Custodian REIT


£476.8m market cap

116.8p 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

Custodian REIT (CREI) continued to produce positive returns through Q419 despite continuing weakness in high street retail capital values outweighing gains elsewhere, including from accretive asset management. The Q419 EPRA NAV total return was 0.6%, taking the annual return to 5.9%, and was entirely income driven, with EPRA NAV per share reducing slightly to 107.1p. With occupancy maintained at a good level (95.9%), income continued to grow, benefitting from accretive acquisitions and rental growth, and EPRA EPS for FY19 increased to 7.3p (FY18: 6.9p). FY19 dividend cover was 1.11x and CREI’s current year target for aggregate fully covered DPS has been increased by 1.5% to 6.65p, barring unforeseen circumstances. Fully covered dividends represent 77% of the NAV total return, a compound 6.8% pa generated since the IPO in 2014. With a year-end LTV of 24.1%, and continuing equity issuance, at a premium to NAV, the company is well positioned for further property acquisition opportunities.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 34.8 N/A 32.4 6.94 16.8 N/A
2019A 40.0 N/A 23.6 7.26 16.1 N/A
2020E 41.2 N/A 30.5 7.28 16.0 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. Parts of the retail sector are displaying clear signs of stress.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual (1.2) 2.5 (3.5)
Relative* (2.3) 2.0 (0.8)
52-week high/low 122.0p/111.0p
*% relative to local index
Key management
David Hunter Chairman
Richard Shepherd-Cross MD
Ed Moore Finance manager

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