5 December 2025 Custodian Property Income REIT plc (“the Company” or “Custodian Property Income REIT”) Interim results for the period ended 30 September 2025 A strong operational performance with active asset management driving valuation and earnings growth, underpinning fully covered dividend 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, today announces its interim results for the period ended 30 September 2025 (“the Period”). Commenting on the interim results, Richard Shepherd-Cross, Managing Director of the Investment Manager, said: “The direct property market is continuing its recovery in the UK, with valuations improving quarter-on-quarter, driven by rental growth across all sectors. The strong performance of the underlying assets should be expected to steadily flow through to listed property companies’ share prices, but a further shift in market sentiment is required along with a willingness to consider the longer-term opportunity that exists in real estate. “At a property level, Custodian Property Income REIT is delivering on all fronts to provide shareholders with strong income returns by capturing portfolio reversion and driving sustainable earnings growth. During the Period, our targeted asset management programme grew the rent roll from £43.9m to £45.9m, primarily driven by lease renewals picking up ongoing rental growth, as well as the new lettings of vacant units and positive rent review results. In line with the growth of the rent roll and estimated rental value of the portfolio, we have witnessed continued valuation growth for the fifth consecutive quarter, with NAV per share increasing by 2.9% since 31 March 2025. “The portfolio has continued to deliver a fully covered dividend of 6.0p per share, with future rental growth potential of 13% embedded, and offering a road map to further earnings growth. Simultaneously, undertaking profitable sales ahead of pre-offer valuations has helped to fund various refurbishment initiatives within the existing portfolio, as well as proving valuations. Our ongoing share buyback programme has executed the timely acquisition of shares at a discount to NAV. “In the inflationary environment that is likely to persist, real assets that can be enhanced to deliver rental and capital growth will protect the real value of both shareholders’ investment and income. At the same time, we will continue to look for opportunities to grow through corporate acquisitions similar to the Merlin transaction we announced at the start of the Period.” Highlights of the Period: 3.3% growth in EPRA earnings per share to 3.1p (30 September 2024: 3.0p) with a fully covered dividend per share of 6.0p, reflecting a 7.4% dividend yield as at 30 September 2025 Estimated rental value (“ERV”) increased by 3.4% from £50.2m to £51.9m, with ERV 13% ahead of passing rent, providing a significant opportunity to unlock further rental growth through asset management and at lease events Leasing activity during the Period included eight new lettings and four rent reviews, helping grow the rent roll from £43.9m as at 31 March 2025 to £45.9m as at 30 September 2025 Occupancy increased by 1.1% to 92.2% (31 March 2025: 91.1%) Like-for-like valuation of the Company’s portfolio of 175 properties increased by 1.9% to £625.0m, supporting a 2.9% NAV per share increase and contributing to a 6.0% NAV total return (30 September 2024: 3.6%). Encouragingly, valuations have improved at an accelerating rate, quarter-on-quarter, reflecting falling interest rates and the recovery of real estate market sentiment £1.6m of solar panel valuation increases represent a 124% uplift on the cost of five of the Company’s operational arrays £6.2m of capital investment during the Period, primarily relating to the refurbishment of industrial units in Plymouth and Biggleswade £8.9m of proceeds from selective disposals achieved at an aggregate 12% premium to pre-offer valuation, with a further £2.4m of disposals since the Period end Net gearing remains low at 26.3% (31 March 2025: 27.9%) with 69% at a fixed rate of interest During the Period, the Company completed the purchase of a £22.1m portfolio via the all-share acquisition of a family property company. The ‘Merlin’ acquisition comprised a £19.4m portfolio of 28 smaller lot-size regional UK investment properties which are highly complementary to the Company’s existing assets, as well as c. £2.7m of newly built housing stock, the ongoing sales of which are expected to conclude by the end of the financial year, generating additional cash for the Company. Further information: Further information regarding the Company can be found at the Company's website
