CUSTODIAN PROPERTY INCOME REIT PLC

Annual Report (ESEF) • Jul 29, 2025

Custodian REIT PLC 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 2138001BOD1J5XK1CX76 2024-03-31 2138001BOD1J5XK1CX76 2025-03-31 2138001BOD1J5XK1CX76 2023-03-31 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 ifrs-full:RetainedEarningsMember 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 ifrs-full:SharePremiumMember 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 ifrs-full:MergerReserveMember 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 ifrs-full:IssuedCapitalMember 2138001BOD1J5XK1CX76 2024-04-01 2025-03-31 crei:RevaluationReserveMember 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 ifrs-full:RetainedEarningsMember 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 ifrs-full:SharePremiumMember 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 ifrs-full:MergerReserveMember 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 ifrs-full:IssuedCapitalMember 2138001BOD1J5XK1CX76 2023-04-01 2024-03-31 crei:RevaluationReserveMember 2138001BOD1J5XK1CX76 2025-03-31 ifrs-full:RetainedEarningsMember 2138001BOD1J5XK1CX76 2025-03-31 ifrs-full:SharePremiumMember 2138001BOD1J5XK1CX76 2025-03-31 ifrs-full:MergerReserveMember 2138001BOD1J5XK1CX76 2025-03-31 ifrs-full:IssuedCapitalMember 2138001BOD1J5XK1CX76 2025-03-31 crei:RevaluationReserveMember 2138001BOD1J5XK1CX76 2023-03-31 ifrs-full:RetainedEarningsMember 2138001BOD1J5XK1CX76 2023-03-31 ifrs-full:SharePremiumMember 2138001BOD1J5XK1CX76 2023-03-31 ifrs-full:MergerReserveMember 2138001BOD1J5XK1CX76 2023-03-31 ifrs-full:IssuedCapitalMember 2138001BOD1J5XK1CX76 2023-03-31 crei:RevaluationReserveMember 2138001BOD1J5XK1CX76 2024-03-31 ifrs-full:RetainedEarningsMember 2138001BOD1J5XK1CX76 2024-03-31 ifrs-full:SharePremiumMember 2138001BOD1J5XK1CX76 2024-03-31 ifrs-full:MergerReserveMember 2138001BOD1J5XK1CX76 2024-03-31 ifrs-full:IssuedCapitalMember 2138001BOD1J5XK1CX76 2024-03-31 crei:RevaluationReserveMember iso4217:GBP iso4217:GBP xbrli:shares 1 Custodian Property Income REIT plc Annual Report and Accounts for the year ended 31 March 2025 Custodian Property Income REIT plc (“Custodian Property Income REIT” or “the Company”) is a UK real estate investment trust (“REIT”) which seeks to deliver an enhanced income return by investing in a diversified portfolio of smaller, regional properties with strong income characteristics let to predominantly institutional grade tenants across the UK. For more information visit custodianreit.com . Contents Strategic report [ ] Highlights [ ] Business model and strategy [ ] Chairman’s statement [ ] Investment Manager’s report [ ] Financial review [ ] Principal risks and uncertainties [ ] Section 172 statement and stakeholder relationships Governance [ ] Board of Directors and Investment Manager personnel [ ] Governance report [ ] ESG Committee report [ ] [ ] Audit and Risk Committee report Management Engagement Committee report [ ] Nominations Committee report [ ] Remuneration report [ ] Directors’ report [ ] Directors’ responsibilities statement Financial statements [ ] Independent auditor’s report [ ] Consolidated and Company statements of comprehensive income [ ] Consolidated and Company statements of financial position [ ] Consolidated and Company statements of cash flows 2 [ ] Consolidated and Company statements of changes in equity [ ] Notes to the financial statements [ ] Environmental disclosures [ ] Historical performance summary [ ] Company information [ ] Investment Policy [ ] Glossary 3 Property highlights 2025 £m Comments Portfolio value 594.4 Valuation increases 1 : 11.9 • Investment property - £11.2m, representing a 2.2% like-for-like increase, explained further in the Investment Manager’s report • Property, plant and equipment - £0.7m, relating to solar panels Occupancy 91.1% Occupancy rates have decreased from 91.7% to 91.1% due to lease expiries in Q4 but partially mitigated by new lettings since the year end Capital investment 8.2 Primarily comprising: • £2.6m extending and refurbishing an industrial unit in Livingston • £1.8m completing refurbishment works at three office buildings in Leeds and Manchester • £1.1m refurbishing industrial assets in Plymouth and Aberdeen • £1.3m invested in solar panels across nine assets Disposal proceeds 15.1 At an aggregate 38% premium to pre-offer valuation 2 comprising: • £9.0m vacant industrial unit in Warrington • £2.3m vacant former car showroom in Redhill • £1.8m vacant offices in Castle Donington • £0.6m industrial unit in Sheffield • £1.4m vacant offices in Solihull Disposal proceeds since the year end 6.9 At an aggregate 12% premium to pre-offer valuation comprising: • £4.0m part-let offices in Cheadle • £2.9m fully-let offices in Cheadle Acquisitions since the year end 22.1 A portfolio of 28 smaller lot-sized investment properties through the corporate acquisition of Merlin Properties Limited (“Merlin”) 1 Comprising unrealised gains on investment property and solar panels (included within property, plant and equipment). 2 Latest external valuation prior to the disposal offer being reflected in subsequent valuations. 4 Financial highlights and performance summary 2025 2024 Comments Returns EPRA 3 earnings per share 4 6.1p 5.8p Increased by 4.9% due to rental growth and financing costs decreasing due to base rate reductions and property disposals Basic and diluted earnings per share 5 8.7p (0.3p) Profit resulting from a £11.2m investment property valuation increase (2024: £27.0m valuation loss) Profit/(loss) before tax (£m) 38.2 (1.5) Dividends per share 6 6.0p 5.8p Target dividend per share for the year ended 31 March 2026 of 6.0p Dividend cover 7 101.3% 100.7% In line with the Company’s policy of paying fully covered dividends NAV total return per share 8 9.5% (0.4%) 6.6% dividends paid (2024: 5.5%) and a 2.9% capital increase (2024: 5.9% capital decrease) Share price total return 9 1.2% (2.6%) Share price decreased from 81.4p to 76.2p during the year. Since the year- end share price has increased to 82p Capital values NAV and EPRA NTA 10 (£m) 423.5 411.8 Increased due to £11.9m of valuation gains NAV per share and NTA per share 96.1 93.4 Net gearing 11 27.9% 29.2% Reduced to 25.8% on a pro-forma basis following acquisitions and disposals since the year-end, broadly in line with the Company’s 25% target Weighted average cost of drawn debt facilities 3.9% 4.1% Base rate (SONIA) decreased from 5.2% to 4.5% during the year. Costs Ongoing charges ratio 12 (“OCR”) 2.48% 2.20% 3 The European Public Real Estate Association (“EPRA”). 4 Profit after tax, excluding depreciation and net revaluation gains on investment property, divided by weighted average number of shares in issue. 5 Profit after tax divided by weighted average number of shares in issue. 6 Dividends paid and approved for the year. 7 Profit after tax, excluding depreciation and net gains on investment property, divided by dividends paid and approved for the year. 8 Net Asset Value (“NAV”) movement including dividends paid during the year on shares in issue at 31 March 2024. 9 Share price movement including dividends paid during the year. 10 EPRA net tangible assets (“NTA” ) does not differ from the Company’s IFRS NAV or EPRA NAV. 11 Gross borrowings less cash (excluding restricted cash) divided by investment property portfolio and solar panel value. 12 Expenses (excluding depreciation and operating expenses of rental property recharged to tenants) divided by average quarterly NAV. 5 OCR excluding direct property expenses 13 1.30% 1.24% Average quarterly NAV has decreased from £423.6m in FY24 to £414.8m in FY25 Environmental Weighted average energy performance certificate (“EPC”) rating 14 C (51) C (53) EPCs updated at certain units across 24 properties demonstrating continuing improvements in the environmental performance of the portfolio Alternative performance measures (“APMs”) - the Company reports APMs to assist stakeholders in assessing performance alongside the Company’s results on a statutory basis, set out above. APMs are among the key performance indicators used by the Board to assess the Company’s performance and are used by research analysts covering the Company. The Company uses APMs based upon the EPRA Best Practice Recommendations Reporting Framework which is widely recognised and used by public real estate companies. Certain other APMs may not be directly comparable with other companies’ adjusted measures and APMs are not intended to be a substitute for, or superior to, any IFRS measures of performance. Supporting calculations for APMs and reconciliations between APMs and their IFRS equivalents are set out in Note 22. 13 Expenses (excluding depreciation and operating expenses of rental property) divided by average quarterly NAV. 14 Weighted by floor area. For properties in Scotland, English equivalent EPC ratings have been obtained. 6 Business model and strategy Purpose Custodian Property Income REIT offers investors access to a diversified portfolio of UK commercial real estate through a closed-ended fund. The Company seeks to provide investors with an attractive level of income and the potential for capital growth from a portfolio with strong environmental credentials, becoming the REIT of choice for private and institutional investors seeking high and stable dividends from well-diversified UK real estate. Stakeholder interests The Board recognises the importance of all stakeholder interests, not just those of investors, and keeps these at the forefront of business and strategic decisions, ensuring the Company: • Understands and meets the needs of its occupiers, owning fit for purpose properties with strong environmental credentials in the right locations which comply with regulations; • Protects and improves its stable cash flows with long-term planning and decision making, implementing its policy of paying dividends fully covered by recurring earnings and securing the Company’s future ; and • Adopts a responsible approach to communities and the environment, actively seeking ways to minimise the Company’s impact on climate change and providing the real estate fabric of the economy, giving employers a place of business. Investment Policy summary The Company’s investment policy 15 is summarised below: • To invest in a diverse portfolio of UK commercial real estate, principally characterised by smaller, regional, core/core-plus 16 properties that provide enhanced income; • The property portfolio should be diversified by sector, location, tenant and lease term, with a maximum weighting by income to any one property sector or geographic region of 50%; • To acquire modern buildings or those considered fit for purpose by occupiers, focusing on areas with: - High residual values; - Strong local economies; and 15 A full version of the Company’s Investment Policy is shown in the Investment Policy section of this Annual Report . 16 ‘ Core ’ real estate is generally understood to offer the lowest risk and target returns, requiring little asset management and fully let on long leases. Core-plus real estate is generally understood to offer low-to-moderate risk and target returns, typically high-quality and well-occupied properties but also providing asset management opportunities. 7 - An imbalance between supply and demand. • No one tenant or property should account for more than 10% of the rent roll at the time of purchase, except for: - Governmental bodies or departments; or - Single tenants rated by Dun & Bradstreet as having a credit risk score worse than two 17 , where exposure may not exceed 5% of the rent roll. • Not to undertake speculative development, except for the refurbishment or redevelopment of existing holdings; • To seek further growth, which may involve strategic property portfolio acquisitions and corporate consolidation; and • The Company may use gearing provided that the maximum loan-to- value (“ LTV ”) shall not exceed 35%, with a medium-term net gearing target of 25% LTV. The Board reviews the Company’s investment objectives at least annually to ensure they remain appropriate to the market in which the Company operates and in the best interests of shareholders. Differentiated property strategy The Company ’s portfolio is focused on smaller, regional assets which helps achieve our target of high and stable dividends from well-diversified real estate by offering: • An enhanced yield on acquisition – with no need to sacrifice quality of property, location, tenant or environmental performance for income and with a greater share of value in ‘bricks and mortar’ rather than the lease; • Greater diversification – spreading risk across more assets, locations and tenants and offering more stable cash flows; and • A higher income component of total return – driving out-performance with forecastable and predictable returns. Success in achieving the Company’s performance and sustainability objectives is primarily measured by performance against key performance indicators set out in detail in the Financial review and ESG Committee reports respectively. The Principal risks and uncertainties section of the Strategic Report sets out potential risks in achieving the Company’s objectives. 17 A risk score of two represents “lower than average risk”. 8 Source: Knight Frank LLP Richard Shepherd-Cross, Investment Manager, commented: "Our smaller-lot specialism has consistently delivered significantly higher yields with lower volatility without exposing shareholders to additional risk”. Growth strategy The Board is committed to seeking further growth in the Company to increase the liquidity of its shares and reduce ongoing charges. Our growth strategy involves: • Strategic property portfolio acquisitions and corporate consolidation, in particular identifying portfolios held by family offices seeking a solution to succession and latent tax issues; • Organic growth through share issuance at a premium to NAV; • Broadening the Company’s shareholder base, particularly through further penetration into online platforms; • Becoming the natural choice for private clients and wealth managers seeking to invest in UK real estate; and • Taking investor market share from open-ended funds and peer group companies being wound down. The Board ensures that property fundamentals are central to all decisions. 9 Diverse portfolio with institutional grade tenants Sector Weighting by income 31 March 2025 Industrial 42% Retail warehouse 22% Office 16% Other 13% High street retail 7% Location Weighting by income 31 March 2025 West Midlands 20% North-West 19% East Midlands 13% Scotland 13% South-East 11% South-West 10% North-East 9% Eastern 4% Wales 1% Top 10 tenants Asset locations Annual passing rent (£m) % portfolio income Menzies Distribution Aberdeen, Edinburgh, Glasgow, Ipswich, Norwich, Dundee, Swansea, York 1.7 3.9% Wickes Building Supplies Winnersh, Burton upon Trent, Southport, Nottingham, Leighton Buzzard 1.5 3.5% B&M Retail Swindon, Ashton-under-Lyne, Plymouth, Carlisle 1.4 3.1% B&Q Banbury, Weymouth 1.0 2.3% Matalan Leicester, Nottingham 1.0 2.2% First Title (t/a Enact Conveyancing) Leeds 0.9 2.1% DFS Droitwich, Measham 0.9 2.0% Zavvi Winsford 0.7 1.7% Next Evesham, Motherwell 0.7 1.6% Nicwood Logistics Burton upon Trent 0.6 1.5% 10 Experian tenant risk rating Sector 31 March 2025 31 March 2024 Government 1% 2% Very low risk 62% 57% Low risk 11% 8% Below average risk 11% 13% Above average risk 5% 8% High risk 1% 2% Other 9% 10% Our environmental, social and governance (“ESG”) objectives • Improving the energy performance of our buildings - investing in carbon-reducing technology, infrastructure and onsite renewables and ensuring redevelopments are completed to high environmental standards which are essential to the future leasing prospects and valuation of each property • Reducing energy usage and emissions - liaising closely with our tenants to gather and analyse data on the environmental performance of our properties to identify areas for improvement • Achieving positive social outcomes and supporting local communities - engaging constructively with tenants and local government to ensure we support the wider community through local economic and environmental plans and strategies and playing our part in providing the real estate fabric of the economy, giving employers safe places of business that promote tenant well-being • Understanding environmental risks and opportunities - allowing the Board to maintain appropriate governance structures to ensure the Investment Manager is appropriately mitigating risks and maximising opportunities • Complying with all requirements and reporting in line with best practice where appropriate - exposing the Company to public scrutiny and communicating our targets, activities and initiatives to stakeholders • Governance - maintaining high standards of corporate governance and disclosure to ensure the effective operation of the Company and instil confidence amongst our stakeholders. We aim to continually improve our levels of governance and disclosure to achieve industry best practice 11 Investment Manager Custodian Capital Limited (“the Investment Manager”) is appointed under an investment management agreement (“IMA”) to provide property management and administrative services to the Company. Richard Shepherd-Cross is Managing Director of the Investment Manager. Richard has 30 years’ experience in commercial property, qualifying as a Chartered Surveyor in 1996 and until 2008 worked for JLL, latterly running its national portfolio investment team. Richard established Custodian Capital Limited as the Property Fund Management subsidiary of Mattioli Woods Limited (“Mattioli Woods”) and in 2014 was instrumental in the launch of Custodian Property Income REIT from Mattioli Woods ’ syndicated property portfolio and its 1,200 investors. Following the successful IPO of the Company, Richard has overseen the growth of the Company to its current property portfolio of c. £600m. Richard is supported by the Investment Manager’s other key personnel: Ed Moore - Finance Director and Alex Nix - Assistant Investment Manager, along with a team of five other surveyors and five accountants. 12 Chairman ’s statement A changing and more challenging global political landscape during the year has resulted in tensions and uncertainty running high in parts of the world. In the UK, it is still early days for the new Labour government but uncertainty is never good for any economy, including the real estate sector. While commercial property in the UK is showing signs of recovering value on the back of increased occupier activity and growing rents, the share prices of listed real estate companies do not yet reflect this recovery with many shares in these companies continuing to trade at discounts to net asset values. As a result of these, in some cases, quite wide discounts there has been increased corporate activity in the listed real estate sector with mergers, take-privates and managed wind downs a feature of the last twelve months following the arrival of more activist shareholders. In my C hairman’s statement last year, I reflected that the Company could soon be one of only a few active and genuinely diversified property investment companies available to investors in the listed sector. It would appear that this reflection has proved prescient, however, as I note in the following paragraphs, the Company is well positioned with a diversified portfolio of performing real estate assets which are providing a strong yield from a fully covered dividend. Performance Custodian Property Income REIT’s strategy is to invest in a diversified portfolio which, at 31 March 2025, comprised 151 properties geographically spread throughout the UK and across a diverse range of sectors. The year-end portfolio valuation reflected a net yield (“NIY”) of 6.6% 18 (31 March 2024: 6.6%). With an average property value of c.£4m and no one tenant or property accounting for more than 3.9% or 1.75% of the Company’s rent roll respectively, property specific risk and tenant default risk are significantly mitigated. The Company’s NAV increased by 2.9% during the year, contributing to a 9.5% NAV total return, and at an accelerating rate, quarter-on-quarter, as the impact of decreasing interest rates and real estate market sentiment started to be reflected in valuations. However, this positive underlying property portfolio performance does not yet appear to be reflected in the share price performance and it is disappointing that the share price total return for the year is only 1.2% which lags the NAV total return of 9.5% (2.9% capital growth and 6.6% income). One of the challenges of the performance for listed real estate over the last 12 months has been the rise in the 10-year gilt yield, which has always been correlated to listed real estate ratings. The 10-year gilt yield rose from 4.0% in March 2024, to 4.9% in January 2025, and was 4.6% at the year end. This historically high and volatile 18 EPRA topped-up net initial yield. 13 rate has had a direct impact on ratings, but set against Custodian Property Income REIT’s dividend yield as at 31 March 2025 of 7.9%, fully covered by earnings and supported by rental growth and a falling cost of variable rate debt, this appears to be a generous margin. Custodian Property Income REIT employs sector expertise, with high quality asset management, covenant management and portfolio construction, to provide an institutional offering to shareholders in a diversified regional portfolio, that generates a superior income return. Notwithstanding recent volatility in pricing and acknowledging that 2024 witnessed the bottom of a property valuation cycle, the Company can still look back over an average annual NAV total return of 5.6% in the 11 years since IPO, driven by strong recurring earnings with fully covered dividends. 