Financial highlights and performance summary

• Net asset value (“NAV”) per share total return(1) of 3.4%
• NAV per share of 101.7p
• Portfolio value of £383.5m
• Profit after tax of £8.3m
• £43.0m(2) of new equity raised at an average premium of 5.0% to dividend adjusted NAV
• Dividends of 3.25p per share paid in the Period(3), proposed Q2 dividend of 1.5875p per share
• £66.6m invested in 18 acquisitions and on-going developments during the Period
• £15.0m committed pipeline of property acquisition opportunities
• £3.5m portfolio valuation uplift(4) including £3.3m from successful asset management initiatives
• Portfolio net initial yield(5) 6.95%, unexpired lease term(6) 6.2 years, occupancy rate(7) 97.8%
• Net gearing(8) of 21.1% loan-to-value
• Drawn down £45.0m 12-year fixed rate loan and repaid £20m five-year variable rate loan
• Heads of terms agreed for a £50m 15-year fixed rate loan

1 NAV movement including dividends paid.
2 Before costs and expenses of £0.6m.
3 Dividends of 1.6625pps and 1.5875pps paid for the quarters ended 31 March 2016 and 30 June 2016 respectively.
4 Before the impact of acquisition costs.
5 Portfolio passing rent divided by portfolio valuation plus estimated purchasers’ costs of 6.5%.
6 Weighted average unexpired lease term to the earlier of first break or expiry.
7 Portfolio passing rent divided by portfolio passing rent plus the estimated rental value (“ERV”) of vacant space.
8 Gross borrowings less unrestricted cash divided by portfolio valuation.

David Hunter, Chairman of Custodian REIT, said:

“This has been another successful period of capital raising and investment as we continue to target growth to realise the potential economies of scale offered by the Company’s relatively fixed cost base, while adhering to the Company’s investment policy and maintaining the quality of both properties and income.

“I believe the current market dynamic supports our strategy of targeting high quality, smaller lot size properties across regional markets, with the type of institutional grade property targeted by the Company showing value relative to larger lots through a higher net income return and opportunities for future rental growth.

“We remain well placed to meet our target of paying further quarterly dividends, fully covered by income, to achieve an annual dividend for the year of 6.35p per share. I expect occupational demand, combined with a limited supply of new development, to drive rental growth and lower vacancy rates across regional markets, which will support our objectives to both grow the dividend on a sustainable basis and deliver capital value growth for our shareholders over the long-term.”

9 Share price movement including dividends paid.
10 Profit after tax excluding gains on investment properties (Note 3).
11 Earnings per share (“EPS”) excluding gains on investment properties. Basic EPS for the Period is 3.0p (30 September 2015: 4.3p, 31 March 2016: 5.5p).
12 NAV per share excluding recognised fair value adjustments on financial instruments and deferred tax.