custodianreit.com or please contact:
| Custodian Capital Limited | |
| Richard Shepherd-Cross – Managing Director Ed Moore – Finance Director Ian Mattioli MBE DL – Chairman | Tel: +44 (0)116 240 8740 |
| | www.custodiancapital.com |
| Deutsche Bank AG, London Branch | |
| Hugh Jonathan / George Shiel | Tel: +44 (0)20 7260 1000 |
| | www.dbnumis.com |
Property highlights
| | 30 Sept 2025 £m | Comments |
| | | |
| Portfolio value[1] | 625.0 | 31 March 2025: £594.4m, 30 September 2024: £582.4m |
| Valuation increases[2]: | 15.4 | £13.8m investment property, representing a 1.9% like-for-like increase, explained further in the Investment Manager’s report £1.6m solar panels[3], representing a 124% uplift on the cost of five of the Company’s operational arrays |
| | | |
| Capital investment | 6.2 | Primarily comprising: £3.6m refurbishing industrial assets in Plymouth and Biggleswade £0.7m combining two units to facilitate a letting at a retail warehouse in Southport |
| | | |
| Disposal proceeds | 8.9 | At an aggregate 12% premium to pre-offer valuation[4] comprising: Two office buildings in Cheadle for an aggregate £6.9m A retail unit in Guildford for £1.6m A retail unit in Leicestershire for £0.4m |
| | | |
| Disposal proceeds since the Period end | 2.4 | Six assets in Leicestershire, acquired as part of the Merlin Portfolio |
| | | |
| Occupancy | 92.2% | Increased 1.2% since 31 March 2025 through letting eight vacant units across seven assets in the retail warehouse, industrial and office sectors |
Financial highlights and performance summary
| | 6 months ended | 6 months ended | 12 months ended | |
| | 30 Sept 2025 | 30 Sept 2024 | 31 Mar 2025 | Comments |
| Returns | | | | |
| EPRA[5] earnings per share[6] | 3.1p | 3.0p | 6.1p | The impact of an improvement in occupancy and increase in income from solar panels have exceeded cost inflation |
| Basic and diluted earnings per share[7] | 6.1p | 3.4p | 8.7p | Current period profit reflects improving valuations |
| Profit before tax (£m) | 27.6 | 14.9 | 38.2 |
| Dividends per share[8] | 3.0p | 3.0p | 6.0p | Target dividend per share for the year ended 31 March 2026 of not less than 6.0p, in line with the Company’s policy of paying fully covered dividends |
| Dividend cover[9] | 101% | 100% | 101% |
| NAV per share[10] total return | 6.0% | 3.6% | 9.5% | 3.1% dividends paid and a 2.9% capital increase |
| Share price total return[11] | 10.2% | 8.8% | 1.2% | Share price increased from 76.2p to 81.0p during the Period |
| | | | | |
| Capital values | | | | |
| NAV and EPRA NTA[12] (£m) | 456.3 | 412.7 | 423.5 | NAV increased during the Period due to £15.4m of valuation increases and the all-share acquisition of Merlin Properties Limited |
| NAV per share and NTA per share | 98.9 | 93.6 | 96.1 |
| Borrowings | | | | |
| Net gearing[13] | 26.3% | 28.5% | 27.9% | Decreased due to disposal proceeds exceeding capital expenditure, valuations increasing during the Period and acquiring the ungeared Merlin Portfolio in an all-share transaction |
| Weighted average cost of drawn debt facilities | 4.0% | 4.0% | 3.9% | Majority fixed rate debt insulating the Company from higher base rate |
| | | | | |
| Costs | | | | |
| Ongoing charges ratio (“OCR”) excluding direct property expenses[14] | 1.34% | 1.28% | 1.30% | Fixed cost inflation exceeding rate of valuation increases |
| | | | | |
| Environmental | | | | |
| Weighted average energy performance certificate (“EPC”) rating[15] | B (49) | C (52) | C (51) | EPCs updated across 12 properties demonstrating continuing improvements in the environmental performance of the portfolio |
