TIDMDRIP
RNS Number : 4001W
Drum Income Plus REIT PLC
17 April 2019
Drum Income Plus REIT plc
("Drum" or the "Company")
Unaudited Net Asset Value as at 31 March 2019
Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited
net asset value ("NAV") as at
31 March 2019.
Highlights
Period from 31 December 2018 to 31 March 2019
-- The independent valuation of the property portfolio as at 31 March 2019 was GBP57.3m
(31 December 2018: GBP57.3m).
-- NAV per share at 31 March 2019 of 91.66p (31 December 2018: 91.60p).
-- Earnings per share (excluding revaluation gains and losses on
fair value of investments) for three months ended 31 March 2019
were 1.59p.
-- Dividend paid during the quarter of 1.50p.
-- NAV total return (NAV movement plus dividend paid) of 1.68%.
Introduction
The Company aims to provide shareholders with a regular dividend
income plus the prospect of income and capital growth over the
longer term. The Company invests in smaller UK commercial
properties, principally in the office, retail (including retail
warehouses) and industrial sectors, which have the potential to
offer a secure income stream, to create value through active asset
management and have strong prospects for future income and capital
growth.
Unaudited NAV (As at 31 March 2019)
GBPm Pence per Share
NAV as at 31 December 2018 34.99 91.60
Property portfolio valuation movement 0.00 0.00
Capitalised costs and rent free
debtor movement (0.02) (0.05)
Income earned for the period 1.08 2.82
Expenses for the period (0.32) (0.84)
Interest paid (0.15) (0.40)
Dividend paid (0.56) (1.47)
Unaudited NAV as at 31 March
2019 35.02 91.66
-------------------------------------- ------ ---------------------------------------
The NAV has been calculated in accordance with International
Financial Reporting Standards and incorporates the independent
portfolio valuation as at 31 March 2019 and income for the period,
but does not include a provision for the second interim dividend,
which will be paid in May 2019. The earnings per share for the
period from 1 January 2019 to 31 March 2019 (excluding revaluation
gains and losses on fair value of investments and expenses charged
to capital) were 1.59p.
As at 31 March 2019, the Company had cash balances of GBP1.06
million and borrowings of GBP22.7 million (loan-to-value of
39.4%).
Current Portfolio
Dec-18 Mar-19
Location Value % Weighting Value % Weighting
North East GBP16,150,000 28.18% GBP16,150,000 28.19%
Scotland GBP18,250,000 31.85% GBP18,350,000 32.02%
North West GBP18,900,000 32.99% GBP18,800,000 32.81%
South West GBP4,000,000 6.98% GBP4,000,000 6.98%
--------------- --------------
GBP57,300,000 100.00% GBP57,300,000 100.00%
--------------------------------- --------------
Sector Value % Weighting Value % Weighting
Office GBP25,300,000 44.15% GBP25,400,000 44.33%
Shopping Centre GBP13,750,000 24.00% GBP13,750,000 23.99%
Retail GBP16,750,000 29.23% GBP16,650,000 29.06%
Industrial GBP1,500,000 2.62% GBP1,500,000 2.62%
--------------- --------------
GBP57,300,000 100.00% GBP57,300,000 100.00%
--------------------------------- --------------
The properties were valued at GBP57,300,000 as at 31 March 2019
(31 December 2018: GBP57,300,000) by Savills (UK) Limited
('Savills'), in their capacity as external valuers, adjusted for
lease incentives of GBP529,227 (31 December 2018: GBP597,433).
Capitalised costs for the quarter were GBP88,695
(31 December 2018: GBP43,916).
Key KPIs
Dec-18 Mar-19
-------- --------
Total Number of
Units 105 105
Total Number of
Tenants 87 89
Total SQFT 336,303 336,162
Vacancy (% SQFT) 10.80% 9.80%
Vacancy (% ERV) 4.50% 6.90%
WAULT (Expiry) 6.25 6.04
WAULT (Breaks) 5.07 4.74
-------- --------
Differentiated Investment Strategy
-- Target lot sizes of GBP2m - GBP15m in regional locations.
-- Sector agnostic - opportunity driven.
-- Entrepreneurial asset management.
-- Risk-controlled development.
-- Dividend paid quarterly.
-- Fully covered dividend policy.
Portfolio Attributes
In the context of the market uncertainty, the Board believes it
is helpful to shareholders to highlight some key attributes of the
Company's property portfolio:
-- The Company has no exposure to Central London markets.
-- The weighted average unexpired lease term (WAULT) to expiry is 6.04 years.
-- The portfolio yield is 6.9% (based on 31 March 2019 valuation).
-- The occupancy rate is high at 90% by ERV.
-- Gearing - the loan-to-value ratio of 39.4% is in line with
the stated intended target of 40%.
-- Further asset management angles to exploit.
Asset Management Overview and Update
Duloch Park, Dunfermline
CHAS have extended their occupation for a further 5 years with a
break at year 3. The rent has increased to GBP33,150 per annum.
Gosforth Shopping Centre, Gosforth
The Company has undertaken a new letting to Savers Health &
Beauty Limited for a 10-year lease with a tenant break in year 5 at
a rent of GBP35,000 per annum. Gosforth Shopping Centre is now 100%
let.
Arthur House, Manchester
The proposed refurbishment works to the 6(th) floor have been
approved by the Board and these works have now been instructed.
Completion will be in Q2 2019. There are further letting
discussions ongoing for c 10% of the total floor area.
Burnside Industrial Estate, Aberdeen.
Refurbishment works to one terrace have been instructed at a
cost of c GBP300,000. This follows the successful lease renewal of
unit 6 at GBP36,500 per annum for a 5-year term. Discussions are
ongoing with other occupiers regarding renewals.
Eastern Avenue, Gloucester
An Agreement for Lease has been entered into with Home Bargains
for the former Office Outlet unit on a subject to planning basis.
The planning application is due to be determined imminently.
There is interest in the former Maplin unit from potential
occupiers.
Dividends
The Board is targeting a fully covered annual dividend of 6.0p
per share in respect of the year ending 30 September 2019*. At the
current share price of 92.50p, this would represent an annualised
dividend yield of 6.5%.
*Target returns only and not a profit forecast. There can be no
assurance that these targets will be met and they should not be
taken as an indication of expected or actual current or future
results.
Director Disclosure
Mr Alan Robertson, a Director of the Company, has assumed the
role of Consultant with Drum Property Group and is working with
them on the asset management and redevelopment of a number of
property investments in Aberdeen. As a result, Mr Robertson,
although non-executive, is no longer considered independent. The
majority of the Board continue to be non-executive and independent
Directors.
Enquiries:
Drum Real Estate Investment Management (Investment Manager)
Bryan Sherriff 0131 285 0050
Cantor Fitzgerald Europe (Financial Adviser and Corporate Broker)
Robert Peel (Corporate Finance) 0207 894 7719
Richard Sloss (Sales) 0131 240 3863
Dickson Minto W.S. (Sponsor)
Douglas Armstrong 020 7649 6823
Weber Shandwick (Financial PR)
Richard Bright 0131 556 6649
Nick Oborne 020 7067 0721
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END
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