0 1 2 3 4 5 6 7 8 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 EPS EPS Dividend pps 0 10 20 30 40 50 60 70 80 90 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Pence Cumulative NAV Total Return 14 The NAV of the Company at 31 March 2025 was £423.5m, approximately 96.1p per share: Pence per share £m NAV at 31 March 2024 93.4 411.8 Valuation increases and depreciation 2.7 11.7 Profit on disposal of investment property 0.1 0.4 Net gain on property portfolio 2.8 12.1 EPRA earnings 6.1 26.8 Quarterly dividends paid during the year 19 (5.9) (25.9) 0.2 0.9 Special dividend paid during the year relating to FY24 (0.3) (1.3) NAV at 31 March 2025 96.1 423.5 Investment property and PPE valuations increased by £11.9m during the year, of which £10.4m was delivered in the second half, demonstrating the current upward trajectory and returning the Company a positive NAV total return per share of 9.5%. A detailed property valuation commentary is given in the Investment Manager’s report. The movement in NAV also reflects the payment of interim dividends during the year, but does not include any provision for the approved dividend of 1.5p per share relating to Q4 which was paid on Friday 30 May 2025. Dividends The Company’s commitment to a property strategy that supports a relatively high dividend, fully covered by EPRA earnings, remains a defining characteristic and in May 2024 the Board announced a 9% increase in the annual target dividend per share from 5.5p to 6.0p. This dividend increase reflected the improving earnings characteristics of the Company’s portfolio through asset management initiatives crystallising rental growth and the profitable disposal of vacant properties increasing occupancy. Our Investment Manager continues to keep a tight control on costs, while the Company’s substantially fixed -rate debt profile is keeping borrowing costs below the current market rate. Based on the current forward interest rate curve the Board expects that the ongoing cost of the Company’s revolving credit facility will fall during the next 12 months, tempering the impact of expiry of a £20m fixed-rate loan in August 2025. 19 Quarterly interim dividends totalling 5.875p per share (1.375p relating to the prior year and 4.5p relating to the year) were paid on shares in issue throughout the year. 15 The Board’s objective remains to continue to grow the dividend at a rate which is fully covered by net rental income and does not inhibit the flexibility of the Company’s investment strategy. Borrowings The Company’s net gearing decreased from 29.2% LTV at 31 March 2024 to 27.9% during the year. Property disposals and the acquisition of Merlin since the year end have reduced pro-forma net gearing to 25.8%, drawing the LTV closer to the Company’s 25% medium -term target. The proportion of the Company’s drawn debt facilities with a fixed rate of interest was 80% at 31 March 2025 (2024: 78%), significantly mitigating interest rate risk for the Company and maintaining the accretive margin between the Company’s 3.9% (2024: 4.1%) weighted average cost of debt and property portfolio EPRA topped- up NIY 20 of 6.6% (2024: 6.6%). The Company’s debt is summarised in Note 1 6. Acquisitions On 30 May 2025 the Company acquired 100% of the ordinary share capital of Merlin Properties Limited for an initial consideration of 22.9m new ordinary shares in the Company (“the Transaction”) . A second tranche of consideration, expected to comprise c. 1.7m shares, will be payable within the next six months following approval of completion accounts drawn up to the acquisition date. Aggregate consideration will be calculated on an ‘adjusted NAV -for-NAV basis ’ , with each company’s NAV being adjusted for respective acquisition costs and Merlin’s investment property portfolio valuation adjusted to the agreed purchase price of £19.4m. 20 Annualised cash rents at the year-end date, adjusted for the expiration of lease incentives, less estimated non-recoverable property operating expenses (excluding letting and rent review fees) , divided by property valuation plus estimated purchaser’s costs. Considered an APM. 16 Merlin’s property portfolio is summarised below: • Investment property portfolio value of £19.4m comprising 28 regional commercial properties, primarily located in the East Midlands, with sector splits by passing rent set out below: Merlin portfolio sector splits Industrial 47% Retail warehouse 19% Office 17% High street retail 13% Other 4% 100% • 10 newly built residential properties largely under offer to sell valued at c. £2.7m • 74% of passing rent is generated from the 10 largest assets, with Halfords representing the largest tenant (5% of the £1.7m rent roll) The Transaction provides us with a portfolio that is both a strong fit with our income-focused strategy and highly complementary to our existing property portfolio, augmenting our regional, industrial bias and adding further diversification by tenant. The Merlin portfolio has a topped-up NIY of 8.1%, ahead of the Company’s equivalent of 6.6%, making it immediately earnings-accretive, and is ungeared so reduces the Company’s pro -forma net gearing by c. 1%. Hubert Lynch, Founder Director of Merlin Properties Limited, said : “ Operating the Merlin portfolio, which our family has compiled and managed over the last 40 years, had become increasingly demanding in today’s complex environment. We have undertaken the Transaction in a tax efficient manner to ensure our family’s continued exposure to property investment both currently and for future generations through a professionally managed fund with a strong track record. As already significant, supportive shareholders of Custodian Property Income REIT we have a strong relationship with the Investment Management team which we look forward to continuing for many years.” Custodian Property Income REIT remains committed to growth and over the first 11 years of trading the Company has grown, largely organically, but also via corporate acquisitions, with an over six-fold increase in the size of the portfolio from £90m of property assets at IPO to a pro-forma c. £610m following the Merlin acquisition and disposals since the year end. This growth has improved shareholder liquidity and increased diversification, mitigating property specific and tenant risk while stabilising earnings. Following the Merlin acquisition, the Board of Custodian Property Income REIT and the Investment Manager are actively exploring further opportunities to purchase complementary portfolios via mergers or corporate acquisitions. 17 Sustainability The Company has made further progress in implementing its environmental policy during the year, improving its weighted average EPC score from C (53) to C (51) following further refurbishments within the portfolio. The Company’s Asset Management and Sustainability report is available at: custodianreit.com/environmental-social-and-governance-esg/ This report contains details of the Company’s asset management initiatives with a clear focus on their impact on ESG, including case studies of recent positive steps taken to improve the environmental performance of the portfolio. Cost disclosure exemption We welcome the Financial Conduct Authority ’s exemption of investment companies (including REITs) from the Packaged Retail and Insurance-based Investment Products (“ PRIIP s”) and Markets in Financial Instruments Directive II (“ MiFID II ”) regulation. Since 2018 this regulation has obliged wealth managers and platforms to make cost disclosures to clients that were ‘fundamentally misleading’ 21 by being presented as being borne by investors despite actually being incurred by the Company and included within reported investment performance 22 . Exacerbated by more recent Consumer Duty regulations these cost disclosures, which also result in investment companies’ management costs appearing spuriously more expensive than alternative structures, are likely to have curtailed investment demand for the Company’s shares over the last six years. As the investment industry gradually adjusts to this change, we expect the Company’s competitive cost structure and high returns to be very attractive to new investors seeking strong returns from UK real estate. 21 Source: Association of Investment Companies. 22 Since this exemption, the Company’s Key Information Document has disclosed ‘the costs that the Investment Manager takes for managing your investment’ as 0%, as annual management charges are already deducted as an expense from reported earnings, with its European MiFID Template disclosing the Company’s ‘ongoing costs’ as its OCR (excluding direct property costs). 18 Investment Manager The performance of the Investment Manager is reviewed each year by the Management Engagement Committee. During the year the fees charged by the Investment Manager were £3.9m (2024: £4.0m) in respect of annual management and administrative transaction fees, resulting in an ongoing charges ratio excluding direct property expenses of 1.30% (2024: 1.24%), which compares favourably to the peer group. Further details of fees payable to the Investment Manager are set out in Note 19. The Board continues to be pleased with the performance of the Investment Manager, noting particularly the successful acquisition of Merlin, continued positive asset management initiatives and capital improvements to the Company’s portfolio , with resulting valuation increases, enhanced environmental performance and maintained occupancy and income. As a result the Board supports the continued appointment of the Investment Manager. On 3 September 2024, 100% of the ordinary share capital of Mattioli Woods , the Investment Manager’s parent company, was acquired by Tiger Bidco Limited, a wholly-owned subsidiary of investment vehicles advised and managed by Pollen Street Capital Limited. The Board is not expecting any operational changes to result from this transaction. Board On 6 November 2024 Ian Mattioli MBE DL stepped down from the Board to focus on capitalising on the market opportunity in UK wealth management in his role as Chief Executive Officer of Mattioli Woods, following its transition to private ownership. On behalf of the Board and our shareholders I thank Ian for his invaluable support and contribution as Founder Director of the Company since IPO in 2014. Ian and his family are expected to remain major, long-term shareholders in the Company and he will continue to serve a valuable role for the Company in his capacity as chair of the Investment Manager and as a member of its Investment Committee. Also on 6 November 2024 Nathan Imlach, who is currently Chief Strategic Adviser to Mattioli Woods focusing on acquisitions and contributing to its future direction, was appointed to the Board for a transition period up until no later than the end of 2025. Following that transition period the Company’s Board will become fully independent from the Company’s Investment Manager. The Board is conscious of the importance stakeholders place on diversity and understands a diverse Board brings constructive challenge and fresh perspectives to discussions. The Company follows the AIC Corporate Governance Code and our policy on board diversity is summarised in the Nominations Committee report. From the start of 2026, the Board expects to meet the FCA’s target for 40% female Board representation. Custodian Property Income REIT is an investment company with no Executive Directors and a small Board compared to 19 equivalent size listed trading companies. The Board welcomes the gender and ethnic diversity offered by the Investment Management team working with the Company. At the Company’s AGM on 8 August 2024 the resolution to re -elect Elizabeth McMeikan as a Director of the Company (“the Resolution”) received votes against of 24.7% (2023: 23.7%), which comprised 6.8% (2023: 5.8%) of total shareholders. Feedback from shareholders indicates that votes against the Resolution were primarily a result of perceived ‘over - boarding’, due to Elizabeth’s roles as Chair of Nichols plc and Non -Executive Director of Dalata Hotel Group plc and McBride plc. These Directorships are within the number of ‘mandates’ permitted by Institutional Shareholder Services (“ISS”), a leading provider of corporate governance and responsible investment solutions to leading institutional investors, which supported the Resolution. Votes against the Resolution were primarily from institutional shareholders applying stricter internal voting policies than ISS by allowing fewer ‘mandates’ , and their voting policies do not acknowledge the generally lower time commitments as Directors of investment companies or companies of a relatively small size. I believe additional roles offer Directors helpful insight and experience which benefits the Boards on which they sit and I do not intend to ask any fellow Directors to reduce their additional roles. Along with all of the Directors, Elizabeth is a diligent and important member of the Board and I am grateful to all of them for their contributions and support. Outlook The Board appreciates the support of its wide range of shareholders with the majority classified as private client or discretionary wealth management investors. Custodian Property Income REIT’s investment and dividend strategy, and diversified portfolio are well suited to investors looking for a close proxy to direct real estate investment but in a managed and liquid structure. The Board believes strongly in the benefits of diversification in mitigating property and sector specific risk, while delivering dividends that are fully covered by recurring earnings and generally higher than sector specialists. The Board also remains firm in its belief that this strategy is well suited to long-term investors in real estate, allowing for the timely execution of acquisitions and disposals without the constraints of sector specificity, while setting the Company apart from the single sector, often higher risk funds. The Company’s Investment Manager has curated a portfolio that focuses on long-term income and income growth, through careful stock selection and a balance between the main commercial property sectors, weighted to those that should offer the greatest rental growth potential. This portfolio has supported growing earnings, fully covered by growing dividends, with 101.3% dividend cover for the year (2024: 100.7%). Income and income growth are likely to form the greater component of total return over the next phase of the property cycle if long-term interest rates continue to stay high with persistent inflation. 20 However, as short-term interest rates fall and investors re-connect with real estate investment for its attractive income credentials, Custodian Property Income REIT’s share price is well -placed to re-rate and trend back towards NAV, enhancing the total return for all of our shareholders. In addition, with asset prices showing signs of recovery and the recent announcement of the Merlin portfolio acquisition, the Board looks to the future with cautious confidence. David MacLellan Chairman 11 June 2025 21 Investment Manager’s report The UK property market At a property market level, it is encouraging that the evidence is once again supportive of a recovery in the fortunes of UK commercial real estate. Transaction volumes have been increasing, albeit there has been a slight hiatus as the world reacts to US trade policy. Of note is the increased investment in the office sector, with a focus on grade A city centre buildings. The industrial and logistics sector continues to be popular and there is renewed focus on out-of-town retail/retail warehousing. Since the middle of last year, we have seen a further stabilisation of valuations as well as some increases during recent quarters, driven mainly by rental growth but also through emerging yield compression. The consistent thread in the story of UK commercial real estate is positive occupier activity, with declining vacancy rates in prime locations and increased leasing activity, particularly in the office sector, as companies finalise their return-to-office strategies. While there is evidence of developments restarting and new planning applications increasing, the lack of development over the last two/three years is maintaining pressure on supply and supporting rental growth. Post year- end, Custodian Property Income REIT’s share price experienced volatility in line with the wider stock market, but perhaps this reaction will settle into a more considered position for real estate. It would not be unreasonable to expect that during periods of trade uncertainty, UK real estate can be seen as a safe haven, as investors seek stable income, with asset backing in established and secure jurisdictions. This should be particularly true for the Company’s investment strategy that generally targets sub £10m, regional, UK assets, that principally serve a local and/or domestic market. The fully covered dividend per share for the year of 6.0p offered a dividend yield of 7.9% at the year end (2024: 5.8p dividend, 7.2% yield), as weak economic confidence pushed the share price to a discount to NAV of c.19%. While we believe this fundamentally undervalues the security and quality of income offered through our fully covered dividend, and despite the fact that we continually demonstrate our ability to realise sales at premiums to book value, the discount remains less than the UK listed real estate market average discount of c. 28%. This suggests that while investors value the income, they also still overplay the risk in UK real estate which should be set against a backdrop of falling interest rates, rising property prices, growing rents and falling vacancy rates which are normally associated with a reduction in risk. No commentary on UK listed real estate would be complete without considering the corporate activity that has swept through the sector. Comprising mergers, acquisitions, wind downs, strategic reviews and take-privates, the common theme is that private equity is seeing value in the sector. Against the average market discount to NAV 22 of c.28%, most corporate activity is pricing transactions at between a 0% and 12% discount to NAV, which highlights the disparity in perceptions of value. As these perceptions of value merge, we should expect to see a recovery in ratings across the sector, which adds further support to our view that the sector is currently under-valued. On a sectoral basis there has been positive news for all the main commercial property sectors. Industrial and logistics continue to lead the way on rental growth, but we have also recorded rental growth in retail warehousing, offices and high street retail. The table below shows the reversionary potential of the portfolio by sector, by comparing EPRA topped-up NIY to the equivalent yield, which factors in expected rental growth and the letting of vacant units. Across the whole portfolio, valuers’ estimated r ental values (“ERV”) are 14% (2024: 15%) ahead of passing rent and while part of the reversionary potential is due to vacancy, the balance is this latent rental growth which will be unlocked at rent review and lease renewal. Sector EPRA topped- up NIY 31 March 2025 Equivalent yield 23 31 March 2025 EPRA topped-up NIY 31 March 2024 Equivalent yield 31 March 2024 Industrial 5.5% 6.9% 5.4% 6.7% Retail warehouse 7.5% 7.6% 8.0% 7.4% Other 7.7% 8.4% 7.1% 8.0% Office 8.1% 11.1% 7.1% 9.8% High street retail 9.4% 8.4% 9.9% 8.1% 6.6% 7.8% 6.6% 7.5% Prevailing property investment approach Based on our assessment of the current market, our strategy to maintain a regionally focused diversified portfolio, as set out below, has proven resilient. We expect to reinvest the proceeds from selective disposals in funding capital expenditure to improve the environmental credentials of the portfolio and to pay down variable rate debt. Over the long-term we intend to focus on: • Maintaining weighting to industrial and logistics – assets in this sector still have latent rental growth and strong occupier demand for small/’mid - box’ units; 23 Weighted average of annualised cash rents at the year-end date and ERV, less estimated non- recoverable property operating expenses, divided by property valuation plus estimated purchaser’s costs. Source: Knight Frank. 