DJ Custodian Property Income REIT plc: Interim results for the period ended 30 September 2025
Custodian Property Income REIT plc (CREI)
Custodian Property Income REIT plc: Interim results for the period ended 30 September 2025
05-Dec-2025 / 07:01 GMT/BST
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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 GBP43.9m to GBP45.9m, 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 GBP50.2m to GBP51.9m, 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 GBP43.9m as at 31 March 2025 to GBP45.9m 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 GBP625.0m, 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
-- GBP1.6m of solar panel valuation increases represent a 124% uplift on the cost of five of the Company's operational
arrays
-- GBP6.2m of capital investment during the Period, primarily relating to the refurbishment of industrial units in
Plymouth and Biggleswade
-- GBP8.9m of proceeds from selective disposals achieved at an aggregate 12% premium to pre-offer valuation, with a
further GBP2.4m 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 GBP22.1m portfolio via the all-share acquisition of a
family property company. The 'Merlin' acquisition comprised a GBP19.4m portfolio of 28 smaller lot-size regional UK
investment properties which are highly complementary to the Company's existing assets, as well as c. GBP2.7m 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 Tel: +44 (0)116 240 8740
Ian Mattioli MBE DL - Chairman
www.custodiancapital.com
Deutsche Bank AG, London Branch
Hugh Jonathan / George Shiel Tel: +44 (0)20 7260 1000
www.dbnumis.com
FTI Consulting
Richard Sunderland / Ellie Sweeney / Andrew Davis / Oliver Parsons Tel: +44 (0)20 3727 1000
custodianreit@fticonsulting.com
Property highlights
30 Sept
2025
GBPm
Comments
31 March 2025: GBP594.4m, 30 September 2024: GBP582.4m
Portfolio value[1] 625.0
-- GBP13.8m investment property, representing a 1.9% like-for-like increase,
Valuation increases[2]: 15.4 explained further in the Investment Manager's report
-- GBP1.6m solar panels[3], representing a 124% uplift on the cost of five of the
Company's operational arrays
Primarily comprising:
Capital investment 6.2
-- GBP3.6m refurbishing industrial assets in Plymouth and Biggleswade
-- GBP0.7m combining two units to facilitate a letting at a retail warehouse in
Southport
At an aggregate 12% premium to pre-offer valuation[4] comprising:
Disposal proceeds 8.9
-- Two office buildings in Cheadle for an aggregate GBP6.9m
-- A retail unit in Guildford for GBP1.6m
-- A retail unit in Leicestershire for GBP0.4m
Disposal proceeds since 2.4 Six assets in Leicestershire, acquired as part of the Merlin Portfolio
the Period end
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 6 months 12 months
ended ended ended
30 Sept 30 Sept
2025 2024 31 Mar 2025
Comments
Returns
EPRA[5] earnings per 3.1p 3.0p 6.1p The impact of an improvement in occupancy and increase in
share[6] income from solar panels have exceeded cost inflation
Basic and diluted 6.1p 3.4p 8.7p
earnings per share[7]
Current period profit reflects improving valuations
Profit before tax 27.6 14.9 38.2
(GBPm)
Target dividend per share for the year ended 31 March 2026 of
Dividends per share not less than 6.0p,
[8] 3.0p 3.0p 6.0p
in line with the Company's policy of paying fully covered
dividends
Dividend cover[9] 101% 100% 101%
NAV per share[10] 6.0% 3.6% 9.5% 3.1% dividends paid and a 2.9% capital increase
total return
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Share price total 10.2% 8.8% 1.2% Share price increased from 76.2p to 81.0p during the Period
return[11]
Capital values
NAV and EPRA NTA[12] 456.3 412.7 423.5
(GBPm) NAV increased during the Period due to GBP15.4m of valuation
increases and the all-share acquisition of Merlin Properties
Limited
NAV per share and NTA 98.9 93.6 96.1
per share
Borrowings
Decreased due to disposal proceeds exceeding capital expenditure,
valuations increasing during the Period and acquiring the
ungeared Merlin Portfolio in an all-share transaction
Net gearing[13] 26.3% 28.5% 27.9%
Weighted average cost of 4.0% 4.0% 3.9% Majority fixed rate debt insulating the Company from higher base
drawn debt facilities rate
Costs
Ongoing charges ratio ("OCR")
excluding direct property 1.34% 1.28% 1.30% Fixed cost inflation exceeding rate of valuation increases
expenses[14]
Environmental
Weighted average energy EPCs updated across 12 properties demonstrating continuing
performance certificate B (49) C (52) C (51) improvements in the environmental performance of the portfolio
("EPC") rating[15]
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."
by income
30 September 2025
Weighting by income
30 September 2025 Location
Sector West Midlands 19%
North-West 17%
Industrial 43% East Midlands 16%
Retail warehouse 22% Scotland 14%
Office 14% South-East 10%
Other 14% South-West 10%
High street retail 7% North-East 9%
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
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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. GBP600m.
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.GBP4m 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 GBP43.9m at 31 March 2025 to GBP45.9m and the estimated rental value ("ERV") of the portfolio has increased by GBP1.7m to GBP51.9m 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 GBP11.3m 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 GBP456.3m, approximately 98.9p per share:
Pence per share GBPm 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 GBP20m 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 GBP5.0m ("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 GBP4.3m (30 September 2025: GBP1.7m) 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 GBP19.4m.
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.
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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 GBP90m of property assets at IPO to GBP625m 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 GBP8m during the Period and a total of GBP39m 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 GBP43.9m to GBP45.9m, 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 GBP2.0m of annual rent have been signed during the Period. GBP2.1m 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 GBP0.5m of new rent; and -- Letting eight vacant units across seven assets in the retail warehouse, industrial and office sectors, in
aggregate, 4% ahead of ERV.
EPRA occupancy[22] has improved to 92.2% (31 Mar 2025: 91.1%) due to the new lettings above and the sale of vacant, or part vacant, units in Cheadle and Guildford.
Property portfolio performance
30 Sept 30 Sept 31 Mar
2025 2024 2025
Property portfolio value GBP625.0m GBP582.4m GBP594.4m
Separate tenancies 430 338 349
EPRA occupancy rate 92.2% 93.5% 91.1%
Assets 175 152 151
Weighted average unexpired lease term to first break or expiry 5.0yrs 4.9yrs 5.0 yrs
EPRA topped-up net initial yield ("NIY") 6.7% 6.9% 6.6%
Weighted average EPC rating B (49) C (52) C (51)
The property portfolio is split between the main commercial property sectors in line with the Company's objective to maintain a suitably balanced investment portfolio. The Company has a relatively low and highly targeted exposure to office and high street retail combined with a relatively high exposure to industrial and to alternative sectors, often referred to as 'other' in property market analysis. The current sector weightings are:
Valuation Weighting by Valuation
income[23]
Valuation
movement
30 September 31 March
2025 30 September 2025
GBPm
Weighting by value 30 Weighting by value 31
GBPm 2025 GBPm September 2025 March 2025
Sector
Industrial 319.2 43% 298.3 8.9 51% 50%
Retail 135.8 22% 127.3 2.8 21% 21%
warehouse
Other 82.4 14% 78.2 2.0 13% 13%
Office 54.3 14% 57.7 (0.2) 9% 10%
High street 33.3 7% 32.9 0.3 6% 6%
retail
Total 625.0 100% 594.4 13.8 100% 100%
For details of all properties in the portfolio please see custodianreit.com/property/portfolio.
Acquisitions
We completed the GBP22.1m acquisition of the Merlin portfolio on 30 May 2025. Since then, 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.
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. 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.
Disposals
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Owning the right properties at the right time is a key element of effective property portfolio management, which necessarily involves periodically selling properties to balance the property portfolio. Custodian Property Income REIT is not a trading company but identifying opportunities to dispose of assets ahead of valuation to crystallise profit or that no longer fit within the Company's investment strategy is important.
During the Period the Company sold the following assets for an aggregate GBP8.9m, 12% ahead of the pre-offer valuation:
-- 5500 Lakeside, Cheadle, which was 66% let, for GBP4.0m; -- Wienerberger House, Cheadle, which was fully let, for GBP2.9m; -- A vacant retail unit in Guildford for GBP1.6m; and
-- A retail unit in Leicestershire for GBP0.4m.
Since the Period end six further Leicestershire assets, acquired as part of the Merlin Portfolio, were sold for an aggregate GBP2.4m.
ESG
The sustainability credentials of both the building and the location have become ever more important for occupiers and investors. As Investment Manager we are absolutely committed to achieving the Company's ambitious goals in relation to ESG and believe the real estate sector should be a leader in this field.
The weighted average EPC across the portfolio achieved a weighted average B rating (equivalent to a score of between 25 and 50) during the Period. With energy efficiency a core tenet of the Company's asset management strategy and with tenant requirements aligning with our energy efficiency goals we see this as an opportunity to secure greater tenant engagement and higher rents.
During the Period the Company has updated EPCs at 23 units across 12 properties where existing EPCs had expired or where works had been completed, improving the weighted average EPC rating from C (51) at 31 March 2025 to B (49).
The Company's EPC profile is illustrated below:
Number of EPCs Weighted average EPC rating[24]
EPC rating 30 Sept 2025 31 Mar 2025 30 Sept 2025 31 Mar 2025
A 30 21 8% 6%
B 164 143 42% 41%
C 136 121 35% 35%
D 52 39 13% 11%
E 6 17 2% 5%
F - 8 - 2%
G - - - -
388 349 100% 100%
The table shows that the weighted average 'C' or better ratings has increased from 82% to 85% during the Period.
At 31 March 2025 the Company had eight 'F' rated units in two properties (Aberdeen and Arthur House, Manchester), both of which have undergone refurbishment which has improved individual unit ratings to A/B as well as significantly increasing rents.
Of the Company's 'E' rated assets, one is earmarked for disposal and three are within the Merlin portfolio, with improvements expected to be implemented as part of the portfolio integration plans.
Outlook
The asset management of our carefully curated portfolio of regional property continues to deliver rental growth, income security and refurbished buildings with improved environmental credentials. Current refurbishment and capex plans should see all properties achieve an EPC rating of A-D over the next 12 months, thus making good progress towards our stated environmental targets. The current floor area weighted average EPC for the whole portfolio is B (49). Importantly, this work is also enhancing rents and capital values while keeping properties fit for purpose and in line with tenant demand.
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
Valuations have improved quarter on quarter for Custodian Property Income REIT since September 2024, driven by consistent rental growth. With rental growth potential in all sectors, 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.
Richard Shepherd-Cross
for and on behalf of Custodian Capital Limited
Investment Manager
4 December 2025
Financial review
A summary of the Company's financial performance for the Period is shown below:
Period ended
Period ended 30 Sept 2024 Year ended
Financial summary 30 Sept 2025 31 Mar 2025
GBP000 GBP000
GBP000
Rental revenue 21,741 20,731 42,828
Other income 420 242 476
Expenses, dilapidations and net tenant recharges (4,620) (4,087) (9,159)
Net finance costs (3,478) (3,683) (7,359)
EPRA profits
14,063 13,203 26,786
Net gain on investment property and depreciation 13,573 1,700 11,369
Profit before tax 27,636 14,903 38,155
EPRA EPS (p) 3.1 3.0 6.1
Dividend cover 101% 100% 101%
OCR excluding direct property costs 1.34% 1.28% 1.30%
During the Period the Company's rent roll increased by 4.6% from GBP43.9m at 31 March 2025 to GBP45.9m at 30 September 2025 primarily due to the Merlin acquisition. Rental revenue was 4.9% higher than the period ended 30 September 2024 as the impact of ongoing rental growth and acquisitions exceeded a 1.3% decrease in occupancy and the impact of property disposals.
