Custodian REIT reports a net asset value per share total return of 3.4% in the six months to the end of September compared with 4.6% in the corresponding period last year and 6.3% for the year to the end of March.
The company said the The first half was a period of significant new investment, where the initial costs (primarily stamp duty) of investing £66.6m in property acquisitions diluted NAV per share total return by circa 1.2p, partly offset by raising £43.0m at a 5% premium to dividend adjusted NAV, which added 0.55p per share.
Acquisition costs incurred during the Period represented 5.7% of the total consideration, lower than the typical purchasers' costs of 6.5% due to the purchase of a portfolio of 10 light industrial units for £26.75m being made by way of a corporate acquisition, allowing the company and vendor to share the associated cost savings.
Chairman David Hunter said: "This has been another successful period of capital raising and investment as we continue to target growth to realise the potential economies of scale offered by the company's relatively fixed cost base, while adhering to the company's investment policy and maintaining the quality of both properties and income.
"I believe the current market dynamic supports our strategy of targeting high quality, smaller lot size properties across regional markets, with the type of institutional grade property targeted by the Company showing value relative to larger lots through a higher net income return and opportunities for future rental growth.
"We remain well placed to meet our target of paying further quarterly dividends, fully covered by income, to achieve an annual dividend for the year of 6.35p per share. I expect occupational demand, combined with a limited supply of new development, to drive rental growth and lower vacancy rates across regional markets, which will support our objectives to both grow the dividend on a sustainable basis and deliver capital value growth for our shareholders over the long-term."
At 8:09am: (LON:CREI) Custodian Reit Plc share price was +0.25p at 105.5p