Drum Income Plus REIT has published figures for the six months ended 31 March 2016. The company’s net asset value as at 31 March 2016 was 92.9 pence per share. This represented a decrease in NAV of 7.1 pence per share (7.1%) since launch. In addition to costs of 2.3 pence per share incurred in respect of the launch, property acquisition costs of 6.8 pence per share (equivalent to 5.7% of the aggregate purchase price paid for the properties) have also been incurred. Net of these purchaser’s costs, the value of the properties purchased has increased by 1.3 pence per share.
During the six month period under review the Company acquired five properties, bringing the total portfolio to seven properties with a value of GBP40.6m. The properties are in strong regional locations and have in total 76 tenants, with the largest, Sainsbury, accounting for 11% of gross contracted rent (RPI linked over the remaining 17 years of the lease).
The Board said in the prospectuses that it intended to target initial gearing, calculated as borrowings as a percentage of the Company’s gross assets, of 40% and this remains the case. The Company has put in place a GBP20 million revolving facility based on the original equity raised with The Royal Bank of Scotland plc which expires in July 2017. At 31 March the Company had drawn down GBP11.1 million of this facility. The interest rate on the facility is LIBOR plus 1.1%.
The Company has declared two interim dividends of 1.3125 pence per share in respect of the period since launch. In the absence of unforeseen circumstances, the Company intends to pay dividends of 1.3125 pence per share in respect of the quarters ending 30 June 2016 and 30 September 2016. The dividend paid during the quarter to 31 March 2016 was fully covered by earnings for the period, and the Board is targeting fully covered aggregate quarterly dividends of at least 5.5 pence per share in respect of the year ending 30 September 2017 and at least 6.0 pence per share in respect of the year ending 30 September 2018.
DRIP : Underlying property values up at Drum Income Plus REIT