Cust Prop Inc Regulatory News (CREI)

21 June 2016

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Property Portfolio

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the acquisition of an £11.5 million portfolio of three properties ("the Portfolio").

The Portfolio comprises:

· 25,471 sq ft office on Pegasus Business Park, Castle Donington, adjacent to East Midlands Airport and Junction 23A of the M1, let to National Grid plc with an unexpired lease term of 6.2 years;

· 16,470 sq ft office in Cheadle, Greater Manchester, at Junction 3 of the M60 and nine miles from Manchester Airport, let to Wienerberger Limited with an unexpired lease term of 2.1 years; and

· 119,600 sq ft industrial unit in Wolverhampton, four miles from Junction 1 of the M54, let to Assa Abloy Limited with an unexpired lease term of 2.1 years.

The Portfolio's current passing rent of £0.99 million reflects a net initial yield of 8.04%, with an expected reversionary yield of 9.63%.

The purchase price of £11.5 million was funded from the Company's cash resources, following the drawdown of a new £45 million term loan on 6 June 2016. Net gearing1 following the acquisition has increased to 14.9%.

Commenting on the transaction, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:

"We are very pleased to have secured the Portfolio which is well aligned to our investment strategy, comprising good quality, smaller lot size, regional office and industrial assets. The properties are single let and occupied by strong tenants that are committed to the locations. The Portfolio also offers the potential for proactive asset management, with a number of opportunities identified and explored with stakeholders during the due diligence process."

1 Gross borrowings less unrestricted cash divided by property portfolio valuation.

-Ends-

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Notes to Editors

Custodian 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 on long leases throughout the UK and is characterised by small lot sizes, with individual property values of less than £7.5 million at acquisition.

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund. By targeting smaller lot size properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth.

Custodian Capital Limited is the discretionary investment manager of the Company.

For more information visit www.custodianreit.com and www.custodiancapital.com.