Custodian REIT

LN: CREI

£472.5m market cap

114.8p last close

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. It targets a balanced portfolio, with a focus on lot sizes of under £10m.

Investment summary

During the three months ended 30 September 2019 (Q220) a quarterly DPS of 1.6625p was paid in respect of Q120. A further similar quarterly DPS has been declared for Q220, fully covered by recurring income and underpinned by the strategy of targeting income from well-located properties predominantly let to institutional grade tenants. End-Q2 occupancy was 95.5% (Q1: 95.9%). The company targets aggregate DPS for FY20 of 6.65p (FY19: 6.55p) and its objective is to continue to grow DPS at a rate which is fully covered by projected rental income without inhibiting investment strategy. Income continues to drive returns and reflecting market conditions, weaker retail valuations offset stronger industrial valuations and the positive effects of asset management during Q2 and NAV per share fell to 104.3p (Q1: 106.0p). EPRA NAV total return was a negative 0.04%. End-Q2 LTV was a modest 20.5% but increased to 23.2% with the subsequent acquisition of an eight-property portfolio of distribution units.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 34.8 N/A 32.4 6.94 16.5 N/A
2019A 40.0 N/A 23.6 7.26 15.8 N/A
2020E 41.2 N/A 30.5 7.28 15.8 N/A
2021E N/A N/A N/A N/A N/A N/A
Industry outlook

The supply demand balance for regional office and industrial property remains generally firm and a positive yield spread between the regions and London offers potential for further narrowing. Rents and capital values in the retail sector have continued to weaken.

Last updated on 14/11/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (1.9) (0.9) (4.0)
Relative* (3.3) (3.0) (8.2)
52-week high/low 120.4p/111.0p
*% relative to local index
Key management
David Hunter Chairman
Richard Shepherd-Cross MD
Ed Moore Finance manager

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