The Company presents alternative performance measures (“APMs”) to assist stakeholders in assessing performance alongside the Company’s results on a statutory basis. APMs are among the key performance indicators used by the Board to assess the Company’s performance and are used by research analysts covering the Company. The Company uses APMs based upon the EPRA Best Practice Recommendations Reporting Framework which is widely recognised and used by public real estate companies. Certain other APMs may not be directly comparable with other companies’ adjusted measures, and APMs are not intended to be a substitute for, or superior to, any IFRS measures of performance. Supporting calculations for APMs and reconciliations between APMs and their IFRS equivalents are set out in Note 19. Business model and strategy Purpose Custodian Property Income REIT offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund. The Company seeks to provide investors with an attractive level of income and the potential for capital growth, with a focus on improving the environmental credentials of the portfolio, to become the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate. Stakeholder interests The Board recognises the importance of stakeholder interests and keeps these at the forefront of business and strategic decisions, ensuring the Company: Understands and meets the needs of its occupiers, owning fit for purpose properties with strong environmental credentials in the right locations which comply with regulations; Protects and improves its stable cash flows with long-term planning and decision making, implementing its policy of paying maintainable dividends fully covered by recurring earnings and securing the Company’s future; and Adopts a responsible approach to communities and the environment, actively seeking ways to minimise the Company’s impact on climate change and providing the real estate fabric of the economy, giving employers a place of business. Investment Policy summary The Company’s investment policy
[16] is summarised below: To invest in a diverse portfolio of UK commercial real estate, principally characterised by smaller, regional, core/core-plus
[17] properties that provide enhanced income; The property portfolio should be diversified by sector, location, tenant and lease term, with a maximum weighting to any one property sector or geographic region of 50%; To acquire modern buildings or those considered fit for purpose by occupiers, focusing on areas with: High residual values; Strong local economies; and An imbalance between supply and demand; No one tenant or property should account for more than: 5% of the rent roll for Governmental bodies or departments and single tenants with an ‘above average risk’ credit rating
[18] risk; and 10% of the rent roll at the time of purchase for other tenants or properties. Not to undertake speculative development, except for the refurbishment or redevelopment of existing holdings; To seek further growth, which may involve strategic property portfolio acquisitions and corporate consolidation; and The Company may use gearing provided that the maximum loan-to-value (“LTV”) shall not exceed 35%, with a medium-term net gearing target of 25% LTV. The Board reviews the Company’s investment objectives at least annually to ensure they remain appropriate to the market in which the Company operates and in the best interests of shareholders. Differentiated property strategy The Company’s portfolio is focused on smaller, regional, core/core-plus assets which helps achieve our target of high and stable dividends from well-diversified real estate by offering: An enhanced yield on acquisition – with no need to sacrifice quality of property, location, tenant or environmental performance for income and with a greater share of value in ‘bricks and mortar’ rather than the lease; Greater diversification – spreading risk across more assets, locations and tenants and offering more stable cash flows; and A higher income component of total return – driving out-performance with forecastable and predictable returns. Richard Shepherd-Cross, Managing Director of the Company’s discretionary investment manager, commented: "Our smaller-lot specialism has consistently delivered significantly higher yields without exposing shareholders to additional risk. We believe the recent narrowing of the margin between lot sizes is in large part due to a smaller sample set of transactions, as investment volumes are down, disproportionately impacted by a number of large, higher yielding office and shopping centre assets. We will watch the data with interest but expect a wider margin to be maintained in normalised markets.”
