3rd Jun 2016 07:34
LONDON (Alliance News) - Drum Income Plus REIT PLC on Friday said its net asset value has dropped since its listing on the Main Market of the London Stock Exchange in in May 2015, but said it continued to be active in deploying the funds from its initial public offering.
The real estate investment trust posted a net asset value of 92.9 pence per share at March 31, which it said was a 7.1 pence, or 7.1%, decrease since its launch.
However, this is largely due to Drum Income incurring costs of 2.3 pence per share in respect of the launch and property acquisition costs of 6.8 pence per share. Net of these purchaser's costs, the value of the properties purchased has increased by 1.3p per share, which Drum Income said demonstrated its investment advisor's ability to add value.
Drum Income said it continued to be active in deploying the GBP31.2 million net proceeds of its initial public offering, together with its GBP20.0 million revolving credit facility with The Royal Bank of Scotland PLC.
In the six months to the end of March, Drum Income purchased five properties, bringing its total portfolio to seven properties with a value of GBP40.6 million. In total there are 76 tenants in its properties, with its largest J Sainsbury PLC, which accounts for 11% of gross contracted rent.
Rental income came in at GBP1.2 million for the six months ended March 31, while the company posted a pretax loss of GBP754,000.
Drum Income said it has declared two interim dividends of 1.3125p per share since its launch in May 2015, and "in the absence of unforeseen circumstances", intends to pay dividends of 1.3125p per share in respect of the quarters ending June 30 and September 30.
Drum Income said it continues to focus on purchasing multi-let assets of between GBP2.0 million and GBP15.0 million in "strong regional locations with opportunities to increase value".
"At the end of the first quarter of 2016 the economic fundamentals supporting the economy remain relatively positive. Gross domestic product growth, while fragile, remains around trend levels, providing a reasonable backdrop to a supply-constrained regional property market due to a lack of new development in regional property over the last eight or so years," said Investment Advisor Bryan Sherriff.
"Interest rates remain low and the country enjoys high employment whilst inflation is benign. Improved levels of business and consumer confidence are noticeable on the back of real wage growth which is also having an impact on household finances," he added.
Shares in Drum Income were untraded on Friday morning, having last traded at 104.00p.
By Hannah Boland; [email protected]; @Hannaheboland
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