Thursday, February 29, 2024

Leicester property investment company slashes pre-tax losses

Custodian Property Income REIT has improved its pre-tax losses, according to interim results for the six months ended 30 September 2023.

The Leicester-based firm posted a loss before tax of £2.7m, contracting from loss of £14.1m in the same period last year.

Revenue grew slightly to £22.8m from £22.3m.

Meanwhile portfolio valuation remained stable with a marginal 0.6% decline to £609.8m. The portfolio saw a £15.6m valuation decrease, driven by current investor and market sentiment around the UK’s economic outlook and high interest rates, tempered by a £6.1m uplift from asset management initiatives.

EPRA earnings per share increased 3.5% to 2.9p, which the property investment company says is due to rental growth and improvement in occupancy offsetting administrative cost inflation and higher finance costs.

During the period £12.2m was invested primarily in the refurbishment and redevelopment of seven properties, which is expected to enhance the assets’ valuations and environmental credentials and increase rents to give a yield on cost of more than 7%, ahead of the company’s marginal cost of borrowing.

David MacLellan, chairman of Custodian Property Income REIT, said: “The company’s diversified and well managed investment portfolio has shown its resilience during the period, mitigating the risks posed by volatility in real estate investment markets and driving a continued strong operational performance.

“In addition, the company’s conservative balance sheet and its longer-term fixed rate debt profile have provided insulation against the challenge of higher interest rates in the short to medium term.

“Negative sentiment towards real estate investment is currently weighing against capital performance. This sentiment is driven primarily by the potential for persistent inflationary pressure to mean ‘higher-for-longer’ interest rates, uncertainty around the future of offices and the impact of the UK’s general economic outlook on discretionary consumer expenditure.

“However, there is depth in occupational demand and latent rental growth in the portfolio which offers the prospect of growth for existing shareholders, as sentiment improves towards the sector and gives us confidence that the company will continue to perform well.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.