Custodian Property Income REIT plc: Q2 trading update shows active asset management and diversified portfolio continuing to drive income and valuation growth, underpinning fully covered dividend

DJ Custodian Property Income REIT plc: Q2 trading update shows active asset management and diversified portfolio continuing to drive income and valuation growth, underpinning fully covered dividend

Custodian Property Income REIT plc (CREI) 
Custodian Property Income REIT plc: Q2 trading update shows active asset management and diversified portfolio 
continuing to drive income and valuation growth, underpinning fully covered dividend 
13-Nov-2025 / 07:00 GMT/BST 
 
=---------------------------------------------------------------------------------------------------------------------- 

13 November 2025 

Custodian Property Income REIT plc 

("Custodian Property Income REIT" or "the Company") 

Q2 trading update shows active asset management and diversified portfolio continuing to drive income and valuation 
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 provides 
a trading update for the second quarter ended 30 September 2025 ("Q2" or the "Quarter"). 

Commenting on the trading update, Richard Shepherd-Cross, Managing Director of the Investment Manager, said: "The 
direct property market has been witnessing a recovery since September 2024, with valuations improving quarter on 
quarter for Custodian Property Income REIT, driven by consistent rental growth across all real estate sectors in the 
UK. As a result, the diversified nature of our portfolio is well positioned to benefit from the upside of both the real 
estate recovery and the improving market sentiment towards listed markets. 

"Despite uncertainty leading into the November 2025 Budget, the Company has continued to deliver another quarter of 
stable earnings, fully covering our dividend, with like-for-like passing rent growing by 2.3% through active asset 
management initiatives and the leasing of vacant space. Logic suggests that the strong performance of our underlying 
assets should flow through to narrowing the share price discount. However, a continued shift in sentiment is required 
alongside a willingness to consider the longer term income-focused opportunity that exists in listed real estate, with 
Custodian Property Income REIT currently offering an attractive c.7.5% dividend yield secured against a broadly 
diversified, well-let, reversionary portfolio of modern, regional properties. 

"Looking ahead, we will continue to pursue opportunities to invest in our existing portfolio and grow through selective 
corporate acquisitions, such as the all-share acquisition of the Merlin portfolio in May 2025. At the same time we will 
continue to actively recycle capital to strengthen the portfolio and increase NAV, facilitated by our share buy-back 
programme through which we have been selling assets at a premium to valuation while undertaking the timely acquisition 
of shares at a discount to the same metric." 
 
Highlights 

Strong leasing activity continues to improve occupancy and drive rental growth, supporting a fully covered dividend 

 -- 1.5p dividend per share approved for the Quarter, fully covered by unaudited European Public Real Estate 
  Association ("EPRA") earnings per share[1], in line with the target of at least 6.0p for the year ending 31 March 
  2026 (FY25: 6.0p). This target dividend represents a 7.3% yield based on the prevailing 82.0p share price[2] and is 
  in line with the Company's goal of being the REIT of choice to investors seeking high and stable dividends from 
  well-diversified UK real estate 
 -- EPRA earnings per share of 1.5p for the Quarter (Q1: 1.5p) 
 -- During the Quarter, like-for-like[3] ERV increased by 1.1%, primarily driven by 0.9% like-for-like growth in the 
  industrial sector, which represents 43% of the portfolio by income. Portfolio like-for-like ERV has grown 1.9% so 
  far this financial year. 
 -- 13% additional income growth already embedded within the portfolio with ERV of GBP51.9m (30 June 2025: GBP51.5m) 
  exceeding the current passing rent of GBP45.9m (30 June 2025: GBP44.9m)  
 -- Based on our track record and strong occupier demand for space, we expect to capture this potential rental upside 
  at (typically) five-yearly rent reviews or on re-letting, while continuing to drive passing rent and ERV growth 
  further through asset management initiatives 
 -- Positive leasing activity during the Quarter comprised: 
   - Letting five vacant units with annual rent of GBP645k (1.2% of ERV), including an industrial unit in Plymouth 
    where a GBP2.5m refurbishment has led to a 66% increase in annual rent to GBP0.5m.  These lettings helped improve 
    EPRA occupancy[4] to 92.2% (30 June 2025: 90.9%); and 
   - Seven lease renewals and regears 4% ahead of ERV and 39% ahead of previous passing rent, in aggregate. 
 -- GBP0.2m (Q1: GBP0.1m) of revenue generated from solar panel arrays across 12 assets, selling the renewable electricity 
  generated to tenants and exporting any surplus. 
  
