Trading Statement

RNS Number : 2475N

Ground Rents Income Fund PLC

06 September 2013

 

6 September 2013

Ground Rents Income Fund plc

("GRIF" or the "Company")

Trading Update

Ground Rents Income Fund, a listed real estate investment trust (REIT) investing in UK ground rents, today announces a trading update covering the period from 1 April to 31 August 2013.

Highlights:

·      Further £7.5m million invested in six transactions totalling more than 1,000 units, with the IPO proceeds fully invested

·      Dividends paid for the period from GRIF's IPO on 13 August 2012 to 30 September 2013 of 2.8p per share, ahead of the target return set at the time of IPO

·      Convertible Preference Share Dividend declared of 0.7p per share for the period from 25 May 2013 to 30 September 2013

·      Strong pipeline of future investment opportunities to enable the Company to achieve its 12 month investment timetable set at the time of the May 2013 Convertible Preference Share issue

Investments

-     City Island, Leeds: acquired for £1.4 million, this is an exclusive, new-build, waterside development of 404 luxury one- and two-bedroom apartments, duplexes and penthouses. This extensive development is located in the west end of Leeds city centre, adjacent to the Leeds Liverpool Canal and the River Aire, and comprises three blocks of between 15 and 20 storeys.

-     Ladywell Point, Salford, Greater Manchester: including three blocks of modern residential apartments, totalling 262 units, the development, purchased for £2.7 million, is situated within easy access of Manchester city centre and Salford Quays.

James Agar, Investment Director of Brooks Macdonald Funds, Investment Adviser to the Company commented:

"The Company has completed a number of sizeable deals over the last few months, including City Island, Leeds, and Ladywell Point, Salford, adding more than 9,000 units to GRIF's portfolio.

When GRIF was designed, we were very clear that we did not want it to be a residential-only ground rents vehicle, like the others which existed in the market.

There are significant opportunities to deliver enhanced yields outside the traditional residential market, whilst continuing to provide predictable returns with assets linked to inflation that also have 'gilt-like' security characteristics.

This opportunity for increased yield has been evidenced by the recent completion of a number of deals in both the hotel and student accommodation sectors. These assets have been added to the portfolio to drive gross dividend yield, whilst continuing to maintain our core investment characteristics.

The recent 'Forward Guidance' provided by the Bank of England's new governor, Mark Carney, has indicated that interest rates are likely to remain low for some time to come, whilst sustained inflation is likely to erode cash holdings further, underlining the attractiveness of GRIF within the wider investment market.

We continue to have excellent visibility and deal flow on the deployment of the remaining funds raised from the Convertible Preference Share issue, which we would anticipate being invested within the 12 month timescale set at issue."

Malcolm Naish, Chairman of GRIF, added:

"The Company is shortly to pay its final first year dividend, which is in excess of the target return outlined at the time of the IPO and, therefore, positive news for shareholders.

It is also pleasing to note GRIF's consistent trading performance at a premium to NAV and investors' appetite for the preference share issue. James Agar and the team at Brooks Macdonald remain focused on investing the remaining capital in line with the investment objectives and as quickly as opportunities allow.

The increased size of the vehicle has given a greater diversity of risk and greater liquidity through an increased market capitalisation, as we look to add further to the underlying portfolio with attractive income generating assets."

Contacts:

Brooks Macdonald Funds Limited Simon Wombwell / James Agar	020 7499 6424
N+1 Singer James Maxwell / Jenny Wyllie - Corporate Finance Alan Geeves / Sam Greatrex - Sales	020 7496 3000
Appleby Securities (Channel Islands) Limited Helen Crossley / Gemma Campbell	01481 755600
Tavistock Communications James Whitmore / Jeremy Carey	020 7920 3159

Website: www.groundrentsincomefund.com

 

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