Custodian REIT PLC (LSE:CREI), the UK commercial real estate investment company, saw its net asset value bounce back in the year to the end of March.
The net asset value (NAV) of the real estate investment trust (REIT) was £527.6mln on 31 March 2022, which roughly equates to 119.7p per share, up 22.1p (22.6%) on a year earlier.
Stripping out the impact of acquisition costs, the net valuation increased by £94.0mln year-on-year, driven by significant increases in the industrial and logistics and retail warehouse sectors, which represent just over two-thirds of Custodian’s portfolio. Even the downtrodden High Street portfolio saw a return to modest growth towards the end of the financial year.
Earnings per year on an EPRA (i.e. industry standard) basis improved to 5.9p from 5.6p in the year before, helped by a £0.3mln decrease in the amount of money earmarked to cover bad debts.
Revenue improved to £39.89mln from £39.58mln the previous year while profit before tax leapt to £122.3mln from £3.7mln, with the REIT registering a £97.1mln gain on investment property versus a £19,93mln decline a year earlier.
Net gearing at the end of March stood at 19.1%, down from 24.9% at the end of March 2021.
The full-year dividend has been bumped up to 5.25p from 5.0p.
“The recovery in NAV has been testament to the strength of the UK commercial property, allied to Custodian REIT’s focus on smaller regional property and the close management of the portfolio to maximise occupancy, rent collection, cash flow and earnings,” said David Hunter, the chair of Custodian REIT.
“Rent collection is back at pre-pandemic levels and tenants have honoured their deferred rent agreements allowing the board to increase fully covered quarterly dividends to at least 5.5p in the forthcoming financial year.
“Although the impact of inflation and political uncertainty could lead to an economic downturn, we believe Custodian REIT’s portfolio, diversified by sector, geography and tenants, with low gearing will remain resilient in the face of any economic headwinds,” he added.