Property developer Drum launches £32m fund

DrumAberdeen and Edinburgh property developer Drum has announced the flotation of a £31.9 million real estate investment trust (Reit).

The firm it is targeting “significant” growth through its Drum Income Plus Reit, which will initially be concerned with commercial property assets valued at between £2m and £15m and have Turcan Connell Asset Management acting as cornerstone investor and adviser.

Drum, which was set up by managing director Graeme Bone in 2004, and has a portfolio currently valued at over £1 billion, said its strategy for the Reit was geared towards exploiting a perceived lack of competition in the market.

Investment director Bryan Sherriff said: “In recent years, the majority of investors have been focusing on prime properties and larger lot sizes in excess of £50m.

“Interest from smaller property companies and private individuals has not returned to previous levels following the 2008 crisis due to the ongoing lack of available credit.”

He added: “This has created a pricing anomaly in smaller lot sizes due to a lack of competition for assets, and the Reit will be ideally placed from launch to benefit from this.”

The Drum Income Plus Reit is chaired by John Evans, a former partner at Edinburgh-based investment manager Aberforth and will be traded on London’s main market.

Mr Evans is joined on the board by Aberdeen Asset Management’s head of acquisitions Hugh Little – who will chair the audit committee – and Alan Robertson, Middle East and North Africa chief executive at property consultant JLL.

Mr Evans said: “Our team has extensive experience of entrepreneurial and proactive asset management and of creating investments that deliver revenue and capital appreciation.”

Drum has enjoyed a steady growth specialising in the creation of large development schemes and the construction and redevelopment of buildings across the UK.

Managing director Graeme Bone said the trust would establish “a regional commercial property portfolio of significant value over the next six months, adding to growth across Drum Property Group as a whole”.

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