Property investor benefits from market’s ‘significant resilience’

Tournament Fields in Warwick is part of Custodian REIT's portfolio
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Custodian REIT has kept an “absolute focus on rent collection, financial resilience and maintaining fully covered dividends” during a challenging period for property investors.

The Leicester-based business generated a pre-tax profit of £48.1m in the six months to September, recovering from a £16.1m loss a year earlier.

“The UK property market has shown significant resilience since the outbreak of the Covid-19 pandemic,” said David Hunter, chairman of Custodian REIT.

“The Covid-19 pandemic has reinforced Custodian REIT’s strategy which, over and above decisions in relation to investment approach, has always placed income and financial resilience at the heart of the company’s objectives.

“When allied to the appropriate property strategy this focus underpins sustainable dividends, which in turn support long-term total return.”

The company has declared an interim dividend of 2.5p, up from 2p last year, and plans to increase quarterly dividends per share to 1.375p as long as rent collection targets are met.

In the six months to September, it collected £18.2m in rent, accounting for 95% of rent due, rising to 98% before contractual deferrals.

Custodian has a diversified £565m portfolio spread across Great Britain, with 20% in the West Midlands and 14% in the East Midlands. It received 40% of its income from industrial properties, with retail warehouses providing 21%.