TIDMDRIP
RNS Number : 9118A
Drum Income Plus REIT PLC
24 January 2020
Drum Income Plus REIT plc
("Drum" or the "Company")
Unaudited Net Asset Value as at 31 December 2019
Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited
net asset value ("NAV") as at 31 December 2019.
Highlights
Period from 1 October 2019 to 31 December 2019
-- The independent valuation of the property portfolio as at 31
December 2019 was GBP55.35m
(30 September 2019: GBP55.35m).
-- NAV per share at 31 December 2019 of 85.14p (30 September 2019 of 84.97p).
-- Earnings per share (excluding revaluation gains and losses on
fair value of investments) for three months ended 31 December were
1.78p.
-- Dividend paid during the quarter of 1.50p.
-- NAV total return (NAV movement plus dividend paid) of 2%.
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 December 2019)
GBPm Pence per Share
NAV as at 30 September 2019 (audited)
Property portfolio valuation
movement 32.46 84.97
Capitalised costs and rent free
debtor movement -0.03 -0.07
Income earned for the period 1.09 2.85
Expenses for the period -0.26 -0.67
Interest paid -0.17 -0.44
Dividend paid -0.57 -1.50
Unaudited NAV as at 31 December
2019 (unaudited) 32.52 85.14
-------------------------------------- ----- ---------------
The NAV has been calculated in accordance with International
Financial Reporting Standards and incorporates the independent
portfolio valuation as at 31 December 2019 and income for the
period, but does not include a provision for the first interim
dividend, which will be paid in February 2020. The earnings per
share for the period from 1 October 2019 to 31 December 2019
(excluding revaluation gains and losses on fair value of
investments and expenses charged to capital) were 1.87p.
As at 31 December 2019, the Company had cash balances of GBP0.29
million and borrowings of GBP22.58 million (loan-to-value of
40.76%).
Current Portfolio
Sep-19 Dec-19
Location Value % Weighting Value % Weighting
North East GBP15,400,000.00 27.82% GBP15,400,000.00 27.82%
Scotland GBP18,250,000.00 32.97% GBP18,250,000.00 32.97%
North West GBP18,200,000.00 32.88% GBP18,200,000.00 32.88%
South West GBP3,500,000.00 6.32% GBP3,500,000.00 6.32%
------------------ -----------------
GBP55,350,000.00 100.00% GBP55,350,000.00 100.00%
------------------------------- -----------------
Sector Value % Weighting Value % Weighting
Office GBP25,800,000.00 46.61% GBP25,800,000.00 46.61%
Shopping
Centre GBP13,000,000.00 23.49% GBP13,000,000.00 23.49%
Retail GBP15,150,000.00 27.37% GBP15,150,000.00 27.37%
Industrial GBP1,400,000.00 2.53% GBP1,400,000.00 2.53%
------------------ -----------------
GBP55,350,000.00 100.00% GBP55,350,000.00 100.00%
------------------------------- -----------------
The properties were valued at GBP55,350,000 as at 31 December
2019 (30 September 2019: GBP55,350,000) by Savills (UK) Limited
('Savills'), in their capacity as external valuers. The fair value
of investments adjusted for lease incentives of GBP472,866 was
GBP54,877,134. (30 September 2019: GBP54,879,976). Capitalised
costs for the quarter were GBP47,346 (30 September 2019:
GBP313,996.26).
Key KPIs
Sep-19 Dec-19
-------- --------
Total Number of
Units 105 106
Total Number of
Tenants 87 88
Total SQFT 336,303 336,303
Vacancy (% SQFT) 10.90% 10.70%
Vacancy (% ERV) 10.20% 10.50%
WAULT (Expiry) 5.85 5.79
WAULT (Breaks) 4.56 4.43
-------- --------
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 5.79 years.
-- The portfolio yield is 7.2% (based on 31 December 2019 valuation).
-- The occupancy rate is high at 89.5% by ERV.
-- Gearing - the loan-to-value ratio of 40.76% is directly in
line with the stated intended target of 40%.
-- Further asset management angles to exploit.
Asset Management Overview and Update
3 Lochside Way, Edinburgh
New letting to Nucana on the Second Floor West suite for a
period of 5 years at an annual rent of New letting to Nucana on the
Second Floor West suite for a period of 5 years at an annual rent
of GBP95,310 per annum which reflects an increased headline rent of
GBP22.50psf. The building is 100% occupied.
Burnside Industrial Estate, Aberdeen.
A Lease Extension for a period of 5 years has been agreed with
the occupier of unit 3 and unit 4 is currently under offer
following refurbishment in 2019.
108 Eastern Avenue Retail Park, Gloucester
Following external advice the decision has been made to appeal
the refusal of the planning application on the former Office Outlet
unit. The appeal will be submitted toward the end of Q1 2020.
Kew Retail Park, Southport
A reversionary lease is currently being documented with Wickes
to extend occupation beyond the lease expiry for a further 4 years
with a tenant break option in year 2.
Duloch Park, Dunfermline
British Red Cross have now taken occupation of Unit 2 for a 10
year term with a tenant break option in year 5 at a rental in line
with recent evidence on the park.
The Rent Review with Indigo Sun at Unit 5B has been documented
and shows an uplift against previous passing rent.
Gosforth Shopping Centre, Gosforth
A lease extension for a period of 5 years is currently being
documented with Costa Coffee.
Dividends
The Board is targeting a fully covered annual dividend of 6.0p
per share in respect of the year ending 30 September 2020*. At the
current share price of 77.50p this would represent an annualised
dividend yield of 7.7%.
*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.
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)
Nick Oborne 020 7067 0721
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END
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