| Sector | Weighting by income
30 September 2025 | | | | | Industrial | 43% | | Retail warehouse | 22% | | Office | 14% | | Other | 14% | | High street retail | 7% |
| | Location | Weighting
by income
30 September 2025 | | | | | West Midlands | 19% | | North-West | 17% | | East Midlands | 16% | | Scotland | 14% | | South-East | 10% | | South-West | 10% | | North-East | 9% | | Eastern | 4% | | Wales | 1% |
|
Our environmental, social and governance (“ESG”) objectives Improving the energy performance of our buildings - investing in carbon-reducing technology, infrastructure and onsite renewables and ensuring redevelopments are completed to high environmental standards which are essential to the future leasing prospects and valuation of each property Reducing energy usage and emissions - liaising closely with our tenants to gather and analyse data on the environmental performance of our properties to identify areas for improvement Achieving positive social outcomes and supporting local communities - engaging constructively with tenants and local government to ensure we support the wider community through local economic and environmental plans and strategies and playing our part in providing the real estate fabric of the economy, giving employers safe places of business that promote tenant well-being Understanding environmental risks and opportunities - allowing the Board to maintain appropriate governance structures to ensure the Investment Manager is appropriately mitigating risks and maximising opportunities Complying with all requirements and reporting in line with best practice where appropriate - exposing the Company to public scrutiny and communicating our targets, activities and initiatives to stakeholders Governance - maintaining high standards of corporate governance and disclosure to ensure the effective operation of the Company and instil confidence amongst our stakeholders. We aim to continue to focus on our levels of governance and disclosure to maintain industry best practice
Investment Manager Custodian Capital Limited (“the Investment Manager”) is appointed under an investment management agreement (“IMA”) to provide property management and administrative services to the Company. Richard Shepherd-Cross is Managing Director of the Investment Manager. Richard has 30 years’ experience in commercial property, qualifying as a Chartered Surveyor in 1996 and until 2008 worked for JLL, latterly running its national portfolio investment team. Richard established Custodian Capital Limited as the Property Fund Management subsidiary of Mattioli Woods Limited (“Mattioli Woods”) and in 2014 was instrumental in the launch of Custodian Property Income REIT from Mattioli Woods’ syndicated property portfolio and its 1,200 investors. Following the successful IPO of the Company, Richard has overseen the growth of the Company to its current property portfolio of c. £600m. Richard is supported by the Investment Manager’s other key personnel: Ed Moore - Finance Director and Alex Nix - Assistant Investment Manager, along with a team of seven other surveyors and five accountants.
Chairman’s statement Custodian Property Income REIT’s strategy is to invest in a diversified, regional portfolio which, at 30 September 2025, comprised 175 properties geographically spread throughout the UK and across a diverse range of sectors, with a portfolio yielding 6.7%
[19] (31 March 2025: 6.6%). With an average property value of c.£4m and no one tenant per property accounting for more than 1.8% of the Company’s rent roll, property specific risk and tenant default risk are significantly mitigated. This diversified strategy and strong focus on income has served to deliver continued and relatively stable returns and puts the Company in a strong position against a background of improving sentiment towards commercial property investment. For the six months to 30 September 2025 share price total return was 10.2%, supported by NAV per share total return of 6.0% with a fully covered dividend providing a significant and defensive component of total returns. The Company’s weighted average cost of debt has remained at c. 4% and earnings have been resilient with EPRA EPS of 3.1p (2024: 3.0p) for the Period, buoyed by rental growth and the letting of vacant space, increasing occupancy since 31 March 2025 from 91.1% to 92.2%. The rent roll has grown from £43.9m at 31 March 2025 to £45.9m and the estimated rental value (“ERV”) of the portfolio has increased by £1.7m to £51.9m during the Period, providing a reversionary potential
