Secure Income REIT Plc (LON:SIRE) (Secure) targets predictable cash flows from a broad range of real estate assets, which offer very long leases (average unexpired lease term more than 23 years) subject to annual fixed or RPI linked rent uplifts, to high-quality tenants providing strong covenants.
The external manager has a strong track record, with interests strongly aligned to other shareholders. The prospects for medium-term dividend growth are very strong, while NAV should also grow at unchanged yields. The starting valuation seems modest compared with similar defensive sector peers.
Specialist investors in long lease assets
In a tax-efficient REIT structure, Secure is a specialist real estate investor targeting predictable cash flows from long leases and upward-only annual fixed or RPI linked rent increases backed by high-quality tenants.
The external manager, Prestbury, brings a strong track record of successfully creating value for investors through previous cycles, sourcing and executing transactions, with management ownership (18%) that is one of the largest in the quoted UK real estate sector.
Among a small number of listed specialist investors in long lease income, Secure is differentiated by adopting a sector-neutral position assessing a wider range of long-term rental streams on the merits of the underlying real estate and tenant credit quality.
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