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Custodian REIT: a premium investment at a discount

Custodian REIT is a real estate investment trust (REIT) focused on UK commercial property, managing a portfolio of 161 properties spread across UK regions and property sectors. The company recently released an update for the quarter ended September 2020. This showed rental collections stabilising at 88%, albeit below the usual higher run rate. The level of rental income provided the company with enough visibility on cash flow to declare a dividend for the quarter above the level of the previous quarter.

Since listing in 2014, the Custodian share price has outperformed the UK REIT sector and the wider UK stock market, driven by strong underlying returns on the investment portfolio. In this report, we examine the fundamental portfolio characteristics that have sustained the long term outperformance and enabled resilient relative performance in 2020. Key differentiators include:

  • A diverse portfolio in terms of regions and property sectors, and low exposure to high street retail.
  • A focus on properties that offer strong rental yields but with low ongoing investment requirements and a secure income stream.
  • The “small lot” strategy, which offers high rental yields and low exposure to individual tenants without affecting asset quality compared to larger lots.

 

Quick facts: Custodian REIT

Price: 89.1 GBX

LSE:CREI
Market: LSE
Market Cap: £374.27 m
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What's in the report?

Financial results and forecasts
Growth drivers
Management
Market conditions
Milestones & inflection points

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Custodian REIT: A premium investment at a discount

Proactive analyst Ed Stacey explains his research on Custodian REIT which he believes is a premium investment at a discount. Stacey talks through some of the highlights on the real estate investment trust (REIT) which is focused on UK commercial property, managing a portfolio of 161...

2 weeks, 2 days ago

20 min read