Custodian REIT is to link its dividend payments to rent collection levels as it experiences “inevitable disruption” in the face of the coronavirus pandemic.
The landlord, which has a mixed portfolio of 161 assets spread across the UK, said that it would pay its dividend for the quarter ended 31 March 2020 as it had collected all rent for that period but that the current level of dividend was not expected to be supported going forward.
It said: “The company intends to continue to pay quarterly dividends at a level broadly linked to net rental receipts, with support from prior years’ undistributed reserves if required, of no less than an aggregate 1.5p per share for the first half of the financial year ending 31 March 2021, until deferred rents can be collected and the dividend can return towards the target level.”
The firm said that following negotiations regarding the March quarter rent, it agreed that a number of its tenants can move from quarterly in advance to monthly in advance rent payments, or defer their March quarter’s rent with a full recovery over the next 12 months.
It added that some tenants had yet to agree a payment profile, but that it was in active discussion with more than 40 tenants to agree payment plans for the balance of outstanding rent.
The group said that it had so far collected 67% of rent due relating to the month of April, with a further 5% expected to be received shortly.
Custodian said it was currently in good financial health with £25m of cash and gross borrowings of £150m. Around £190m of its £571.2m portfolio is unencumbered by borrowings.
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