Leicester-based Custodian REIT has completed its acquisition of its Edinburgh headquartered counterpart, Drum Income plus REIT plc, an income- focused real estate fund targeting UK regional commercial property assets, primarily in the office, retail and industrial sector.
Under the terms of the deal, Drum Income Plus REIT shareholders will be entitled to receive 0.530 new Custodian shares in exchange for each Drum share.
Drum Income Plus REIT Plc (DRIP REIT) was an income- focused real estate fund targeting UK regional commercial property assets, primarily in the office, retail and industrial sector. Between 2015 and 2021, it successfully purchased and managed a varied portfolio of high-quality assets in key regional locations across the UK.
In September 2021, DRIP REIT and Leicester-based Custodian REIT announced they had reached agreement on an all-share acquisition of DRIP REIT, providing shareholders with exposure to a larger portfolio with more diversity across both sectors and geography, whilst benefiting from a property strategy entirely consistent with DRIP REIT.
Commenting on the Acquisition at the outset, Hugh Little, Chairman of Drum said:”This transaction gives Drum Shareholders the opportunity to participate in a portfolio of regional real estate assets that has similar characteristics to the existing Drum portfolio but is larger and, as a result, more diversified. Drum Shareholders will benefit from lower costs as a proportion of net assets and from the greater premium to NAV at which the Custodian Shares may trade. The Board is grateful to Drum Real Estate Investment Management Limited for the skill and effort it has devoted to the Company since IPO and looks forward, on behalf of Shareholders, to a continuing investment with Custodian.”
David Hunter, Chairman of Custodian added: “I am delighted to announce this important transaction for Custodian, which I am confident should benefit both our new and existing shareholders. The property portfolios of each company are complementary, and the Acquisition is expected to deliver increased earnings and dividend cover, to further diversify our portfolio and to reduce our Ongoing Charges Ratio.”
