3rd Mar 2026 14:06
(Alliance News) - Custodian Property Income REIT PLC on Tuesday announced its acquisition of Scorpion Properties Ltd, a "family property company", for GBP8.5 million.
The Leicester, England-based real estate investment trust, which is focused on smaller regional UK properties "with strong income characteristics", said the majority-share acquisition provides it with "another highly complementary portfolio...and further demonstrates Custodian Property Income REIT’s ability to build scale by sourcing and executing acquisitions where it can successfully marry its investment strategy and listed REIT structure to provide an effective tax efficient solution to family property companies."
The transaction marks Custodian's third recent corporate acquisition of a family property portfolio, following its mid-February acquisition of GBP35.9 million family property portfolio via the purchase of Grove Court Properties Holdings Ltd.
The Scorpion portfolio, Custodian said, comprises five single-let industrial properties with 100% occupancy along the M40 corridor in the South Midlands, with a GBP1.7 million average lot-size. It generates about GBP600,000 annually in aggregate passing rent, which Custodian said adds approximately 1.3% to its annual rent roll.
It has a net initial yield of around 6.8% with a revisionary yield of 9.7%, which the company expects to crystallise over the weighted average unexpired lease term to first break of 2.6 years and to increase the portfolio's rent roll by 43% to GBP874,000 from GBP613,000.
“Following so shortly after our recent acquisition of Grove Court, the transaction is a further statement of our ambition to continue scaling the business using the strong blueprint we set in last year’s Merlin acquisition," commented investment manager Custodian Capital Ltd Managing Director Richard Shepherd-Cross. "It also provides further evidence of the solution we offer to family offices seeking to exit or simplify the ownership structure of their property holdings by utilising the benefits of our listed REIT status as well as our focus on high quality smaller-lot size investments, which offer an attractive yield premium over larger assets, with little or no more associated risk.
"We will continue to progress our pipeline of similar opportunities in line with our growth strategy and against a challenging but improving capital markets backdrop."
Custodian Property Income REIT shares were down 2.1% at 85.70 pence on Tuesday afternoon in London.
By Emma Curzon, Alliance News reporter
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