Custodian REIT PLC (LON:CREI) said the UK commercial property market has become characterised by a very tight supply of investment opportunities and strong demand.
Richard Shepherd-Cross, the trust's managing director, said this has led to strong competition, particularly for industrial/logistics assets and properties let on long leases.
READ: Custodian REIT happy to keep property portfolio small and perfectly formed
He said: “We believe the market is over-pricing some assets and have taken a cautious approach to acquisition through the period.”
However, Shepherd-Cross said he remained hopeful that an increase in the supply of investment opportunities will see the market settle back to a more sustainable level.
Shepherd-Cross described the occupational market as ‘robust’ and said: “It is this robustness that will continue to drive performance in the portfolio and maintain occupancy levels, which in turn will sustain cash flow and support our policy of paying fully covered dividends.”
Custodian's target dividend per share for the year ending 31 March 2019 was increased to 6.55p from 6.46p.
Net asset value (NAV) per share increased to 107.3p from 106p in the year just ended on total assets of 415.2mln.
In late afternoon trading, company's shares were up 0.6% at 118.6p.