23 • Retail warehousing let off low rents which are starting to show rental growth and supply side restrictions; • Selective regional offices with a focus on strong city centre locations instead of out-of-town business parks; • Drive-through expansion involving acquisition and development where rental growth is anticipated; • Selective high street retail assets in the country’s strongest locations where rents have stabilised and there is potential for growth; and • Refurbishment of existing property, maximising all opportunities to invest in the quality of our assets and support our ESG goals. Sectoral view Industrial and logistics Rental growth remains strongest in the industrial and logistics sector which accounts for the largest share of the Company’s rent roll. Lack of supply, and in some urban areas reducing supply, limited development of smaller and ‘mid - box’ industrial units and construction cost inflation have all combined to focus occupational demand and create low vacancy rates, driving rental growth for new-build regional industrial units and well specified, refurbished space. The industrial sector is also providing the greatest opportunity for solar panels, generally referred to as photovoltaic (“PV”) installations, which is not only delivering on our environmental commitments but also growing revenue through the sale of the electricity generated to tenants via a power purchase agreement. In the three months to 31 March 2025 the Company recorded income of £0.1m from 10 PV installations currently operational at industrial sites. 12 new installations are currently under consideration. In summary: • Occupational demand is robust • Limited supply of modern, ‘ low carbon ’ , buildings • Latent rental growth potential • Target sector for well-priced opportunities Retail warehouse Retail warehousing is the sector which the Investment Property Forum Consensus Forecast expects to record the highest total return, showing some rental growth but with strong capital performance. Our preferred sub-sectors are food, homewares, DIY and the discounters. Vacancy rates are very low and future rental growth appears affordable for occupiers. 24 The combination of convenience, lower costs per square foot and the complementary offer to online retail has kept these assets trading strongly. As the second largest sector in the Custodian Property Income REIT portfolio, the recovery in market sentiment towards out-of-town retail is positive and vacancy rates remain low. In summary: • Units let off low rents • Lower costs of occupation • Complementary to online Offices In the office sector, we have pursued a strategy of reducing exposure to business park assets, where we believe tenant demand is weaker and rental growth prospects are much more limited. While only a small percentage of the portfolio, where we have retained offices, they have been city centre buildings that can be or have been brought up to modern occupier requirements and have low environmental impact standards. In summary: • Occupier demand is stronger in city centre locations • Strong rental growth in select locations • Valuations have stabilised High street retail We continue to see low vacancy rates in prime locations and occupier demand, from both retail and leisure operators, should be supportive of future rental growth. In summary: • Low vacancy rates in prime locations • Rents are starting to show growth • Rental yields support dividends 25 Other Sub- sector of ‘Other’ sector assets Weighting by income 31 March 2025 Weighting by income 31 March 2024 Gym 20% 18% Drive-through 17% 17% Motor trade 16% 17% Pub and restaurant 15% 15% Other, including day nursery and hotel 13% 13% Leisure 12% 13% Trade counter 7% 7% 100% 100% Property portfolio balance Property portfolio summary 2025 2024 Property portfolio value 24 £594.4m £589.1m Separate tenancies 349 335 EPRA vacancy rate 8.9% 8.3% Assets 151 155 Weighted average unexpired lease term to first break of expiry (“ WAULT ”) 5.0 years 4.9 years EPRA topped-up NIY 6.6% 6.6% Weighted average EPC rating C (51) C (53) The property portfolio is split between the main commercial property sectors in line with the Company’s objective to maintain a suitably balanced investment portfolio . The Company’s strategy since IPO has been a relatively low exposure to office and high street retail combined with a relatively high weighting to the industrial and alternative sectors, often referred to as ‘other’ in property market analysis. 24 2024 includes £11.0m of assets sold since the year end classified as ‘held -for- sale’. 26 The current sector weightings are: Sector Valuation 31 March 2025 £m Weighting by income 25 31 March 2025 Valuation 31 March 2024 £m Weighting by income 31 March 2024 Valuation movement £m Weighting by value 31 March 2025 Weighting by value 31 March 2024 Industrial 298.3 42% 291.4 40% 11.6 50% 49% Retail warehouse 127.3 22% 122.7 23% 4.4 21% 21% Other 78.2 13% 78.8 13% 0.5 13% 13% Office 57.7 16% 63.9 16% (5.7) 10% 11% High street retail 32.9 7% 32.3 8% 0.4 6% 6% Total 594.4 100% 589.1 100% 11.2 100% 100% For details of all properties in the portfolio please see custodianreit.com/property/portfolio . Disposals Owning the right properties at the right time is a key element of effective property portfolio management, which necessarily involves periodically selling properties to balance the property portfolio. Custodian Property Income REIT is not a trading company but identifying opportunities to dispose of assets significantly ahead of valuation or that no longer fit within the Company’s investment strategy is important. The Company sold the following properties during the year for an aggregate £15.1m, 5% ahead of the most recent valuation and 38% ahead of their pre-offer valuation: • A vacant industrial unit in Warrington for £9.0m to a developer; • A vacant former car showroom in Redhill for £2.35m to a developer; • Vacant offices in Castle Donington for £1.75m to a flexible office provider; • Vacant offices in Solihull for £1.4m to an owner-occupier; and • One unit of a two-unit industrial asset in Sheffield to an owner-occupier for £0.55m. Since the year end the Company has sold: • Part-let offices in Cheadle for £4.0m; and • Fully-let offices in Cheadle for £2.9m. 25 Current passing rent plus ERV of vacant properties. 27 Asset management During the year we have remained focused on active asset management, completing 15 rent reviews at an aggregate 29% increase in annual rent from £2.5m to £3.2m, along with 64 new lettings, lease renewals and lease regears, with rental levels remaining affordable to our occupiers. During the year we deployed £8.2m on property refurbishments including £1.3m installing solar panels. £2.6m of this capital expenditure related to the pre-let extension of an industrial building in Livingston, allowing the occupier to expand and achieve its plans for growth. The extension achieved practical completion in May 2025, increasing annual rent by c.£0.2m. ESG The sustainability credentials of both the building and the location have become ever more important for occupiers and investors. As Investment Manager we are absolutely committed to achieving the Company’s challenging goals in relation to ESG and believe the real estate sector should be a leader in this field. The weighted average EPC across the portfolio is following a positive trajectory towards an average B rating (equivalent to a score of between 25 and 50). With energy efficiency a core tenet of the Company’s asset management strategy and with tenant requirements aligning with our energy efficiency goals we see this as an opportunity to secure greater tenant engagement and higher rents. During the year the Company has updated EPCs at 35 units across 24 properties where existing EPCs had expired or where works had been completed, improving the weighted average EPC rating from C (53) at 31 March 2024 to C (51). 0 10 20 30 40 50 60 70 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Weighted Average EPC 28 Richard Shepherd-Cross Managing Director for and on behalf of Custodian Capital Limited Investment Manager 11 June 2025 29 Financial review A summary of the Company’s financial performance for the year is shown below: Financial summary Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Rental revenue 42,828 42,194 Other income 476 195 Expenses and net tenant recharges (9,159) (8,599) Net finance costs (7,359) (8,048) EPRA profits 26,786 25,742 Abortive acquisition costs - (1,557) Net gain/(loss) on investment property and depreciation 11,369 (25,687) Profit/(loss) before tax 38,155 (1,502) EPRA EPS (p) 6.1 5.8 Dividend cover 101.3% 100.7% OCR excluding direct property costs 1.30% 1.24% Borrowings Net gearing 27.9% 29.2% Weighted average debt maturity 4.5 years 5.3 years Weighted average cost of drawn debt 3.9% 4.1% Revenue Rental revenue increased by 1.5% compared to the year ended 31 March 2024 with year-end contractual passing rent increasing by 1.9% from £43.1m to £43.9m during the year (a 2.3% like-for-like increase). As illustrated below, the £0.4m impact on year-end passing rent from an overall 0.6% decrease in occupancy was more than offset by annual rental growth of £1.2m, of which £1.1m was from the industrial sector. 30 During the year we deployed £1.3m on PV installations at nine assets (2024: £2.1m) and associated ‘other’ revenues have increased by 144% as a result. We expect PV revenues to continue to grow as recent installations go live and we continue to roll-out PV via our pipeline of anticipated refurbishments. Finance costs During the year we deployed £8.2m (2024: £19.0m) of variable rate debt on property refurbishments and installing solar panels. This capital expenditure was funded by £15.1m of disposal proceeds with the balance used to pay down the Company’s variable rate revolving credit facility (“RCF”) facility. With a net decrease in the drawn RCF balance and base rate (SONIA) decreasing from c.5.2% to c.4.5% during the year, net finance costs decreased by £0.7m. 43.1 0.2 -0.2 -0.4 1.2 NAV per share (p) 42.0 42.5 43.0 43.5 44.0 44.5 43.9 31 Earnings These positive movements in rent and finance costs increased EPRA earnings per share to 6.1p (2024: 5.8p). This increase in recurring earnings demonstrates the robust nature of the Company’s diverse property portfolio. During the year sentiment towards real estate improved despite concerns over high long-term gilt rates and the outlook for medium-term earnings. Like-for-like valuation increases were 2.2% following two years of previous decreases and over the year these outlook improvements resulted in an £11.2m valuation increase (2024: £27.0m decrease) and an associated profit before tax of £38.2m (2024: £1.5m loss). Dividends The Board acknowledges the importance of income for shareholders and during the year its policy was to pay dividends at a rate fully covered by net rental income which does not inhibit the flexibility of the Company’s investment strategy. The Company paid dividends totalling 6.175p per share during the year (£27.2m) comprising a fourth interim dividend relating to the year ended 31 March 2024 of 1.375p, a special dividend relating to FY24 of 0.3p, and three quarterly interim dividends of 1.5p per share relating to the year ended 31 March 2025. On Friday 30 May 2025 the Company paid a fourth quarterly interim dividend per share of 1.5p for the quarter ended 31 March 2025 of £6.6m. Dividends relating to the year ended 31 March 2025 of 6.0p (2024: 5.8p) were 101.3% (2024: 100.7%) covered by EPRA earnings of £26.8m (2024: £25.7m), as calculated in Note 22. Debt financing The Company operates with a conservative level of net gearing, with target borrowings over the medium-term of 25% of the aggregate market value of all properties at the time of drawdown. The Company’s net gearing decreased from 29.2% LTV last year to 27.9% at the year-end primarily due to £11.9m of valuation increases and a net £6.9m receipt from disposals and capital deployment. On 23 January 2025 the Company and Lloyds Bank plc (“Lloyds”) agreed to extend the term of the RCF by one year to expire on 10 November 2027. An option remains in place to extend the term by a further year to 2028, subject to Lloyds’ consent. The RCF includes an ‘accordion’ option , with the facility limit increased from £50m to £60m since the year end , which can be increased up to £75m subject to Lloyds’ agreement. 32 At the year end the Company had the following facilities available: • A £50m RCF with Lloyds with interest of between 1.62% and 1.92% above SONIA, determined by reference to the prevailing LTV ratio of a discrete security pool of assets, and expiring on 10 November 2027 (with an extension option to 2028) . The facility limit can be increased to £75m with Lloyds’ approval; • A £20m term loan facility with Scottish Widows Limited (“SWIP”) repayable in August 2025, with fixed annual interest of 3.935%; • A £45m term loan facility with SWIP repayable in June 2028, with fixed annual interest of 2.987%; and • A £75m term loan facility with Aviva Real Estate Investors (“Aviva”) comprising: - A £35m tranche repayable on 6 April 2032, with fixed annual interest of 3.02%; - A £15m tranche repayable on 3 November 2032 with fixed annual interest of 3.26%; and - A £25m tranche repayable on 3 November 2032 with fixed annual interest of 4.10%. Each facility has a discrete security pool, comprising a number of the Company’s individual properties , over which the relevant lender has security and the following covenants: • The maximum LTV of each discrete security pool is either 45% or 50%, with an overarching covenant on the Company’s property portfolio of a maximum of either 35% or 40% LTV; and • Historical interest cover, requiring net rental income from each discrete security pool, over the preceding three months, to exceed either 200% or 250% of the facility’s quarterly interest liability . SWIP 3.9% fixed Lloyds RCF - 1.62% - 1.92% + SONIA SWIP 3.0% fixed Aviva 3.4% fixed 0 10 20 30 40 50 60 70 80 2024 2025 2026 2027 2028 2029 2030 2031 2032 £m Debt profile 33 At the year end the Company had £103.5m (17% of the property portfolio) of unencumbered assets which could be charged to the security pools to enhance the LTV on the individual loans. A £1.9m unencumbered industrial asset in Dundee is in the process of being charged to the Aviva loan pool. The weighted average cost of the Company’s drawn debt facilities at 31 March 2025 was 3.9% (2024: 4.1%), with a weighted average maturity of 4.5 years (2024: 5.3 years). At 31 March 2025 the Company had £35.0m (2024: £39.0m) drawn under its Lloyds RCF, meaning 80% (2024: 78 %) of the Company’s drawn debt facilities were at fixed rates of interest. This high proportion of fixed rate debt significantly mitigates long-term interest rate risk for the Company and provides shareholders with a beneficial margin between the fixed cost of debt and income returns from the property portfolio. The Board intends to utilise the Company’s variable rate RCF to repay the £20m fixed rate loan with SWIP due to expire in August 2025 and since the year end has increased the RCF facility limit from £50m to £60m to provide headroom. The Board intends to consider longer-term options once financial markets are more stable. Key performance indicators The Board reviews the Company’s quarterly performance against a number of key financial and non-financial measures: • EPS and EPRA EPS – reflect the Company’s ability to generate recurring earnings from the property portfolio which underpin dividends; • Dividends per share and dividend cover - to provide an attractive level of income to shareholders, fully covered from net rental income. The Board reviews target dividends in conjunction with detailed financial forecasts to ensure that target dividends are being met and are maintainable; • Target dividend per share – an expectation of the Company’s ability to deliver an income stream to shareholders for the forthcoming year; • NAV per share total return – reflects both the NAV growth of the Company and dividends payable to shareholders. The Board assesses NAV per share total return over various time periods and compares the Company's returns to those of its peer group of listed, closed-ended property investment funds; • Share price total return – reflects the movement in share price and dividends payable to shareholders, giving returns that were available to shareholders during the year; • NAV/NTA per share, share price and market capitalisation – reflect various measures of shareholder value at a point in time; 34 • Net gearing – measures the Company’s borrowings as a proportion of its investment property, balancing the additional returns available from utilising debt with the need to effectively manage risk; • Weighted average cost of debt – measures the cost of the Company’s borrowings based on amounts drawn and base rate at the year end; • OCR – measures the annual running costs of the Company and indicates the Board’s ability to operate the Company efficiently, keeping costs low to maximise earnings from which to pay fully covered dividends; and • Weighted average EPC rating – measures the overall environmental performance of the Company’s property portfolio. The Board considers the key performance measures over various time periods and against similar funds. A record of these measures is disclosed in the Financial highlights and performance summary, the Chairman's statement and the Investment Manager's report. EPRA performance measures EPRA Best Practice Recommendations, which are APMs, have been disclosed to facilitate comparison with the Company’s peers through consistent reporting of key real estate specific performance measures. 2025 2024 EPRA EPS (p) 6.1 5.8 EPRA Net Tangible Assets (“NTA”) and Net Reinstatement Value (“NRV”) per share (p) 96.1 93.4 EPRA Net Disposal Value (“NDV”) per share (p) 99.9 97.3 EPRA NIY 6.2% 6.3% EPRA ‘topped - up’ NIY 6.6% 6.6% EPRA vacancy rate 8.9% 8.3% EPRA cost ratio (including direct vacancy costs) 24.0% 22.0% EPRA cost ratio (excluding direct vacancy costs) 19.7% 17.7% EPRA LTV 28.7% 29.6% EPRA capital expenditure (£m) 6.8 17.0 EPRA like-for-like annual rent (£m) 42.3 41.0 • EPRA EPS – a key measure of the Company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings • EPRA NAV per share metrics – make adjustments to the NAV per the IFRS financial statements to provide stakeholders with information on the fair value of the assets and liabilities of a real estate investment company, under different scenarios. EPRA NTA - assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax. EPRA NDV – includes an adjustment for the fair value of fixed rate debt. 35 • EPRA NIY and ‘topped - up’ NIY – alternative measures of property portfolio valuation based on cash passing rents at the reporting date and once lease incentive periods have expired, net of vacant property operating costs • EPRA vacancy rate – expected rental value (“ ERV ”) of vacant space as a percentage of the ERV of the whole property portfolio and offers insight into the additional rent generating capacity of the portfolio. • EPRA cost ratios – alternative measures of ongoing charges based on expenses, excluding operating expenses of rental property recharged to tenants, but including increases in the doubtful debt provision, compared to gross rental income • EPRA LTV – a measure of gearing including all payables and receivables • EPRA capital expenditure - capital expenditure incurred on the Company’s property portfolio during the year • EPRA like-for-like rental growth - a measure of passing rent of the property portfolio, excluding acquisitions and disposals • EPRA Sustainability Best Practice Recommendations – environmental performance measures focusing on emissions and resource consumption which create transparency to potential investors by enabling a comparison against peers and set a direction towards improving the integration of ESG into the management of the Company’s property portfolio. Outlook The Company’s business model has remained resilient during the year and we have further mitigated against refinancing risk by renewing the Company’s RCF. We have a scalable cost structure and flexible capital structure to be on the front foot when opportunities present themselves to raise new equity and exploit acquisition opportunities. Ed Moore Finance Director for and on behalf of Custodian Capital Limited Investment Manager 11 June 2025 36 Principal risks and uncertainties The Board has overall responsibility for reviewing the effectiveness of the system of risk management and internal control which is operated by the Investment Manager. During the year the Board has performed a robust assessment of the principal and emerging risks facing the Company through a periodic review of, and updates to, its risk register. The Company’s risk management process is designed to identify, evaluate and mitigate the significant risks the Company faces in line with its risk appetite. At least annually, the Board undertakes a risk review, with the assistance of the Audit and Risk Committee, to assess the effectiveness of the Investment Manager’s risk management and internal control systems. During this review, no significant failings or weaknesses were identified in respect of risk management, internal control and related financial and business reporting. Further information on the risk governance and risk management processes are included in the Internal control and risk management section of the Governance report. The Company holds a portfolio of high quality property let predominantly to institutional grade tenants and is primarily financed by fixed rate debt. It does not undertake speculative development. There are a number of potential risks and uncertainties which could have a material impact on the Company's performance over the forthcoming financial year and could cause actual results to differ materially from expected and historical results. The Directors have assessed the risks facing the Company, including risks that would threaten the business model, future performance, solvency or liquidity. The table below outlines the principal risks identified, but does not purport to be exhaustive as there may be additional risks that materialise over time that the Company has not yet identified or has deemed not likely to have a potentially material adverse effect on the business. 