Custodian Property Income REIT plc: Q3 Trading Update
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Custodian Property Income REIT plc (CREI)
12 February 2026
Custodian Property Income REIT plc
(“Custodian Property Income REIT” or “the Company”)
Q3 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 third quarter ended 31 December 2025 (“Q3” or the “Quarter”).
Commenting on the trading update, Richard Shepherd-Cross, Managing Director of the Investment Manager, said: “During the Quarter we continued to drive occupancy and rental growth through strong leasing activity across our portfolio, underlining the strength of occupier demand for our properties, despite market headwinds. In addition to supporting growth in EPRA earnings per share, our asset management activities also led to a further increase in the portfolio ERV on a like-for-like basis and we now have around 14% of additional income growth already embedded when compared to current rents, which we will continue to unlock as lease events occur.
“During the Quarter we issued the final tranche of shares in consideration for the Merlin portfolio. This corporate acquisition has given us a strong blueprint that we will continue to pursue. It has the double benefit of providing a solution to family offices when succession planning and / or seeking to simplify the structure of their property holdings, while allowing us to achieve our own ambitions for growth in an environment when issuing new equity for cash remains challenging. It has resulted in a number of enquiries from similar potential vendors, with whom we have entered initial discussions.
“2025 proved to be a challenging year for UK listed and direct real estate, with almost half the year ‘on hold’ as the country awaited the outcome of the November 2025 Budget, despite a promising start. However, we are seeing the market begin to react to some of the underlying positive metrics in the early weeks of 2026, which combined with the easing of longer-term gilt rates and stable property valuations over the last year seem to have started to shift the mindset of investors about the solid prospects for commercial property. This has been particularly notable amongst retail investors where we saw a notable uptick in investment into the Company through share trading platforms. This has been no doubt helped by the fact that following recent listed market consolidation these investors have fewer ways to invest in commercial property and is in line with our goal of being the REIT of choice for investors seeking high and stable dividends from well-diversified UK real estate.”
Highlights
Strong leasing activity continues to improve occupancy and drive rental growth, supporting a fully covered dividend
The value of the Company’s investment property portfolio was £626.7m (30 September 2025: £625.0m), a like-for-like valuation increase of 0.5% during the Quarter, net of £1.3m of capital expenditure.
Ongoing capital investment programme continues to enhance the portfolio, and asset recycling from the Merlin acquisition continues to be accretive
Prudent debt levels
Dividends
The Company paid an interim dividend per share of 1.5p on Friday 28 November 2025 relating to Q2, fully covered by EPRA earnings.
The Board has approved a fully covered interim dividend per share of 1.5p for the third quarter to be paid on Friday 27 February 2025 to shareholders on the register on 16 January 2026, 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 £458.2m, or approximately 99.8p per share, at 31 December 2025:
The unaudited NAV attributable to the ordinary shares of the Company is calculated under International Financial Reporting Standards and incorporates the independent portfolio valuation at 31 December 2025 and net income for the Quarter.
The movement in unaudited NAV reflects the payment of an interim dividend per share of 1.5p during the Quarter, but as usual this does not include any provision for the approved dividend of 1.5p per share for the Quarter under review to be paid on Friday 27 February 2026.
The 12 months to 31 December 2025 proved challenging for UK listed real estate, and the direct commercial property market, with five of the 12 months ‘on hold’ as the country awaited the outcome of the November 2025 Budget. Despite strong investment volumes in the second quarter of the year, volumes dropped to 26% below the five-year quarterly average, according to Carter Jonas, in Q3 and early indications show that Q4 was little better.
We believe that the Q2 investment volumes point to the confidence in a property recovery that would have continued without the budget fear hiatus. The impact of the budget on commercial real estate was very limited, extending only to a proposed reorganisation of business rates. The gloom that hung over the economy in anticipation of the November 2025 budget masked some strongly positive metrics for property and we are seeing the market react to this positivity in the early weeks of 2026.
Rental growth continues to underpin performance, with Custodian Property Income REIT showing a reversionary potential (estimated rental value over passing rent) of 14%, or £52.0m over £45.8m and like-for-like rental growth of 2.4% over the financial year to date. As detailed below eight new lettings were agreed in the Quarter, 10% ahead of estimated rental value, in aggregate, adding £0.7m to the rent roll.
Easing longer-term gilt rates, with 10-year rates falling from c.4.6% to c.4.4% over the last 12 months, have also had a positive effect on listed real estate. Combined with stable property valuations, these rate movements have convinced a growing number of more generalist investors that the prospects for commercial property are strongly positive. Notable amongst these investors who have seen the opportunity are retail investors and Custodian Property Income REIT’s retail shareholder base, through share trading platforms alone, grew by 1.1m shares in the Quarter and by over 18.7m shares during 2025.
