Custodian Property launches £5m share buyback

Custodian Property Income REIT announced the launch of a share buyback programme of up to £5m on Thursday, citing what it sees as a material undervaluation of the company and its portfolio in the current market.

The London-listed firm said the buyback, to be conducted by Deutsche Numis on behalf of the company, was following a series of selective disposals that had raised £41.8m since April 2023.

It noted that the assets were sold at an average premium of 8% to book value, with a focus on properties seen as having limited rental growth potential.

Further disposals exceeding £5m were planned for the rest of the financial year.

Proceeds from asset sales had so far been used to reduce variable rate debt and fund capital expenditure to enhance the environmental credentials of the portfolio.

The company said it had lowered its loan-to-value ratio from 27.4% in March 2023 to 25.6% as of March 2025, adjusted for post-period sales.

Its board said the current share price failed to reflect the quality and security of the company’s fully covered dividend, and that the buyback was expected to enhance earnings per share and net asset value per share for remaining shareholders.

The buyback would be conducted under the authority granted at the August 2024 annual general meeting, and may cover up to 10% of the company’s issued share capital.

Shares repurchased would be held in treasury.

The board said it would keep the programme under review and could cancel or amend it at any time.

At 1322 BST, shares in Custodian Property REIT were down 0.44% at 81.54p.

Reporting by Josh White for Sharecast.com.