Custodian Property Incom... Share Discussion Threads

[neilyb675] 05/11/2015 14:43

Wirral

No probs. I like this company, and view todays RNS as a stepping stone to growing the div from the current 1.5p per quarter. More properties will mean more income and therefore more yield/share.

They have as you know been pretty active the past 12 months.

[wirralowl] 05/11/2015 14:35

Thanks for the quick answer, Neilyb. Not sure if I'm interpreting the statement correctly, but would appear they're aiming to reach 6.25pa from 2016 onwards, so in effect a fixed rather than growing dividend from next year?

Trying to ascertain, so that I can decide how much to apply for in the open offer, ideally would like some inflation protection, but saying that 6.25pa on 104.2 is still a very respectable 6%.

[neilyb675] 05/11/2015 14:25

Income is a major component of total return and the Board is committed to growing future dividends sensibly.

"The Board intends to pay a fourth interim dividend of 1.5 pence per share on 30 June 2015, meaning total dividends for the period ended 31 March 2015 will be in line with our target of 5.25 pence per share. The Company is well placed to meet its target of paying further quarterly dividends, fully covered by income, to achieve an annual dividend of 6.25 pence per share for the year ending 31 March 2016 and in subsequent years."

taken from 09/06/15 final results

[wirralowl] 05/11/2015 14:19

Anyone know if the company has a progressive dividend policy here eg. increases in-line with RPI, or is it a fixed 6p pa, with most/any of the anticipated growth to come from increases in the NAV?

[mad foetus] 05/11/2015 09:05

neily,
you may want to look at KWE which reported this morning. It only launched a couple of years ago and so has taken a bit of time to get invested and to start generating income but it now pays 10p per quarter and has managed 18% capital growth since launch. All in commercial property, mainly in London but also in Spain, Dublin and a bit in Italy. It's big by the way (£2.5bn of gross assets).

[neilyb675] 05/11/2015 08:49

The Company believes that the current property market dynamic supports its strategy of targeting a high income return, fully covered by income from smaller lot size properties across regional markets.



The Investment Manager anticipates that demand for property will continue from across the investor spectrum as interest rates stay ''lower for longer'' and that a competitive investment market has the potential to generate value growth.



The Company's focus on smaller lot sizes has allowed it to secure a strong pipeline of opportunities and it is expected that lesser levels of competition for these assets will endure, with many larger funds continuing to sell their smaller lots.



Given this market dynamic, and an expectation of continued growth in the regions, it is anticipated that the Company's typical investment in good quality secondary regional property will show value relative to larger lots. This value may be expressed through a higher initial income yield, but also through opportunities for future rental growth which are not ''priced-in'' to every deal.



Reasons for the Issue and use of proceeds



To capitalise on current opportunities to invest in commercial real estate properties in the UK, the Company proposes to raise further capital to make further investments. To ensure the Company's continued compliance with the Investment Policy and the Facilities Agreements, the Directors believe that the most effective method of raising such funds is to complete the Issue and the Placing Programme.



The net proceeds of the Issue and the Placing Programme are expected to be used first to repay amounts drawn under the RCF (approximately £3.9 million as at 31 October 2015) and then invested by the Company within a period of six to nine months after Admission (depending on the amount of net proceeds of the Issue) in the property pipeline (including the Target Portfolio discussed below) and additional UK commercial real estate properties to complement the properties in the Property Portfolio.



The Company recently entered into non-legally binding heads of terms to acquire a portfolio of 11 UK commercial properties for an aggregate consideration of approximately £69.4 million. The Target Portfolio is consistent with the Investment Policy, comprising smaller size, good quality, secondary offices, retail and industrial assets diversified by tenant and region. The tenant covenant profile also meets the minimum criteria set out in the Investment Policy.



It is intended, subject to the completion of due diligence and to contract, that the acquisition of the Target Portfolio will be completed in two tranches in early January 2016. First, it is intended that approximately £28 million of assets will be acquired through a combination of the Company's existing cash resources and capacity under the RCF. Second, it is intended that the balance of the Target Portfolio (or part thereof) will be acquired by the Company subject to the availability of net proceeds of the Issue and the Placing Programme.



Following the intended acquisition of the Target Portfolio, the weighted average unexpired lease term of the Property Portfolio as a whole would stand at approximately 6.1 years. The Board believes the acquisition will enhance returns to Shareholders while improving dividend cover and offering the potential for a number of asset management opportunities.



