Custodian Property Income REIT PLC (LSE:CREI) has announced a fully covered 1.375p dividend per share in its latest trading update, which is in line with its target of at least 5.5p for the financial year.
The diversified real estate trust also reported a 7% increase in EPRA earnings per share to 1.5p for the third quarter, thanks to £18mln of net investment into acquisitions during the previous quarter and recent positive asset-management outcomes.
During the quarter, the company signed 10 new lease agreements, adding £1.2mln of annual rent for an average of 7.3 years, while occupancy rates increased to 89.9% from 89.5% in the previous quarter.
The company said 48% of current vacancy is due to refurbishments or redevelopments, 8% was let post-quarter end and a further 8% has been put under offer for sale or lease.
Lettings momentum has continued into the final quarter of the financial year with a further four new leases completed since the end of the third quarter, adding £800,000 of annual rental income.
Custodian saw a 9.1% like-for-like valuation decrease across the company’s 162 assets to £612.8mln in response to the market-wide rerating of UK commercial property driven by sentiment around the UK’s economic outlook, but was positively impacted by a £3mln increase from active asset-management activity
Disposals during the quarter included a shopping center in Gosforth for £9.3mln; a business park office in Leicester for £2.8mln; and an industrial unit in Kilmarnock for £1.4mln.
At 27.1%, gearing remains slightly above Custodian’s 25% target.
Custodian’s unaudited net asset value as of 31 December 2022 was £440mln, reflecting approximately 99.8p per share, a decrease of 13.9 from the previous quarter.
Commenting on the results, managing director Richard Shepherd-Cross said: “Despite recent market-wide valuation decreases, Custodian Property Income REIT’s prudent approach to investment and the management of its balance sheet, with low gearing and a longer-term fixed rate debt profile, has left the company well insulated from the negative impact of interest rate rises.
“We remain confident that our ongoing intensive asset management of the portfolio, which still offers a number of wide-ranging opportunities to add value, will maintain cash flow and support consistent returns.”