Custodian Property Income REIT PLC on Wednesday said it believed it was at the start of a ‘gradual upwards trend,’ noting potential rental upside at five-yearly rent reviews.
The Leicester-based investor in ‘smaller, regional properties’ said it saw ‘further evidence that the market has bottomed out’. In the quarter to December 31, the value of its portfolio rose 0.7% to £586.4 million from £582.4 million in September.
‘Benefitting from a diversified portfolio, in the last 12 months the company has seen two quarters of stable valuations followed by two quarters of modest like-for-like capital growth across almost all asset classes,’ the firm added.
Its net asset value per share rose 0.9% to 94.4p at the end of December from 93.6p in September.
The company said a dividend of 1.5 pence per share was approved, in line with its 6.0p per share target for financial year 2025, up 3.4% from 5.8p a year prior.
Richard Shepherd-Cross, managing director of Custodian Capital Ltd said: ‘This quarter saw further evidence that the market has bottomed out, with the last 12 months seeing two quarters of broadly flat valuations followed by two quarters of like-for-like valuation growth. These valuation increases add further support to our belief that we are at the start of a gradual upwards trend having delivered like-for-like average rental growth of more than 5.0% per annum over the last 18 months, with proactive asset management being the key driver of returns.’
Looking ahead, highlighting a ‘significant’ potential for further rental growth with its portfolio’s estimate rental value, Custodian Property said: ‘Based on our track record and occupier demand for space in our assets we expect to capture this potential rental upside at [typically] five-yearly rent reviews or on re-letting, in addition to continuing to drive passing rent and ERV growth further through asset management initiatives.’
Custodian Property shares rose 3.2% to 78.70 pence each on Wednesday morning in London.
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