8th May 2025 16:30
(Alliance News) - Custodian Property Income REIT PLC on Thursday said strong leasing activity was supporting rental growth in its fourth quarter, despite continued "trade uncertainty".
The stock was up 2.4% at 77.32 pence late on Thursday afternoon in London.
In its trading update for the three months ended March 31, the Leicester-based real estate investment trust said EPRA earnings per share totalled 1.6p, up from 1.5p in the third quarter.
Net asset value total return for the quarter was 3.4%, with NAV per share rising 1.8% to 96.1p at March 31 from 94.4p at December 31.
EPRA occupancy however decreased to 91.1% at March 31 from 93.4% at December 31, "primarily due to a previously flagged industrial unit becoming vacant in Biggleswade". This resulted in like for like passing rent decreasing 1.2%, although LFL estimated rental value rose 1.5%.
The portfolio's current ERV of GBP50.2 million, Custodian Property continued, exceeds by 14% (up on-quarter from 11%) the current passing rent of GBP43.9 million, the company added.
Custodian Property said its board has approved a 1.5p per share fully covered interim dividend for the quarter, payable on May 30. It is aiming for a total payout of at least 6.0p per share for the year ending March 31, 2026.
"This quarter's performance further emphasised the benefits of portfolio diversification, which combined with our hands on approach to generating strong income growth, has helped support three consecutive quarters of capital appreciation," said Richard Cross, managing director of investment manager Custodian Capital Ltd. "We believe the current discount provides an attractive entry point for investors, especially given our long track record of fully covering the dividend, with shares currently yielding around 8%."
He added: "We also believe that during periods of trade uncertainty such as the one the world now finds itself in, it would not be unreasonable to view UK real estate as a relatively safe haven for investors seeking stable asset backed income in established and secure jurisdictions.
"This should be particularly true for the company's diversified investment strategy that generally targets [sub-GBP10 million], higher yielding, regional assets across the UK, that principally serve a local and/or domestic market."
By Emma Curzon, Alliance News reporter
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