In addition to the Target Portfolio, the Company has committed pipeline investments in the form of the funding of pre-let industrial developments in Cannock and Stevenage, and the completion of the refurbishment of an industrial unit in Milton Keynes. This committed pipeline totals approximately £5 million of further investment. The Company also has a £6.6 million leisure park under offer and the Investment Manager continues to track other investment opportunities including a single let industrial property, a high street retail property adjoining an existing portfolio holding and a city centre office building. The combined value of these other opportunities is approximately £12.5 million.

[neilyb675] 05/11/2015 08:42

1 for 5 OO, plus placing to raise upto £75 million. This company is definitely growing, love it.

[neilyb675] 11/8/2015 12:17

Investec Wealth & Investment Limited over 5% holding.

[neilyb675] 21/7/2015 07:58

Commenting on performance, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:

"We were delighted to complete GBP16.9 million of acquisitions in the Period, maintaining both the quality of property and length of income, demonstrating the success of the Company's strategy of focusing on smaller lots in strong, regional markets. As a result, I believe the potential for rental growth and further consequential NAV growth has increased.

"We have secured a pipeline of GBP9.5 million of pre-let development funding projects which, once complete, will improve the portfolio's weighted average unexpired lease term."

For details of all properties in the portfolio please see www.custodianreit.com/property/portfolio.php.

[neilyb675] 20/7/2015 16:29

Another £2 million just raised.

[neilyb675] 02/7/2015 08:23

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:



"The unit is situated at Glasgow International Airport, one of the UK's busiest airports serving its fourth largest city by population. This is an ideal location for DHL being adjacent to both the airport and the M8 motorway, only 7.5 miles west of the city centre. It comprises one of only a handful of similar units at the airport. Priced to reflect a net initial yield of over 7% this is another example of the relative value of small lot size property".

[neilyb675] 24/6/2015 08:30

The Company has acquired 3.5 acres of land at the Kingswood Lakeside development, Cannock, adjacent to the A5 and Junction T7 of the M6 Toll, and three miles from the M6. Current occupiers on the development include 3663, DHL, Finning Cat and Veolia.



The development comprises a 63,000 sq ft warehouse unit, with construction being phased over an expected 10 month build period. Custodian REIT's funding for the development will be drawn-down via monthly certified payments.



The unit, to be developed by Coltham Developments, has been pre-let to Hellerman Tyton Limited on a 20 year lease without break. On completion of the development for a total consideration of £4.22 million, the total passing rent will be £279,090, reflecting a net initial yield of 6.38% (assuming actual purchaser's costs) rising to 7.06% from year five. The lease will provide for a fixed rental uplift at year five and two further rent reviews linked to the Retail Prices Index.



The land purchase price of £0.47 million was funded from the Company's existing facilities, with net borrowings following the acquisition of 16.7% loan to value.



Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said: "We are delighted to have secured another development funding opportunity in a prime location, with a long-term lease to an excellent tenant. Pre-let industrial development volumes are increasing and we will continue to pursue opportunities where it is possible to secure brand new buildings in strong locations with tenants on long-leases, for no more than the price of standing investments."

[neilyb675] 22/6/2015 08:17

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:



"Custodian REIT's investment strategy of targeting small lot size property makes this portfolio an excellent fit. Despite widespread price inflation in the market, the Company's strategy is proving resilient in delivering a high income return from a well-diversified portfolio, in locations with low vacancy rates that have future rental growth potential."

[neilyb675] 04/6/2015 08:07

The agreed land purchase price of £0.85 million was funded from the Company's existing facilities, with net borrowings following the acquisition of 11.1% loan to value.



Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said: "The current shortfall in supply of quality industrial units has led to increased demand for development funding of this kind throughout the UK. This opportunity was of particular interest due to a well located unit and strong tenant on a long term lease. We anticipate further investment in pre-let development projects while the requirement for good quality units in areas of high demand continues."

[neilyb675] 28/5/2015 13:29

My ambition is to build a PF of diverse yielding shares, with a preference for quarterly yielders.

I was surprised not to find a thread for Custodian REIT, so here I have created one. Let battle commence (I mean let discussion commence)... !!

ps I hold this stock.