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Custodian REIT hikes quarterly dividend as property investment activity rebounds

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Custodian REIT PLC (LON:CREI) has again upped its dividend as institutional investment activity increased in its UK commercial property segment.

The property investment trust approved a dividend of 1.05p per share for the quarter ending September 30, 2020, up from the 0.95p approved for the first quarter of its financial year.

As a result, the aggregate dividend per share of 2.0p for the first half of the year to end-March 2021 is 33% ahead of the 1.5p minimum announced in April and compares to 3.325p a year ago.

Rent collection has remained affected by the coronavirus (COVID-19) pandemic, the REIT said in its quarterly statement, with 88% of rent collected for the past period, adjusted for contractual rent deferrals and 74% collected for the final quarter of calendar 2020. Collection for the quarter ended June 30 has risen to 90% from the 80% last reported.

The group’s net asset value (NAV) was £399.8mln or 95.2p per share as of June 30, 2020, compared to £402.1mln and 95.7p at the end of June.

The property portfolio of 161 assets across all commercial sectors was valued at £532.3mln after a £5.9mln decrease due to the impact of COVID-19 on estimated rental values, partly offset by £2.8mln valuation increase from successful asset management initiatives.

“Investment activity is increasing and appears to be tracking the emerging picture of forecast occupier demand,” said Richard Shepherd-Cross, managing director of the trust’s investment manager, Custodian Capital.

“There is confidence in the industrial and logistics market where record investment volumes have been matched by record occupational demand for warehouse space. This occupational demand, driven by the continued growth of e-commerce and onshoring of supply chains, combined with low vacancy rates has led to the continuation of rental growth.

“Much of the investment capital that might have been focused on the office or retail sectors has been redirected to industrial and logistics. We see continued opportunity in this sector as the UK has yet to build a sufficient logistics network to support the continued growth in e-commerce,” he added.

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