(Alliance News) - Drum Income Plus REIT PLC on Wednesday said Brexit uncertainty and negative sentiment in the retail sector led to a drop in its annual net asset value per share.
The stock closed untraded on Wednesday in London, last quoted at 75.00 pence each.
The real estate investment trust - which focuses on regional commercial property assets - said its net asset value stood at 84.97 pence per share as at September 30, 2019, compared to 93.77p the year before.
The company said that although the demand for office property remained high against tight supply, NAV fell as a result of negative sentiment in the retail sector caused by the ongoing decline of the high street, and the continuing structural shift toward increased online spend. It added that uncertainty regarding Brexit also had an effect on the performance of its portfolio.
Drum Income paid a total dividend of 6.0p during the year, unchanged from the year before. The company intends to at least maintain its dividend payout for financial 2020.
The firm's rental income for financial 2019 stood at GBP4.3 million versus GBP4.4 million a year ago. NAV total return amounted to 6.5%.
Looking ahead, Chair Hugh Little said: "Whilst the result of the UK general election in December may have given us greater clarity on the direction of travel, there is as yet no such clarity for the real estate sector on what the implications will be of whatever Brexit agreement is eventually reached. As a result, risks and a level of uncertainty are likely to remain throughout 2020."
"However, the UK real estate market remains an attractive one for global investors, and as uncertainties are gradually removed, we may see some of the pent-up demand for commercial estate being released, which could be beneficial for valuations. Our portfolio is in excellent condition, and is well-placed to benefit over time from the various asset management opportunities which continue to be undertaken by the managers," he added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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