37 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Loss of revenue • An increasing number of tenants exercising contractual breaks or not renewing at lease expiry • Unable to re-let void units promptly • Tenant default due to a cessation or curtailment of trade • Enforced reduction in contractual rents through CVAs • Property environmental performance insufficient to attract tenants or maintain rents • More frequent and longer periods of property refurbishment delaying re- letting • Decreases in rental rates due to general economic conditions or sector/property specific factors • Expiries or breaks concentrated in a specific year • Low UK economic growth impacting the occupational property market Likelihood: Moderate Impact: High Loss of revenue has an immediate impact on earnings and dividend capacity. There is also an increased risk of breaching interest cover covenants on borrowings, detailed in Note 16, which could ultimately lead to default. No change Discussed further in the Investment Manager’s report • Diverse property portfolio covering all key sectors and geographical areas • The Company has over 300 individual tenancies with the largest tenant accounting for 3.9% of the rent roll • Investment policy limits the Company’s rent roll to no more than 10% from a single tenant and 50% from a single sector • Primarily institutional grade tenants • Focused on established business locations for investment • Active management of lease expiry profile considered in forming acquisition and disposal decisions • Building specifications typically not tailored to one user • Strong tenant relationships • Significant focus and proactive investment in asset-by- asset environmental performance to maintain or improve rental levels The Board relies on the Investment Manager’s processes regarding due diligence on lettings. A degree of tenant covenant risk and short WAULTs are accepted due to the nature of the business 38 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Decreases in property portfolio valuation • Reduced property market sentiment and investor demand affecting market pricing • Decreases in sector-specific ERVs • Change in demand for space • Property environmental performance insufficient to attract tenants • Property obsolescence requiring increasing levels of capital expenditure to maintain rental tone • Refurbishment or repair work cost over-runs not reflected in valuations • Properties concentrated in a specific geographical location or sector • Lack of transactional evidence • Decreases in occupancy Likelihood: Low Impact: Moderate Valuation decreases increase the risks of: • Non-compliance with LTV covenants on borrowings, detailed in Note 16, which could ultimately lead to default; and • The Company realising its investments at lower values. The Company’s sensitivity to valuation decreases is considered further in Going concern and longer-term viability below Decreased – valuations have stabilised during the year due to decreasing interest rates and continued robust occupational demand Discussed further in the Chairman’s statement and Investment Manager’s report • Occupational demand has been resilient during the year despite economic headwinds • Active property portfolio diversification between office, industrial (distribution, manufacturing and warehousing), retail warehousing, high street retail and other • Investment policy limits the Company’s property portfolio to no more than 50% in any specific sector or geographical region • Smaller lot-size business model limits exposure to individual asset values • High quality assets in good locations should remain popular with investors • Significant focus on asset-by-asset ESG performance and proactively investing in environmental performance to maintain or improve demand There is no certainty that property values will be realised. This is an inherent risk of property investment. The Investment Manager aims to minimise this risk through its asset selection and active asset management initiatives. 39 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Reduced availability or increased cost of debt financing • Breach of financial and non- financial borrowing covenants • Over-reliance on an individual lender • Significant increases in interest rates • LTV increasing above target • Refinancing risk from upcoming expiries Likelihood: Low Impact: High Increases in interest rates in the short-term reduce earnings and dividend capacity to the extent the Company has drawn balances on its variable rate RCF. Lack of availability of financing would have a significant impact on property strategy if properties needed to be sold to repay loans. Decreased – valuations have stabilised during the year and are starting to increase, with variable interest rates decreasing • The Company has three lenders • The Company’s weighted average maturity on its debt is c. five years • Target net gearing of 25% LTV on property portfolio • 80% of drawn debt facilities at the year end at a fixed rate of interest • Significant unencumbered properties available to cure any potential breaches of LTV covenants • Ongoing monitoring and management of the forecast liquidity and covenant position • RCF limit increased from £50m to £60m since the year end to provide RCF headroom ahead of repaying the £20m SWIP loan expiring in August 2025 The Board and Investment Manager focus on having funding in place to take advantage of opportunities as they arise. The Board’s aim is to minimise this risk to the extent possible through arranging longer- term facilities. Inadequate operational performance • Inadequate performance, controls or systems operated by the Investment Manager • Over-reliance on key investment manager personnel or other third party service providers Likelihood: Moderate Impact: High Increased risk of sub- optimal returns impacting earnings and dividend capacity, ineffective risk or threat management or decisions made on inaccurate information. Inability to retain or recruit staff of an appropriate calibre Increased – a member of key Investment Manager personnel left during the year • Ongoing review of key service provider performance by the Management Engagement Committee • Outsourced internal audit function reporting directly to the Audit and Risk Committee • External depositary with responsibility for safeguarding assets and performing cash monitoring • The Investment Management Agreement contains key personnel provisions designed to mitigate the potential impact of key individuals leaving • A satisfactory appointment has been made by the Investment Manager to replace its key member of personnel who left during the year The Board relies on the Investment Manager’s processes. Its appetite for such risk is low 40 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Regulatory, legal and governance • Adverse impact of new or revised legislation or regulations, or by changes in the interpretation or enforcement of existing government policy, laws and regulations • Non-compliance with the REIT regime 26 or changes to the Company’s tax status • Properties aren’t compliant with prevailing fire safety legislation • Conflicts of interest with the Investment Manager • Non-compliance with the Company’s Articles of Association Likelihood: Low Impact: High • Reputational damage could impact demand for shares. • Earnings and dividend capacity would decrease with penalties/fines for non- compliance or through an increased tax charge • Remedial costs or claims for non- compliance could be substantial • Conflicts of interest could lead to operational issues or reputational damage No change • Strong compliance culture, with an independent Management Engagement Committee overseeing the Investment Manager relationship • External professional advisers are engaged to review and advise upon control environment, ensure regulatory compliance and advise on the impact of changes • Business model and culture embraces FCA principles • REIT regime compliance is considered by the Board in assessing the Company’s financial position and setting dividends and by the Investment Manager in making operational decisions • Fire safety policy goes over and above minimum requirements The Board has no appetite for non- compliance 26 As defined by the Corporation Tax Act 2010. 41 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Business interruption • Cyber-attack results in the Investment Manager being unable to use its IT systems and/or losing data • Terrorism or pandemics interrupt the Company’s operations through impact on either the Investment Manager or the Company’s assets or tenants Likelihood: Moderate Impact: High Reputational damage from not being able to communicate with shareholders on a timely and accurate basis. Loss of earnings and dividend capacity if contractual rents not invoiced. Fines and penalties from non- compliance with reporting requirements. No change • Data is regularly backed up and replicated and the Investment Manager’s IT systems are protected by anti - virus software and firewalls that are regularly updated • Fire protection and access/security procedures are in place at all of the Company’s managed properties • Comprehensive property damage and business interruption insurance is held, including three years’ lost rent and terrorism • At least annually, a fire risk assessment and health and safety inspection is performed for each property in the Company’s managed portfolio The Board relies on the Investment Manager’s processes. It has no appetite for such risk 42 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Environmental • Failure to appropriately manage the environmental performance of the property portfolio, resulting in it not meeting the required standards of environmental legislation and making properties unlettable or unsellable • ESG policies and targets being insufficient to meet the required standards of stakeholders • Non-compliance with environmental reporting requirements • Insufficient electricity supply to maintain tenant requirements for clean energy due to inadequate infrastructure • Unsuccessful investment in new technology • Physical risk to properties due to environmental factors and extreme weather Likelihood: Moderate Impact: Moderate Risk of reputational damage, suboptimal returns for shareholders, decreased asset liquidity, reduced access to debt and capital markets and poor relationships with stakeholders No change Discussed further in the ESG Committee report • The Company has engaged specialist environmental consultants to advise the Board on compliance with requirements and adopting best practice where possible • The Company has a published ESG policy which seeks to improve energy efficiency and reduce emissions • The ESG Committee ensures compliance with environmental requirements, the ESG policy and environmental KPIs • At a property level an environmental assessment is undertaken which influences decisions regarding acquisitions, refurbishments and asset management initiatives • Upgrading power supplies where availability permits • All investments are scrutinised by the Investment Manager’s Investment Committee. Investment Committee reports include a dedicated ESG rationale. Carbon reducing technology is a key part of the carbon-reduction strategy but is not invested in speculatively and only established products are considered. The Board is averse to non- compliance risk, in particular when it may adversely impact reputation, stakeholder sentiment or asset liquidity. 43 Risk on business and causes Likelihood and impact Overall change in risk from last year Mitigating factors Appetite Acquisition due diligence • Unidentified risk and liabilities associated with the acquisition of new properties (whether acquired directly or via a corporate structure) Likelihood: Low Impact: Moderate Decrease in profitability or NAV and loss of shareholder value No change • Comprehensive due diligence is undertaken in conjunction with professional advisers and the provision of insured warranties and indemnities are sought from vendors where appropriate • Acquired companies’ trade and assets are hived -up into Custodian Property Income REIT plc and the acquired entities are subsequently liquidated The Board accepts risk with such transactions with the mitigations opposite used to manage risk where possible 44 Emerging risks The following risks have been added to the Company’s risk register during the year: • Increases in yields of long-term fixed- rate government bonds impacting demand for the Company’s shares ; and • Shareholder activists in the Investment Company sector not acting in the best interests of all shareholders. The Company’s share price has been materially impacted by increases in gilt yields during the year, and since the year end by the escalating global impact of US trade policy. The Board accepts inherent risk associated with operating a closed-ended investment structure. The I nvestment Manager and the Company’s broker and Distribution Agent maintain strong lines of communication with shareholders The impact of geo-political risk relating to the ongoing conflicts in Ukraine and Gaza, tensions between the USA and its trading partners and its volatile political climate, and UK specific factors including apparent declining health of public markets and a ‘cost of living crisis’ also add to uncertainty over the prevailing macroeconomic outlook. However, these factors are not considered direct emerging risk s because of the Company’s diverse property portfolio covering all sectors and geographical areas in the UK with over 300 individual tenancies. Going concern and longer-term viability The Board assesses the Company ’s prospects over the long-term, taking into account rental growth expectations, climate related risks, longer-term debt strategy, expectations around capital investment in the portfolio and the UK’s long -term economic outlook. At quarterly Board meetings, the Board reviews summaries of the Company ’ s liquidity position and compliance with loan covenants, as well as forecast financial performance and cash flows. Forecast The Investment Manager maintains a detailed forecast model projecting the financial performance of the Company over a period of three years, which provides a reasonable level of accuracy regarding projected lease renewals, asset-by-asset capital expenditure, property acquisitions and disposals, rental growth, interest rate changes, cost inflation and refinancing of the Company’s debt facilities ahead of expiry. The detailed forecast model allows robust sensitivity analysis to be conducted and over the three year forecast period included the following assumptions: 45 • 1% annual loss of contractual revenue through CVA or tenant default; • 70% tenant retention rate at lease break or expiry with vacated assets followed by an appropriate period of void; • Rental growth, captured at the earlier of rent review or lease expiry, based on current ERVs adjusted for consensus forecast changes; • Portfolio valuation movements based on consensus forecast changes; • Completing a programme of asset disposals; • The Company’s capital expenditure programme to invest in its existing assets continues as expected; • The £20m SWIP loan is repaid using the RCF on its expiry in August 2025; and • Interest rates follow the prevailing forward curve. The Directors have assessed the Company ’s prospects and longer-term viability over this three-year period in accordance with Provision 36 of the AIC Code, and the Company ’s prospects as a going concern over a period of 12 months from the date of approval of the Annual Report, using the same forecast model and assessing the risks against each of these assumptions. The Directors note that the Company has performed strongly during the year despite economic headwinds with like-for-like rents increasing over the last 12 months. Sensitivities Sensitivity analysis involves flexing the assumptions listed above, taking into account the principal risks and uncertainties and emerging risks detailed in the Strategic Report. This analysis includes stress testing the point at which covenants would breach through rent losses and property valuation movements, and assessing their impact on the following areas: Covenant compliance The Company operates the loan facilities summarised in Note 16. At 31 March 2025 the Company had sufficient headroom on lender covenants at a portfolio level with: • Net gearing of 27.9% compared to a maximum LTV covenant of 35% on its Aviva facilities and 40% on its Lloyds and SWIP facilities, with £103.5m (17% of the property portfolio) unencumbered by the Company’s borrowings; and • 117% minimum headroom on interest cover covenants for the quarter ended 31 March 2025. 46 Over the one and three year assessment periods the Company’s forecast model projects a small increase in net gearing and an increase in headroom on interest cover covenants. Reverse stress testing has been undertaken to understand what circumstances would result in potential breaches of financial covenants over these periods. While the assumptions applied in these scenarios are possible, they do not represent the Board’s view of the likely outturn, but the results help inform the Directors’ assessment of the viability of the Company. The testing indicated that: • The rate of loss of contractual rent on the borrowing facility with least headroom would need to deteriorate by 17% (for the going concern assessment period) to breach its interest cover covenant from the levels included in the Company’s prudent base case forecasts, assuming no unencumbered properties were charged; or • To risk breaching the applicable covenant for both assessment periods, property valuations would have to decrease from the 31 March 2025 position by: o 20% at a portfolio level; or o 13% at an individual charge pool level, assuming no further properties were charged Note 10 details the expected movements in the valuation of investment properties if the equivalent yield at 31 March 2025 is increased or decreased by 0.25% and if the ERV is increased or decreased by 5.0%, which the Board believes are reasonable sensitivities to apply given historical changes. The Board notes that the latest IPF Forecasts for UK Commercial Property Investment survey suggests an average 2.8% increase in rents during 2025 with capital value increases of 3.7%. The Board believes that the valuation of the Company’s property portfolio will prove resilient due to its higher weighting to industrial assets and overall diverse and high-quality asset and tenant base comprising c.150 assets and over 300 typically 'institutional grade' tenants across all commercial sectors. Liquidity At 31 March 2025 the Company had £7.9m of unrestricted cash and £15.0m undrawn RCF, with gross borrowings of £175.0m resulting in net gearing of 27.9%. As detailed in Note 16, the Company’s £20m loan with SWIP expires in August 2025 which the Company intends to repay using its RCF facility. The Company increased its RCF limit from £50m to £60m in June 2025 ahead of the August 2025 expiry to maintain headroom, with t he Company’s forecast model projecting it will have at least £10.8m of undrawn RCF facility over the next 12 months to continue its programme of discretionary capital investment, pay its target dividends and its expense and interest liabilities over the one and three year assessment periods. Results of the assessments 47 Based on the prudent assumptions within the Company’s forecasts regarding the factors set out above, the Directors expect that over the one-year and three-year periods of their assessment: • The Company has surplus cash to continue in operation and meet its liabilities as they fall due; • Borrowing covenants are complied with; and • REIT tests are complied with. 48 Section 172 statement and stakeholder relationships The Directors consider that in conducting the business of the Company over the course of the year they have complied with Section 172(1) of the Companies Act 2006 (“the Act”) by fulfilling their duty to promote the success of the Company and act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. Issues, factors and stakeholders The Board has direct engagement with the Company’s shareholders and seeks a rounded and balanced understanding of the broader impact of its decisions through regular engagement with its stakeholder groups (detailed below) to understand their views, typically through feedback from the Investment Manager, the Company’s broker and the distribution agent, which is regularly communicated to the Board via quarterly meetings. Stakeholder engagement also ensures the Board is kept aware of any significant changes in the market, including the identification of emerging trends and risks, which in turn can be factored into its strategy discussions. Management of the Company’s day -to-day operations has been delegated to the Investment Manager, Custodian Capital Limited, and the Company has no employees. This externally managed structure allows the Board and the Investment Manager to have due regard to the impact of decisions on the following matters specified in Section 172 (1) of the Act: Section 172(1) factor Approach taken