Custodian REIT, the Leicester-based commercial real estate investment company, has seen profits drop according to interim results for the six months ended 30 September 2019.
Profit before tax decreased to £0.7m from £16.6m in the same period of 2018. The firm noted this was primarily due to property valuation decreases largely offsetting a steady trading result.
Revenue in the period however rose to £20.4m up from £19.6m in 2018.
David Hunter, Chairman of Custodian REIT, said: “I am pleased to report that the Company delivered a further positive total return for the Period despite a struggling retail sector and continued UK political uncertainty. We continue to target sustainable growth to realise the potential economies of scale offered by the Company’s relatively fixed administrative cost base.
“The challenges to physical retail compared to online retail have yet to reach a conclusion, but, across other sectors of the commercial property market, there remain supply and demand imbalances that should continue relatively low vacancy rates and further rental growth. These conditions are positive for the income focused strategy of Custodian REIT. It seems we are almost certainly destined for an extended period of low interest rates and in a low return environment the income returns offered by property look very attractive.
“We are well placed to meet our target of paying further quarterly dividends, fully covered by net income, to achieve an annual dividend for the year of 6.65p per share, and remain committed to both growing the dividend on a sustainable basis and delivering capital value growth for our shareholders over the long-term.”