7th Jun 2016 08:00
LONDON (Alliance News) - Custodian REIT PLC on Tuesday said its recently-ended financial year was a period of "significant new investment" and pointed to occupational demand as a driver of further rental growth, which should support sustainable income returns.
The real estate investment company said its dividend for the year ended March 31 was 6.25 pence per share, up 19% from the 5.25p per share offered a year earlier. Custodian said this rise was due to the flexibility offered by its GBP35.0 million credit facility, coupled with the "proactive asset management" of the portfolio, as it seeks to "minimise the impact of 'cash drag'" in deploying cash rapidly.
Pretax profit rose to GBP11.2 million during the year from GBP8.7 million the year earlier, and net asset value per share rose to 101.50p at March 31 from 101.30p a year earlier. Net asset value was up 42% at GBP255.1 million from GBP180.1 million, boosted by the issue of equity in November.
The company delivered a net asset value total return of 6.2% for the year, which "was a period of significant new investment where the initial costs (primarily stamp duty) of acquiring 29 new properties diluted NAV total return by around 2.5%".
Custodian said it has a "strong committed pipeline" including pre-let development funding projects totaling GBP3.4 million, and said it was actively considering GBP25.0 million to GBP50.0 million of opportunities.
Custodian is targeting a dividend of 6.35p per share for the next financial year.
"While the investment market appears to have become more competitive, in large part this is being matched by a strengthening occupational market. This, combined with a dearth of modern vacant space, is leading to rental growth in most office and industrial markets with reducing vacancy rates on the High Street driving a return to rental growth in many retail centres," said Chairman David Hunter.
"I anticipate occupational demand, combined with a limited supply of new development, will drive further rental growth across regional markets, supporting the delivery of both sustainable income returns and capital value growth to our shareholders over the long-term," Hunter added.
Shares in Custodian were down 0.7% at 106.30p on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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