Strong rental growth in the industrial markets has helped Custodian Property Income REIT deliver a 1.2% increase in like-for-like passing rents and a 1% hike in ERVs in the three months ended 30 June.
The REIT said its portfolio ERV of £49.4m exceeded passing rent by 13%, reflecting the reversion captured and sales undertaken during the quarter.
Custodian said there was continuing “significant potential” to grow rental income across its portfolio by capturing reversion typically at five-yearly rent reviews or on reletting, in addition to continuing to drive rental growth through asset management.
Over the quarter the group added £700,000 of new rent, comprising three rent reviews on industrial assets at an aggregate 11% ahead of ERV and 41% above previous passing rent, two renewals agreed in line with previous passing rent and at a 6% premium to ERV; and seven new leases across various sectors adding £300,00 of new rent, in line with ERV.
Since the quarter end Custodian has completed two further lease renewals and three new leases at a combined average of 35% above the previous passing rent.
These include a five-year lease renewal to NatWest at an office in Oxford, with an annual rent of £128,000; a 10-year lease renewal to Barrhead Travel Service, with a tenant break option in years five and seven, at an annual rent of £65,000; and three leases of industrial units in Atherstone, with a combined annual rent of £29,000.
The valuation of the company’s portfolio of 153 assets was flat during the quarter at £579.6m.
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