DRIP REIT Announces Further Acquisitions in Gloucester and Manchester
26th February 2016
DRIP REIT growth continues taking portfolio to seven regional UK investment properties totalling £40.362 million
Drum Income Plus Real Estate Investment Trust (DRIP REIT) has acquired two further properties in Manchester and Gloucester for a combined total of £9.71 million. DRIP REIT has acquired Arthur House in Piccadilly, Manchester, for £4.41 million. The multi-let office investment has an exceptional city centre location and is currently occupied by 23 professional services firms. The purchase price reflects an acquisition yield of 8.9%.
DRIP REIT has also acquired 108 Eastern Avenue Retail Park in Gloucester for £5.3 million. The park is fully let with tenants including Staples, Maplin and Farmfoods. The purchase price reflects an acquisition yield of 8.4%.
DRIP REIT has now completed acquisitions valued at £40.362 million since it raised over £30 million at the time of its IPO in May 2015. This includes properties in Dunfermline, Glasgow, Newcastle-upon-Tyne and Gateshead, as well as Manchester and Gloucester. DRIP REIT has a further £10m acquisition capacity due to the credit facility agreed with RBS in January and hopes to announce further acquisitions. Arthur House is DRIP REIT's second acquisition in Manchester following the purchase of Lakeside 5500 in Cheadle for £5.275 million in January 2016.
Welcoming the acquisitions, DRIP REIT’s Chairman, John Evans said:
“We are extending the significant momentum that has been created since our IPO in May 2015, securing regional properties that fit with our differentiated investment strategy of focusing on assets between £2m and £15m which offer opportunities to add value.
"Our team has extensive experience of entrepreneurial, proactive asset management and of creating investments that deliver revenue and capital appreciation. We continue to follow an asset management strategy that will drive rental growth and maximise additional income opportunities, offering investors an attractive blend of income return and capital growth."
DRIP REIT is an income-focused real estate fund targeting regional commercial property assets, principally in the office, retail and industrial sectors where there is an opportunity to increase income and capital returns via entrepreneurial proactive asset management and risk-controlled development. As the RBS credit facility will allow the Company to transact on only a small proportion of the additional investment opportunities that are likely to be available to it in the coming months, DRIP REIT intends to seek shareholder approval to issue up to 100,000,000 new shares. The net proceeds of new equity issuance will be used to fund further acquisitions for DRIP REIT's portfolio. Further details will be announced shortly.
Regarding future expansion, Drum Real Estate Investment Management’s Managing Director, Bryan Sherriff added:
“Securing these two new additions to the portfolio maintains the impetus created since the IPO in May 2015. We have committed the equity raised at the IPO in the timeline stated, and have identified an attractive pipeline of further investment opportunities that are currently being offered for sale which meet DRIP REIT’s investment policy, acquisition criteria and return profile. We are also paying a dividend ahead of what was stated in the prospectus, and are fully engaged in carrying out the numerous value add opportunities within the portfolio.”
The Board of DRIP REIT comprises John Evans (Chairman), formerly of Aberforth Partners, Hugh Little (Chair of Audit Committee), formerly of Aberdeen Asset Management, and Alan Robertson (Director) of Jones Lang Lasalle. Drum Real Estate Investment Management Limited is the Investment Manager of DRIP REIT.