Property developer Drum today said it was poised for “significant” growth with the flotation of a £31.9 million real estate investment trust (Reit).
The firm, based in Aberdeen and Edinburgh, said the trust will initially be targeted at commercial property assets valued at between £2m and £15m, 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, which will be traded on London’s main market, is chaired by John Evans, a former partner at Edinburgh-based investment manager Aberforth. He 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.
Evans said: “Our team has extensive experience of entrepreneurial and proactive asset management and of creating investments that deliver revenue and capital appreciation.”
Turcan Connell Asset Management is the Reit’s investment adviser and cornerstone investor.
Drum 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”.