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Custodian REIT sees steady NAV per share as portfolio value grows at end of 2018

In an update for the period from 1 October to 31 December, the real estate investment firm said NAV per share had remained fairly flat at 108.1p compared to 108.6p at the end of September, while the NAV total return per share for the period was 1%
Brexit money
Custodian said Brexit was still impacting investment decisions into 2019

Custodian REIT PLC (LON:CREI) has reported a steady net asset value (NAV) per share as its portfolio value rose in the last three months of 2018.

In an update for the period from 1 October to 31 December, the real estate investment firm said NAV per share had remained fairly flat at 108.1p compared to 108.6p at the end of September, while the NAV total return per share for the period was 1%.

READ: Custodian REIT extends revolving credit facility with Lloyds Bank

However, the group’s portfolio value grew to £576.2mln from £547mln in the period, boosted by £29.5mln invested in four property acquisitions.

The total NAV for the firm in the period had dipped slightly to £426.6mln from £427.5mln. while net gearing rose to 24.7% loan-to-value from 20.5%.

Despite the small dip in NAV, Custodian said it had approved an interim dividend for the period of 1.63p per share, adding that barring “unforeseen circumstances” it intended to pay quarterly dividends to achieve the target dividend for the year of 6.55p, higher than last year’s total of 6.45p.

“The Board's objective is to grow the dividend on a sustainable basis, at a rate which is fully covered by projected net rental income and does not inhibit the flexibility of the Company's investment strategy”, the company said.

Commenting on the outlook for the property market, Richard Shepherd-Cross, managing director of Custodian’s discretionary investment manager Custodian Capital Limited, said the postponement of investment decisions during the Brexit process was continuing to impact demand with most investors awaiting “greater political certainty before settling on their investment strategies for 2019”. 

He added that a greater challenge was retail properties, for which there was “little consensus in forecasts” and the company would need to ensure its retail assets were part of the future landscape.

“Retailers have yet to strike the perfect balance between physical and online retailing, but we expect that retail stores will still form the backbone of many retailers' strategies.”

In early trading Tuesday, Custodian REIT shares were flat at 114p.

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Custodian REIT Timeline

CN Research
January 29 2019

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