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Custodian REIT rentals stabilise after coronavirus uncertainties

Snapshot

  • Market valuation up considerably since IPO
  • Annual dividend growth
  • Recently gained new largest tenant
Custodian

Quick facts: Custodian REIT

Price: 88.7 GBX

LSE:CREI
Market: LSE
Market Cap: £372.59 m
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What it does

Custodian REIT PLC (LON:CREI) is a real estate investment trust with a portfolio of assets made of industrial, retail, office and other properties.

The company listed on the main market of the London Stock Exchange in 2014.

Since then, its market capitalisation has grown substantially on the back of investment into UK regional real estate.

 

How it's doing

In October, Custodian recommended again upped its dividend as institutional investment activity increased in its UK commercial property segment.

The property investment trust approved a dividend of 1.05p per share for the quarter ending September 30, 2020, up from the 0.95p approved for the first quarter of its financial year.

As a result, the aggregate dividend per share of 2.0p for the first half of the year to end-March 2021 is 33% ahead of the 1.5p minimum announced in April and compares to 3.325p a year ago.

The trust said it had collected 88% of rent collected for the past quarter, adjusted for contractual rent deferrals, and 74% collected for the current quarter.

Net asset value (NAV) was £399.8mln or 95.2p per share as of the end of September, compared to £402.1mln and 95.7p at the end of June.

 

What they say: Richard Shepherd-Cross, manager

“Investment activity is increasing and appears to be tracking the emerging picture of forecast occupier demand,” said Richard Shepherd-Cross, managing director of the trust’s investment manager, Custodian Capital.

“There is confidence in the industrial and logistics market where record investment volumes have been matched by record occupational demand for warehouse space. This occupational demand, driven by the continued growth of e-commerce and onshoring of supply chains, combined with low vacancy rates has led to the continuation of rental growth.

“Much of the investment capital that might have been focused on the office or retail sectors has been redirected to industrial and logistics. We see continued opportunity in this sector as the UK has yet to build a sufficient logistics network to support the continued growth in e-commerce.".

 

Proactive Research - Ed Stacey

Read Ed Stacey's latest update - Custodian REIT: a premium investment at a discount

Inflexion points

  • Dividends still being paid albeit at a slightly reduced rate
  • NAV per share of 95.2p at last valuation
  • Rental collections improving

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Custodian REIT continuing to outperform and has hopes of restoring dividend...

Proactive Research analyst Ed Stacey says shares in Custodian REIT PLC (LON:CREI) have recovered from their lows at the end of March and year-to-date they've been an outperformer versus the UK real estate sector. Stacey says 82% of rent is 'under control' while the balance sheet gearing is still...

on 06/23/2020

2 min read