Custodian strikes deal for £22m family-owned portfolio

Custodian Property Income REIT has acquired a £22m real estate portfolio through the takeover of Merlin Properties, a family-owned property company.  Merlin’s portfolio comprises 28 smaller lot-size regional UK investment properties valued at £19.4m, mostly in the East Midlands and 46% weighted to industrials, as well as £2.7m of newly built housing stock, the ongoing sale of which is expected to conclude in the coming months. Richard Shepherd-Cross (pictured), managing director of Custodian Capital, the company’s investment manager, said: “We have been clear that a key element of our strategy is to seek opportunities to scale the business through corporate and/or portfolio acquisitions. In an environment where current market conditions make further capital raisings through the stock market challenging, this strategic transaction via an all-share acquisition on an adjusted NAV-for-NAV basis allows us to circumnavigate that issue and continue to grow.” He added: “We believe many other family property companies in the UK will face similar succession and tax issues [to the Merlin team] and we hope to use the transaction as a blueprint for further opportunities to achieve scale in the current environment.”