Second quarter trading update shows rental growth supporting fully covered dividends and stable values

Custodian Property Income REIT (LSE: CREI), which seeks to deliver an enhanced income return by investing in a diversified portfolio of smaller, regional properties with strong income characteristics across the UK, today provides a trading update for the quarter ended 30 September 2023 (“Q2” or the “Quarter”).

Strong leasing activity continues to support rental growth and underpin fully covered dividends

  • 1.375p dividend per share approved for the Quarter, fully covered by unaudited EPRA earnings, in line with target of no less than 5.5p for the year ending 31 March 2024, representing a 6.8% yield based on the prevailing 81p share price[1]
  • EPRA earnings per share[2] of 1.4p for the Quarter (FY24 Q1: 1.5p, FY23 Q4: 1.4p)
  • Nine new leases signed and one rent review settled during the Quarter across a range of property sectors, on average, in line with ERV and 24% above previous passing rent. These initiatives added £1.0m of new annual rent through letting vacant assets and secured a further £0.7m of existing annual rent roll, increasing property capital value by £4.5m
  • ERV has increased by 0.7% since 30 June 2023, driven primarily by capital expenditure. Portfolio ERV (£49.7m) now exceeds passing rent (£43.2m) by 15% (30 June 2023: 17%) demonstrating the portfolio’s significant reversionary potential
  • EPRA occupancy[3] increased to 91% (30 June 2023: 90%). 8% of ERV is vacant subject to refurbishment or redevelopment with 2.2% of ERV vacant but under offer to let or sell

You can read the full update here.

[1] Price on 30 October 2023. Source: London Stock Exchange.

[2] Profit after tax excluding net gains or losses on investment property divided by weighted average number of shares in issue.

[3] Estimated rental value (“ERV”) of let property divided by total portfolio ERV.