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Drum Income Plus REIT – Delivering on promises

16
2017
May

QuotedData is publishing a new update note on a company in the UK property sector:

Drum Income Plus REIT – Delivering on promises

DRUM Income Plus REIT (DRIP) focuses on acquiring properties overlooked by large institutional and overseas buyers (smaller lot sizes, multi-let). It provided an NAV total return of 2.4% in Q1 2017 (1.6% of which related to income and 0.8% to capital). Its most recent acquisitions (the latest, Kew Retail Park, was announced on 11 May) were, the manager thinks, made at particularly attractive net initial yields and the manager is engaged in a number of asset management initiatives with the aim of further improving income from the portfolio. DRIP recently issued some shares; it remains small, but still has a strong desire to grow, with the aims of increasing its cost efficiency and liquidity.

Secondary assets in good regional locations

DRIP invests in a portfolio of regional commercial property assets, principally in the office, retail and industrial sectors, with the aim of providing investors with an attractive level of income while also delivering annual capital growth. It is targeting lot sizes worth between £2m and £15m, and looks for second tier property assets in what the managers consider to be good, but not necessarily prime locations. The managers believe that such assets offer marked yield advantages over prime assets in prime locations, but still allow them to make acquisitions with the same level of covenant protection and sufficient liquidity, so that these assets will not be hard to sell. This would appear to be a key differentiator for DRIP in comparison with its peers.

As discussed on page 18, DRIP is also focused on multi-let assets and the managers are seeking properties where they can add value through asset management initiatives. DRIP has a long-term gearing target of 40% of gross assets.

170516 DRIP Update QD

you can access the company’s website here

DRIP : Drum Income Plus REIT – Delivering on promises

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