. The lender's loan to value covenant of 60% is significantly higher than the Group's Loan to GAV. In addition, if agreed by the current lender, two properties not secured against the Loan and valued at £8.65 million are available as additional security for the Loan.

The Loan also has a lender's interest cover covenant of 250%. At 30 June 2025 the Group's interest cover ratio was 592.4%, giving significant headroom. A 'severe but plausible downside' scenario has been projected. While rent collections have been strong, this scenario projects rent deferrals and write-offs for tenants with difficulty paying rents from operational cash flows. In this scenario the Group still has adequate headroom against the interest cover covenant and positive cash balances. Further detail of the assumptions made in assessing the adoption of Group's going concern basis can be found in Note 2.4.

The Group benefits from a secure, diversified income stream from leases which are not overly reliant on any one tenant or sector, with the Group generating net cash flows from operating activities for the year being reported of £9.0 million. As a result, the directors believe that the Group is well placed to manage its financing and other business risks.

The going concern statement is based on the reporting requirement that the Group and the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of these financial statements. For the reasons explained above, the Board is satisfied that the Group and the Company has adequate resources to continue in operational existence for the foreseeable future and is of the opinion that the going concern basis adopted in the preparation of the financial statements is appropriate.

Viability Statement

In accordance with provision 30 of the UK Code, the Board has assessed the prospects of the Group for at least the 12-month period from the date the financial statements are approved as required by the 'Going Concern' provisions.

The Board has considered the nature of the Group's assets and liabilities and associated cash flows and has determined that three years, from the balance sheet date up to 30 June 2028, is an appropriate and realistic timescale over which the performance of the Group can be forecast with a degree of accuracy. Even though the Group's contractual income extends beyond three years, the Board considers this period (the 'Period') to be appropriate, given:

In performing its viability review, the Board considers the Group's cash flows (noting that the Group's property portfolio had a WAULT to break of 15.6 years and a WAULT to expiry of 17.2 years at 30 June 2025, representing a secure income stream for the Period), future dividends and dividend cover, REIT compliance and relevant key financial ratios over the Period. The Board carried out a thorough review of the Group's business model, including future performance, liquidity and banking covenant tests for the Period and with various debt finance cost scenarios based on refinancing the £41 million debt (see below) in full at its maturity. The Board has assessed the extent of any operational disruption; potential curtailment of rental receipts; potential liquidity and working capital shortfalls; and diminished demand for the Group's assets going forward, in adopting a going concern preparation basis and in assessing the Group's longer-term viability.

These assessments are subject to sensitivity analysis, which involves flexing a number of key assumptions and judgements included in the financial projections:

· Tenant default;

· Dividend payments;

· Financing and refinancing; and

· Property portfolio valuation movements.

The Group's debt:

The Group has borrowings of £41 million under a loan facility repayable on 20 October 2025 (the 'Loan'). Subsequent to the year end the Board announced that it has secured long-term debt facilities with HSBC. The New HSBC Bank Facilities consist of both a fixed term loan of £31 million and a £10 million revolving credit facility, both on floating rates and on a fixed term of five years with an option to extend by two years if mutually acceptable. Details of the New HSBC Bank Facilities are contained in both the Chairman's Statement and Note 20 to these financial statements. Specifically with respect to viability and the Group's debt:

· the Loan covenants - at 30 June 2025, the asset valuations and rental income of the properties secured to Canada Life would need to fall by 16.9% and 40.8%, respectively, before breaching the Loan to Value and Income Cover Cash Trap covenants; and

· the cash flow modelling has taken account of the New HSBC Bank Facilities and its covenants, and future interest rate predictions (assuming interest rate hedging is not put in place). The Group is in compliance with the New HSBC Bank Facilities covenants throughout the cash flow period to 30 June 2028.

Based on the prudent assumptions within the Group's forecasts including the rent deferrals, tenant default, void rates, property valuation movements and the successful refinancing of the debt, the Board has a reasonable expectation that for the Period:

· all current and future loan covenants will be complied with throughout the Period;

· REIT tests will similarly be complied with; and

· the Group and the Company will be able to continue in operation and meet its liabilities as they fall due over the Period.

Board Approval of the Strategic Report

The Strategic Report has been approved and signed on behalf of the Board by:

Simon Bennett

Chairman

3 October 2025

Statement of Directors' Responsibilities

in respect of the Annual Report and the Financial Statements

The directors are responsible for preparing the Annual Report and the Group and parent Company Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the UK adopted international accounting standards. The directors have elected to prepare the parent Company financial statements in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework and applicable law.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of the Group and parent Company financial statements, the directors are required to:

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the parent Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We confirm that to the best of our knowledge:

On behalf of the Board

Simon Bennett

Chairman

3 October 2025

The accompanying Notes 1 to 20 form part of these Consolidated Financial Statements.

The Consolidated Financial Statements were approved by the Board of Directors on 3 October 2025 and were signed on its behalf by:

Simon Bennett

Chairman

Company number: 10727886