Other income, which primarily comprises income from solar panels, also known as photovoltaics ("PV"), has increased by 74% compared to the period ended 30 September 2024, driven by the GBP1.4m invested in PV installations over the last 18 months.
In August 2025, the Company used its variable-rate RCF, with a prevailing interest rate of c.5.8%, to repay a GBP20m loan on expiry which had a 3.9% fixed-rate of interest. However, the Company's weighted average cost of debt only increased by 0.1% during the Period to 4.0% due to SONIA decreasing by 0.25% on both 8 May and 7 August 2025, and this expired loan only represented 11% of total drawn debt at 31 March 2025.
Overall, rental growth and an increase in PV income increased EPRA earnings per share to 3.1p (2024: 3.0p) to continue to fully cover this year's dividend. This increase in recurring earnings demonstrates the robust nature of the Company's diverse property portfolio despite economic headwinds.
Debt financing
The Company's debt profile at 30 September 2025 is summarised below:
30 Sept 2025 30 Sept 2024 31 Mar 2025 Gross debt GBP173.5m GBP174.0m GBP175.0m Net gearing 26.3% 28.5% 27.9% Weighted average cost 4.0% 4.0% 3.9% Weighted average maturity 4.3 years 4.8 years 4.5 years Percentage of facilities at a fixed rate of interest 69% 80% 80%
Of the Company's GBP173.5m of drawn debt facilities 69% are at fixed rates of interest. The Company's weighted average term and cost of drawn debt at 30 September 2025 were 4.3 years and 4.0% respectively (fixed rate only: 5.3 years and 3.3%). This high proportion of fixed rate debt significantly mitigates medium-term interest rate risk for the Company and provides shareholders with a beneficial margin between the fixed cost of debt and income returns from the property portfolio.
The Company operates with a conservative level of net gearing, with target borrowings over the medium-term of 25% of the aggregate market value of all properties at the time of drawdown. The Company's net gearing decreased from 27.9% LTV at 31 March 2025 to 26.3% during the Period primarily due to disposals and acquiring the ungeared Merlin Portfolio for all-share consideration.
At the Period end the Company had the following facilities available:
-- A GBP60m RCF with Lloyds Bank plc ("Lloyds") with interest of between 1.62% and 1.92% above SONIA, determined by
reference to the prevailing LTV ratio of a discrete security pool of assets, and expiring on 10 November 2027. The
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facility was GBP52m drawn at the Period-end. Options remain in place to extend the term by a further year to 2028,
and to increase the facility limit to GBP75m, both subject to Lloyds' consent.
-- A GBP45m term loan facility with Scottish Widdows ("SWIP") repayable in June 2028, with fixed annual interest of
2.987%; and -- A GBP75m term loan facility with Aviva Real Estate Investors ("Aviva") comprising:
-- A GBP35m tranche repayable on 6 April 2032, with fixed annual interest of 3.02%; -- A GBP15m tranche repayable on 3 November 2032 with fixed annual interest of 3.26%; and -- A GBP25m tranche repayable on 3 November 2032 with fixed annual interest of 4.10%.
Each facility has a discrete security pool, comprising a number of the Company's individual properties, over which the relevant lender has security and covenants:
-- The maximum LTV of each discrete security pool is either 45% or 50%, with an overarching covenant on the Company's
property portfolio of a maximum of either 35% or 40% LTV; and -- Historical interest cover, requiring net rental income from each discrete security pool, over the preceding three
months, to exceed either 150% (RCF) or 250% (fixed rate loans) of the facility's quarterly interest liability.
The Company's debt facilities contain market-standard cross-guarantees such that a default on an individual facility will result in all facilities falling into default.
At the Period end the Company had GBP183.7m (29% of the property portfolio) of unencumbered assets which could be charged to the security pools to enhance the LTV and interest cover on the individual loans, of which a further GBP4.5m is in the process of being charged.
On 13 August 2025 the Company increased the limit on the RCF from GBP50m to GBP60m and repaid a GBP20m loan from SWIP on its expiry using its RCF facility.
Dividends
The Company has declared dividends per share of 3.0p relating to the Period, 101% covered by EPRA earnings. The Company paid dividends per share of 3.0p during the Period relating to FY25 Q4 and FY26 Q1.
The Company paid an interim dividend per share of 1.5p relating to FY26 Q2 on Friday 28 November 2025 to shareholders on the register on 7 November 2025, which was designated as a property income distribution ("PID").
Ed Moore
for and on behalf of Custodian Capital Limited
Investment Manager
4 December 2025
Principal risks and uncertainties
The Company's assets consist of direct investments in UK commercial property. Its principal risks are therefore related to the UK commercial property market in general, the particular circumstances of the properties in which it is invested and their tenants. The Company's Annual Report for the year ended 31 March 2025 set out the principal risks and uncertainties facing the Company at that time, and the way in which they are mitigated and managed, which are summarised below.
-- Loss of contractual revenue; -- Decreases in property portfolio valuations; -- Reduced availability or increased costs of debt and complying with loan covenants; -- Inadequate performance, controls or systems operated by the Investment Manager; -- Non-compliance with regulatory or legal changes; -- Business interruption from cyber or terrorist attack, or pandemics; -- Failure to meet environmental compliance requirements or occupier market expectations, and physical risks to
properties due to environmental factors and extreme weather; and -- Unidentified risk and liabilities associated with the acquisition of new properties (whether acquired directly or
via a corporate structure)
The following emerging risks were added to the Company's risk register during the year ended 31 March 2025, but are not considered by the Board to be principal risks:
-- Increases in yields of long-term fixed-rate government bonds impacting demand for the Company's shares; and -- Shareholder activists in the Investment Company sector become shareholders and do not act in the best interests of
all shareholders.
The Company's share price has also been impacted by geo-political risk relating to the conflicts in Ukraine and Gaza, tensions between the USA and its trading partners and its volatile political climate, and UK specific factors including apparent declining health of public markets and a 'cost of living crisis'. However, these factors are not considered direct emerging risks because of the Company's diverse property portfolio covering all sectors and geographical areas in the UK with over 400 individual tenancies.
We do not anticipate any changes to the other risks and uncertainties disclosed over the remainder of the financial year.
Condensed consolidated statement of total comprehensive income
For the six months ended 30 September 2025
Unaudited
Audited
Unaudited 6
months 6 months
to 30 Sept 2025 to 30 Sept 2024 12 months
GBP000 to 31 Mar
2025
GBP000
GBP000
Note
Revenue 4 25,703 24,757 47,997
Investment management fee (1,849) (1,692) (3,417)
Operating expenses of rental property
-- rechargeable to tenants (2,418) (2,942) (3,562)
-- directly incurred (2,315) (2,413) (4,891)
Professional fees (371) (369) (823)
Directors' fees (182) (172) (345)
Other expenses (1,149) (409) (1,099)
Expenses (8,284) (7,997) (14,137)
Operating profit before net gains on investment property
17,419 16,760 33,860
Unrealised gains on revaluation of investment property:
-- relating to property revaluations 9 13,831 1,699 11,211
-- relating to acquisition costs (953) - (1)
Profit on disposal of investment property 818 127 444
Net gains on investment property 13,696 1,826 11,654
Operating profit 31,115 18,586 45,514
Finance income 5 64 56 127
Finance costs 6 (3,543) (3,739) (7,486)
Net finance costs (3,478) (3,683) (7,359)
Profit before tax 27,636 14,903 38,155
Income tax 7 - - -
Profit for the Period, net of tax 27,636 14,903 38,155
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Other comprehensive income 1,551 - 714
29,187 14,903 8,869
Total comprehensive income for the Period, net of tax
Attributable to:
Owners of the Company 27,636 14,903 38,155
Earnings per ordinary share:
Basic and diluted (p) 3 6.1 3.4 8.7
EPRA (p) 3 3.1 3.0 6.1
The profit and total comprehensive income for the period arise from continuing operations and is all attributable to owners of the Company. Other comprehensive income represents items that will not be subsequently reclassified to profit or loss.
Condensed consolidated statement of financial position
At 30 September 2025
Registered number: 08863271
Unaudited
Unaudited at 30 Sept 2024 Audited
Note at 30 Sept at 31 Mar
2025 2025
GBP000 GBP000
GBP000
Non-current assets
Investment property 9 622,838 582,437 594,364
Property, plant and equipment 10 6,213 3,448 4,711
Total non-current assets 629,051 585,885 599,075
Current assets
Assets held for sale 9 2,196 - -
Housing inventory 1,291 - -
Trade and other receivables 11 7,066 6,567 5,201
Cash and cash equivalents 13 7,922 10,919 10,118
Total current assets 18,475 17,486 15,319
Total assets 647,526 603,371 614,394
Equity
Issued capital 15 4,638 4,409 4,409
Share premium 250,970 250,970 250,970
Merger reserve 37,684 18,931 18,931
Treasury shares (1,735) - -
Retained earnings 162,513 138,416 148,442
Revaluation reserve 2,265 - 714
Total equity attributable to equity holders of the Company
456,335 412,726 423,466
Non-current liabilities
Borrowings 14 172,317 152,526 153,641
Other payables 12 2,093 570 2,087
Total non-current liabilities 174,410 153,096 155,728
Current liabilities
Borrowings 14 - 19,974 19,989
Trade and other payables 12 8,691 9,759 7,029
Deferred income 8,090 7,816 8,182
Total current liabilities 16,781 37,549 35,200
Total liabilities 191,191 190,645 190,928
Total equity and liabilities 647,526 603,371 614,394
These interim financial statements of Custodian Property Income REIT plc were approved and authorised for issue by the Board of Directors on 4 December 2025 and are signed on its behalf by:
David MacLellan
Chairman
Condensed consolidated statement of cash flows
For the six months ended 30 September 2025
Unaudited Audited
Unaudited 6
months 6 months 12 months
Note to 30 Sept to 30 Sept 2024
2025
GBP000
to 31 Mar
GBP000 2025
GBP000
Operating activities
Profit for the Period 27,636 14,903 38,155
Net finance costs 5,6 3,478 3,683 7,359
Valuation increase of investment property, net of acquisition 9 (12,878) (1,699) (11,211)
costs
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Impact of rent free 9 (1,450) (789) (1,470)
Amortisation of right-of-use asset 9 3 3 7
Profit on disposal of investment property (818) (127) (444)
Depreciation 10 122 126 285
Cash flows from operating activities before changes in working
capital and provisions
16,093 16,100 32,681
Increase in trade and other receivables (1,721) (3,237) (1,871)
(Decrease)/increase in trade/other payables and deferred income (171) 2,131 1,286
Decrease in housing stock 576 - -
Cash generated from operations (1,316) 14,994 32,096
Interest and other finance charges 6 (3,332) (3,514) (7,068)
11,445 11,480
Net cash flows from operating activities 25,028
Investing activities
Purchase of investment property - - -
Capital expenditure and development 9 (6,126) (4,055) (6,843)
Acquisition costs (953) - -
Purchase of property, plant and equipment 10 (73) (617) (1,326)
Disposal of investment property 8,907 13,650 15,050
Costs of disposal of investment property (143) (297) (331)
Interest and finance income received 5 64 56 127
Net cash flows from investing activities 1,676 8,737 6,677
Financing activities
New borrowings origination costs 14 (25) (15) (78)
Net repayment of RCF (1,500) (5,000) (4,000)
Dividends paid 8 (13,565) (13,997) (27,223)
Share buybacks (1,735) - -
Equity issuance costs (48) - -
Net cash flows used in financing activities (16,873) (19,012) (31,301)
Net (decrease)/increase/in cash and cash equivalents (3,752) 1,205 404
Cash and cash equivalents at start of the period 10,118 9,714 9,714
Cash and cash equivalents acquired 1,556 - -
Cash and cash equivalents at end of the period 7,922 10,919 10,118
Condensed consolidated statements of changes in equity
For the six months ended 30 September 2025
Issued Share Retained Total
Merger Treasury Reval'n
reserve shares reserve
capital prem' earnings equity
GBP000 GBP000 GBP000
Note GBP000 GBP000 GBP000 GBP000
At 31 March 2025 (audited) 4,409 18,931 - 250,970 148,442 714 423,466
Profit for the Period - - - - 27,636 - 27,636
Revaluation of PPE 10 - - - - - 1,564 1,564
Depreciation of PPE revaluation surplus 10 - - - - - (13) (13)
Total comprehensive income for Period - - - - 27,636 1,551 29,187
Transactions with owners of the Company,
recognised directly in equity
Dividends 8 - - - - (13,565) - (13,565)
Purchase of own shares into treasury - - (1,735) - - - (1,735)
Share issuance 15 229 18,753 - - - - 18,982
At 30 September 2025 (unaudited) 4,638 37,684 (1,735) 250,970 162,513 2,265 456,335
Issued Share Retained Total
Merger Treasury Reval'n
reserve shares reserve
capital Prem' earnings equity
GBP000 GBP000 GBP000
Note GBP000 GBP000 GBP000 GBP000
At 31 March 2024 (audited) 4,409 18,931 - 250,970 137,510 - 411,820
Profit and total comprehensive income
for the period - - -
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- - 14,903 14,903
Transactions with owners of the Company,
recognised directly in equity
Dividends 8 - - - - (13,997) - (13,997)
At 30 September 2024 (unaudited) 4,409 18,931 - 250,970 138,416 412,726
At 31 March 2024 (audited) 4,409 18,931 - 250,970 137,510 - 411,820
Profit for the year - - - - 38,155 - 38,155
Revaluation of PPE 10 - - - - - 714 714
Total comprehensive income for year - - - - 38,155 714 38,869
Transactions with owners of the Company,
recognised directly in equity
Dividends 8 - - - - (27,223) - (27,223)
At 31 March 2025 (audited) 4,409 18,931 - 250,970 148,442 714 423,466
Notes to the interim financial statements for the period ended 30 September 2025
1. Corporate information
The Company is a public limited company incorporated and domiciled in England and Wales, whose shares are publicly traded on the London Stock Exchange plc's main market for listed securities. The interim financial statements have been prepared on a historical cost basis, except for the revaluation of investment property, and are presented in pounds sterling with all values rounded to the nearest thousand pounds (GBP000), except when otherwise indicated. The interim financial statements were authorised for issue in accordance with a resolution of the Directors on 4 December 2025.
2. Basis of preparation and accounting policies
1. Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements do not include all the information and disclosures required in the annual financial statements. The Annual Report for the year ending 31 March 2026 will be prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") of the IASB (together "IFRS") as adopted by the United Kingdom, and in accordance with the requirements of the Companies Act applicable to companies reporting under IFRS.
The information relating to the Period is unaudited and does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. A copy of the statutory financial statements for the year ended 31 March 2025 has been delivered to the Registrar of Companies. The auditor's report on those financial statements was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
Certain statements in this report are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Accordingly, undue reliance should not be placed on forward looking statements.
2. Significant accounting policies
The principal accounting policies adopted by the Company and applied to these interim financial statements are consistent with those policies applied to the Company's Annual Report and financial statements.
During the Period the Company acquired housing stock as part of the Merlin acquisition, to which the following policy has been applied:
Housing inventory
Housing inventory comprises residential properties acquired for sale measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs necessary to make the sale. Housing stock is assessed for impairment at each reporting date, and any write-downs to net realisable value are recognised in cost of sales.
During the Period the Company commenced a share buyback programme, to which the following policy has been applied:
Treasury shares
Consideration for the purchase of the Company's own equity instruments (treasury shares), including any directly attributable incremental costs, is recognised as a deduction from equity within a treasury shares reserve. Treasury shares are not recognised as a financial asset.
When treasury shares are sold or reissued, any difference between the carrying amount and the consideration received is recognised within share premium.
The number of treasury shares held is excluded from the calculation of basic and diluted earnings per share.
3. Critical judgements and key sources of estimation uncertainty
Preparation of the interim financial statements requires the Company to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on the Directors' best judgement at the date of preparation of the interim financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.
Judgements
No significant judgements have been made in the process of applying the Company's accounting policies, other than those involving estimations, that have had a significant effect on the amounts recognised within the interim financial statements.
Estimates
The accounting estimate with a significant risk of a material change to the carrying values of assets and liabilities within the next year relates to the valuation of investment property. Investment property is valued at the reporting date at fair value. Where an investment property is being redeveloped the property continues to be treated as an investment property. Surpluses and deficits attributable to the Company arising from revaluation are recognised in profit or loss. Valuation surpluses reflected in retained earnings are not distributable until realised on sale. In making its judgement over the valuation of properties, the Company considers valuations performed by the independent valuers in determining the fair value of its investment properties. The valuers make reference to market evidence of transaction prices for similar properties. The valuations are based upon assumptions including future rental income, anticipated capex and maintenance costs (particularly in the context of mitigating the impact of climate change) and appropriate discount rates (ie property yields). The key sources of estimation uncertainty within these inputs above are future rental income and property yields. Reasonably possible changes to these inputs across the portfolio would have a material impact on its valuation and are set out in Note 9.
4. Going concern
The Directors believe the Company is well placed to manage its business risks successfully and the Company's projections show that it should be able to operate within the level of its current financing arrangements for at least the 12 months from the date of approval of these financial statements. The Board assesses the Company's prospects over the long-term, taking into account rental growth expectations, climate related risks, longer-term debt strategy, expectations around capital investment in the portfolio and the UK's long-term economic outlook. At quarterly Board meetings, the Board reviews summaries of the Company's liquidity position and compliance with loan covenants, as well as forecast financial performance and cash flows.
Forecast
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The Investment Manager maintains a detailed forecast model projecting the financial performance of the Company over a period of three years, which provides a reasonable level of accuracy regarding projected lease renewals, asset-by-asset capex, property acquisitions and disposals, rental growth, interest rate changes, cost inflation and refinancing of the Company's debt facilities ahead of expiry. The detailed forecast model allows robust sensitivity analysis to be conducted and over the three year forecast period included the following key assumptions:
-- 1% annual loss of contractual revenue through Company Voluntary Arrangements or tenant default; -- 70% tenant retention rate at lease break or expiry with vacated assets followed by an appropriate period of void; -- Rental growth, captured at the earlier of rent review or lease expiry, based on current ERVs adjusted for consensus
forecast changes; -- Portfolio valuation movements based on consensus forecast changes; -- Selling assets currently earmarked for disposal; -- The Company's capex programme to invest in its existing assets continues as expected; and -- Interest rates follow the prevailing forward curve.
In accordance with Provision 35 of the AIC Code the Directors have assessed the Company's prospects as a going concern over a period of 12 months from the date of approval of the Interim Report, using the same forecast model and assessing the risks against each of these assumptions.
The Directors note that the Company has performed strongly during the Period despite economic headwinds with like-for-like rents increasing over the last six months.
Sensitivities
Sensitivity analysis involves flexing these key assumptions, taking into account the principal risks and uncertainties and emerging risks detailed in the Annual Report. This analysis includes stress testing the point at which covenants would breach through rent losses and property valuation movements, and assessing their impact on the following areas:
Covenant compliance
The Company operates the loan facilities summarised in Note 14. At 30 September 2025 the Company had the following headroom on lender covenants at a portfolio level with:
-- Net gearing of 26.3% compared to a maximum LTV covenant of 35% on its Aviva facilities and 40% on its Lloyds and
SWIP facilities, with GBP183.7m (29% of the property portfolio) unencumbered by the Company's borrowings; and -- 126% minimum headroom on interest cover covenants for the quarter ended 30 September 2025.
Over the three year assessment period the Company's forecast model projects a small increase in net gearing with a small increase in headroom on interest cover covenants. Reverse stress testing has been undertaken to understand what circumstances would result in potential breaches of financial covenants over these periods. While the assumptions applied in these scenarios are possible, they do not represent the Board's view of the likely outturn, but the results help inform the Directors' assessment of the viability of the Company. The testing indicated that:
-- The rate of loss or deferral of contractual rent on the borrowing facility with least headroom would need to
deteriorate by 22% from the levels included in the Company's prudent base case forecasts to breach interest cover
covenants from the levels included in the Company's prudent base case forecasts, assuming no unencumbered
properties were charged; or -- To risk breaching the applicable covenant, property valuations would have to decrease from the 30 September 2025
position by:
- 25% at a portfolio level; or
- 12% at an individual charge pool level, assuming no further properties were charged.
The Board notes that the latest IPF Forecasts for UK Commercial Property Investment survey suggests an average 2.7% increase in rents during 2026 with capital value increases of 3.6%. The Board believes that the valuation of the Company's property portfolio will prove resilient due to its higher weighting to industrial assets and overall diverse and high-quality asset and tenant base comprising over 150 assets and over 300 typically 'institutional grade' tenants across all commercial sectors.
Liquidity
At 30 September 2025 the Company had GBP5.9m of unrestricted cash and GBP6.5m undrawn RCF, with gross borrowings of GBP173.5m resulting in net gearing of 26.3%. The Company increased its RCF limit during the Period from GBP50m to GBP60m to maintain headroom on using the RCF to repay the GBP20m SWIP loan on expiry. The Company's forecast model projects it will have sufficient cash and undrawn facilities to continue its programme of capital investment, pay its target dividends and its expense and interest liabilities.
Results of the assessments
Based on the prudent assumptions within the Company's forecasts regarding the factors set out above, the Directors expect that over the period of their assessment:
-- The Company has surplus cash to continue in operation and meet its liabilities as they fall due; -- Borrowing covenants are complied with; and -- REIT tests are complied with.
Having due regard to these matters and after making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing of these condensed consolidated financial statements and, therefore, the Board continues to adopt the going concern basis in their preparation.
5. Segmental reporting
An operating segment is a distinguishable component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company's chief operating decision maker (the Board) to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available. As the chief operating decision maker reviews financial information for, and makes decisions about the Company's investment properties as a portfolio, the Directors have identified a single operating segment, that of investment in commercial properties.
3. Earnings per ordinary share
Basic earnings per share ("EPS") amounts are calculated by dividing net profit for the Period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the Period.
