REG-Custodian Property Income REIT plc Custodian Property Income REIT plc: Strategic Majority-Share Acquisition of £8.5m Family Property Portfolio with Significant Rental Growth Potential

Custodian Property Income ReitAnnouncement

Yesterday 07:02

============

   Custodian Property Income REIT plc (CREI)
   Custodian Property Income REIT plc: Strategic Majority-Share Acquisition
   of £8.5m Family Property Portfolio with Significant Rental Growth
   Potential

   03-March-2026 / 07:00 GMT/BST

   ══════════════════════════════════════════════════════════════════════════

    

    

                                                                             

                                                                 3 March 2026

                                        

                       Custodian Property Income REIT plc

                                        

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

                                        

    Strategic Majority-Share Acquisition of £8.5m Family Property Portfolio
                    with Significant Rental Growth Potential

    

     • Represents  the  Company’s   third  majority-share  acquisition   this
       financial year of  a highly  complementary, diversified,  family-owned
       portfolio, following last year’s  Merlin transaction and last  month’s
       Grove Court transaction
     • Portfolio  offers   significant  value   creation  potential   through
       capturing an expected 43% latent rental growth at review
     • Further demonstration  of  the  appeal to  vendors  of  the  Company’s
       ability to leverage its investment strategy and listed REIT  structure
       to facilitate all-share  or majority-share  corporate acquisitions  of
       family property companies which offer:

     • Tax efficient solution for the sellers;
     • Share register augmented  by the  sellers’ desire  to retain  property
       investment exposure via ownership interests in the Company;
     • Family office portfolios typically  comprise regional properties  with
       lot sizes below £10m that align to the Company’s investment  strategy;
       and
     • Corporate acquisitions incur no SDLT leading to cost savings  compared
       to an equivalent property acquisition.

    

   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,  is
   pleased to announce  its third  recent corporate acquisition  of a  family
   property company with  the purchase of  Scorpion Properties Limited  (“the
   Transaction”) for £8.5m.

    

   The Transaction  provides the  Company with  another highly  complementary
   portfolio which comprises five single-let industrial properties with  100%
   occupancy (the “Investment Portfolio”) and further demonstrates  Custodian
   Property Income REIT’s ability  to build scale  by sourcing and  executing
   acquisitions where it can successfully  marry its investment strategy  and
   listed REIT structure to  provide an effective  tax efficient solution  to
   family property companies.

    

   With an average  lot-size of £1.7m,  the assets are  located in the  South
   Midlands along the  M40 corridor.  The  Investment Portfolio generates  an
   annual aggregate passing rent  of £0.6m, adding  c. 1.3% to the  Company’s
   annual rent roll.

    

   The Investment Portfolio  comprises four vehicle  accident repair  centres
   let to one of the UK’s leading automotive repair businesses, and one  unit
   let to the UK’s largest car-part distributor:

    

   Location            Tenant Annual passing rent (£000) % income
   Reading     Euro Car Parts                        205      33%
   Slough    Steer Automotive                        190      31%
   Aylesbury Steer Automotive                        100      16%
   Brackley  Steer Automotive                         82      14%
   Coventry  Steer Automotive                         36       6%
                                                     613     100%

    

   The Investment Portfolio  has a net  initial yield of  c.6.8%, but with  a
   reversionary  yield 1  1   of  9.7%,  expected  to  crystallise  over  the
   weighted average unexpired  lease term to  first break of  2.6 years  and,
   which will increase the Investment Portfolio’s rent roll by 43% from £613k
   to £874k.

    

   Transaction structure and consideration

    

   On 2 March 2026  the Company acquired the  entire issued share capital  of
   Scorpion Properties Limited (“Scorpion”) satisfied through:

    

     • The issuance of  4.9m shares  in the Company  on completion  (“Initial
       Consideration”), calculated on an adjusted net asset value (“NAV”) for
       NAV basis);
     • Settlement of Scorpion’s existing debt facilities totalling £3.4m; and
     • The issuance of  a further  estimated 0.3m shares  on finalisation  of
       completion accounts,  expected  during  the  next  three  months  (the
       “Deferred Consideration”).

    

   Aggregate  Initial  Consideration  and  expected  Deferred   Consideration
   represents approximately  1.1%  of  the  Company’s  current  issued  share
   capital (excluding treasury shares).

    

   Commenting on the Transaction,  Richard Shepherd-Cross, Managing  Director
   of  Custodian  Capital   Limited  “Custodian   Capital”),  the   Company’s
   Investment  Manager,  said:  “Following   so  shortly  after  our   recent
   acquisition of Grove Court, the Transaction is a further statement of  our
   ambition to continue scaling  the business using  the strong blueprint  we
   set in last year’s Merlin  acquisition. It also provides further  evidence
   of the solution we offer to family offices seeking to exit or simplify the
   ownership structure of their property  holdings by utilising the  benefits
   of our listed REIT status as well as our focus on high quality smaller-lot
   size investments,  which offer  an attractive  yield premium  over  larger
   assets, with  little  or no  more  associated risk. We  will  continue  to
   progress our pipeline  of similar  opportunities in line  with our  growth
   strategy  and  against  a   challenging  but  improving  capital   markets
   backdrop. Scorpion adds another high  quality and complementary  portfolio
   to our  asset  base and  is  a  further demonstration  our  commitment  to
   generating shareholder value through disciplined consolidation.

