Custodian REIT (CREI)

Business description

CREI is a London Main Market listed REIT focused on commercial property in the UK outside London. It is income focused, with a commitment to pay a high but sustainable and covered dividend.

Investment summary

NAV total return for the three months ending 31 December 2017 was 2.6%, with the NAV per share increasing to 106.0p (September: 104.9p) and a dividend paid of 1.6125p per share, in line with the fully covered 6.45p target for the year. During the period, six properties were acquired for £43m (before costs) and one sold for £4.6m, generating a gain of £0.7m. The rent roll grew to £37m, with EPRA basis occupancy increasing to 97.2% (September: 96.7%). Asset management and other net valuation movements were £4.2m, with the portfolio value reaching £518.7m, with a net initial yield of 5.7% (September: 5.9%). 17.5m shares were issued in the period under the block listing facility, at an 11.8% premium to the September NAV per share, and with demand for the shares remaining strong, issuance has continued in recent weeks. Management is focused on maintaining high levels of occupancy and growing income through rental growth and further accretive acquisitions.

Last updated on 02/03/2018

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 19.0 N/A 11.2 6.80 16.8 16.7
2017A 27.6 N/A 24.2 6.59 17.3 14.8
2018E 34.6 N/A 28.8 6.84 16.7 17.4
2019E 38.7 N/A 38.8 7.29 15.6 13.2

Last updated on 22/02/2018

Latest research

Latest video

Executive interview - Custodian REIT

Industry outlook

Regional occupier demand is generally firm, driven by continuing economic growth and business relocation away from London, while new supply remains limited. Meanwhile, the yield spread between the regions and London remains historically wide, representing a clear potential for narrowing.

Last updated on 02/03/2018

Key management

David Hunter, Chairman
Richard Shepherd-Cross, MD

Company address

Penman Way
Grove Park
LE19 1SY
United Kingdom
0116 240 8740
View website