REG-Custodian Property Income REIT plc Custodian Property Income REIT plc: Update on All-share Acquisition of £22m Merlin Properties

Custodian Property Income ReitAnnouncement

22/10/2025 07:00

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   Custodian Property Income REIT plc (CREI)
   Custodian Property Income REIT plc: Update on All-share Acquisition of
   £22m Merlin Properties

   22-Oct-2025 / 07:00 GMT/BST

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                                                              22 October 2025

                                        

                       Custodian Property Income REIT plc

                                        

              (“Custodian Property Income REIT” or “the Company”)

                                        

           Update on All-share Acquisition of £22m Merlin Properties

    

   Custodian Property  Income REIT  (LSE: CREI),  which seeks  to deliver  an
   enhanced income return by investing in a diversified portfolio of smaller,
   regional properties  with strong  income  characteristics across  the  UK,
   provides an update on the purchase of a £22.1m portfolio via the all-share
   acquisition of Merlin Properties  Limited (“Merlin”) (“the  Transaction”),
   as announced on 2 June 2025.

    

   Since completion of the Transaction, the Merlin properties have integrated
   well into the Company’s portfolio, with Merlin occupancy remaining  strong
   at almost 100%  and a number  of opportunities identified  to drive  value
   from increased rental income from upcoming lease events.

    

   The Transaction  has  also generated  immediate  capital upside  with  the
   disposal of two  non-core Merlin  properties for £0.6m,  in aggregate  16%
   ahead of purchase price. A further  five non-core assets recently sold  at
   auction 46% ahead of purchase price,  with the sales expected to  generate
   proceeds of £2.2m in  aggregate when they  complete later this  month. The
   proceeds  of  these   sales  will   be  recycled   into  value   enhancing
   opportunities within the wider portfolio.

    

   Commenting on the Transaction,  Richard Shepherd-Cross, Managing  Director
   of Custodian Capital Limited, the  Company’s Investment Manager, said:  “A
   key element of  our growth  strategy is  to seek  select opportunities  to
   scale the business and enhance earnings through corporate and/or portfolio
   acquisitions. The strategic all-share acquisition of the Merlin  portfolio
   provides a strong  blueprint of  how we can  achieve that  aim, despite  a
   challenging capital markets backdrop.

    

   “The ongoing disposal of non-core assets has already crystallised a profit
   and once again  demonstrates both our  ability to achieve  sales ahead  of
   purchase price as well as the  continued strength of purchaser demand  for
   smaller  lot-sized  assets. We  expect  to   use  the  proceeds  to   fund
   improvements to  the  existing portfolio  and  our ongoing  share  buyback
   programme. Looking ahead,  we hope  to position  the Company  for  further
   growth by targeting similar opportunities for increased scale, which offer
   a more liquid  investment and attractive  income returns, while  providing
   tax efficient solutions for family property companies in the UK.”

    

   Transaction consideration and issue of equity

    

   Under the terms of the Transaction, the Company acquired the entire issued
   share capital of  Merlin for  an initial consideration  of 22,928,343  New
   Ordinary Shares in the Company, which were admitted to the premium segment
   of the Official List  and to trading on  the London Stock Exchange's  Main
   Market for listed  securities ("Admission")  on 4  June 2025,  as well  as
   further new shares to be issued on finalisation of completion accounts.

    

   The Company is pleased to announce the finalisation of completion accounts
   in relation to the Transaction and the issuance of 1,224,401 New  Ordinary
   Shares (“the New  Shares”) for  Admission. It is  expected that  Admission
   will become effective and dealings in the New Shares will commence at  8am
   on 23 October 2025.  The New Shares will rank pari passu with the ordinary
   shares already in issue. 

    

   The Company  also holds  3,210,000  of its  ordinary shares  in  Treasury,
   purchased   since   30   June   2025   under   a   previously    announced
   non-discretionary buyback programme for aggregate consideration of  £2.5m,
   at a weighted average cost per share of 78.0p. This represents an  implied
   18.9% discount to the latest published NAV per share. The total number  of
   voting rights of  the Company following  Admission of the  New Shares  and
   excluding treasury shares is  461,793,142 and this figure  may be used  by
   shareholders as the denominator  for the calculations  by which they  will
   determine if they are required to notify their interest in, or of a change
   to  their  interest  in,  the  Company  under  the  FCA's  Disclosure  and
   Transparency Rules.

    

                                    - Ends -

    

   Further information:

    

   Further information regarding the  Company can be  found at the  Company's
   website  1 custodianreit.com or please contact:

    

   Custodian Capital Limited                                             
   Richard Shepherd-Cross – Managing Director

   Ed Moore – Finance Director                   Tel: +44 (0)116 240 8740

   Ian Mattioli MBE DL – Chairman
                                               2 www.custodiancapital.com

    

   Deutsche Numis                                       
   Hugh Jonathan / George Shiel Tel: +44 (0)20 7260 1000
                                   www.dbnumis.com/funds

    

   FTI Consulting                                                            
   Richard Sunderland / Ellie Sweeney /              Tel: +44 (0)20 3727 1000
   Andrew Davis / Oliver Parsons
                                            3 custodianreit@fticonsulting.com

    

   Notes to Editors

    

   Custodian Property Income REIT plc is  a UK real estate investment  trust,
   which listed on the main market of  the London Stock Exchange on 26  March
   2014.  Its   portfolio   comprises   properties   predominantly   let   to
   institutional  grade  tenants  throughout   the  UK  and  is   principally
   characterised by smaller, regional, core/core-plus properties. 

    

   The Company  offers  investors the  opportunity  to access  a  diversified
   portfolio of UK commercial  real estate through  a closed-ended fund.   By
   principally targeting  smaller, regional,  core/core-plus properties,  the
   Company seeks to provide investors with an attractive level of income with
   the potential for capital growth.

    

   Custodian Capital Limited is the  discretionary investment manager of  the
   Company.

    

   For     more      information     visit       4 custodianreit.com      and
    5 custodiancapital.com.

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   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:           GB00BJFLFT45
   Category Code:  MSCH
   TIDM:           CREI
   LEI Code:       2138001BOD1J5XK1CX76
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   405767
   EQS News ID:    2216332


    
   End of Announcement EQS News Service

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References

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