Custodian Property Income REIT buys £11.0m portfolio from eight property syndicates
Investors in eight syndicates run by Lincoln Property Syndicates are swapping their stakes in eight mainly East Midlands shops and industrial units for 10.6m new shares in the listed trust, plus £0.4m in cash.
By Daily Oracles News Team2 min read
Custodian Property Income REIT has bought a portfolio of eight retail and industrial properties worth £11.0 million from investors in eight syndicated property vehicles managed by Lincoln Property Syndicates. The sellers have been paid mostly in shares in the listed trust rather than in cash.
The transaction took place on 5 November. Custodian paid £0.4 million in cash and is issuing 10.6 million new ordinary shares, about 2.2% of its existing share capital, with the price set by comparing the net asset value of both sides. The new shares are expected to start trading on the London Stock Exchange's main market before 30 November, taking the total in issue to 498,620,553.
The portfolio
The properties are mainly in the East Midlands, are all occupied and have an average lot size of £1.4 million. Together they produce rent of £0.8 million a year, a net initial yield of about 6.7%, and Custodian puts the reversionary yield at 7.2%. Occupiers have been in place for nine years on average, and the weighted average unexpired lease term is six years.
Rent by tenant:
- National Co-op convenience stores, £402,000 (51%)
- Home Bargains on a retail park, £154,000 (20%)
- Costa Coffee drive-through, £73,000 (9%)
- other retail and local convenience occupiers, £85,000 (11%)
- local industrial occupiers, £74,000 (9%)
Because the portfolio carries no debt, the purchase lowers Custodian's net gearing by about 0.2%, keeping it close to the board's 25% target. The trust expects the deal to add to earnings per share and dividend cover as rents rise at upcoming lease events.
The sellers
Lincoln Property Syndicates said it had begun thinking about succession after running the portfolio privately for more than ten years, and that many of its investors wanted easier access to their money. Swapping into the REIT gives them shares they can buy or sell, removes the compliance work of owning property through a syndicate, and keeps them invested in the same buildings within a larger portfolio.
It is Custodian's fourth acquisition paid mainly in shares and the first from syndicated vehicles. In the year to 31 March 2026 it bought three privately owned property companies, Grove Court, Merlin and Scorpion, for a combined portfolio price of £63.8 million. The trust said it thinks the approach can be repeated with other UK property syndicates facing the same questions over liquidity and succession.