Likely consequences of any decision in the long-term The business model and strategy of the Company is set out within the Strategic Report. Any deviation from or amendment to that strategy is subject to Board and, if necessary, shareholder approval. The Company’s Management Engagement Committee ensures that the Investment Manager is operating within the scope of the Company’s investment objectives. At least annually, the Board considers a budget for the delivery of its strategic objectives based on a three year forecast model. The Investment Manager reports non-financial and financial key performance indicators to the Board, set out in detail in the Business model and strategy section of the Strategic report, at least quarterly which are used to assess the outcome of decisions made. The Board’s commitment to keeping in mind the long -term consequences of its decisions underlies its focus on risk, including risks to the long-term success of the business. The investment strategy of the Company is focused on medium to long-term returns and minimising the Company’s impact on communities and the environment and as such the long-term is firmly within the sights of the Board when all material decisions are made. 49 The Board gains an understanding of the views of the C ompany’s key stakeholders from the Investment Manager, broker, distribution agents and Management Engagement Committee, and considers those stakeholders’ interests and views in board discussions and long-term decision-making. The interests of the Company’s employees The Company has no employees as a result of its external management structure, but the Directors have regard to the interests of the individuals responsible for delivery of the property management and administration services to the Company to the extent that they are able to. The Company’s Nominations Committee is responsible for applying the diversity policy set out in the Nominations Committee report to Board recruitment. The need to foster the Company’s business relationships with suppliers, customers and others Business relationships with suppliers, tenants and other counterparties are managed by the Investment Manager. Suppliers and other counterparties are typically professional firms such as lenders, property agents and other property professionals, accounting firms and legal firms and tenants with which the Investment Manager often has a longstanding relationship. Where material counterparties are new to the business, checks, including anti money laundering checks where appropriate, are conducted prior to transacting any business to ensure that no reputational or legal issues would arise from engaging with that counterparty. The Company also periodically reviews the compliance of all material counterparties with relevant laws and regulations such as the Modern Slavery Act 2015 and environmental practices. The Company pays suppliers in accordance with pre-agreed terms. The Management Engagement Committee engages directly with the Company’s key service providers where necessary providing a direct line of communication for receiving feedback and resolving issues. The Investment Manager has open lines of communication with tenants and can understand and resolve any issues promptly. The impact of the Company’s operations on the community and the environment The Board recognises the importance of supporting local communities where the Company’s assets are located and seeks to invest in properties which will be fit for future purpose and which align with ESG targets. The Company also seeks to benefit local communities by creating social value through employment, viewing its properties as a key part of the fabric of the local economy. The Board takes overall responsibility for the Company’s impact on the community and the environment and its ESG policies are set out in the ESG Committee report. The Company’s approach to preventing bribery, money laundering, slavery and human trafficking is disclosed in the Governance report. The desirability of the Company maintaining a reputation for high standards of business conduct The Board believes that the ability of the Company to conduct its investment business and finance its activities depends in part on the reputation of the Board and Investment Manager’s team. The risk of falling short of the high standards expected and the reby risking its business reputation is included in the Board’s review of the Company’s risk register, which is conducted periodically. The principal risks and uncertainties facing the business are set out in that section of the Strategic Report. The Com pany’s requirements for a high standard of conduct and business ethics are set out in the Governance report. 50 The need to act fairly as between members of the Company The Company’s shareholders are a very important stakeholder group. The Board oversees the Investment Manager’s investor relations programme which involves t he Investment Manager engaging routinely with the Company’s shareholders. The programme is managed by the Company’s broker and distribution agents and the Board receives prompt feedback on the outcomes of meetings and presentations. The Board and Investment Manager aim to be open with shareholders and available to them, subject to compliance with relevant securities laws. The Chairman of the Company and other Non-Executive Directors make themselves available for meetings as appropriate and attend the Company’s AGM. The investor relations programme is designed to promote formal engagement with investors and is typically conducted after each half-yearly results announcement. The Investment Manager also engages with existing investors who may request meetings and with potential new investors on an ad hoc basis throughout the year, including where prompted by Company announcements. Shareholder presentations are made available on the Company’s website. The Company has a single class of share in issue with all members of the Company having equal rights. Methods used by the Board The main methods used by the Directors to perform their duties include: • Board Strategy meetings are held typically annually to review all aspects of the Company’s business model and strategy and assess the long-term success of the Company and its impact on key stakeholders; • The Management Engagement Committee assesses the Company’s engage ments with its key service providers. The Investment Manager reports on their performance to the Committee which in turn reports key issues to the Board. The responsibilities of the Management Engagement Committee are detailed in the Management Engagement Committee report; • The Board is ultimately responsible for the Company’s ESG activities set out in the ESG Committee report, which it believes are a key part of benefitting the local communities where the Company’s assets are located ; • The Board’s risk management procedures set out in the Governance report identify the potential consequences of decisions in the short, medium and long-term so that mitigation plans can be put in place to prevent, reduce or eliminate risks to the Company and wider stakeholders; • The Board sets the Company ’s purpose, values and strategy, detailed in the Business model and strategy section of the Strategic report, and the Investment Manager ensures they align with its culture; • The Board carries out direct shareholder engagement via the AGM and Directors attend shareholder meetings on an ad hoc basis; • External assurance is received through internal and external audits and reports from brokers and advisers; • Specific training for existing Directors and induction for new Directors as set out in the Governance report; and • Ad hoc meetings to consider corporate acquisition opportunities. 51 Principal decisions in the year The Board has delegated operational functions to the Investment Manager and other key service providers. In particular, responsibility for management of the Company’s property portfolio has been delegated to the Investment Manager. The Board retains responsibility for reviewing the engagement of the Investment Manager and exercising overall control of the Company, reserving certain key matters as set out in the Governance report. The principal non-routine decisions taken by the Board during the year, and its rationale on how the decision was made, were: Decision How decision was made Setting target dividends at 6.0pps for the year ending 31 March 2026. In line with the Board’s dividend policy of paying a high, fully covered level of dividend which maximises shareholder returns without negatively influencing property strategy. Extending the RCF by one year to move expiry from November 2026 to 2027. To mitigate refinancing risk and secure the existing competitive margin for a further year. Appointing a new Director as detailed in the Chairman ’s statement. The Board believes Nathan Imlach brings a wealth of experience which will benefit shareholders. Acquiring Merlin Properties Limited in an all-paper transaction on an adjusted NAV-for-NAV basis. The Company has undertaken property, legal, financial and tax due diligence work on Merlin and the Investment Manager modelled the combined entity to understand the projected short and medium-term impact of the Acquisition on the combined portfolio and its earnings. The Board constituted an Acquisition Committee comprising Malcolm Cooper and Chris Ireland which held regular meetings to understand and oversee progress and any issues arising to remain in position to make decisions as they arose. The key challenges faced by the Acquisition Committee and Board focused on ensuring forecasts and potential risks were accurately identified to ensure the transaction was in the best long-term interests of all stakeholders by increasing long-term earnings within the Company’s stated investment policy. 52 Due to the nature of these decisions, a variety of stakeholders had to be factored into the Board’s discussions. Each decision was announced at the time, so that all stakeholders were aware of the decisions. Stakeholders The Board recognises the importance of stakeholder engagement to deliver its strategic objectives and believes its stakeholders are vital to the continued success of the Company. The Board is mindful of stakeholder interests and keeps these at the forefront of business and strategic decisions. Regular engagement with stakeholders is fundamental to understanding their views. The below section highlights how the Company engages with its key stakeholders, why they are important and the impact they have on the Company and therefore its long-term success, which the Board believes helps demonstrate the successful discharge of its duties under s172(1) of the Act. The Board assesses the effectiveness of stakeholder engagement through discussion with the Investment Manager and the Company’s broker and distribution agent. 53 Stakeholder Stakeholder interests Stakeholder engagement Tenants The Investment Manager understands the businesses occupying the Company’s assets and seeks to create long-term partnerships and understand their needs to deliver fit for purpose real estate and develop asset management opportunities to underpin long-term maintainable income growth and maximise occupier satisfaction • High quality assets • Profitability • Efficient operations • Knowledgeable and committed landlord • Flexibility to adapt to the changing UK commercial landscape • Buildings with strong environmental credentials • Regular dialogue • Review published data, such as accounts, trading updates and analysts’ reports • Ensured buildings comply with safety regulations and insurance requirements • Certain tenants contacted to request environmental performance data and offer an engagement programme on their premises’ environmental performance • Occupancy has remained above 90% during the year The Investment Manager and its employees As an externally managed fund the Company’s key service provider is the Investment Manager and its employees are a key stakeholder. The Investment Manager’s culture aligns with that of the Company and its long-standing reputation of operating in the smaller lot- size market is key when representing the Company • Long-term viability of the Company • Long-term relationship with the Company • Well-being of the Investment Manager’s employees • Being able to attract and retain high- calibre staff • Maintaining a positive and transparent relationship with the Board • Board and Committee meetings • Face-to-face and video-conference meetings with the Chairman and other Board Directors • Quarterly KPI reporting to the Board • Board evaluation, including feedback from key Investment Manager personnel • Ad hoc meetings and calls Suppliers A collaborative relationship with our suppliers, including those to whom key services are outsourced, ensures that we receive high quality services to help deliver strategic and investment objectives • Collaborative and transparent working relationships • Responsive communication • Being able to deliver service level agreements • Board and Committee meetings which certain key suppliers attend • One-to-one meetings • Annual review of key service provider engagements by the Management Engagement Committee, which includes appropriateness of internal policies and payment practices Shareholders Building a strong investor base through clear and transparent communication is vital to building a successful business and generating long-term growth • Maintainable growth • Attractive level of income returns • Strong Corporate Governance and environmental credentials • Transparent reporting framework • Annual and half year presentations • AGM • Market announcements and corporate website • Regular investor feedback received from the Company’s broker, distribution agents and PR adviser as well as seeking feedback from face-to-face meetings • On-going dialogue with analysts 54 Stakeholder Stakeholder interests Stakeholder engagement Lenders Our lenders play an important role in our business. The Investment Manager maintains close and supportive relationships with this group of long-term stakeholders, characterised by openness, transparency and mutual understanding • Stable cash flows • Stronger covenants • Being able to meet interest payments • Maintaining agreed gearing ratios • Regular financial reporting • Proactive notification of issues or changes • Quarterly covenant reporting • Regular catch-up calls Government, local authorities and communities As a responsible corporate citizen the Company is committed to engaging constructively with central and local government and ensuring we support the wider community • Openness and transparency • Proactive compliance with new legislation • Proactive engagement • Support for local economic and environmental plans and strategies • Playing its part in providing the real estate fabric of the economy, giving employers a place of business • Engagement with local authorities where we operate • Two way dialogue with regulators and HMRC when required Approval of Strategic report The Strategic report, (incorporating the Business model and strategy, Chairman ’s statement, Investment Manager’s report, Financial report, Principal risks and uncertainties and Section 172 statement and stakeholder relationships) was approved by the Board of Directors and signed on its behalf by: David MacLellan Chairman 11 June 2025 55 Board of Directors and Investment Manager personnel The Board comprises six non-executive directors. A short biography of each director is set out below: David MacLellan - Independent Chairman David was appointed to the Board on 9 May 2023 and took over the Chairman role on 8 August 2023. He has over 35 years’ experience in private equity and fund management and an established track record as Chairman and Non-Executive director of public and private companies. During his executive career David was an Executive Director of Aberdeen Asset Management plc following its purchase of Murray Johnstone Limited (“MJ”) in 2000. At the time of the purchase he was Group Managing Director of MJ, a Glasgow based fund manager managing inter alia closed and open ended funds, having joined MJ’s venture capi tal team in 1984. Prior to joining MJ he qualified as a Chartered Accountant at Arthur Young McLelland Moores (now EY). David is currently Chairman and Managing Partner of RJD Partners, a private equity business; Non-Executive Director and Audit Committee Chairman of Lindsell Train Investment Trust plc, a closed-ended equity investment fund; Non-Executive Director and Audit Committee Chair of J&J Denholm Limited, a family owned business involved in shipping, logistics, seafoods and industrial services; and Non-Executive Director and Audit Committee Chair of Aquila Renewables plc, an investment trust. David is former Chairman and Senior Independent Director (“SID”) of John Laing Infrastructure Fund, a FTSE 250 investment company, former Chairman of Stone Technologies Limited, former Chairman of Havelock Europa plc and former Non-Executive Director of Maven Income & Growth VCT 2 plc. He was also Chairman of Britannic UK Income Fund for 12 years until 2013 as well as a director of a number of private equity backed businesses. David’s other roles are not considered to impact his ability to allocate sufficient time to the Company to discharge his responsibilities effectively. Elizabeth McMeikan – Senior Independent Director Elizabeth’s substantive career was with Tesco plc, where she was a Stores Board Director before embarking on a non-executive career in 2005. Elizabeth is currently Chair of Nichols plc, the AIM listed diversified soft drinks group. She is SID and Remuneration Committee Chair at both Dalata Hotel Group plc, the largest hotel group in Ireland, and at McBride 56 plc, Europe’s leading manufacturer of cleaning and hygiene products. She is also Non-Executive Director of Fresca Group Limited, a fruit and vegetable grower and importer. Previously Elizabeth was SID and Remuneration Committee Chair at both The Unite Group plc and at Flybe plc, SID at J D Wetherspoon plc and Chair of Moat Homes Limited. Elizabeth’s other roles are not considered to impact her ability to allocate sufficient time to the Company to discharge her responsibilities effectively. Hazel Adam - Independent Director Hazel was an investment analyst with Scottish Life until 1996 and then joined Standard Life Investments. As a fund manager she specialised in UK and then Emerging Market equities. In 2005 Hazel joined Goldman Sachs International as an executive director on the new markets equity sales desk before moving to HSBC in 2012, holding a similar equity sales role until 2016. Hazel was an independent non-executive director of Aberdeen Latin American Income Fund Limited until June 2023 and holds the CFA Level 4 certificate in ESG Investing and the Financial Times Non-Executive Directors Diploma. Chris Ireland FRICS - Independent Director Chris joined international property consultancy King Sturge in 1979 as a graduate and has worked his whole career across the UK investment property market. He ran the investment teams at King Sturge before becoming Joint Managing Partner and subsequently Joint Senior Partner prior to its merger with JLL in 2011. Chris was Chief Executive Officer of JLL UK between 2016 and 2021 and subsequently its Chair from 2021 until retiring in March 2023. Chris is a former Chair of the Investment Property Forum and is a Non-Executive Director of Le Masurier, a Jersey based family trust with assets across the UK, Germany and Jersey. Chris is also a keen supporter of the UK homelessness charity Crisis. Chris’ other roles are not considered to impact his ability to allocate sufficient time to the Company to discharge his responsibilities effectively. 57 Malcolm Cooper FCCA FCT - Independent Director Malcolm is a qualified accountant and an experienced FTSE 250 company Audit Committee Chair with an extensive background in corporate finance and a wide experience in infrastructure and property. Malcolm worked with Arthur Andersen and British Gas/BG Group/Lattice before spending 15 years with National Grid with roles including Managing Director of National Grid Property and Global Tax and Treasury Director, and culminated in the successful sale of a majority stake in National Grid’s gas distribution business, now known as Cadent Gas. Malcolm is currently Chair of MORhomes plc, SID and Audit Committee Chair at Southern Water Services Limited and Non-Executive Director and Audit and Risk Committee Chair at Local Pensions Partnership Investment. Malcolm was previously: a Non-Executive Director of Morgan Sindall Group plc, a FTSE 250 UK construction and regeneration business, Chairing its Audit and Responsible Business Committees; SID and Audit Committee Chair at CLS Holdings plc; a Non-Executive Director of St William Homes LLP; President of the Association of Corporate Treasurers and a member of the Financial Conduct Authority’s Listing Authority Advisory Panel. Malcolm’s other roles are not considered to impact his ability to allocate sufficient time to the Company to discharge his responsibilities effectively. Nathan Imlach CA FCSI CF - Director Nathan was appointed to the Board on 6 November 2024 for a transition period up until no later than the end of 2025 following Ian Mattioli stepping down as a Company Director to focus on his role as Chief Executive Officer of Mattioli Woods following its recent transition to private ownership. Nathan is currently Chief Strategic Adviser to Mattioli Woods with a focus on acquisitions and contributing to its future direction. Nathan is also currently SID of Mortgage Advice Bureau (Holdings) plc and is a patron and former trustee of Leicester Grammar School Trust. He is a chartered accountant, holds the ICAEW’s Corporate Finance qualification and is a Chartered Fellow of the Chartered Institute for Securities and Investment. From 2005 to 2020 Nathan was Chief Financial Officer of Mattioli Woods, Company Secretary of Custodian Property Income REIT and a director of Custodian Capital Limited. Before this, Nathan gained over 15 y ears’ experience as a corporate finance adviser to directors of leading organisations in both the private and public sectors, gaining international experience across a wide range of transactions throughout Europe, North America and Australia. 