Alternative Income REIT : Notice of AGM

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to what action to take you are recommended to consult your stockbroker, solicitor, accountant or other independent adviser authorised under the Financial Services and Markets Act 2000.

Government restrictions on movement and gatherings have been imposed as a result of the COVID-19 pandemic which prohibit or restrict public gathering, and as a result, shareholders will not be permitted to attend the meeting in person. Please see further notes on the meeting at the end of this notice concerning the venue and format of the meeting.

If you have sold or transferred all of your ordinary shares in Alternative Income REIT plc, you should pass this document, together with the accompanying Form of Proxy, to the person through whom the sale or transfer was made for transmission to the purchaser or transferee.

ALTERNATIVE

INCOME

REIT PLC

(Incorporated in England and Wales with registered number 10727886)

Notice of Annual General Meeting

including

Proposed amendments to the Company's Investment Policy

Notice of the Annual General Meeting which has been convened for Thursday 26 November 2020 at 10.00 a.m. at 1 King William Street, London, EC4N 7AF is set out on pages 9 to 12 of this document.

To be valid, Forms of Proxy must be completed and returned in accordance with the instructions printed thereon so as to be received by the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as soon as possible and in any event not later than 10.00 a.m. on Tuesday 24 November 2020.

Registered Office:

1 King William Street

London

EC4N 7AF

United Kingdom

19 October 2020

Dear Shareholder,

Notice of Annual General Meeting including proposed amendments to the Company's Investment Policy

Alternative Income REIT plc (the "Company") will be holding its 2020 Annual General Meeting ("AGM") at 10.00 a.m. on Thursday 26 November 2020 at 1 King William Street, London, EC4N 7AF. The formal notice of AGM and the resolutions to be proposed are set out on pages 9 to 12 of this document.

If you would like to vote on the resolutions, please fill in the Form of Proxy sent to you with this notice and return it to the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as soon as possible. They must receive it no later than 10.00 a.m. on Tuesday 24 November 2020.

As a result of the UK Government's current guidance on social distancing and prohibition on non-essential travel and public gatherings due to the COVID-19 pandemic, shareholders will not be permitted to attend the AGM. The AGM will be convened in accordance with the Company's Articles of Association and in line with UK Government guidance. Voting on the resolutions to be proposed at the AGM will be conducted on a poll, rather than a show of hands. Therefore, shareholders are encouraged to vote via proxy, and where possible, vote by proxy online, electing the Chairman of the meeting as proxy as no other proxy will be permitted to attend the meeting. Shareholders may submit questions to the Board in advance of the AGM by emailing such questions to [e-mail].

The health of our shareholders and colleagues remains our priority and the steps set out above are necessary to ensure their well-being during the COVID-19 pandemic.

Proposed amendments to the Company's Investment Policy

As announced on 5 October 2020, the Company is proposing an amendment of its Investment Policy. The principal changes to the policy include a reduction in the minimum WAULT of the portfolio to 12 years, removal of the requirement for leases representing 85% of gross passing rent to be linked to inflation and removal of the restrictions relating to permitted sectors, including the differentiation between traditional and non-traditional sectors.

Whilst recognising that it is difficult to predict where markets will stabilise in current circumstances, the Board believes that the Group has a resilient portfolio. The Group has sustained a strong dividend distribution and delivered a significant reduction to its cost base.

However, none of this can disguise the fact that performance when measured by total shareholder return, the consequence of a combination of inadequate fund raising, asset purchase costs averaging around 6% across the portfolio and a long period of property market uncertainty, has resulted in unsatisfactory overall performance. Whilst the Company is now close to fully invested, the Board recognises that aspects of performance since IPO have been unsatisfactory, even after allowance for the change of investment manager and, more recently, market turbulence in anticipation of Brexit prior to the 2019 Election and latterly, the pandemic.

Following M7's review of the existing portfolio, the Board invited M7 to appraise the Company's Investment Policy and to make recommendations to update the investment strategy.

The Board believes that with the implementation of the proposed amendments to the investment policy and strategy announced on 5 October 2020 and outlined below, the Group has the potential to outperform from what is now a relatively strong base.

