Purchase of Property

22 December 2017

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Property

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further purchase of property.

The Company has acquired St Nicholas Gate Retail Park in Carlisle, comprising six retail warehouse units totalling 73,690 sq ft with a 434 parking spaces and the reversionary interest in a 34,750 sq ft Asda supermarket. The park is within a mile of the city centre and two miles from the M6, prominently positioned on the busy A6, with occupiers including Asda, Halfords, Oak Furniture Land, Iceland, B&M and Poundland. Nearby retailers include B&Q, Pets at Home, Laura Ashley and Matalan.

The properties have a weighted average unexpired lease term to first break or expiry of 8.4 years and total passing rent of £889,718 per annum, reflecting a net initial yield1 of 6.89%.

The agreed aggregate purchase price of £12.1 million was funded from the Company's existing cash resources, resulting in net gearing2 increasing to 21.1% loan to value.

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

"We are pleased to have acquired these properties in one of Carlisle's dominant out-of-town retail locations. The acquisition includes the freehold interest in an Asda supermarket which reverts to the Company in 2038. We expect to witness strong valuation growth in this interest as the headlease shortens. Planning permission has been obtained for two additional units which could drive further valuation growth."

1 Portfolio passing rent divided by portfolio valuation plus estimated purchaser's costs.

2 Gross borrowings less unrestricted cash divided by last published 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 principally characterised by properties with individual values of less than £10 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 sub £10 million lot size, regional 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.