A 海角视频 property investment business has seen profits rise even though the fall in demand for shop units leading to a drop in the value in its portfolio.
Management at Custodian REIT said overall resilient capital values during the pandemic – with industrial and logistics buildings doing OK – allowed it to stabilise dividends for its investors.
The Leicester-based business – a subsidiary of pensions and wealth management provider Mattioli Woods – reported pre-tax profits up 76.6 per cent to £3.7 million in the year to March 31.
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In final results published today, the company said the overall value of the property it holds was down around £8 at just under £552 million.
That change was put down to a combination of buying and selling a handful of properties plus a drop in the estimated rental value of high street retail properties, along with negative market sentiment for retail assets and the general impact of the pandemic.
The business also invested £700,000 building a drive-through restaurant on one of its existing sites.
Custodian REIT has a strategy of investing in a diverse range of properties valued at up to £10 million each.
It owns 159 properties and its top 10 tenants include Menzies Distribution, B&Q, B&M Retail, VW Group, Superdrug, Wickes and Williams BMW and Mini.
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Overall it said some 91 per cent of rent was successfully collected in the year, taking into account agreed rent deferrals for struggling tenants.
Earnings per share were down, it said, due to deferred and overdue rents and a 5 per cent decrease in the annual rent roll.
Chairman David Hunter said: “Custodian REIT's investment strategy has been tested, with the company operating for a full year under the shadow of Covid-19.
“From a low point in May 2020, Custodian REIT's share price has been gently recovering, matching the greater clarity that the company has provided around dividends through the course of the year.
"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.
“Despite the strongly positive performance of the company's industrial and logistics portfolio, the net result has been a 3.5 per cent property valuation decrease during the year.
"However, 91 per cent of rent was collected, net of contractual deferrals, meaning I was delighted to be able to announce dividends per share totalling 5p for the year and that the company is targeting a dividend per share of at least 5p for the year ending March 31, 2022, based on rent collection levels remaining in line with expectations.
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“This dividend outcome is significantly ahead of the minimum level announced in April 2020 of 0.75p per quarter before the full impact of the first national lockdown could be ascertained.
"The combination of resilient capital values and a return to stabilised dividends should lend support to Custodian REIT's objective to be the REIT of choice for private and institutional investors seeking high and well supported dividends from diversified 海角视频 commercial property."