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

29 January 2021

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

Unaudited Net Asset Value as at 31 December 2020

Drum Income Plus REIT plc (LSE: DRIP) announces its unaudited net asset value ('NAV') as at 31 December 2020.

Highlights

Period from 30 September 2020 to 31 December 2020

• The NAV is £28.15m at 31 December 2020. (30 September 2020 £27.89m).
• The independent valuation of the property portfolio as at 31 December 2020 was £50.75m (30 September 2020: £51.05m).
• NAV per share at 31 December 2020 of 73.67p (30 September 2020 of 73.01p).
• Earnings per share (excluding revaluation gains and losses on fair value of investments) for three months ended 31 December were 1.61p.
• No dividend was paid during the quarter.
• NAV total return (NAV movement) of 6%.

Introduction

The Company aims to provide shareholders with a regular dividend income plus the prospect of income and capital growth over the longer term. The Company invests in smaller UK commercial properties, principally in the office, retail (including retail warehouses) and industrial sectors, which have the potential to offer a secure income stream, to create value through active asset management and have strong prospects for future income and capital growth.

Unaudited NAV (As at 31 December 2020)

The NAV has been calculated in accordance with International Financial Reporting Standards and incorporates the independent portfolio valuation as at 31 December 2020 and income for the period. The earnings per share for the period from 1 October 2020 to 31 December 2020 (excluding revaluation gains and losses on fair value of investments and expenses charged to capital) were 1.61p.

Dividend Policy

The Board is pleased to announce that despite the inevitable disruption caused by the COVID-19 pandemic, the Company's cash collection rate to date will now allow for the resumption of dividend payments to shareholders. A dividend per share of 0.75p per share has therefore been declared for the quarter ended December 31, 2020. The ex-dividend date will be 11 February 2021 and the record date will be 12 February 2021. The dividend will be paid on or around 26 February 2021. The dividend level will continue to be monitored quarterly and it is possible that it could increase should cash collection and tenant occupancy improve.

The Board acknowledges the importance of income for shareholders, and its objective remains paying dividends broadly linked to net rental receipts that do not inhibit the flexibility of the Company's investment strategy. In addition, the Board has the objective to declare dividends at a level required to maintain REIT status, being a minimum of 90% of tax-exempt income profits.

Current Portfolio

The properties were valued at £51,750,000 as at 31 December 2020 (30 September 2020: £51,050,000) by Savills (UK) Limited ('Savills'), in their capacity as external valuers and were adjusted for lease incentives of £1,484,056. (30 September 2020: £1,480,679). Capitalised costs for the quarter were £56,116 (30 September 2020: £59,928).

Differentiated Investment Strategy
- Target lot sizes of £2m - £15m in regional locations.
- Sector agnostic - opportunity driven.
- Entrepreneurial asset management.
- Risk-controlled development.

Portfolio Attributes
In the context of the market uncertainty, the Board believes it is helpful to shareholders to highlight some key attributes of the Company's property portfolio:

- The Company has no exposure to Central London markets.
- The weighted average unexpired lease term (WAULT) to expiry is 4.79 years.
- The portfolio yield is 6.8% (based on 31 December 2020 valuation).
- The occupancy rate is high at 86.4% by ERV.
- Gearing - the loan-to-value ratio is in line with the stated intended target range of 40% - 50%.
- Further asset management angles to exploit.

Asset Management Overview and Update

Duloch Park, Dunfermline
Re-gear successfully documented with Indigo Sun for a period of 5 years. The transaction takes account of arrears built up during the initial lockdown period.

Monteith House, Glasgow
Following completion of the new lease to SDS the tenant has confirmed that it will now undertake an extensive refurbishment of the building.

Mayflower House, Gateshead
Following completion of the refurbishment to the vacant suite Knight Frank have been instructed to market the suite.

Eastern Avenue Gloucester
We received notification of the planning hearing date in December for February 2021. The hearing has subsequently been moved to the end of March due to the pandemic. If the appeal is successful, this will have significant benefit to the portfolio given the pre-let to Home Bargains which is contracted.

Arthur House, Manchester
Successful removal of break dates within the lease with IJ Tours in lieu of rent arrears being written off.

3 Lochside Way, Edinburgh
Following the departure of Exception and Cash Generator both suites are now actively being marketed by JLL and Knight Frank.

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