58 Nathan is a non-independent Director of the Company due to his role with Mattioli Woods and is viewed by the Board as representative of Mattioli Woods’ client shareholders which represent approximately 65% of the Company’s shareholders. Nathan ’s other roles are not considered to impact his ability to allocate sufficient time to the Company to discharge his responsibilities effectively. Investment Manager personnel Short biographies of the Investment Manager’s key personnel and senior members of its property team are set out below: Richard Shepherd-Cross MRICS - Managing Director Richard qualified as a Chartered Surveyor in 1996 and until 2008 worked for JLL, latterly running its national portfolio investment team. Since joining Mattioli Woods in 2009, Richard established Custodian Capital as the Property Fund Management subsidiary to Mattioli Woods and in 2014 was instrumental in the establishment of Custodian Property Income REIT from Mattioli Woods ’ syndicated property portfolio and its 1,200 investors. Following the successful IPO of the Company, Richard has overseen the growth of the Company to its current property portfolio of over £0.6bn. Ed Moore FCA – Finance Director Ed qualified as a Chartered Accountant in 2003 with Grant Thornton, specialising in audit, financial reporting and internal controls across its Midlands practice. He is Finance Director of Custodian Capital with responsibility for all day-to-day financial aspects of its operations. Since IPO in 2014 Ed has overseen the Company raising over £300m of new equity, arranging or refinancing eight loan facilities and completing four corporate acquisitions, including leading on the acquisition of DRUM in 2021. Ed’s key responsibilities for Custodian Property Income REIT are accurate external and internal financial reporting, ongoing regulatory compliance and maintaining a robust control environment. Ed is Company Secretary of Custodian Property Income REIT and is a member of the Investment Manager’s Investment Committee. Ed is also responsible for the Investment Manager’s environmental initiatives, attending Custodian Property Income REIT ESG Committee meetings and co- leading the Investment Manager’s ESG working group. 59 Ian Mattioli MBE - Founder and Chair With nearly 40 years’ experience in financial services, wealth management and property businesses, Ian is responsible for the vision and operational management of Mattioli Woods. With this experience he instigated the development of Mattioli Woods’ investment proposition, including the syndicated property initiative that developed the seed portfolio for the launch of Custodian Property Income REIT plc in 2014. Outside of work, Ian has many personal achievements, including winning the London Stock Exchange AIM Entrepreneur of the Year award and CEO of the Year in the 2018 City of London Wealth Management Awards. He was also awarded an MBE in the Queen’s 2017 New Year’s Honours lists for services to business and the community in Leicestershire. More locally, Ian was awarded an honorary degree (Doctor of Laws) by the University of Leicester and was appointed High Sheriff of Leicestershire for 2021/22. Ian and his close family own 6.4m shares in the Company. Alex Nix MRICS – Assistant Investment Manager Alex graduated from Nottingham Trent University with a degree in Real Estate Management before joining Lambert Smith Hampton, where he spent eight years and qualified as a Chartered Surveyor in 2006. Alex is Assistant Investment Manager to Custodian Property Income REIT having joined Custodian Capital in 2012. Alex heads the Company’s property management and asset management initiatives, assists in sourcing and executing new investments and is a member of the Investment Manager’s Investment Committee. James Hunt MRICS – Portfolio Manager James joined Custodian as Portfolio Manager in January 2025 bringing 15 years of commercial real estate experience from previous consultancy and client-side roles, most recently with the portfolio management team at St Modwen Logistics. James previously studied Real Estate Management at Nottingham Trent University and qualified as a Chartered Surveyor in 2014. As Portfolio Manager, James manages Custodian’s properties predominantly in the Midlands and Scotland. Eoin Greenwood MRICS – Portfolio Manager 60 Eoin joined Custodian in 2018 where he successfully graduated from The University College of Estate Management with a remote learning degree in Real Estate Management. After five years Eoin joined Buccleuch Property, managing a £130m mixed use UK commercial portfolio for the Buccleuch family office before returning to Custodian Capital in 2024 where he recently qualified as a Charted Surveyor. As Portfolio Manager, Eoin now manages Custodian’s properties predominantly in the South -west and South-east of England. Javed Sattar MRICS – Portfolio Manager Javed joined Custodian Capital in 2011 after graduating from Birmingham City University with a degree in Estate Management Practice. Whilst working as a trainee surveyor on Custodian Property Income REIT ’s property portfolio for Custodian Capital he completed a PGDip in Surveying via The College of Estate Management and qualified as a Chartered Surveyor in 2017. Javed operates as Portfolio Manager managing properties predominantly located in the North-West of England. 61 Governance report The Board has considered the Principles and Provisions of the AIC Code. The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the “ UK Code ” ), as well as setting out additional Provisions on issues that are of specific relevance to the Company. The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council, provides more relevant information to shareholders. By reporting against the AIC Code, the Company also meets its obligations under the UK Code and associate disclosure requirements under paragraph 9.8.6 of the Listing Rules. The Company has complied with the Principles and Provisions of the AIC Code since IPO. The AIC Code is available on the AIC website (theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies. Further explanation of how the main principles of the AIC Code have been applied, to enable shareholders to evaluate how the principles have been applied, is set out below: AIC Code principle How applied to Custodian Property Income REIT 5 – Board leadership and purpose • Role of the Board - Governance Report 6 – Division of responsibilities • Division of responsibilities - Governance Report • Board Committees - Governance Report 7 - Composition, succession and evaluation • Board performance and evaluation - Governance Report 8 - Audit, risk and internal control • Internal control and risk management - Governance Report • Audit and Risk Committee report 9 - Remuneration • Remuneration report Role of the Board The Board is responsible to shareholders, tenants and other stakeholders for promoting the long-term success of the Company and generating shareholder value. Good governance is fundamental to the long-term success of the Company and the Board, Company Secretary and Investment Manager work together to ensure the highest standards of governance are maintained by the Company and are central to every Board decision. 62 The Board comprises six directors, all of whom have wide experience, are non-executive and, save for Nathan Imlach, are independent of the Investment Manager. Biographical information on each Director is set out earlier in the Governance Report. The Directors are responsible for managing the Company’s business in accordance with its Articles of Association (“the Articles”) and the Investment Policy (as set out in the Strategic report), and have overall responsibility for the Company’s activities. The Directors may delegate certain funct ions to other parties and in particular the Directors have delegated responsibility for management of the Company’s property portfolio to the Investment Manager. The Board retains responsibility for reviewing the engagement of the Investment Manager, based on recommendations from the Management Engagement Committee, and exercising overall control of the Company, reserving the following key matters: • Setting the Company's values, standards, investment strategy, strategic aims, risk appetite and objectives; • Setting the overall tone of the Company’s ESG strategy; • Approving the annual operating and capital expenditure budgets and external financial reporting; • Approving valuations of the Company’s property portfolio; • Approving the Company’s dividend policy and the interim dividends; • Ensuring a satisfactory dialogue with shareholders and approving General Meeting resolutions and shareholder circulars; • Reviewing and approving changes to the structure, size and composition of the Board, including succession planning, following recommendations from the Nominations Committee; • Determining the remuneration policy for the Directors; • Undertaking a formal and rigorous annual review of its own performance, that of its committees and individual directors, and the division of responsibilities and independence; • Considering the balance of interests between shareholders, employees, customers and the community; and • Approving the appointment of the Company’s principal professional advisers. Meetings The Board meets at least four times a year to consider the Company’s quarterly trading performance and approve the Annual and Interim reports. The Board also meets on an ad hoc basis to discuss specific issues. Meetings are attended by the Directors, the Investment Manager, the Company Secretary and other attendees by invitation. Culture The culture of the Company is integral to its success. The Board promotes open dialogue and frequent, honest and open communication between the Investment Manager and other key advisors to the Company. Whilst the Company has no employees, the Board pays close attention to the culture of the Investment Manager and its employees and believes that its open, proactive and pragmatic approach is the right fit for delivering the 63 Company’s purpose, values and strategy. The Board believes that its positive engagement and working relationship with the Investment Manager helps the business achieve its objectives by creating an open and collaborative culture, whilst allowing for constructive challenge. The Non-Executive Directors speak regularly with key members of the Investment Manager’s team outside of Board meetings to discuss various key issues relating to the Company. Division of responsibilities Chairman David MacLellan is the Chairman and is responsible for the leadership of the Board and ensuring its overall effectiveness on directing the Company. The Chairman is responsible for setting the Board’s agenda and ensuring that adequate time is available for discussion of all agenda items, in particular strategic issues. The Chairman promotes a culture of openness and debate by facilitating the effective contribution of other non-executive directors. The Chairman is also responsible for ensuring that the directors receive accurate, timely and clear information and ensuring effective communication with shareholders. In addition to formal general meetings, the Chairman makes himself available for meetings with major shareholders in order to understand their views on governance and performance against the Company's investment objective and investment policy. Senior Independent Director Elizabeth McMeikan is the SID and has a responsibility to be available as an alternative point of contact (other than the Chairman) for shareholders and other stakeholders and to act as a sounding board for the Chairman. The SID is also expected to take an active part in the assessment of Board effectiveness and when required to lead the recruitment process for a new Chair and recommend the Chairman’s remuneration. Non-Executive Directors The Company has six non-executive directors and no employees. The Board has delegated operational functions to the Investment Manager and other key service providers. The independent Non-Executive Directors provide constructive challenge, strategic guidance and offer specialist advice to the Investment Manager and hold it to account. 64 Company Secretary The Company Secretary, supported by the Company Secretarial adviser, is available to support all Directors and is responsible for the efficient administration of the Company, particularly with regard to ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the Board are implemented. The Company Secretary ’s other roles include d eveloping Board and Committee agendas, advising on regulatory compliance and corporate governance, facilitating Director induction programmes and organising General Meetings. Board performance and evaluation The Directors have annual appraisals as part of a Board Effectiveness Review ( “ BER ” ). The Chairman reviews the performance of the other Independent Non-Executive Directors, and the SID reviews the Chairman in conjunction with other Directors. Board Committees review their own performance annually. During the year the Board undertook an internally facilitated BER overseen by David MacLellan and Elizabeth McMeikan, covering: • Leadership and purpose - how effectively the Chairman, SID and Committee Chairs fulfil their roles and how far the Board inputs into helping develop and challenge the Company’s long -term strategic planning; • Relationships and communication – how effectively the Board communicates with, and understands the views of, its stakeholders in particular shareholders and key service providers; • Governance - has the Board suitably addressed best practice and its obligations around diversity, independence and the regulatory environment; • Performance - how well the Board oversees and holds management to account for delivery of the strategy; and • Composition - skills, knowledge and experience of the Board and its Committees. Overall, the results of the evaluation were positive and there were no significant concerns amongst the Directors relating to the effectiveness of the Board. The Board considers that all the current Independent Directors remain independent, contribute effectively and have the skills and experience relevant to foster the effective leadership and direction of the Company. It was found that the Directors can commit sufficient time to the Company’s activities. The Chair man ’s review was positive, and the other Directors considered that the Chairman remained independent and that he continued to strongly and effectively lead the Board. 65 Board training We require Directors to keep their knowledge and skills up to date and include training discussions with the Chairman in their annual appraisals. As required, we invite professional advisers to provide updates on a range of issues including, but not limited to, market trends, legislative developments, environmental, technological and social considerations. Our Investment Manager and brokers provide regular updates to the Board and its committees on regulatory and corporate governance matters. In addition, Directors are encouraged to attend courses hosted by the Deloitte Academy and AIC. Our Directors receive training on their duties under section 172(1) of the Act as part of their induction process. The Company’s advisers include technical and regulatory updates in reports to the Audit and Risk Committee. Board Committees Audit and Risk Committee The Audit and Risk Committee comprises the independent directors, excluding the Board Chairman, and is chaired by Malcolm Cooper. Its responsibilities are set out in the Audit and Risk Committee report. Management Engagement Committee The Management Engagement Committee comprises the independent directors and is chaired by Chris Ireland. Its responsibilities are set out in the Management Engagement Committee report. 66 Nominations Committee The Board as a whole is responsible for ensuring adequate succession planning to maintain an appropriate balance of skills on the Board to ensure it functions effectively and promotes the long-term success of the Company, whilst generating shareholder value. Changes to the structure, size and composition of the Board may be made following recommendations from the Nominations Committee, which operates under written terms of reference which are available on the Company’s website. This includes the selection of the Chair of the Board, the SID and the Company Secretary. The letter of appointment of new Directors sets out the expected time commitment and the Directors must undertake that they will have sufficient time to meet what is expected of them. Their other significant commitments are disclosed to the Board before appointment, with a broad indication of the time involved, and they are required to inform the Board of subsequent changes. The Nominations Committee comprises all independent Directors and is chaired by David MacLellan. Its responsibilities are set out in the Nominations Committee report. ESG Committee The ESG Committee comprises Hazel Adam as Chair, Elizabeth McMeikan and Malcolm Cooper, all of whom are independent non-executive directors. The ESG Committee’s key responsibilities are set out in the ESG Committee report. 67 Meeting attendance The attendance of the Directors at scheduled Board and Board committee meetings held during the year, reflecting appointment or retirement dates, were as follows: Board Audit and Risk Committee Nominations Committee Management Engagement Committee ESG Committee David MacLellan 4/4 n/a 1/1 2/2 n/a Hazel Adam 4/4 3/3 1/1 2/2 4/4 Nathan Imlach 2/2 n/a n/a n/a n/a Ian Mattioli 2/2 n/a 1/1 n/a n/a Elizabeth McMeikan 4/4 3/3 1/1 2/2 4/4 Chris Ireland 4/4 3/3 1/1 2/2 n/a Malcolm Cooper 4/4 3/3 1/1 2/2 4/4 * On 6 November 2024 Ian Mattioli resigned from the Board and Nathan Imlach was appointed. Directors’ interests are set out in the Remuneration report. The Investment Manager The Company has appointed Custodian Capital Limited as Investment Manager and Alternative Investment Fund Manager (“AIFM”) under an IMA. Under the IMA, t he Investment Manager is due an annual fund and asset management fee and an annual administration fee. The Investment Manager is a subsidiary of Mattioli Woods, a related party and a provider of specialist pension consultancy and administration, employee benefits and wealth management services. The Investment Manager is authorised and regulated by the Fina ncial Conduct Authority (“FCA”) and has an established market presence in the smaller lot-size property sector, with a proven track record of property syndication (external to the Company), investment and asset management. Nathan Imlach is Chief Strategic Adviser to Mattioli Woods, the parent company of the Investment Manager, and therefore has an indirect interest in the Investment Manager. As a result, Nathan Imlach is not independent. For its financial year ended 31 May 2024 remuneration paid by the Investment Manager to its 33 staff (2023: 26 staff) was £1.7m (2023: £1.5m), which included £0.5m (2023: £0.4m) payable to senior management and 68 members of staff whose actions could have a material impact on the risk profile of the Company. More detail is contained within the Investment Manager’s statutory accounts available from Companies House. Key personnel The I nvestment Manager’s key personnel, as set out in the IMA, are Richard Shepherd -Cross, Ed Moore and Alex Nix. AIFM Directive The Company’s activities fall within the scope of the AIFM Directive and the Board has determined that the Investment Manager will act as AIFM for these purposes. The Board has put in place a system of regular reporting from the AIFM and the Company’s depositary to ensure both are meeting their regulatory responsibilities in respect of the Company. Non-mainstream pooled investments The Company conducts its affairs so that its shares can be recommended by financial advisers to retail investors in accordance with the rules of the FCA in relation to non-mainstream pooled investments, and intends to continue to do so for the foreseeable future. Directors’ share dealings The Directors have adopted a code for directors’ share dealings, which is compliant with the UK’s Market Abuse Regulation (“MAR”). The Board is responsible for taking all proper and reasonable steps to ensure compliance with the MAR. Shareholders The Board is responsible for ensuring a satisfactory dialogue with shareholders based on the mutual understanding of objectives. It approves the resolutions and corresponding documentation