Final results for the year ended 31 March 2026

By in Corporate news

Corporate acquisitions, active asset management and a differentiated investment strategy driving valuation and earnings growth, underpinning a fully covered dividend

  • Differentiated portfolio with an enhanced yield on acquisition – with no need to sacrifice quality of property, location, tenant or environmental performance for income and with a greater share of value in ‘bricks and mortar’ rather than the lease

Custodian Property Income REIT (LSE: CREI), which seeks to deliver an enhanced income return by investing in a diversified portfolio of smaller, UK regional properties with strong income characteristics, today announces its final results for the year ended 31 March 2026.

Commenting on the final results, Richard Shepherd-Cross, Managing Director of the Investment Manager, said: “This has been another year of positive operational performance which has provided a strong foundation to continue our long track record of delivering a fully covered dividend for our shareholders.  Despite challenging capital markets conditions, we have been innovative in successfully continuing to scale the Company, through the majority-share acquisitions of three separate privately owned property companies.  At the same time, we continue to see the benefits of our differentiated smaller lot sized investment strategy, which provides us with an enhanced yield, resilient income through cycle from a diverse mix of more than 350 tenants, further protecting earnings, with no need to sacrifice quality of property.

“Since 2024, valuations have been gradually recovering across most sectors within the Company’s portfolio and we have continued to focus on driving earnings growth through our active asset management programme as well as our ability to capture the latent rental growth in our portfolio.  This has helped us deliver our strongest total return performance since 2022.

“With development activity reduced across the regions, the current supply of well-located modern buildings is increasingly limited, leading to rental growth in several sectors and supporting the returns from our refurbishment projects.  Over the last 12 months, this favourable momentum combined with the quality of our portfolio has recorded like-for-like growth in estimated rental value in its two largest sectors of 4.1% in industrial and 2.7% in retail warehousing.  While the conflict in the Middle East has presented another hurdle for the recovery of UK listed real estate, we believe that the Company is well positioned for the headwinds that may lie ahead, with our diversified portfolio minimising the risk of sector specific downturns and providing defensive income for our investors.”

Commenting on the final results, David MacLellan, Chairman of the Company, said: “The Board’s commitment to seeking further growth for the Company through strategic corporate acquisitions and disciplined consolidation has resulted in the purchase of three privately owned property companies for a combined portfolio price of £63.8m.  During the year, this innovative strategy proved to be an effective way to achieve scale, and we will continue to pursue similar opportunities with privately owned businesses facing succession issues in the UK that could benefit from our income focused strategy and tax efficient REIT status.

“The Company’s Investment Manager has curated a diversified portfolio that focuses on long-term income growth, delivering earnings enhancement through careful stock selection and increased exposure to higher yielding property sectors with the greatest potential for rental growth.  As a result, we have continued to grow earnings, for the third consecutive year, as well as delivering another fully covered dividend to our shareholders.  Income and income growth are likely to form the greater component of total return over the next phase of the property cycle if long-term interest rates continue to remain elevated with persistent inflation.

“Both the Board and the Investment Manager believe in the security of investing in real assets with well-diversified, contractual income supporting a fully covered dividend and forecast rental growth, which should continue to be attractive to shareholders in the inflationary environment seen since the start of the conflict in the Middle East.”

Highlights of the year:

  • The purchase of three privately owned portfolios totalling £63.8m via the majority-share acquisition of the respective holding companies, adding 40 new assets primarily located in the Midlands and Buckinghamshire, which are highly complementary to the Company’s diversified portfolio
  • 3.3% growth in EPRA earnings per share to 6.3p (FY25: 6.1p) with a 105% covered dividend per share of 6.0p, reflecting a 7.5% dividend yield as at 31 March 2026 (2025: 6.0p dividend, 7.9% yield).
  • IFRS profit before tax increased to £48.3m (2025: £38.2m) with IFRS EPS of 10.4p (2025: 8.7p)
  • 3.4% growth in like-for-like contractual rent, which increased to £49.2m (2025: £43.9m)
  • Estimated rental value (“ERV”) grew 3.3% like-for-like, meaning that there is 13% of potential rental growth already baked into the portfolio when compared to current passing rent, which we expect to unlock at upcoming lease events, in addition to the other significant asset management opportunities to create value we have identified
  • Nine rent reviews completed during the year at an average 6% ahead of previous passing rent and 7% ahead of ERV, with 53 new lettings, lease renewals and lease re-gears reflecting continued occupier demand for space in our properties.
  • Occupancy improved by 1.3% to 92.4% during the year (31 March 2025: 91.1%)
  • Like-for-like valuation of the Company’s portfolio of 174 properties increased by 2.7% to £669.3m, supporting a 3.7% NAV per share increase and contributing to a 10.0% NAV total return (2025: 9.5%)
  • We continued to progress our accretive capex programme, with £9.5m of investment into refurbishing industrial units in Plymouth, Biggleswade and Kettering, as well as the construction of a drive-through restaurant at a retail park in Carlisle
  • £19.9m of proceeds from selective disposals achieved at an aggregate 23% premium to pre-offer valuation
  • Net gearing remains low at 25.9% (31 March 2025: 27.9%) with 65% at a fixed rate of interest. During the year, the Company’s RCF limit was increased from £50m to £75m to maintain headroom following repayment of a £20m loan which expired in August 2025, which increased the weighted average cost of debt from 3.9% to 4.1%

You can read the full results here.