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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

Full year results to 31 March 2018 provided more detail on the strong performance during the year and update on prospects for the current year. CREI continued to deliver strong returns in FY18, with a NAV total return of 9.6%, 6.0% from dividends paid and the balance from NAV growth. Fully covered dividends paid since the IPO in 2014 represent more than 70% of the NAV total return generated since, a compound 7.3% pa. Barring unforeseen circumstances, the board anticipates an increase in quarterly dividends per share for the current year to an aggregate 6.55p (FY18: 6.45p), fully covered by earnings. In a confident outlook statement, CREI points to the continuing strength of the regional occupier market, giving confidence in its ability to maintain occupancy levels and achieve rental growth at lease renewals and through proactive asset management, while the investment manager continues to source accretive acquisitions.

Last updated on 29/06/2018

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2017A 27.6 N/A 24.2 6.59 18.5 15.8
2018A 34.8 N/A 32.4 6.94 17.6 15.6
2019E 38.7 N/A 35.4 7.20 17.0 15.5
2020E 39.2 N/A 33.7 7.29 16.8 15.4

Last updated on 27/06/2018

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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 29/06/2018

Key management

David Hunter, Chairman
Richard Shepherd-Cross, MD
Ed Moore, Finance manager

Company address

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