Custodian REIT portfolio value falls in ‘testing’ year

Custodian REIT has posted declines in the value of its portfolio and NAV per share, with its chairman pointing to “testing times” arising from the pandemic. The landlord’s portfolio value fell to £551.9m during the year ending March, down from £559.8m last year. The firm said there was a £19.6m aggregate valuation decrease during the year, representing a 3.5% net valuation decline. Although there was a £9.4m valuation uplift from asset management initiatives, it did not offset £29m of pandemic-driven valuation decreases and market sentiment. The value of the REIT’s office properties dropped by 10.4% as vacancy rates rose, with occupiers exercising their options to vacate at lease expiry or break. Its high street retail properties suffered a 21.6% hit to values, while out-of-town retail warehousing values fell by 10.8%. On the other hand, industrial and logistics values strengthened by 4%, on the back of high occupancy and rental growth. NAV per share declined by 3.9% year on year to 97p. However, pretax profit improved by 76.6% to £3.7m during the period. The firm collected 91% of rent owed for the year, after adjusting for rent deferrals. It will pay out a 5p dividend per share. David Hunter, chairman of Custodian REIT, said that the REIT’s investment strategy has been “tested” during the year. Hunter said: “The impact of the pandemic has been to accelerate the decline in high street retail, pushing an increasing number of occupiers into insolvency and many occupiers into seeking to defer rental payments.”   To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews