Custodian REIT plc : Results of Annual General Meeting - Additional Statement

16 August 2018

Custodian REIT plc

("Custodian REIT" or "the Company")

Results of Annual General Meeting - Additional Statement

Custodian REIT (LSE: CREI), the UK commercial real estate investment company, announces its response to the results of the Annual General Meeting ("AGM") of the Company held on 19 July 2018, at which Resolution 11 to dis-apply pre-emption rights in relation to up to 10% of the Company's issued share capital ("ISC") was passed, but Resolution 12 to further dis-apply pre-emption rights in relation to an additional 10% of the Company's ISC did not receive the required 75% of votes cast in favour.

This resolution was tabled to take advantage of the changes to the Prospectus Directive that were effective from 20 July 2017, increasing the limit on new equity that can be issued over a 12-month period on a non-pre-emptive basis before the Company is required to publish a prospectus ("Limit") from 10% to 20% of the Company's ISC.

The Pre-Emption Group's Statement of Principles on Disapplying Pre-emption Rights, however, continues to support a Limit of 10%.  Accordingly, 26.0m votes against Resolution 12 were received (representing 47.4% of votes cast and 7.4% of eligible votes), largely from shareholders following Institutional Voting Information Service recommendations, based on the Pre-emption Group's guidance.

At the Company's AGM on 20 July 2017, shareholders voted in favour of dis-applying pre-emption rights in relation to up to 20% of the Company's ISC.

In the Board's opinion, having the authority to issue up to 20% of the Company's ISC on a non-pre-emptive basis, in line with the revised Limit implemented by the European Securities and Markets Authority, is justified to continue the Company's programme of tap issuance, which allows the Company to grow in a cost-efficient manner by avoiding the significant costs of publishing a prospectus and satisfies demand for the Company's shares.

The Board believes that growing the Company is in the best interests of all Shareholders as it reduces the Company's fixed costs per Ordinary Share and should increase the secondary market liquidity in its Ordinary Shares.  New Ordinary Shares will only be issued to new and existing Shareholders at a sufficient premium to net asset value ("NAV") at the point of issue to at least cover the issue costs of the new Ordinary Shares and will therefore be accretive to the prevailing NAV for existing Shareholders.  Whilst existing Shareholders' voting rights will be diluted, the Directors believe this consideration is outweighed by the flexibility that a larger authority provides and the cost savings associated with not needing to issue subsequent circulars to obtain further authority.  The Directors would use this authority only when they consider it to be in the best interests of Shareholders to fund suitable property acquisitions.

Due to the votes against Resolution 12 only representing 7.4% of eligible votes and based on feedback from Shareholders since the 2018 AGM, the Board currently expects to request approval to dis-apply pre-emption rights in relation to up to 20% of the Company's ISC at the 2019 AGM.

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Notes to Editors

Custodian REIT plc is a UK real estate investment trust with a portfolio comprising properties predominantly let to institutional grade tenants throughout the UK, principally characterised by properties with individual values of less than £10m at acquisition.

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By principally targeting sub £10m lot size regional properties, the Company intends to provide investors with an attractive level of income and the potential for capital growth, becoming the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate. 

Custodian Capital Limited is the discretionary investment manager of the Company. 

For more information visit www.custodianreit.com and www.custodiancapital.com.