TIDMDRIP

RNS Number : 0262G

Drum Income Plus REIT PLC

22 July 2021

Drum Income Plus REIT plc

("Drum" or the "Company")

Unaudited Net Asset Value as at 30 June 2021

Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited net asset value ("NAV") as at 30 June 2021.

Highlights

Period from 31 March 2021 to 30 June 2021

   --           The NAV is GBP26.78 m at 30 June 2021.  (31 March 2021 GBP26.35m). 
   --           The independent valuation of the property portfolio as at 30 June 2021 was GBP48.90m 

(31 March 2021: GBP48.825m).

   --           NAV per share at 30 June 2021 of 70.11p (31 March 2021 of 68.97p). 

-- Earnings per share (excluding revaluation gains and losses on fair value of investments) for three months ended 30 June were 1.66p.

   --           Dividend paid during the quarter of 0.75p. 
   --           NAV total return (NAV movement) of 3%. 

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 30 June 2021)

 
                                     GBPm  Pence per Share 
Unaudited NAV as at 31 March 2021   26.35            68.97 
 
Property portfolio valuation 
 movement                            0.07             0.19 
Capitalised costs                   -0.03            -0.07 
Rent free debtor movement            0.04             0.11 
Income earned for the period         0.87             2.27 
Expenses for the period             -0.10            -0.25 
Provision for bad debt              -0.01            -0.04 
Interest paid                       -0.12            -0.32 
Dividend paid                       -0.29            -0.75 
Unaudited NAV as at 30 June 2021    26.78            70.11 
----------------------------------  -----  --------------- 
 

The NAV has been calculated in accordance with International Financial Reporting Standards and incorporates the independent portfolio valuation as at 30 June 2021 and income for the period. The earnings per share for the period from 1 April 2021 to 30 June 2021 (excluding revaluation gains and losses on fair value of investments and expenses charged to capital) were 1.66p.

Dividend Policy

A dividend per share of 0.75p per share has therefore been declared for the quarter ended June 30, 2021. The ex-dividend date will be 29 July 2021 and the record date will be 30 July 2021. The dividend will be paid on or around 27 August 2021. The dividend level will continue to be monitored quarterly and it is possible that it could increase should cash collection and tenant occupancy improve.

The Board acknowledges the importance of income for shareholders, and its objective remains paying dividends broadly linked to net rental receipts that do not inhibit the flexibility of the Company's investment strategy. In addition, the Board has the objective to declare dividends at a level required to maintain REIT status, being a minimum of 90% of tax-exempt income profits.

Current Portfolio

 
                           Mar-21                            Jun-21 
 Location            Value         % Weighting        Value         % Weighting 
 North East     GBP12,175,000.00        24.94%   GBP12,175,000.00        24.90% 
 Scotland       GBP19,350,000.00        39.63%   GBP19,325,000.00        39.52% 
 North West     GBP14,800,000.00        30.31%   GBP14,900,000.00        30.47% 
 South West      GBP2,500,000.00         5.12%    GBP2,500,000.00         5.11% 
              ------------------                ----------------- 
                GBP48,825,000.00       100.00%   GBP48,900,000.00       100.00% 
 -------------------------------                ----------------- 
 
 Sector                    Value   % Weighting              Value   % Weighting 
 Office         GBP25,825,000.00        52.89%   GBP26,100,000.00        53.37% 
 Shopping 
  Centre        GBP10,000,000.00        20.48%   GBP10,000,000.00        20.45% 
 Retail         GBP11,500,000.00        23.55%   GBP11,300,000.00        23.11% 
 Industrial      GBP1,500,000.00         3.07%    GBP1,500,000.00         3.07% 
              ------------------                ----------------- 
                GBP48,825,000.00       100.00%   GBP48,900,000.00       100.00% 
 -------------------------------                ----------------- 
 

The properties were valued at GBP48,900,000 as at 30 June 2021 (31 March 2021: GBP48,825,000) by Savills (UK) Limited ('Savills'), in their capacity as external valuers and were adjusted for lease incentives of GBP1,418,191. (31 March 2021: GBP1,460,011). Capitalised costs for the quarter were GBP28,380 (31 March 2021: GBP31,024).

 
 Key KPIs 
                      Mar-21    Jun-21 
                    --------  -------- 
 Total Number of 
  Units                  100       100 
 Total Number of 
  Tenants                 84        82 
 Total SQFT          336,303   336,303 
 Vacancy (% SQFT)     12.80%    14.00% 
 Vacancy (% ERV)      13.40%    14.80% 
 WAULT (Expiry)         4.57       4.4 
 WAULT (Breaks)         3.75      3.57 
                    --------  -------- 
 

Differentiated Investment Strategy

   --      Target lot sizes of GBP2m - GBP15m in regional locations. 
   --      Sector agnostic - opportunity driven. 
   --      Entrepreneurial asset management. 
   --      Risk-controlled development. 

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 4.40 years. 
   --           The portfolio yield is 6% (based on 30 June 2021 valuation). 
   --           The occupancy rate is high at 86% by ERV. 

-- Gearing - the loan-to-value ratio is in line with the stated intended target range of 40% - 50%.

   --           Further asset management angles to exploit. 

Asset Management Overview and Update

Duloch Park, Dunfermline

Reversionary lease agreed with Lloyds for a further 5 years from the current lease expiry of April 2023

Monteith House, Glasgow

SDS has commenced the tenant fit out works at a cost of c GBP2.8m. The works are due to complete at the end of August 2021.

Mayflower House, Gateshead

Following completion of the refurbishment to the vacant suite Knight Frank have been instructed to market the suite.

Gosforth Shopping Centre, Gosforth

Solicitors have been instructed on new Leases to existing Tenants Card Factory and Naked Deli along with a re-gear with Yum Lush.

A new letting has also been agreed with Julies Flowers to take occupation of Unit 9 for 10 years with the tenant having a break option in year 6. A stepped rent has been agreed, reaching GBP20,500pa in year 4.

Lakeside 5500, Cheadle Royal Business Park, Cheadle

Solicitors have been instructed to document a reversionary 10 year lease with a break in year 5 with Agilent. Once documented the new rent will show a healthy increase to the passing rent.

Discussions have commenced with Satixfy to agree a reversionary lease.

.

Enquiries:

Drum Real Estate Investment Management (Investment Manager)

Bryan Sherriff 0131 285 0050

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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July 22, 2021 02:00 ET (06:00 GMT)

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