 
Continued valuation growth across the Company's c.GBP625m portfolio, with a 1.4% increase on a like-for-like basis 

 -- Q2 net asset value ("NAV") total return per share[5] of 3.8% 
 -- NAV per share increased to 98.9p (30 June 2025: 96.7p) 
 -- NAV increased to GBP456.3m (30 June 2025: GBP448.7m), primarily due to valuation increases across all key property 
  sectors 
 -- The value of the Company's investment property portfolio was GBP625.0m (30 June 2025: GBP614.7m), a like-for-like 
  valuation increase of 1.4% during the Quarter, net of GBP3.7m of capital expenditure. 
  
 
Ongoing capital investment programme continues to enhance the portfolio, and asset recycling from the Merlin 
acquisition continues to be accretive 

 -- During the Quarter, the Company sold: 
   - A retail unit in Guildford for GBP1.6m, representing a 6.25% premium to the 30 June 2025 valuation; and 
   - A retail unit in Leicestershire for GBP0.4m, generating a 9% premium to the allocated purchase price. This 
    property was sold at auction having been earmarked for disposal when acquired as part of the Merlin Portfolio. 
 -- Post period end a further six assets in Leicestershire, acquired as part of the Merlin Portfolio, were sold for an 
  aggregate GBP2.4m. Two assets were sold to special purchasers, which helped deliver aggregate proceeds GBP0.7m (41%) 
  ahead of the allocated purchase price. 
 -- GBP3.7m of capital expenditure primarily relating to the refurbishment of industrial buildings in Plymouth and 
  Biggleswade, including the installation of solar panels and electric vehicle chargers, window replacement and 
  installation air source heat pumps, which both increases rental income and improves environmental performance. 
 -- Five solar panel arrays were independently valued for the first time during the Quarter, having been in operation 
  for 12 months, resulting in a GBP1.6m (124%) valuation uplift on cost. 
  
 
Prudent debt levels 

 -- Net gearing[6] was 26.4% loan-to-value at 30 Sept 2025 (30 June 25: 26.9%) 
 -- GBP173.5m (30 June 2025: GBP172m) of drawn debt at 30 Sept 2025, comprising GBP120m (69%) of fixed rate debt and GBP53.5m 
  (31%) drawn under the Company's GBP60m variable rate revolving credit facility ("RCF") 
 -- Weighted average cost ("WAC") of aggregate borrowings increased to 4.0% (30 June 2025: 3.8%) due to the Company 
  utilising its RCF to repay a GBP20m fixed rate loan that expired on 13 August 2025. The Company's remaining GBP120m of 
  longer-term fixed-rate debt facilities have a weighted average term of 5.3 years and a WAC of 3.3%, offering 
  significant medium-term interest rate risk mitigation. 
  
 
Dividends 

The Company paid an interim dividend per share of 1.5p on Friday 29 August 2025 relating to Q1, fully covered by EPRA 
earnings. 

The Board has approved a fully covered interim dividend per share of 1.5p for the second quarter to be paid on Friday 
28 November 2025 to shareholders on the register on 7 November 2025, designated as a property income distribution 
("PID"). 

The Board is targeting a dividend per share of no less than 6.0p for the year ending 31 March 2026. 

Net asset value 

The Company's unaudited NAV increased to GBP456.3m, or approximately 98.9p per share, at 30 September 2025: 
 
                                          Pence per share    GBPm 

NAV at 30 June 2025                                96.7          448.7 
 
Shares repurchased                                0.1          (1.7) 
 
                                          96.8          447.0 

Net income for the Quarter                            1.5          7.1 
 
Interim quarterly dividends paid during the Quarter relating to FY25 Q4[7]    (1.5)         (7.0) 

Valuation increases and depreciation                       2.1          9.1 
 
Profit on disposal                                -           0.1 

NAV at 30 Sept 2025                                98.9          456.3 

(MORE TO FOLLOW) Dow Jones Newswires

November 13, 2025 02:00 ET (07:00 GMT)