More widely, this growing confidence in listed real estate was reported by Citywire which noted that the main UK REIT index delivered 11% growth in 2025. This was consistent with Custodian Property Income REIT which enjoyed a 12% increase in share price over the year and a share price total return of 20%, demonstrating the importance of the income component of this metric.
Asset management
Custodian Capital Limited, the Investment Manager, has remained focused on active asset management during the Quarter, completing:
Further details of these asset management initiatives are shown below:
New leases
£0.7m of new annual rental income was added to the rent roll through the letting of eight vacant units, in aggregate, 10% ahead of ERV:
Renewals/regears
Nine lease renewals/regears at a combined average of 6% ahead of passing rent and in line with ERV:
Rent reviews
Two rent reviews at an aggregate 7% ahead of previous passing rent, and 10 annual RPI linked rent reviews across the portfolio on Instavolt EV chargers.
During the Quarter, Ichor Systems surrendered the remaining 3.5 years of its lease at an industrial unit in Hamilton for a premium of £950k (equivalent to 3.25 years of passing rent), along with completing dilapidations works of c.£1.0m. This surrender premium increased FY26 Q3 EPRA earnings per share by c. 0.2p. The completion of dilapidations works and a light refurbishment is expected to increase the unit’s ERV by approximately 10-15%, and due to a lack of local supply we are optimistic regarding its re-letting potential.
Since the Quarter end the Company has let its largest void, a 60,000sq ft industrial unit in Redditch which was redeveloped in 2023, to Sonas Bathrooms at an annual rent of £669k, in line with ERV.
Share capital
Share buyback programme
During Q2 the Company implemented a share buyback programme with an initial maximum aggregate consideration of £5.0m (“the Buyback Programme”). 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 continues to be an attractive use of property disposal proceeds that will create value for shareholders.
The Company has purchased a total of 5.7m shares under the Buyback Programme, which are held in treasury. Aggregate consideration for these buybacks was £4.5m at a weighted average cost per share of 79.1p, representing an average 17.6% discount to prevailing NAV.
Deferred consideration relating to the acquisition of Merlin Properties Limited
During the Quarter, the Company issued 1.2m new shares in the Company at 92p per share as final consideration for the corporate acquisition of Merlin Properties Limited (“Merlin”) which completed on 30 May 2025.
This acquisition set a strong blueprint as a solution to family offices when succession planning and / or seeking to simplify the structure of their properties holdings and has resulted in a number of enquiries from potential similar vendors, which the Company is now progressing in line with its growth ambitions.
Borrowings
At 31 December 2025, the Company had £172.5m of debt drawn comprising:
At 31 December 2025, the Company’s borrowing facilities were:
Variable rate borrowing
Fixed rate borrowing
Each facility has a discrete security pool, comprising a number of individual properties, over which the relevant lender has security and covenants:
On 10 February 2026 the Company and Lloyds Bank plc agreed to extend the term of the RCF by one year to expire on 10 November 2028 and increased the RCF facility limit from £60m to £75m.
Portfolio analysis
At 31 December 2025, the investment property portfolio was split between the main commercial property sectors, in line with the Company’s objective to maintain a suitably balanced investment portfolio. Sector weightings are shown below:
For details of all properties in the portfolio please see custodianreit.com/property-portfolio.
Board
As previously reported, Nathan Imlach retired as a Director of the Company on 31 December 2025.
- Ends -
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 secure an attractive level of income with the potential for capital growth through a diversified portfolio of UK commercial real estate comprising principally smaller, regional, core/core-plus properties, accessed via a closed-ended listed fund.
Custodian Capital Limited is the discretionary investment manager of the Company.
For more information visit custodianreit.com and custodiancapital.com. [1] Profit after tax, excluding depreciation and net gains on investment property, divided by weighted average number of shares in issue (excluding treasury shares) during the Quarter. [2] Price on 11 February 2026. Source: London Stock Exchange. [3] Adjusting for property acquisitions, disposals and capital expenditure. [4] NAV per share movement including dividends paid during the Quarter on shares (excluding treasury shares) in issue at 30 September 2025. [5] Gross borrowings less cash (excluding rent deposits) divided by property portfolio and solar panel valuations. [6] Comprises drive-through restaurants, car showrooms, trade counters, gymnasiums, restaurants and leisure units.
Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. View original content: EQS News |
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| ISIN: | GB00BJFLFT45 |
| Category Code: | QRT |
| TIDM: | CREI |
| LEI Code: | 2138001BOD1J5XK1CX76 |
| Sequence No.: | 417881 |
| EQS News ID: | 2275130 |
| End of Announcement | EQS News Service |
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