    

   “We believe many other family  property companies face similar  succession
   and tax issues in the UK. The listed REIT structure offers a tax efficient
   solution for the  sellers, extinguishing the  latent chargeable gains  and
   potentially deferring the crystallisation of a latent capital gain, whilst
   obtaining a more liquid and easily tradeable investment.”

    

   David MacLellan, Chairman of Custodian  Property Income REIT, added:  "The
   addition of  the Investment  Portfolio will  provide further  reversionary
   potential to  drive  future  earnings. With  three  similar  all-share  or
   majority-share  acquisitions  now  announced,  this  innovative   strategy
   targeting family  held  property  holdings  is proving  its  worth  as  an
   effective way to achieve scale.

    

   “The c.20% increase in the Company’s  share price since October last  year
   makes  these  types   of  transactions  more   appealing. Long-established
   family-owned  businesses  find  the  Investment  Manager’s  expertise   in
   property, combined  with  the  attractiveness  and  simplicity  of  owning
   property via  listed shares  which deliver  a high,  consistent  quarterly
   dividend, very compelling.”

    

   Gearing

    

   On acquisition GCP had net  gearing 2  2  of c.38%, resulting in  combined
   net gearing of 26%, still broadly in line with the Company’s 25% target.

    

   Directors

    

   On completion of the Transaction, the GCP Board resigned as directors with
   immediate effect.

   Rationale

    

   The Custodian Property Income  REIT Board believes  there is a  compelling
   strategic rationale for the Transaction:

    

     • Helps the Company progress its growth ambitions with the addition of a
       portfolio which is complementary, based on its equivalent lot size and
       current sector and geographical weightings;
     • The Transaction adds further income and strong reversionary  potential
       and is expected to  enhance earnings per share  and dividend cover  as
       this rental growth  is captured, increase  tenant diversification  and
       reduce the Company’s ongoing charges ratio.
     • As the Transaction is structured  as a corporate acquisition, no  SDLT
       was payable on acquiring the Investment Portfolio, leading to  savings
       of approximately £0.1m (net  of stamp duty payable  by the Company  on
       the acquisition of the GCP shares) compared to an equivalent  property
       acquisition.

    

   Issue of equity

    

   An application has been made for 4,942,650 New Ordinary Shares in relation
   to the Initial Consideration to be admitted to the premium segment of  the
   Official List, and to trading on  the London Stock Exchange's Main  Market
   for listed securities  ("Admission"). It is expected  that Admission  will
   become effective and dealings in the New Ordinary Shares will commence  at
   8am on 5 March 2026. The New Ordinary Shares will rank pari passu with the
   ordinary shares already in issue.

    

   Following  Admission,  the  Company's  issued  share  capital   (excluding
   treasury shares) will consist  of 488,316,789 ordinary  shares. Therefore,
   the total number of voting rights  of the Company is 488,316,789 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  3 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
                                               4 www.custodiancapital.com

    

   Deutsche Bank AG, London Branch                         
   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
                                            5 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       6 custodianreit.com      and
    7 custodiancapital.com.

   ══════════════════════════════════════════════════════════════════════════

    8  1  Estimated rental value divided by property valuation plus estimated
   purchaser’s costs.

    9  2  Bank and Director loans outstanding immediately prior to
   acquisition, less cash (excluding rent deposits) divided by Investment
   Portfolio acquisition price.

   ══════════════════════════════════════════════════════════════════════════

   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by  10 EQS Group.
   The issuer is solely responsible for the content of this announcement.

   View original content:  11 EQS News

   ══════════════════════════════════════════════════════════════════════════

   ISIN:          GB00BJFLFT45
   Category Code: ACQ
   TIDM:          CREI
   LEI Code:      2138001BOD1J5XK1CX76
   Sequence No.:  419700
   EQS News ID:   2284102


    
   End of Announcement EQS News Service

   ══════════════════════════════════════════════════════════════════════════

References

   Visible links
   1. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_AMQfnvyz.html#_ftn1
   2. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_AMQfnvyz.html#_ftn2
   3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=44eae66ce326b2005a19503bbab5faed&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news
   4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=c24dec6d0ea6c746569ddd52de0eca8d&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news
   5. mailto:custodianreit@fticonsulting.com
   6. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=44eae66ce326b2005a19503bbab5faed&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news
   7. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=c24dec6d0ea6c746569ddd52de0eca8d&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news
   8. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_AMQfnvyz.html#_ftnref1
   9. file:///data/ucdp/tmp/xhtmlconvert_parsn_eqs_AMQfnvyz.html#_ftnref2
  10. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=f5d50dc7e8798b6eb177f7955e598e60&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news
  11. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=c9446dc58060fb4df57adfb79825503b&application_id=2284102&site_id=refinitiv~~~790ea929-3c21-49b8-8ff9-1aed464daef1&application_name=news


============