Custodian Property Income REIT (LSE: CREI)

Last close As at 12/06/2024

GBP0.71

−1.00 (−1.39%)

Market capitalisation

GBP313m

Custodian Property Income REIT (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.

The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles. Income returns have been significantly more stable, supporting rental growth across much of the market. Capital values have fallen significantly from the 2022 peak and should benefit from the expected decline in interest rates.

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Sector

Real Estate

Equity Analyst

Martyn King

Martyn King

Director, Financials

Key Management

  • David MacLellan

    Chairman

  • Ed Moore

    Finance manager

  • Richard Shepherd-Cross

    MD

Balance Sheet

Forecast net cash (£m)

172

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (5.5) (7.0) (23.7)
Relative (2.5) (12.2) (29.0)
52 week high/low 94.0p/65.0p

Financials

With its Q424 update, the company announced a 9% increase in its FY25 DPS target to a fully covered 6.0p per share and, reflecting the strong FY24 performance, a special dividend of 0.3p per share. Leasing has remained strong, and rents have continued to increase. CREI sees strong income growth potential from the existing portfolio, with reversionary rent potential of c £6m, or 15% of current rents. Selective property disposals, during Q4 and FY25 to date, at an average 21% premium to book value, are accretive to earnings and NAV, with proceeds supporting a further reduction in borrowing and LTV and an increase in the proportion of fixed rate debt (78% at end-Q424). Property valuations were modestly (4%) lower for the year but stabilised in Q4, as did unaudited NAV per share (93.4p). FY24 results will be published in June.

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2022A 35.6 30.1 25.3 5.89 12.0 9.3
2023A 37.1 31.0 24.8 5.62 12.6 10.3
2024E 39.3 33.7 25.7 5.83 12.1 11.3
2025E 40.9 35.2 27.5 6.24 11.3 8.8

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