Diluted EPS amounts are calculated by dividing the net profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the Period (excluding treasury shares) plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. There are no dilutive instruments.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
Audited
Unaudited 6 months Unaudited 6 months 12 months
to 30 Sept 2025 to 30 Sept 2024 to 31 Mar
2025
Net profit and diluted net profit attributable to equity holders of 27,636 14,903 38,155
the Company (GBP000)
Net gain on investment property and depreciation (GBP000) (13,573) (1,700) (11,369)
EPRA net profit attributable to equity holders of the Company (GBP000) 14,063 13,203
26,786
Weighted average number of ordinary shares (excluding treasury
shares):
Issued ordinary shares at start of the Period (thousands) 440,850 440,850 440,850
Effect of shares issued and repurchased during the Period 14,309 - -
(thousands)
Basic and diluted weighted average number of shares (thousands) 455,160 440,850 440,850
Basic and diluted EPS (p) 6.1 3.4 8.7
3.1 3.0
EPRA EPS (p) 6.1
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4. Revenue
Unaudited
Unaudited Audited
6 months
6 months to 30 Sept 2024 12 months
to 30 Sept 2025 to 31 Mar 2025
GBP000 GBP000
GBP000
Rental income from investment property 21,741 20,731 42,828
Sale of housing stock 583 - -
Income from recharges to tenants 2,189 2,942 3,562
Income from dilapidations 770 842 1,131
Other income 420 242 476
25,703 24,757 47,997
5. Finance income
Unaudited
Unaudited Audited
6 months
6 months to 30 Sept 2024 12 months
to 30 Sept 2025 to 31 Mar 2025
GBP000 GBP000
GBP000
Bank interest 64 56 127
64 56 127
6. Finance costs
Unaudited
Unaudited Audited
6 months
6 months to 30 Sept 2024 12 months
to 30 Sept 2025 to 31 Mar 2025
GBP000 GBP000
GBP000
Amortisation of arrangement fees on debt facilities 210 225 418
Other finance costs 51 120 443
Bank interest 3,282 3,394 6,625
3,543 3,739 7,486
7. Income tax
The effective tax rate for the Period is lower than the standard rate of corporation tax in the UK during the Period of 25.0% (2024: 25.0%). The differences are explained below:
Unaudited
Unaudited Audited
6 months
6 months to 30 Sept 2024 12 months
to 30 Sept to 31 Mar
2025 2025
GBP000 GBP000
GBP000
Profit before income tax 27,636 14,903 38,155
Tax at a standard rate of 25.0% (30 September 2024: 25.0%, 31 March
2025: 25.0%)
6,909 3,726 9,539
Effects of:
REIT tax exempt rental profits and gains (6,909) (3,726) (9,539)
Income tax expense for the Period - - -
Effective income tax rate 0.0% 0.0% 0.0%
The Company operates as a REIT and hence profits and gains from the property rental business are normally exempt from corporation tax.
8. Dividends
Unaudited
Unaudited Audited
6 months
6 months to 30 Sept 2024 12 months
to 30 Sept to 31 Mar
2025 2025
GBP000 GBP000
GBP000
Interim equity dividends paid on ordinary shares relating to the periods
ended:
31 March 2024: 1.375p - 6,062 6,062
30 June 2024: 1.5p - 6,613 6,613
30 September 2024: 1.5p - - 6,613
31 December 2024: 1.5p - - 6,613
31 March 2025: 1.5p 6,613 - -
30 June 2025: 1.5p 6,952 - -
Special equity dividends paid on ordinary shares relating to the year ended - 1,322 1,322
31 March 2024: 0.3p
13,565 13,997 27,223
The Directors approved an interim dividend relating to the quarter ended 30 September 2025 of 1.5p per ordinary share in October 2025 which has not been included as a liability in these interim financial statements. This interim dividend was paid on Friday 28 November 2025 to shareholders on the register at the close of business on 7 November 2025.
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DJ Custodian Property Income REIT plc: Interim results for the period ended 30 September 2025 -12-
9. Investment property and assets held for sale
Unaudited at 31
Mar
Unaudited at 30 Sept Unaudited at 30 Sept
2025 2024
2025
Assets held for sale
GBP000 GBP000
GBP000
Balance at the start of the - 11,000 11,000
period
Reclassification from investment 2,196 - -
property
Disposals - (11,000) (11,000)
Balance at the end of the period 2,196 - -
Investment property
GBP000
At 31 March 2025 594,364
Impact of lease incentives and lease costs 1,450
Additions 18,165
Acquisition costs (953)
Capital expenditure 6,126
Disposals (7,947)
Amortisation of right-of-use asset (3)
Reclassification as held for sale (2,196)
Valuation increase 13,831
At 30 September 2025 622,838
GBP000
At 31 March 2024 578,122
Impact of lease incentives and lease costs 789
Additions -
Capital expenditure 4,055
Disposals (2,225)
Amortisation of right-of-use asset (3)
Valuation decrease 1,699
At 30 September 2024 582,437
At 31 March 2024 578,122
Impact of lease incentives and lease costs 1,470
Amortisation of right-of-use asset (7)
Capital expenditure 6,843
Disposals (3,275)
Valuation increase 11,211
At 31 March 2025 594,364
GBP441.3m (2024: GBP476.8m) of investment property was charged as security against the Company's borrowings at the Period end with a further GBP4.5m in the process of being charged. GBP0.6m (2024: GBP0.6m) of investment property comprises right-of-use assets.
Investment property is stated at the Directors' estimate of its 30 September 2025 fair value. Savills (UK) Limited ("Savills") and Knight Frank LLP ("KF"), professionally qualified independent property valuers, each valued approximately half of the property portfolio at 30 September 2025 in accordance with the Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors ("RICS"). Savills and KF have recent experience in the relevant locations and categories of the property being valued.
