Drum Income Plus REIT : DRIP REIT - Net Asset Value Announced, September 2020

23 October 2020

Drum Income Plus REIT plc
('Drum' or the 'Company')

Unaudited Net Asset Value as at 30 September 2020

Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited net asset value ('NAV') as at 30 September 2020.

Summary

Period from 30 June 2020 to 30 September 2020

• The NAV is £29.15m at 30 September 2020. (30 June 2020 £26.32m).
• NAV per share at 30 September 2020 of 76.31p (30 June 2020 of 68.91p).
• The independent valuation of the property portfolio as at 30 September 2020 was £51.05m (30 June 2020: £48.93m).
• Earnings per share (excluding revaluation gains and losses on fair value of investments) for three months ended 30 September were 1.89p.
• No dividend was paid during the quarter.
• NAV total return (NAV movement) of 10%.

Operational Performance

The Board and the Manager are taking every precaution to safeguard the health and wellbeing of staff, occupiers and stakeholders. We are continually monitoring our assets in light of the outbreak of Covid-19 and our primary focus through this exceptionally challenging period has been to ensure that the portfolio is well positioned to begin its recovery. We remain focused on preserving the long-term value and financial strength of the Company. Covid-19 has had and will continue to have a material impact upon the trading performance of the Sector.

While the focus of the Board and the Manager during the March and June quarters has been on tenant and cash management, it is encouraging to now report that those efforts are yielding results and that the portfolio is beginning to stabilise. The revenue account for the quarter recorded an operating profit of £0.7m. The fundamental driver for this has been the Manager's engagement with tenants, which has yielded £2.4m in rental receipts over the last 3 quarters, some 78% of the total rent demanded.

For the period to 30 September 2020 the portfolio valuation stabilised across all sectors. In addition, asset management initiatives completed during the quarter have increased the portfolio valuation by £2.1m. The main value generator was the company entering into a new 10 year lease at Monteith House in Glasgow with Skills Development Scotland Limited at an annual rent of £489,989. This, together with the operating profit of £0.7m, has led to a corresponding increase in NAV.

The cash balance as at the end of the quarter is £1.1m. The Company has a £25M facility in place with no need to refinance until 30 September 2022. The amount drawn under the facility is £22.7m

The rent collection statistics (as at 13 October 2020) for the 3 quarters impacted by Covid-19 are reported below. We expect to see further improvement in the September 20 arrears in the coming months.

Dividends

While the Board is pleased to report a degree of stability, exceptional circumstances affecting global economies and markets continue to prevail. The Board has therefore maintained its current policy to preserve cash and suspend interim dividends. The position will be reviewed again for the December 2020 quarter.

The NAV has been calculated in accordance with International Financial Reporting Standards and incorporates the independent portfolio valuation as at 30 September 2020 and income for the period. The earnings per share for the period from 1 July 2020 - 30 September 2020 (excluding revaluation gains and losses on fair value of investments and expenses charged to capital) were 1.89p.

Current Portfolio

The properties were valued at £51,050,000 as at 30 September 2020 (30 June 2020: £48,925,000) by Savills (UK) Limited (SaviIls'), in their capacity as external valuers. The fair value of investments adjusted for lease incentives of £714,299 was £50,335,701 (30 June 2020: £48,510,028). Capitalised costs for the quarter were £59,928 (30 June 2020: £40,242).

Asset Management Overview and Update

Monteith House, Glasgow
New 10 year lease entered into with Skills Development Scotland Limited across the entire building at an annual rent of £489,989.

Duloch Park, Dunfermline
Re-gear documented with Barrhead Travel and Indigo Sun for 10 year and 5 year lease extensions respectively. Both transactions take account of rent arrears built up during Covid and are accretive to NAV.

Mayflower House, Gateshead
Refurbishment of vacant second floor suite instructed.

Burnside Industrial Estate, Aberdeen
New 5 year lease agreed with Razor with a tenant only break option in year 3. Annual rent of £27,500 pa
Demolition of the former SKF unit instructed to create a yard space. Interest in the yard space from two existing tenants.

Kew Retail Park, Southport
Poundstretcher successfully secured a CVA and now remain in occupation on rates and service charge basis only.
Dreams served notice to vacate but have subsequently agreed a deal on rates and service charge only which maintains occupancy.

Important information:
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

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