to be put forward to shareholders at the AGM, together with any circulars, prospectuses, listing particulars and press releases concerning matters decided by the Board. The Company reports to shareholders at least twice each year in its interim and annual reports, and makes announcements, where any price sensitive or other information requires disclosure, to the London Stock Exchange 69 and on the Company ’ s website. Any material presentations to investors are made available on the Company ’ s website. Where there has been contact with shareholders, feedback is presented to the Board by the Investment Manager and the Company’s broker, Deutsche Numis, to ensure it is aware of any issues raised by investors. The Company ’ s shareholder profile and any material changes in shareholdings are reviewed by the Board at least quarterly and more often as appropriate. All members of the Board are available to meet with investors as and when required. The Board considers that the provision of independent feedback to the Board through the Company ’ s brokers and, where appropriate, directly from investors ensures that the whole Board remains well informed of investors ’ views. Board members, including the Chairs of Board Sub-Committees, and representatives of the Investment Manager are available to meet with investors and to answer any questions at the Company ’ s AGM. All shareholders have at least 20 clear working days’ notice of the AGM, where all directors and committee members are available to answer questions. At the AGM all votes are dealt with on a poll and the number of proxy votes cast is indicated. Votes on separate issues are proposed as separate resolutions. Significant holdings of ordinary shares in the Company are set out in the Directors’ report. Conflicts of interest The Articles allow the Board to authorise potential conflicts of interest that may arise, subject to imposing limits or conditions when giving authorisation if this is appropriate. Only directors, who have no interest in the matter being considered, are able to take the relevant decision and, in taking the decision, the Directors must act in a way they consider will be most likely to promote the Company's success. Procedures have been established to monitor actual and potential conflicts of interest on a regular basis, and the Board is satisfied that these procedures are working effectively. Internal control and risk management We recognise the importance of identifying and managing both the financial and non-financial risks faced by the business, including climate related risks, and the Board has agreed a robust risk management framework to facilitate this. The framework ensures that risk management responsibilities are allocated and those, along with the Board ’ s appetite for risk, are clearly communicated and understood. The Investment Manager is responsible for operating the Company’s system of internal control and reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the risk of fraud or the risks of not achieving some or all of the Company’s business objectives and can provide only reasonable but not absolute 70 assurance against material misstatement or loss. The Investment Manager outsources its internal audit function to RSM which has undertaken an assessment of the design and operational effectiveness of internal controls during the year with no significant deficiencies reported. Investment Manager employees are covered by the whistleblowing policy of Maven Capital Partners LLP (“Maven”) , a subsidiary of Mattioli Woods. The Board has an ongoing process to monitor the Company’s risk management and internal control systems, including financial, operational and compliance controls, and to identify, evaluate and manage the significant risks faced by the Company. The process is regularly reviewed by the Board, based on reports from the Investment Manager, and accords with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting . Key features of the Company’s system of internal control inc lude: • A detailed authorisation process and formal delegation of authority; • A comprehensive financial reporting and forecasting system; • A defined schedule of matters reserved for the Board; and • An annual review of the effectiveness of internal controls and formal consideration of business risks. Issues are also raised at quarterly board meetings as appropriate. Responsibilities The Board has overall responsibility for the Company ’ s approach to risk management and internal control, including: • Ensuring the design and implementation of risk management and internal control systems which identify the risks facing the business and enable the Board to make an assessment of principal risks; • Determining the nature and extent of the principal risks faced, and those risks which the Company is willing to take; • Agreeing how principal risks should be managed or mitigated to reduce the likelihood of their incidence or impact; • Ensuring that there is sufficient relevant, reliable and valid assurance about the mitigation of risk; and • Reviewing the disclosures to be included in the Annual Report and Accounts, to ensure that the statements made are supported by valid, relevant and reliable assurances received from the Investment Manager. The Audit and Risk Committee provides oversight of the framework, monitors principal risks and undertakes the annual review of the Group ’ s approach to risk management and compliance with the framework, including a review of the risk register. The external Auditor will also provide information to the Audit and Risk Committee concerning the system of internal control and any material control weaknesses, with any significant issues referred to the Board for consideration. The Audit and Risk Committee ’s responsibilities are set out in further detail in the Audit and Risk Committee report. 71 Risk appetite Risk management is embedded in our decision-making processes, supported by robust systems, policies, leadership and governance. The level of risk considered appropriate to accept in achieving business objectives is determined by the Board. The Board has no appetite for risk in areas relating to regulatory compliance, and the health, safety and welfare of our occupiers and the wider communities in which we work. We have a moderate appetite for risk in relation to activities which are directed towards driving revenues and increased financial returns for investors. Framework The Company ’ s risk register is the core of the risk management framework containing an overall assessment of the risks faced by the Company together with the: • Quantified consequences; • Controls established, following the three lines of defence model to reduce those risks to an acceptable level; and • Board appetite for each category of risk. The Investment Manager undertakes a documented annual review of the risk register, which is also is reviewed periodically by the Board. Continuance The Company’s Articles require that a Continuation Resolution be proposed at every seventh AGM. The next Continuation Resolution will be proposed at the fourteenth AGM of the Company expected to be held in 2027. Bribery, money laundering, slavery and human trafficking The Board has considered the requirements of the Bribery Act 2010, the Criminal Finances Act 2017 and the Modern Slavery Act 2015 and has taken steps to ensure that it has adequate procedures in place to comply with their requirements. The Board has a zero tolerance policy towards unethical behaviour and is committed to carrying out business fairly, honestly and openly and it expects the same of its business partners. The Investment Manager actively 72 reviews and is responsible for monitoring perceived risks and responsibility for anti-bribery and corruption. The Investment Manager maintains a risk register where perceived risks and associated actions are recorded and this is shared annually with the Board for approval. We believe that all efforts should be made to eliminate unethical behaviour from our supply chains. We seek to mitigate our exposure to any unethical activity by engaging with reputable third-party professional service firms based in the United Kingdom. We request formal governance information from our current or potential suppliers if there is a perceived risk of unethical behaviour to assess overall supply chain risk and conduct due diligence and risk assessment on potential new suppliers where considered necessary. We will continue to monitor and collaborate with our suppliers and tenants to ensure that they continue to adopt systems and controls that reduce the risk of facilitating bribery, money laundering, modern slavery, child labour and human trafficking. Approval This Governance report was approved by the Board of Directors and signed on its behalf by: David MacLellan Chairman 11 June 2025 73 ESG Committee report Composition and designation The ESG Committee (“the Committee”) comprises Hazel Adam as Chair, Malcolm Cooper and Elizabeth McMeikan, all of whom are independent non-executive directors. Reporting The Committee was delighted to publish its 2025 Asset Management and Sustainability report recently which is available at: custodianreit.com/environmental-social-and-governance-esg/ This report contains details of the Company’s asset management initiatives with a clear focus on their impact on ESG, including case studies of recent positive steps taken to improve the environmental performance of the portfolio. Responsibilities The Committee’s key responsibilities are: • To develop the Company’s environmental KPIs , monitor expected future performance against those KPIs and evolve them to reflect prevailing best practice; • To ensure the Company complies with its external reporting obligations and best practice on ESG matters including EPRA sustainable best practice recommendations and Streamlined Energy and Carbon Report (“ SECR ”) ; • To assess, at least annually, the fees and scope of engagement of the Company ’s environmental consultants; and • To assess whether the Company is obtaining a suitable level of social outcomes for its tenants, other stakeholders and the communities in which it operates. The Company is committed to delivering its strategic objectives in an ethical and responsible manner and meeting its corporate responsibilities towards society, human rights and the environment. The Board acknowledges its responsibility to society is broader than simply generating financial returns for shareholders. The Company’s 74 approach to ESG matters addresses the importance of these issues in the day-to-day running of the business, as summarised below. ESG approach Environmental - we want our properties to minimise their impact on the local and wider environment. The Investment Manager carefully considers the environmental performance of our properties before we acquire them as well as during our period of ownership. Sites are visited on a regular basis by the Investment Manager and any obvious environmental issues are reported. Social - Custodian Property Income REIT strives to manage and develop buildings which are safe, comfortable and high-quality spaces. As such, the safety and well-being of occupants of our buildings is paramount. Governance - high standards of corporate governance and disclosure are essential to ensuring the effective operation of the Company and instilling confidence amongst our stakeholders. We aim to continually improve our levels of governance and disclosure to achieve industry best practice. The Committee encourages the Investment Manager to act responsibly in the areas it can influence as a landlord, for example by working with tenants to improve the environmental performance of the Company’s properties and minimise their impact on climate change. The Committee believes that following this strategy will ultimately be to the benefit of shareholders through enhanced rent and asset values. T he Company’s environmental policy commits the Company to: • Improving the energy performance of our buildings - investing in carbon reducing technology, infrastructure and onsite renewables and ensuring redevelopments are completed to high environmental standards which are essential to the future leasing prospects and valuation of each property. • Reducing energy usage and emissions - liaising closely with our tenants to gather and analyse data on the environmental performance of our properties to identify areas for improvement. • Achieving positive social outcomes and supporting local communities - engaging constructively with tenants and local government to ensure we support the wider community through local economic and environmental plans and strategies and playing our part in providing the real estate fabric of the economy, giving employers safe places of business that promote tenant well-being. • Understanding environmental risks and opportunities – allowing the Board to maintain appropriate governance structures to ensure the Investment Manager is appropriately mitigating risks and maximising opportunities. 75 • Reporting in line with best practice and complying with all requirements - exposing the Company to public scrutiny and communicating our targets, activities and initiatives to stakeholders. Environmental key performance indicators The Company’s environmental targets are measured by key performance indicators ( “ KPIs ” ), which provide a strategic way to assess its success towards achieving its environmental objectives and ensure the Investment Manager has embedded key ESG principles. To help the assessment of progress against KPIs a central data management system, hosted by the Company’s environment consultants, has been established to provide a robust data collation and validation process. This data management system allows us to identify data inefficiencies and improve data collection. This data management system is also being used to identify tenant engagement and asset optimisation opportunities and facilitates the communication of environmental performance data to various stakeholders. The Company has decreased the number of environmental KPIs it reports on during the year on advice from its Environmental Consultants, JLL, in order to focus on the most important areas, with other areas now only subject to ad hoc reporting. The table below shows progress against revised KPIs expected to be reported against going forwards. 2025 KPIs KPI Progress during the year Cumulative annual 1.5 kgCO2e/m 2 reduction of operational carbon intensity (3.5% pa of 2021 baseline) 13kgCO2e/m 2 reduction since 2021, currently 28kgCO2e/m 2 PV to be installed on five warehouses per annum cumulatively from 2023 17 PV installations out of 91 potential assets since 2023 Cumulative annual reduction of two EPC rating points across the portfolio, weighted by floor area. EPCs updated across 24 properties, during the year, achieving the targeted two-point annual decrease from C (53) to C (51) 76 KPI Progress during the year Install smart meters or appoint data aggregators across 60% of the portfolio by floor area 56% annual increase (48 installs) Achieve an annual improvement in GRESB score • Real estate – 48 (2024: 45) • Developments – 59 (2024: 57) Utilise 25% of vacant high street retail space by floor area for not-for-profit lettings Of five vacant retail properties two are occupied by charities representing 55% floor coverage of the vacant space the use of GRESB as an appropriate framework is currently under review by the Committee. 77 ESG policy The Company’s ESG policy is set out at: custodianreit.com/wp-content/uploads/2023/04/20.-CREIT-ESG-policy.pdf EPC ratings During the year the Company has updated EPCs at 35 units (2024: 112) across 24 properties (2024: 42). For updated EPCs, there was a simple average improvement in rating of 20 ‘energy performance asset rating points 27 (2024: 20) and the portfolio weighted average EPC score has improved from C (53) to C (51) during the year. Particular improvements in rating occurred during the year at the following assets: • 36k sq ft offices in Leeds which were refurbished during the year, improving the average rating from C (52) to A (25); and • 72k sq ft gym and leisure centre in Lincoln which had PV installed during the year, improving the rating from D (85) to B (49). The Investment Manager is currently reviewing and undertaking new assessments of any EPCs that are older than five years and below a ‘C’ rating. A ‘ B ’ rating is due to become the minimum standard under the MEES by 2030. The Company’s EPC profile is shown below: Number of EPCs Weighted average 28 EPC rating 31 March 2025 31 March 2024 31 March 2025 31 March 2024 A 21 19 6% 5% B 143 127 41% 36% C 121 130 35% 38% D 39 49 11% 14% E 17 18 5% 5% F 8 8 2% 2% G - - - - 349 351 100% 100% 27 One EPC letter represents 25 energy performance asset rating points. 28 Weighted by floor area. 78 The table shows that the weighted average ‘C’ or better ratings has increased from 79% to 82 % during the year. The Company has ‘F’ rated units at 31 March 2024 and 2025 in two properties . Both properties were recently refurbished, which is expected to improve the EPC rating once assessed in the next six months. Net zero carbon The ESG Committee was delighted to announce the Company’s operational net zero carbon (“NZC”) commitment in June 2024. Continuing the journey towards net zero, meaning a 90% reduction in operational carbon intensity, is a crucial part of our ESG strategy and making this journey align with stakeholder goals and the Company’s property strategy is one of the key challenges facing the Company and the real estate sector. We are working towards our long-term KPIs in this regard and will continue our strong focus on this area. Our initial commitment is to achieve operational NZC by 2050. The Committee will consider bringing this date forwards once our target for data collection is reached, to minimise reliance on estimated data. Targets will also be amended over time based on material acquisitions and disposals within the portfolio. Outlook The Company will work towards achieving its ESG targets over the course of the next financial year, improving our understanding of the specific impacts of climate change on the Company, seeking to further influence tenant behaviour to improve environmental outcomes and continuing to develop our carbon reduction strategy. Approval This report was approved by the Committee and signed on its behalf by: Hazel Adam Chair of the ESG Committee 11 June 2025 79 Audit and Risk Committee report Composition and designation The Audit and Risk Committee (“the Committee”) comprises Malcolm Cooper as Chair, Hazel Adam, Elizabeth McMeikan and Chris Ireland, all of whom are independent non-executive directors. Responsibilities The Committee meets regularly to monitor the integrity of the Company’s financial statements and to ensure they present a fair, balanced and understandable assessment of the C ompany’s position and prospects. The Committee is also responsible for appointing and assessing the performance and independence of the external auditor, and the programme of work and reports of the internal auditor. In providing support to the Board in making this statement, the Committee has reviewed and approved a process undertaken by the Investment Manager to provide confirmation to the Board. The Committee operates under written terms of reference which are available on the Company’s website. The key responsibilities and principal activities of the Committee are as follows: • To monitor the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance, and reviewing significant financial reporting judgements contained in them; • To advise the Board on whether the Interim Report, Annual Report and financial statements are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model, strategy, risks, working capital requirements and longer-term viability; • To advise the Board on whether the Investment Manager’s working capital review supports assertions made in the Annual Report regarding going concern and longer-term viability; • To monitor and review the effectiveness of the Company’s internal control environment and monitoring processes, which were in place for the year under review and up to the date of approval of these financial statements; • To review the significant risks faced by the Company; • To review the internal audit programme and monitoring the effectiveness of the internal audit process by reviewing reports, meeting with the internal auditor and identifying any matters it considers need action or improvement, making recommendations as to the steps to be taken; 80 • To make recommendations to the Board to be put to shareholders for their approval in general meetings in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor; • To review the appointment of the external auditor, monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements; • To develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm and to report to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken; • To agree the scope of statutory audit work and any additional assurance work to be undertaken; • To take an active part in discussions between the external auditor and the Investment Manager regarding the resolution of issues that impact the audited financial statements; and • To have the opportunity to meet with the external property valuers at least once a year, to discuss the valuers ’ remit and any issues arising from the valuations. The Committee also oversees and approves the calculation of fees payable to the Investment Manager set out in Note 19. Meetings The Committee meets no less than three times a year, typically in May to consider the Annual Report and external audit findings, in November to consider the Interim Report, interim announcement and external review findings, and in February to plan for the financial year ahead. Any other matters, including internal controls, are considered as and when necessary. Meetings are attended by the Committee members, the Investment Manager, the external auditor, the Directors not on the Committee and, periodically, the Investment Manager’s internal auditor. 