28 February 2024

Custodian Property Income REIT plc

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

Two further sales agreed bringing total announced disposals in 2024 to c. £30 million, reflecting a 24% average premium to book value

Custodian Property Income REIT (LSE: CREI), which seeks to deliver a strong income return by investing in a diversified portfolio of smaller regional properties across the UK, is pleased to announce that further to its Third Quarter Trading Update of 7 February 2024, it has agreed terms on two additional sales,

comprising industrial units in Warrington and Weybridge.

This brings the total assets under offer to sell since 31 December 2023 to four, including a vacant former car dealership in Redhill and a vacant office in Castle Donington.  Collectively these four assets are under offer to sell for an aggregate £19.5 million, representing a premium of 29% to their 31 December 2023 aggregate valuation of £15.0 million. These disposals are scheduled to complete during the next two months, with proceeds expected to be used to reduce variable rate borrowings.

As a result, and following the previously announced sales of an industrial unit in Milton Keynes and an office building in Derby in January 2024 for an aggregate £10.1 million, the Company has sold or agreed to sell £29.6 million of assets this calendar year. 

Commenting on the disposals pipeline, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company’s external fund manager), said:

“The successful completion of these sales would be significantly accretive to annual recurring earnings, adding c.5% on a proforma basis for the 12 month period to 31 December 2023, by using expected sale proceeds to pay down variable rate debt with a current all-in interest rate of c. 6.9%, and so be supportive of paying a fully covered dividend in line with the Company’s policy and practice since IPO. 

These disposals would also have a positive effect on NAV adding c.1%, while improving the Company’s debt position by reducing LTV from 30.6% to 27.5%, as well as increasing occupancy from 91% to 93%, each on a pro-forma basis as at 31 December 2023.

These sales also demonstrate our ability to leverage our asset and portfolio management expertise, and highlight the benefits of the Company’s diversified investment strategy. This allows us to undertake both sales and acquisitions across all sectors where we see opportunities to optimise shareholder value, without the confines of being beholden to the head or tail winds of any single sector at a specific point in time.”

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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.

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