Custodian REIT


£373.4m market cap

88.9p 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.

Investment summary

The Q121 DPS of 0.95p was 27% ahead of the minimum level of 0.75p previously indicated for each of the first two quarters of FY21. It was fully covered by net cash receipts, reflecting better than expected rental collection, and was 140% covered by EPRA earnings, including accrued rents that are yet to be collected. Unrealised valuation losses weighed on NAV per share, down by 5.9p to 95.7p, and including DPS paid the Q121 NAV total return was -4.2%. Rent collection is robust and we expect the easing of the lockdown to support a further improvement in H221. The portfolio is diversified and gearing is moderate with good liquidity, no short-term refinancing risk and borrowing headroom.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2019A 37.6 32.7 28.5 7.26 12.2 9.7
2020A 38.1 33.4 28.7 7.00 12.7 11.7
2021E 35.5 29.3 24.3 5.79 15.4 12.7
2022E 35.4 30.7 25.7 6.12 14.5 12.3
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in valuation through cycles while income returns have been more stable, but still fluctuating according to tenant demand and rent terms. The extent and duration of impact of the global pandemic on the economic outlook remains uncertain. While the supply demand balance for regional office and industrial property has hitherto remained generally firm the weakness that was previously confined to the retail sector is likely to continue to broaden.

Last updated on 24/09/2020
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Share price graph
Balance sheet
Forecast net cash (£m) 120.9
Forecast gearing ratio (%) N/A
Price performance
Actual 3.1 (2.1) (23.5)
Relative* 8.1 2.4 (5.5)
52-week high/low 117.6p/76.0p
*% relative to local index
Key management
David Hunter Chairman
Richard Shepherd-Cross MD
Ed Moore Finance manager

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