TIDMCREI
RNS Number : 7735K
Custodian REIT PLC
21 April 2015
21 April 2015
Custodian REIT plc
("Custodian REIT" or "the Company")
Net Asset Value as at 31 March 2015
Custodian REIT (LSE: CREI), the UK commercial real estate
investment company which listed on the main market of the London
Stock Exchange on 26 March 2014 ("Admission"), today reports its
unaudited net asset value ("NAV") as at 31 March 2015 and
highlights for the period from 1 January 2015 to 31 March 2015
("the Period").
Financial highlights
-- NAV per share 101.2p (31 December 2014: 100.2p)
-- GBP22.6m raised from issue of equity (before costs and
expenses) and GBP10.0m term debt drawn down during the Period
-- GBP24.3m of debt facilities deployed (31 December 2014:
GBP22.5m) resulting in net gearing(1) of 11.4% (31 December 2014:
12.1%)
-- Q3 dividend paid 31 March 2015 at 1.25p per share
-- NAV total return(2) since Admission of 6.9%
1 Borrowings less cash divided by portfolio valuation
2 NAV movement including dividends paid
Portfolio highlights
-- Portfolio value of GBP207.0m (31 December 2014: GBP180.2m)
-- Nine acquisitions completed during the Period for total consideration of GBP25.8m
Net asset value
The unaudited NAV of the Company at 31 March 2015 was GBP179.8
million, reflecting approximately 101.2 pence per share, an
increase of 1.0% since 31 December 2014:
Pence
per
share GBPm
-------------------------------------------- ----------- ----------
NAV at 31 December 2014 100.2 156.2
Issue of equity 0.3 22.3
-------------------------------------------- ----------- ----------
100.5 178.5
Valuation uplift in property portfolio 1.2 2.0
Impact of acquisition costs (0.8) (1.5)
Unrealised valuation movement 100.9 179.0
Income earned for the period 2.0 3.6
Expenses for the period (0.4) (0.9)
Dividends paid (1.3) (1.9)
NAV at 31 March 2015 101.2 179.8
-------------------------------------------- ----------- ----------
The NAV attributable to the ordinary shares of the Company is
calculated under International Financial Reporting Standards and
incorporates the independent portfolio valuation as at 31 March
2015 and income for the quarter, but does not include any provision
for the interim dividend for the final quarter, to be paid in June
2015.
Activity during the Period has continued to focus on
acquisitions, with the aim of deploying new monies raised from the
recent placing and increasing gearing towards the target level of
25%. This investment impacts NAV to the extent that acquisition
costs have partially offset the upward movement in valuations at
the reporting date.
The quarterly portfolio valuation uplift of GBP2.0 million and
improvement in NAV are in line with the Board's expectations.
Commenting on performance, Richard Shepherd-Cross, Managing
Director of Custodian Capital Limited (the Company's external fund
manager), said:
"The property market has made a strong start to 2015, witnessing
unrelenting demand due to the extraordinary flows of money into the
open-ended retail property funds. It has been reported that net
inflows were over GBP235 million in January and GBP300 million in
February. This follows on from GBP3.8 billion of net inflows in
2014, which exceeded peak inflows in 2006. This dynamic, combined
with tighter supply than in Q4 2014, has put continued upward
pressure on pricing.
"Against this backdrop we were delighted to complete GBP25.8
million of acquisitions in Q1 2015, taking total investment in the
12 months since IPO to GBP107.3 million, more than doubling the
size of the initial GBP95 million portfolio. Achieving this level
of investment at an average net initial yield of over 7.5% while
maintaining both the quality of property and length of income
demonstrates the success of the Company's strategy of focusing on
smaller lots in strong, regional markets. Despite incurring
significant acquisition costs in achieving this growth, NAV has
increased and the portfolio profile has improved in respect of
tenant, sector and lease break/expiry. As a result, I believe the
potential for rental growth and further consequential NAV growth
has increased.
"We expect the target dividend for this financial year to be
fully covered by earnings (excluding costs associated with
Admission). Full deployment of the Company's undrawn debt
facilities and its capacity for new debt should improve dividend
cover as we continue the investment programme. We continue to enjoy
a strong pipeline of opportunities and remain confident we can
acquire properties that meet the Company's investment criteria and
improve the portfolio mix. During 2015 the occupational market will
face a limited supply of modern, vacant space but with development
coming on stream, increasing tenant demand, widespread rental
growth and low vacancy rates, all of which help support the
Company's strategy."
The performance of the fund will be detailed in the 31 March
2015 annual report, which will be released in June 2015.
For details of all properties in the portfolio please see
www.custodianreit.com/property/portfolio.php.
Financing
Equity
A share placing was completed on 12 February 2015, raising
GBP22.6 million (before costs and expenses) through the issue of
21,750,000 new ordinary shares of 1p each in the capital of the
Company ("the New Shares") under the Placing Programme established
in the Company's February 2014 prospectus. The New Shares were
issued at 104.0 pence per share, which the Board and the Fund
Manager considered represented a premium of approximately 5% to the
NAV per share at 31 December 2014, after adjusting the NAV to
recognise the third quarter dividend of 1.25 pence per share paid
to shareholders on the register at the close of business on 6
February 2015.
