Multi-let office building Arthur House in Piccadilly, Manchester has been sold by Curzon Advisers for £4.41m to listed property fund Drum Income Plus Real Estate Investment Trust.
DRIP REIT said it was attracted to Arthur House by its “exceptional city centre location”. The building is currently occupied by 23 firms. The purchase price reflects an acquisition yield of 8.9%.
DRIP REIT has now completed acquisitions valued at £40m since it raised £30m at the time of its listing on the stockmarket in May 2015.
The company has a further £10m acquisition capacity due to the credit facility agreed with RBS in January and hopes to announce further acquisitions in the near future.
Arthur House, on Chorlton Street, is DRIP REIT’s second acquisition in the Manchester area following the purchase of Lakeside 5500 in Cheadle from Quorum for £5.275m in January 2016.
John Evans, chairman of DRIP REIT, formerly of Aberforth Partners, 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 through 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.
Shares in DRIP REIT are trading at 109p, towards the lower end of the 52-week range, having peaked at 142p in June. The shares entered the market at 115p at the end of May 2015.
Metis Real Estate acted from Drum.