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Secure Income Reit combines income and security

And nearly half a billion pounds has been spent on acquisitions
March 12, 2018

Secure Income Reit (SIR) lived up to its name in 2017, boosting adjusted net asset value by 14.5 per cent, which, together with dividends paid, equated to a total shareholder return of 19 per cent. And this comes from a portfolio comprising 81 operating assets in highly defensive sectors, and with average unexpired lease terms of 22.2 years with no breaks.

IC TIP: Buy at 372p

What’s more, the rental stream has inbuilt growth, with 58 per cent on fixed annual uplifts on a minimum of 2.8 per cent, and a further 27 per cent subject to an upward-only uplift linked to inflation. Just over half the portfolio comprises hospitals run by a subsidiary of Ramsey Health Care, with the balance made up of leisure attractions owned by Merlin Entertainments as well as a number of Travelodge hotels.

The biggest development came after the year-end with the announcement that substantial off-market purchases have been made costing £436m. This has been complemented with a £315.5m share placing (subject to shareholder approval) that will help to finance the purchase of several leisure assets, including an eight-acre site on top of Manchester Victoria station and The Brewery in Chiswell Street, London’s largest catered events space, as well as a further 76 Travelodge hotels.

SECURE INCOME (SIR)  
ORD PRICE:372pMARKET VALUE:£857m
TOUCH:370-373p12-MONTH HIGH:381pLOW: 332p
DIVIDEND YIELD:3.7%TRADING PROPERTIES:nil
PREMIUM TO NAV:0%NET DEBT:
 £1.78bn £879m 
INVESTMENT PROPERTIES:    
Year to 31 DecNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
     
2014*204133150nil
20152803920nil
201632594485.9
20173731396013.6
% change+15+48+23+131
Ex-div:**   
Payment:**   
*Nine months to 31 December **Dividends paid quarterly; latest dividend of 3.5p a share paid on 23 February