Debt
The Company operates a GBP25 million revolving credit facility
with Lloyds Bank plc, which attracts interest of 2.45% above three
month LIBOR and expires on 26 March 2019. The Company also operates
a GBP20 million term loan with Lloyds Bank plc, which attracts a
blended interest of 1.95% above three month LIBOR and is repayable
on 10 October 2019.
Dividends
An interim dividend of 1.25 pence per share for the quarter
ended 31 December 2014 was paid on 31 March 2015.
The Board expects to propose an interim dividend for the final
quarter of 1.5 pence per share to achieve the target dividend of
5.25 pence per share for the financial year ended 31 March
2015.
In the absence of unforeseen circumstances, the Board intends to
pay further quarterly dividends to achieve the target dividend of
6.25 pence per share for the financial year ending 31 March 2016
and in subsequent financial years, implying an annualised dividend
yield of 6.25% calculated by reference to the Company's issue price
on Admission of 100 pence per share.
Sector and geographic analysis as at 31 March 2015
Valuation
31 Quarter Weighting Weighting
Mar valuation by income by income
2015 movement 31 Mar 31 Dec
Sector GBPm GBPm 2015 2014
---------------- -------------- --------------- --------------- ---------------
Industrial 93.0 1.7 45% 41%
Retail 48.2 (0.2) 22% 24%
Other(3) 41.7 0.5 18% 21%
Office 24.1 - 15% 14%
Total 207.0 2.0 100% 100%
---------------- -------------- --------------- --------------- ---------------
3 Includes leisure, education and motor trade
The Company continues to have a strong focus on industrial
property, while retaining its investment objective to maintain a
suitably balanced portfolio.
Valuation Quarter Weighting Weighting
31 Mar valuation by income by income
2015 movement 31 Mar 31 Dec
Location GBPm GBPm 2015 2014
------------------- -------------- --------------- --------------- ---------------
South-East 43.3 0.6 20% 22%
West Midlands 33.7 0.4 15% 16%
East Midlands 30.3 0.2 17% 17%
North-West 28.5 0.5 13% 15%
North-East 25.5 - 13% 11%
South-West 19.5 0.2 8% 6%
Scotland 15.2 0.2 8% 6%
East Anglia 9.5 - 5% 6%
Wales 1.5 (0.1) 1% 1%
Total 207.0 2.0 100% 100%
------------------- -------------- --------------- --------------- ---------------
The Company operates a geographically diversified portfolio
across the UK, seeking to ensure that no one area represents the
majority of the portfolio.
- Ends -
Further information:
Further information regarding the Company can be found at the
Company's website www.custodianreit.com or please contact:
Custodian Capital Limited
Richard Shepherd-Cross / Nathan Tel: +44 (0)116
Imlach / Ian Mattioli 240 8740
www.custodiancapital.com
Numis Securities Limited
Nathan Brown / Hugh Jonathan Tel: +44 (0)20
7260 1000
www.numis.com/funds
Camarco
Ed Gascoigne-Pees Tel: +44 (0)20
3757 4984
www.camarco.co.uk
Notes to Editors
Custodian REIT plc is a UK real estate investment trust ("REIT")
listed on the London Stock Exchange. The Company launched on 26
March 2014, acquiring a portfolio of GBP95 million of UK commercial
property. This was sourced from an existing portfolio of 48
properties held by clients of Mattioli Woods plc in a syndicated
structure. The diverse portfolio consisted of properties let to
institutional grade tenants on long leases throughout the UK.
The Company raised gross proceeds of GBP55 million through an
initial public offering and has raised a further GBP47.6 million
via two subsequent placings. It invests in a diversified portfolio
of UK commercial properties to achieve its investment objective of
providing shareholders with an attractive level of income together
with the potential for capital growth through a closed-ended
fund.
The target portfolio is characterised by small lot sizes with
individual property values of less than GBP7.5 million at
acquisition. Custodian Capital Limited is the discretionary
investment manager of the Company.
For more information visit www.custodianreit.com and
www.custodiancapital.com.
Important notice
Forward looking statements: This announcement includes
"forward-looking statements". All statements other than statements
of historical facts included in this announcement, including,
without limitation, those regarding the Company's business strategy
and plans are forward-looking statements.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These factors include but are not limited to those that
are described in the February 2014 prospectus and December 2014
supplementary prospectus.
These forward-looking statements speak only as at the date of
this announcement. The Company expressly disclaims any obligation
or undertaking to update or revise any forward-looking statements
contained herein to reflect actual results or any change in the
assumptions, conditions or circumstances on which any such
statements are based unless required to do so by the Financial
Services and Markets Act 2000, the Financial Services Act 2012, the
Listing Rules or Prospectus Rules of the Financial Conduct
Authority or other applicable laws, regulations or rules.
Certain statements have been made with reference to forecast
price changes, economic conditions and the current regulatory
environment. Nothing in this announcement should be construed as a
profit forecast. Past share price performance cannot be relied on
as a guide to future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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