Property investor sees portfolio valuation soar

Leicester-based property investment firm Custodian Property Income REIT saw the value of its portfolio increase to £685.4m during the six months to 30 September – up by around £20m on the previous half-year and a c. £133m improvement on the comparable period in 2021.

The company – formerly known as Custodian REIT – attributed the stellar performance to its investment in a diversified portfolio of smaller regional properties and an £8.4m uplift from asset management initiatives and income growth.

£47.8m of asset recycling within Custodian’s portfolio and a £36.1m valuation decrease driven by current investor and market sentiment around the UK’s economic outlook also played their part.

The firm invested £52.7m in seven property acquisitions and made a £4.7m profit from the disposal of three properties during the period.

It has also sold three properties for a total consideration of £13.5m since the period end.

David Hunter, chairman of Custodian Property Income REIT, said: “The Company’s well-diversified investment portfolio has shown its resilience during the Period and this diversification has mitigated the risks posed by volatility in real estate investment markets. In addition, the Company’s conservative balance sheet and its longer-term fixed rate debt profile have provided insulation against the challenge of rising interest rates in the short to medium term.

“Our dividend remains fully covered and, in line with our objectives, I was very pleased to announce 2.75p of aggregate dividends (2021: 2.5p) for the Period. The Board expects to continue to pay quarterly dividends per share of 1.375p to achieve a target dividend per share for the year ending 31 March 2023 of no less than 5.5p.

“Over the last five years, shareholders have received an income return of 29.7p per share, or an annual average of 5.93p per share, always fully covered by earnings, supported by both a diverse, smaller regional property strategy and a conservative gearing policy. There is depth in occupational demand and latent rental growth in the portfolio which offers the prospect of growth for existing shareholders, despite the current difficult economic circumstances.”