[20] of 13%. Dividends In line with the Company’s objective to be the REIT of choice for institutional and private investors seeking high and stable dividends from well diversified UK commercial real estate, we were pleased to announce dividends per share of 3.0p (2024: 3.0p) relating to the six months to 30 September 2025. The Board expects to continue to pay quarterly dividends per share of 1.5p to achieve a fully covered target dividend per share for the year ending 31 March 2026 of no less than 6.0p. The Board acknowledges the importance of income for shareholders and its objective remains to grow the dividend at a rate which is fully covered by net rental income and does not inhibit the flexibility of the Company’s investment strategy. Portfolio During the Period and since the Period end the Company has generated sale proceeds of £11.3m which have been recycled into investments in accretive asset improvements whilst paying down variable rate debt to support net earnings. The Company’s property investment strategy, which targets smaller regional properties, often provides strategic options to re-lease or to sell at lease expiry. This optionality exists because there is an active owner-occupier market for smaller regional properties, which is much less the case for larger assets. Net asset value The NAV of the Company at 30 September 2025 was £456.3m, approximately 98.9p per share:
| | | | Pence per share | £m |
| | | | | |
| NAV at 31 March 2025 | | | 96.1 | 423.5 |
| | | | | |
| Share repurchases | | | 0.1 | (1.7) |
| | | | | |
| Acquisition of Merlin Properties Limited | | | (0.1) | 21.2 |
| Acquisition costs | | | (0.2) | (1.0) |
| | | | | |
| Valuation increases[21] and depreciation | | | 2.8 | 13.1 |
| Profit on disposal | | | 0.2 | 0.8 |
| Net gains on investment property | | | 3.0 | 13.9 |
| | | | | |
| Net earnings | | | 3.0 | 14.0 |
| Quarterly interim dividends paid during the Period | | | (3.0) | (13.6) |
| | | | | |
| NAV at 30 September 2025 | | | 98.9 | 456.3 |
Borrowings The Company’s net gearing decreased from 27.9% LTV at 31 March 2025 to 26.3% during the Period. The proportion of the Company’s drawn debt facilities with a fixed rate of interest decreased to 69% at 30 September 2025 (31 March 2025: 80%) due to a £20m fixed rate loan expiring in August 2025 and being repaid using the revolving credit facility (“RCF”). However, the Company’s majority fixed rate debt still significantly mitigates interest rate risk for the Company and maintains a beneficial margin between the weighted average cost of debt of 4.0% (31 March 2025: 3.9%) and income returns from the property portfolio. The Company’s debt is summarised in Note 14. Board As previously reported, Nathan Imlach will retire from the Board on 31 December 2025. On behalf of the Board I would like to thank Nathan for his contribution and wish him well in the future. Following Nathan’s retirement, the Board will be fully independent and will meet the FCA’s target for 40% female Board representation. Share buyback programme During the Period the Company implemented a share buyback programme with a maximum aggregate consideration of £5.0m (“the Buyback Programme”). During the higher interest rate environment since 1 April 2023 the Company has prioritised re-investment of proceeds from selective disposals in funding capital expenditure (“capex”) to improve the quality and environmental credentials of the portfolio and to pay down variable rate debt, aligning with the Company’s strategy of providing shareholders with strong income returns. The Board believes the current share price materially undervalues the Company and its portfolio, including the security and quality of income offered through the fully covered dividend. Under the Buyback Programme shares will only be purchased if the Directors believed it would result in an increase in earnings per share or an increased NAV per share (or both) for remaining shareholders. At the current share price and given the latest expectations for future interest rates, the Directors believe the Buyback Programme is an attractive use of property disposal proceeds that will create value for shareholders. To date the Company has purchased 5,495,732 (30 September 2025: 2,210,000) shares under the Buyback Programme, which are held in treasury. Aggregate consideration for these buybacks was £4.3m (30 September 2025: £1.7m) at a weighted average cost per share of 79.0p (30 September 2025: 78.4p), representing an average 17.7% (30 September 2025: 18.5%) discount to prevailing dividend adjusted NAV per share. Acquisitions On 30 May 2025 the Company acquired 100% of the ordinary share capital of Merlin Properties Limited (“Merlin”) for initial consideration of 22.9m new ordinary shares in the Company (“the Transaction”). A final tranche of consideration, comprising 1.2m shares, was issued on 23 October 2025. The aggregate consideration was calculated on an ‘adjusted NAV-for-NAV basis’, with each company’s NAV being adjusted for respective acquisition costs and Merlin’s investment property portfolio valuation adjusted to the agreed purchase price of £19.4m. The Transaction provides the Company with a portfolio that is both a strong fit with our income-focused strategy and highly complementary to our existing property portfolio, augmenting our regional, industrial bias and adding further diversification by tenant. We have also successfully disposed of seven non-core properties from the Merlin portfolio since acquisition at an aggregate premium to allocated purchase cost, supporting the overall acquisition value. Custodian