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 first quarter ended 30 June 2023 (“Q1” or the “Quarter”).

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

• 375p dividend per share approved for the Quarter fully covered by unaudited EPRA earnings
• Target dividends per share of no less than 5.5p for the year ending 31 March 2024, representing a 6.4% yield based on the prevailing 86p share price[1]
• EPRA earnings per share[2] of 1.5p for the Quarter (FY23 Q4: 1.4p, Q3: 1.5p)
• £2.2m of annual rental income secured, in aggregate in line with ERV, which added £2.0m in property capital value during the Quarter through leasing, renewals and rental uplifts, comprising:
• 14 new leases signed across a range of property sectors at an average 5% ahead of ERV, adding £1.1m of annual rent for a weighted average of 4.9 years to first break; and
• 15% (£0.1m) aggregate annual rental increase across six rent reviews settled during the Quarter
• Like-for-like[3] ERV has increased by 1.2% since 31 March 2023, driven primarily by capital expenditure in refurbishing industrial assets successfully. Portfolio ERV (£49.0m) now exceeds passing rent (£42.1m) by 17% (31 March 2023: 16%) demonstrating the portfolio’s significant reversionary potential
• EPRA occupancy[4] maintained at 90% (31 March 2023: 90%). 7% of vacant ERV is subject to refurbishment or redevelopment with 3.9% under offer to let or sell.

You can read the full update here.

[1] Price on 8 August 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] Adjusting for property disposals and capital expenditure.

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