2015 saw continued demand for ground rent assets. FY results show GRIO delivered a H2 NAV TR of 9.1% to 30-Sep and 12.9% YoY – largely as a result of revaluation gains. Dividends for the year totalled 3.5p which we estimate could rise to almost 3.9p in FY16 as ground rent collections commence for deals not yet completed. GRIO offers a low-risk source of inflation protected income and the forecast FY16 yield of 3.4% compares favourably to UK index-linked gilts. The shares trade at a 2% premium to 30-Sep NAV (114.2p) adjusted for the latest dividend.