Property Income REIT remains committed to growth and over the first 11 years of trading the Company has grown, largely organically, but also via corporate acquisitions, with an over six-fold increase in the size of the portfolio from £90m of property assets at IPO to £625m at 30 September 2025. This growth has improved shareholder liquidity and increased diversification, mitigating property specific and tenant risk while stabilising earnings. Following the Merlin acquisition, the Board of Custodian Property Income REIT and the Investment Manager are actively exploring further opportunities to purchase complementary portfolios via mergers or corporate acquisitions. ESG The Company has made further pleasing progress implementing its environmental policy during the Period, improving its floor area weighted average EPC score from C (51) to B (49) due primarily to completing refurbishments at two large industrial units. The Board was pleased to publish its Asset Management and Sustainability report in June which is available at:
custodianreit.com/environmental-social-and-governance-esg/ This report contains details of the Company’s asset management initiatives with a clear focus on their impact on ESG, including case studies of recent positive steps taken to improve the environmental performance of the portfolio. Outlook Sentiment towards real estate investment has been dominated by economic and political uncertainty, most particularly in the run up to the Budget on 26 November 2025. No Budget measures are expected to have a direct, negative impact on commercial real estate investment and, as summarised by Knight Frank, a relatively ‘bond-friendly’ budget has resulted in gilt yields edging down leaving the door firmly open for future base rate cuts. This further supports the existing positive outlook for real estate, with rental growth across all sectors, albeit not all properties. Valuations have been increasing, largely in line with rental growth, and vacancy rates have fallen during the Period. We have seen continued buying of our shares through the retail investor platforms which have committed a further £8m during the Period and a total of £39m over the last two years. Custodian Property Income REIT continues to provide shareholders with an income focused investment opportunity, with earnings supporting a fully covered dividend. We believe the twin drivers of interest rate cuts and continued rental growth will attract capital back to listed real estate and lead to a sustained share price recovery. In the meantime, we are making best use of our ability to buy-back shares, to support earnings per share, at prices that we believe undervalue the Company. We continue to look for opportunities to grow through corporate acquisitions while at the same time expect to progress selective and profitable disposals to further manage our revolving debt and support asset enhancing capex. David MacLellan Chairman 4 December 2025 Investment Manager’s report Property market The direct property market is continuing its recovery in the UK, with valuations improving quarter-on-quarter, driven by rental growth across all sectors. The strong performance of the underlying assets should be expected to steadily flow through to listed property companies’ share prices, but a further shift in market sentiment is required along with a willingness to consider the longer-term opportunity that exists in real estate. At a property level, Custodian Property Income REIT is delivering on all fronts to provide shareholders with strong income returns by capturing portfolio reversion and driving sustainable earnings growth. During the Period, our targeted asset management programme grew the rent roll from £43.9m to £45.9m, primarily driven by lease renewals picking up ongoing rental growth, as well as the new lettings of vacant units and positive rent review results. In line with the growth of the rent roll and estimated rental value of the portfolio, we have witnessed continued valuation growth for the fifth consecutive quarter, with NAV per share increasing by 2.9% since 31 March 2025. The portfolio has continued to deliver a fully covered dividend of 6.0p per share, with future rental growth potential of 13% embedded, and offering a road map to further earnings growth. Simultaneously, undertaking profitable sales ahead of pre-offer valuations has helped to fund various refurbishment initiatives within the existing portfolio, as well as proving valuations. Our ongoing share buyback programme has executed the timely acquisition of shares at a discount to NAV. Strong recent leasing activity demonstrates the resilience of Custodian Property Income REIT’s well-diversified investment portfolio. 15 lease renewals/regears with £2.0m of annual rent have been signed during the Period. £2.1m of new rent has been added to the rent roll from: Completing four rent reviews on assets in the retail warehouse, industrial and retail sectors at an aggregate 8% above previous passing rent and in line with ERV, adding £0.5m of new rent; and Letting