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The current Investment Policy was constructed with a detailed set of restrictions, including restrictions around specific sector exposures. Many of these were required to differentiate the Company's investment policy from that of other investment vehicles managed by the Company's former investment manager, AEW. The Board believes that in light of this, the ongoing changes to the property markets and the opportunities that M7 has identified (set out in more detail in the Investment Adviser's proposed Investment Principles on page 12 of the Annual Report) that the Company will be better placed to deliver significant added value to shareholders with fewer and simpler investment restrictions.

The Board believes that, in general terms, the strategy of investment in non-traditional areas, which are becoming increasingly mainstream, remains fit for purpose. However, this needs some adjustment to reflect, in particular, the movement away from high street retail to online shopping, a big shift in sentiment in the business space market and changes in the credit environment. Specifically, the Board and the Investment Adviser see excellent potential in the warehouse and business space markets.

Proposed changes to the Directors' Remuneration Policy

As provided for in Article 108 of the Company's Articles of Association and page 64 of the IPO Prospectus, the revised Directors' Remuneration Policy is proposed to include a provision for an additional fee for special duties or additional services undertaken by Directors outside of his ordinary duties. Such provision had been omitted from the current Directors' Remuneration Policy in an administrative error.

Subject to shareholder approval, this flexibility is intended to be used by discretion of the Board, to award an additional service fee of £15,000 to Jim Prower for the significant amount of time undertaken with assisting with the transition between service providers. The Board believe that these services have been in the best interest of the Company.

Recommendation

The Board considers that all resolutions contained in this Notice of AGM are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company for the benefit of its shareholders as a whole. The Board unanimously recommends that you vote in favour of the proposed resolutions as the Directors intend to do in respect of their own beneficial holdings.

Yours faithfully

Steve Smith

Chairman

(Company Number 10727886)

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Proposed Investment Policy

Proposed Investment Policy in comparison to current Investment Policy

Investment Objective

The Investment Objective of the Group is to generate a secure and predictable income return, sustainable in real terms, whilst at least maintainingseeking to improvecapital values, in real terms, through investment inasset management. The portfolio will consist ofa diversified portfoliocollectionof UK properties in alternative and specialist sectorsfocussed on cash generation.

Proposed Investment Policy

Investment Objective

The Investment Objective of the Group is to generate a secure and predictable income return, sustainable in real terms, whilst seeking to improve capital values, in real terms, through asset management. The portfolio will consist of a diversified collection of UK properties focussed on cash generation.

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, but with a focus on alternative and specialist real estate sectors. Examples of alternative and specialist real estate sectors include, but are not limited to, leisure, hotels, healthcare, education, logistics, automotive, supported living and student accommodation.

The Group intends to invest in a diversified portfolio across both properties and tenants. The Group will focus on properties that can generate predictable income streams and focus on maintaining a WAULT of 12 years or more.

Within the scope of the restrictions set out below (under the heading "Investment Restrictions") the Group may invest up to 10% of the Gross Asset Value (measured at the point of capital commitment) in development opportunities, with the intention of holding any completed development as an investment. Such opportunities, where undertaken, are likely to be forward funding development commitment and/ or pre-leased development as part of an asset repositioning. Speculative development, being where pre-leases have not been secured for at least 75% of the space, will not be permitted.

In the event of a breach of the investment policy or the investment restrictions set out below, the Investment Manager shall inform the Board upon becoming aware of the same and, if the Board considers the breach to be material, notification will be made to a Regulatory Information Service and the Investment Manager will look to resolve the breach.

Any material change to the investment policy or investment restrictions of the Group may only be made with the prior approval of shareholders.

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 intends to invest in a diversified portfolio across both properties and tenants. The Group will focus on properties that can generate predictable income streams and focus on maintaining a WAULT of 12 years or more.

Within the scope of the restrictions set out below (under the heading "Investment Restrictions") the Group may invest up to 10% of the Gross Asset Value (measured at the point of capital commitment) in development opportunities, with the intention of holding any completed development as an investment. Such opportunities, where undertaken, are likely to be forward funding development commitment and/ or pre-leased development as part of an asset repositioning. Speculative development, being where pre-leases have not been secured for at least 75% of the space, will not be permitted.

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