6th Dec 2023 10:07
(Alliance News) - Custodian Property Income REIT PLC on Wednesday reported a fall in net asset value, citing higher interest rates, but touted optimism looking ahead.
The Leicester, England-based real estate investment trust focused on smaller, regional properties said net asset value per share as declined 3.4% to 95.9 pence as at September 30 from 99.3p at March 31.
Custodian Property's NAV total return per share was negative 0.7% for the six months to September 30, an improvement from negative 2.7% a year prior.
The firm said it expects to continue to pay quarterly dividends of 1.375 pence per share for its financial 2024 dividend per share target of no less than 5.5p, which was financial 2023's total dividend.
The company said its "diversified strategy and strong focus on income has served to deliver relatively stable returns against a background of weak sentiment towards commercial property investment and volatility across the sector."
Chair David MacLellan said "negative sentiment towards real estate investment is currently weighing against capital performance. This sentiment is driven primarily by the potential for persistent inflationary pressure to mean 'higher-for-longer' interest rates, uncertainty around the future of offices and the impact of the UK’s general economic outlook on discretionary consumer expenditure."
Looking ahead, Chair MacLellan added that "there is depth in occupational demand and latent rental growth in the portfolio which offers the prospect of growth for existing shareholders, as sentiment improves towards the sector."
Custodian Property shares rose 0.9% to 88.10 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News slot editor
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