Custodian REIT

LN: CREI

Market Cap£466.4m

Last Close 105.8p

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.

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Investment summary

The agreed acquisition of Drum Income REIT has completed, settled by the issue of c 20.2m new CREI shares, calculated on an ‘adjusted NAV-for-NAV’ basis. CREI’s Q222 NAV per share increased to 106.0p (Q122: 101.7p) and including DPS paid the quarterly total return was 5.5% (taking H122 to 11.7%). The portfolio value increased 2.5% like-for-like in Q222 (£12.8m) with £4.2m of disposal gains. With continuing strong rent collection the quarterly DPS target is increased 10% to 1.375p from Q322, resulting in a target of no less than 5.25p for FY22 and 5.5p for FY23. We will review our forecasts accordingly.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 38.1 33.4 28.7 7.00 15.1 14.0
2021A 33.1 28.5 23.7 5.64 18.8 18.5
2022E 36.0 30.8 25.9 6.04 17.5 14.6
2023E 39.4 33.9 28.5 6.48 16.3 14.6
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles while income returns have been more stable. The pandemic continues to generate uncertainty but the rebounding GDP growth, continuing low interest rates and lockdown easing are supporting strong commercial property returns, still led by the industrials, but broadening across all sectors.

Last updated on 18/01/2022
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Custodian REIT – Robust FY21 with improving outlook
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Share price graph
Balance sheet
Forecast net cash (£m) 152
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 1.5 7.6 18.1
Relative* (1.6) 3.8 5.2
52-week high/low 107.4p/87.5p
*% relative to local index
Key management
David Hunter Chairman
Richard Shepherd-Cross MD
Ed Moore Finance manager