Property investor optimistic despite slipping to loss

Leicester-headquartered property investment company Custodian Property Income REIT has slipped to a pre-tax loss in its full-year results but said there were signs of "optimism returning to real estate markets".

Leicester-headquartered property investment company Custodian Property Income REIT has slipped to a pre-tax loss in its full-year results but said there were signs of "optimism returning to real estate markets".

The listed company reported a pre-tax loss of £65.8m for the year ended 31 March 2023, compared to a £122.3m profit in 2021/22. This was put down to £91.6m valuation decreases caused by market sentiment around interest rate rises and inflation.

David Hunter, chairman of Custodian Property Income REIT, said: "Our strategy of investing in smaller, regional, core/core-plus property demonstrated its relative resilience and defensive qualities this year as the market corrected to the new interest rate environment, with the Company's portfolio experiencing a 11.8 per cent like-for-like decline in valuations compared to a 17 per cent market decrease.

"Since the year end we are beginning to see some optimism returning to real estate markets following six months of economic turbulence.  Valuations appear to have largely stabilised and the Company saw a return to a positive quarterly NAV total return per share in Q4.

"Recurring (EPRA) earnings per share of 5.6p for the year compares to 5.9p in 2022 and 5.6p in 2021.  While capital valuations have fluctuated, the underlying occupational property market has remained strong, maintaining relatively stable income returns."