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

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.

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Further information:

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

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 custodianreit.com and custodiancapital.com.