Investment property and assets held for sale have been valued using the investment method which involves applying a yield to rental income streams. Inputs include yield, current rent and ERV. For the Period end valuation, the following inputs were used:
Weighted
average passing rent of let
Valuation properties ERV range EPRA topped-up NIY
30 September 2025 (GBP per sq ft) (GBP per sq ft)
Sector
GBP000 Equivalent yield
Industrial 319.2 6.1 2.1 - 15.0 7.0% 5.6%
Retail warehouse 135.8 11.6 5.2 - 28.4 7.7% 7.5%
Other 82.4 10.5 1.5 - 80.0* 8.1% 7.5%
Office 54.3 14.0 6.6 - 38.0 11.1% 7.9%
High street retail 33.3 17.8 3.1 - 67.0 8.2% 9.7%
625.0
*Drive-through restaurants' ERV per sq ft are based on building floor area rather than area inclusive of drive-through lanes.
Valuation reports are based on both information provided by the Company eg current rents and lease terms, which are derived from the Company's financial and property management systems and are subject to the Company's overall control environment, and assumptions applied by the property valuers eg ERVs, expected capex and yields. These assumptions are based on market observation and the property valuers' professional judgement. In estimating the fair value of each property, the highest and best use of the properties is their current use.
All other factors being equal, a higher equivalent yield would lead to a decrease in the valuation of investment property, and an increase in the current or estimated future rental stream would have the effect of increasing capital value, and vice versa. However, there are interrelationships between unobservable inputs which are partially determined by market conditions, which could impact on these changes.
30 Sept 2025 31 Mar 2025
GBP000 GBP000
Increase in equivalent yield of 0.25% 36,264 34,941
Decrease in equivalent yield of 0.25% (32,175) (30,975)
Increase of 5% in ERV 1,963 1,864
Decrease of 5% in ERV (1,939) (1,834)
10. Property, plant and equipment
PV cells EV chargers Total
GBP000 GBP000 GBP000
Cost/valuation
At 31 March 2025 3,808 1,126 4,934
Additions 73 - 73
Valuation increase net of depreciation eliminated on revaluation 1,513 - 1,513
At 30 September 2025 5,393 1,126 6,519
Depreciation
At 31 March 2025 - (223) (223)
Depreciation (52) (83) (135)
Eliminated on revaluation 52 - 52
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DJ Custodian Property Income REIT plc: Interim results for the period ended 30 September 2025 -13-
Accumulated at 30 September 2025 - 306 306
Net book value at 30 September 2025 5,393 820 6,213
PV cells EV chargers Total
GBP000 GBP000 GBP000
Cost/valuation
At 31 March 2024 2,076 1,126 3,202
Additions 617 - 617
At 30 September 2024 2,693 1,126 3,819
Depreciation
At 31 March 2024 (123) (122) (245)
Depreciation (76) (50) (126)
Accumulated at 30 September 2024 (199) (172) (371)
Net book value at 30 September 2024 2,494 954 3,448
Cost/valuation
At 31 March 2024 2,076 1,126 3,202
Additions 1,326 - 1,326
Valuation increase net of depreciation eliminated on revaluation 406 - 406
At 31 March 2025 3,808 1,126 4,934
Depreciation
At 31 March 2024 (123) (122) (245)
Depreciation (185) (100) (285)
Eliminated on revaluation 308 (1) 307
Accumulated at 31 March 2025 - (223) (223)
Net book value at 31 March 2025 3,808 903 4,711
11. Trade and other receivables
Unaudited
Unaudited
Audited
at 30 Sept 2024 at 31 Mar 2025
at 30 Sept 2025 GBP000
GBP000
GBP000
Trade receivables before expected credit loss provision 5,335 4,476 4,387
Expected credit loss provision (539) (499) (627)
Trade receivables 4,796 3,977 3,760
Other receivables 1,756 2,250 1,146
Prepayments and accrued income 514 340 295
7,066 6,567 5,201
The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk, for example a deterioration in a tenant's or sector's outlook or rent payment performance, and revises them as appropriate to ensure that the criteria are capable of identifying significant increases in credit risk before amounts become past due.
Tenant rent deposits of GBP1.6m (2024: GBP1.8m) are held as collateral against certain trade receivable balances.
The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
-- When there is a breach of financial covenants by the debtor; or -- Available information indicates the debtor is unlikely to pay its creditors.
Such balances are provided for in full. For remaining balances the Company has applied an expected credit loss ("ECL") matrix based on its experience of collecting rent arrears. The majority of tenants are invoiced for rental income quarterly in advance and are issued with invoices before the relevant quarter starts. Invoices become due on the first day of the rent quarter and are considered past due if payment is not received by this date. Other receivables are considered past due when the given terms of credit expire.
Unaudited
Unaudited Audited
at 30 Sept 2024
at 30 Sept at 31 Mar
2025 2025
GBP000 GBP000
Expected credit loss provision GBP000
Opening balance 627 855 855
Decrease in provision relating to trade receivables that are (92) (235) 196
credit-impaired
Utilisation of provisions (8) (121) (424)
Acquired 12 - -
Closing balance 539 499 627
The ageing of receivables considered credit impaired is as follows:
Group and Company Unaudited
Unaudited Audited
at 30 Sept 2024
at 30 Sept 2025 at 31 Mar 2025
GBP000 GBP000
GBP000
0 - 3 months 351 471 106
3 - 6 months 50 10 40
Over 6 months 342 541 551
Closing balance 743 1,022 697
12. Trade and other payables
Unaudited
Unaudited Audited
at 30 Sept 2024
at 30 Sept 2025 at 31 Mar 2025
GBP000 GBP000
GBP000
Falling due in less than one year:
Trade and other payables 5,100 3,745 2,603
Social security and other taxes 325 942 760
Accruals 3,163 3,307 3,601
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