3 March 2014

Flotation of Custodian Reit plc

Mattioli Woods plc is pleased to announce its intention to launch a £130 million ‘real estate investment trust’ (Custodian REIT plc) on the main market of the London Stock Exchange at the end of March 2014.

The REIT will be constituted with an independent board, which benefits from extensive property expertise, with the properties managed by its subsidiary, Custodian Capital. This team is spearheaded by Richard Shepherd-Cross, Managing Director, who has 20 years’ experience in the property investment market.

Richard Shepherd-Cross, commented:

“We are seeing growing confidence and momentum in the prevailing economic environment. With interest rates remaining low and the upturn in economic data, this has led to improved outlooks for real assets such as property and equity. Accordingly, whilst not without investment risk, holding exposure to property as part of a balanced portfolio has real merit, and the REIT offers a flexible and tax-efficient route to access what is a solid, long-term income-producing asset class, offering prospects for growth and a hedge against inflation.”

The initial public offering (IPO) for the purchase of ordinary shares in Custodian REIT plc is targeting a fund-raise of £50 million, which is forecast to be invested in a diverse portfolio of commercial properties over the next 9 to 12 months, to enhance the initial portfolio of £100 million. The IPO offers investors access to an existing high-quality portfolio at net asset value (NAV) with an attractive dividend yield from launch. Custodian REIT plc’s target distribution yield is 5.25% of NAV in year one, and 6.25% thereafter, fully covered from income.

Ian Mattioli, Group Chief Executive added:

“As a UK REIT the company will be very tax efficient, as it will pay no corporation tax or capital gains tax on the profits made from its UK qualifying property investment business. As a REIT there is a requirement to distribute at least 90% of the property rental profits to shareholders, a structure which aligns with our property investment strategy.”

The initial portfolio will constitute 48 assets in a nationwide portfolio, split across all property sectors: offices, industrial, retail, hotels, car showrooms and restaurants, and 90 separate tenancies. It will benefit from long unexpired leases with an average unexpired lease term of 8.63 years to first break in tenants’ leases.

REIT shares are suitable for SIPP, SSAS, ISA and private investors and offer a good alternative to direct commercial property investment. Clients of the Mattioli Woods Group, are able to invest in the REIT at flotation.

For further details please contact your consultant or send us an enquiry today.