81 Primary areas of judgement in relation to the Annual Report and financial statements The Committee considers the significant judgements made in the Annual Report and financial statements and receives reports from the Investment Manager and the external auditor on those judgements. The Committee pays particular attention to the matters it considers to be important by virtue of size, potential impact, complexity and level of judgement. The principal issue considered by the Committee for the year was the valuation of the Company’s property portfolio, which is fundamental to the Company’s statement of financial position and reported results. The external auditor uses real estate specialists to challenge the assumptions and approach adopted by the valuers and reported back to the Committee on its review. The Committee also gained comfort from the valuers ’ methodology and other supporting market information and representatives of the Committee attended valuation meetings involving the external auditor and the valuers, and held separate meetings with each valuer to discuss each valuer’s remit and any issues arising from the valuation s. During the year, the Committee recommended to the Board that the Company amend its accounting policy relating to solar panels, moving the basis of carrying value from cost to fair value, and amending their useful economic life from 20 years to 30 years. The Committee believes these changes give shareholders a more accurate reflection of the value of the Company’s property, plant and equipment. Loan covenant and REIT regime compliance are matters for the whole Board. The Committee has considered reports to support the Company’s REIT regime compliance , going concern status and longer-term viability statement, along with details of available undrawn facilities and financial forecasts. The Committee has reviewed, challenged and assessed the Company's use of APMs in previous years, in particular in the context of ESMA Guidelines on APMs, and believes that there is an appropriate balance between APMs and IFRS reported measures. The Committee considers that the use of APMs, some of which are based upon EPRA Best Practice Recommendations, is reflective of best practice in the sector and in line with other similar companies. The Committee was satisfied that these issues had been fully and adequately considered and addressed and that the judgements made were appropriate. The Committee discussed the issues with the external auditor, who had concurred with the judgement of the Investment Manager. 82 Audit Internal audit The Company’s day -to-day operations are contracted to the Investment Manager. The Company’s internal audit function, which assesses the systems and control framework of the Investment Manager and its parent company, Mattioli Woods, is carried out by RSM. The Committee agrees an appropriate annual internal audit programme with the Investment Manager, taking into consideration the current size of the Company and its relative lack of business complexity. The Committee receives and reviews reports of the internal audit function, which during the year covered the forecast model. The Committee allows time to speak with the internal auditor without the Investment Manager present for at least one meeting each year. The external audit, review of audit effectiveness, auditor reappointment and audit tendering The Committee reviews annually the external auditor’s: • Relationship with the Company; • Level of effectiveness; • Audit and non-audit fees; and • Independence. The Committee uses a framework to assess the effectiveness of the audit approach and considered the views of the Investment Manager. This framework includes: • The auditor confirming its independence and compliance the FRC’s Ethical Standard and the Company’s policy for the supply of non-audit services; • The Investment Manager confirming its view on external auditor independence; • How the auditor demonstrated professional scepticism and challenged assumptions where necessary; and • Assessment of the audit quality of Deloitte LLP (“Deloitte”). In assessing how the Auditor demonstrated professional scepticism and challenged assumptions, the Committee considered the depth of discussions held with the a uditor, particularly in respect to challenging the Company’s approach to its significant judgements and estimates (set out in the Strategic report) and risk assessment. The Committee was satisfied that Deloitte’s individual report on Audit Quality Inspections carried out by the Financial 83 Reporting Council (“FRC”) Audit Quality Review team and ICAEW Quality Assurance Department showed very positive results with no audits requiring ‘significant improvements’. After taking these matters into account, the Committee concluded that Deloitte had performed the audit effectively, efficiently and to a high quality. The Committee allows time to speak with the external auditor without the Investment Manager present for at least one meeting each year. Fees incurred by the Company from Deloitte during the year were as follows: Year ended 31 March 2025 Year ended 31 March 2024 £000 £000 Audit of the Company’s Annual Report 171 163 Total audit related fees 171 163 Review of the Company’s Interim Report 39 37 Total non-audit fees 39 37 Total fees 210 200 Non-audit fees An external auditor independence policy has been adopted by the Committee, which considers the appointment of the external auditor for non-audit work, after taking into account their suitability to perform the services, the potential impact on their independence and objectivity and the relationship of non-audit to audit fees. Fees for permissible non-audit fees payable to the external auditor are capped at 70% of the average audit fee over the three preceding financial years (or from appointment, if later) in line with the FRC’s Revised Ethical Standard 2019. Where there are any doubts as to whether the external auditor has a conflict of interest, Committee approval is required in advance of the engagement. Given the external auditor’s detailed knowledge of the structure of the organisation, certain recurring services provided by them, subject to the amount of fee involved, are not considered to impair the external auditor’s independence or objectivity. Services included in this category are: accounting advice forming part of extended audit procedures; compliance and regulatory certificates and minor projects, where the fee involved per service will not exceed £10k without the prior consent of the Committee. 84 Other than the review of the Interim Report, the Committee will not normally allow the external auditor to be used for the following: tax services, compiling accounting records; payroll services; work on internal controls; valuation work; legal services; internal audit services; corporate finance services; share brokerage or human resources. Non-audit fees incurred during the year related to a review of Board effectiveness. The Committee has reviewed the level of fees due to Deloitte for permitted non-audit services and is satisfied the independence and objectivity of Deloitte as the Company’s audit or is not impaired. As a ‘public interest entity’ the Company will be required to rotate audit firms by 2034, meaning the final audit Deloitte can carry out is for the year ending 31 March 2033. Deloitte has confirmed its willingness to continue in office and ordinary resolutions reappointing Deloitte as auditor and authorising the Committee to set the auditor’s remuneration will be proposed at the AGM. Approval This report was approved by the Committee and signed on its behalf by: Malcolm Cooper Chair of the Audit and Risk Committee 11 June 2025 85 Management Engagement Committee report Composition The Management Engagement Committee (“the Committee”) comprises Chris Ireland as Chair, Hazel Adam, Elizabeth McMeikan, Malcolm Cooper and David MacLellan, all of whom are independent non-executive directors. Meetings The Committee meets at least twice a year and otherwise as required. Responsibilities The key responsibilities of the Committee are: • Monitor and annually review the independence, expertise and performance of the Investment Manager and its compliance with the terms of the IMA; • Ensure the terms of the IMA comply with all relevant regulatory requirements, conform with market practice and remain in the best interests of Shareholders; • Oversee the relationship with the external property valuers considering changes, reappointment and tendering, their remuneration, terms of engagement, independence and expertise; and • Review annually the remuneration, any points of conflict and the Investment Manager’s views on the effectiveness of the Company’s other key service providers , excluding internal and external auditors and ESG advisers. Investment Manager During the year, the Committee has considered: • The capability and resources of the Investment Manager to deliver satisfactory investment performance; and • The fees payable to the Investment Manager. The Committee concluded that, based on its interaction with the Investment Manager’s staff during the year, participation in meetings and quarterly reporting, that the Investment Manager had sufficient capability and resources and had delivered satisfactory investment performance. 86 Other key service providers During the year the Committee recommended to the Board replacing PwC with Maven as Company Secretarial Adviser due to its investment management specialism. The Committee has also considered its external valuer engagements of Knight Frank LLP (“Knight Frank”) and Savills (UK) Limited which began in 2019 and 2021 respectively. The Company follows prevailing RICS guideline regarding valuers’ rotation, and in line with RICS Valuation Standards UK National Supplement (October 2023) transitional arrangements, Knight Frank signatories will rotate off the engagement ahead of the 30 September 2025 half-year end. Approval This report was approved by the Committee and signed on its behalf by: Chris Ireland Chair of the Management Engagement Committee 11 June 2025 87 Nominations Committee report Composition The Nominations Committee (“the Committee”) consists of David MacLellan as Chair, Hazel Adam, Elizabeth McMeikan, Chris Ireland and Malcolm Cooper. Meetings The Committee meets at least once a year and otherwise as required. Responsibilities The key responsibilities of the Committee are: • Review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to any changes; • Consider succession planning for directors taking into account the: o Challenges and opportunities facing the Company; o Skills, expertise and diversity needed on the Board in the future; and o Independence of the Board regarding tenure and external appointments. • Keep under review the leadership needs of the organisation, with a view to ensuring the continued ability of the Company to compete effectively in the marketplace; and • Identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise. Before any appointment of an independent director is made by the Board the Committee is required to evaluate the balance of skills, knowledge, experience and diversity on the Board and, in light of this evaluation, prepare a description of the role and capabilities required for a particular appointment. In identifying suitable candidates the committee shall: • Use open advertising or the services of external advisers to facilitate the search; • Consider candidates from a wide range of backgrounds; and • Consider candidates on merit and against objective criteria and with due regard for the benefits of diversity on the Board, including gender, social and ethnic backgrounds and cognitive and personal strengths, taking care that appointees have enough time available to devote to the position. 88 The Committee also makes recommendations to the Board concerning: • Formulating plans for succession for the Non-Executive Directors; • Suitable candidates for the role of SID; • Membership of the Company’s Board Committees , in consultation with the chairs of those committees; and • The annual re- election by shareholders of directors or the retirement by rotation provisions in the Company’s Articles, having due regard to their performance and ability to continue to contribute to the Board in light of the knowledge, skills and experience required and the need for progressive refreshing of the Board. Policy on tenure and succession planning In determining an appropriate period of tenure for each Director, including the Chair, the Committee considers: • The ongoing independence of each of the Non-Executive Directors; • The benefits of regular Board refreshment and diversity; • Their respective skills and experience; • Whether each Non-Executive Director is able to commit sufficient time to the Company; and • The nature and time commitment involved in any other appointments held. The Board considers that each Non-Executive Director has contributed an appropriate amount of time during the year. Pursuant to the Articles, at every AGM of the Company, one third of the Non-Executive Directors who are subject to the requirement to retire by rotation (not including any Non-Executive Director who was appointed by the Board since the last AGM and is standing for election) will retire from office and may offer themselves for re-election. However, notwithstanding the provisions of the Articles, all the Non-Executive Directors will offer themselves for re-election at each AGM in accordance with the provisions of the AIC Code. Succession planning The Directors have a duty to ensure the long-term success of the Company, which includes ensuring that we have an established succession plan for Board changes. The Committee considers succession planning on a regular basis to ensure that changes to the Board are proactively planned and co-ordinated where possible. 89 Induction The Company provides new Directors with a comprehensive and tailored induction process which includes meetings with the Company ’s audit partner and corporate lawyer, together with meetings with Investment Manager key personnel and the Directors individually. The induction programme is managed by the Company Secretary and approved by the Chair of the Committee. New Directors are also provided with external training that addresses their role and duties as a Director of a public company. Diversity policy The Committee is conscious of stakeholder focus on diversity and understands a diverse Board brings constructive challenge and fresh perspectives to discussions. The Committee follows the AIC Code of Corporate Governance which recommends: • The Board has a combination of skills, experience and knowledge; and • Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths. The Company complied with these recommendations during the year. The Board’s positive approach to diversity means that each time a n independent director is recruited at least one of the shortlist candidates is female and at least one of the shortlist candidates is from a minority ethnic background. The Board supports the overall recommendations of the FTSE Women Leaders Review and Parker Reviews for appropriate gender and ethnic diversity. The FCA has ‘comply or explain’ targets of: • At least 40% of the board should be women; • At least one of the senior board positions (Chair, Chief Executive Officer, Chief Financial Officer or SID) should be a woman; and • At least one member of the board should be from a minority ethnic background. 90 At the year end, the Company only met one of the three criteria above, as Elizabeth McMeikan acts as the SID. In line with the requirements of listing rule LR 9.8.6, the Board’s ethnicity and gender balance at the year -end is shown in tabular format below. No other categories of ethnicity are relevant for the Company and as the Company has no executive directors it has not reported the fields and the corresponding data relating to executive management in the table below as required by listing rule 15.4.29RB. Number of Board members Percentage of the Board Number of senior positions on the Board (SID and Chair) White British or other White (including minority-white groups) 6 100% 2 Female 2 33% 1 Male 4 67% 1 This information has been collected by self-disclosure directly from the individuals concerned who were asked to confirm their gender and ethnicity. Custodian Property Income REIT is an investment company with no Executive Directors and a small Board compared to equivalent size listed trading companies. As a result, the Company does not comply with the FCA diversity targets. The Committee considers diversity in a broad sense, not limited to gender or ethnicity, including socio-economic background and education. The Board also welcomes the diversity offered by the Investment Management team working with the Company. During the prior year the Company engaged Human EDI Limited to assess the demographics of the Company’s Board and key stakeholders, including factors such as gender, ethnicity, age, and other relevant diversity indicators, evaluate the diversity of skills, experiences, and perspectives and make recommendations for enhancing diversity and inclusivity. The results of the review are under consideration and are expected to be implemented during future appointments to the Board and of key service providers. During the year Ian Mattioli stepped down as a Director the Company and was replaced by Nathan Imlach, who as Chief Strategic Adviser to Mattioli Woods is not independent . Nathan’s appointment is for a transition period to no later than 31 December 2025 and following that transition period the Company’s board will be 40% female. Formulating strategies to further promote diversity and inclusivity will be made in the forthcoming financial year. Approval This report was approved by the Committee and signed on its behalf by: 91 David MacLellan Chair of the Nominations Committee 11 June 2025 92 Remuneration report Responsibilities The Board is responsible for: • Setting the Remuneration Policy for all the Directors taking into account relevant legal and regulatory requirements and the provisions and recommendations of the AIC Code; • Reviewing the on-going appropriateness and relevance of the Remuneration Policy; and • Within the terms of the agreed policy, determining the individual remuneration of each director, taking into account information about remuneration in other companies of comparable scale and complexity. Directors and officers The Non-Executive Directors and Company Secretary are the only officers of the Company. The Company Secretary is engaged under the terms of the IMA with the Investment Manager. The Company has no employees. The Articles require one third of Directors to retire and seek re-election each year. However, notwithstanding the provisions of the Articles, all the Non-Executive Directors offer themselves for re-election at each AGM in accordance with the terms of their appointment and the provisions of the AIC Code. Remuneration Policy The Company’s objective is to have a simple and transparent remuneration structure, aligned with the Company’s strategy and be comparable with similar companies. The Company offers Directors, including any new Directors, an annual fee with no pension contributions, allowances or variable elements. Directors are engaged under Letters of Appointment (rather than service contracts with the Company), which do not allow for any payments on the termination of office. Each Director’s appointment under their respective Letter of Appointment is terminable immediately by either party (the Company or the Director) giving written notice. Letters of Appointment are kept available for inspection at the Company’s registered office. The Remuneration Policy was last approved at the AGM held on 31 August 2022 with 99.98% of votes cast for the resolution, 0.02% of votes cast against the resolution with 22,539 votes withheld. The Company’s remuneration policy is designed to attract, retain and motivate non-executive directors with the skills and experience necessary to maximise shareholder value on a long-term basis. The Board believes that the 93 policy remains fit for purpose and operates as intended and will seek shareholder approval of the policy at the forthcoming AGM. There have been no major decisions, substantial changes or discretion applied relating to Directors’ remuneration during the year, other than the fees payable to the Directors for the forthcoming financial year. The Remuneration Policy has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (“the Regulations”) as amended in August 2013, the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, the Companies (Miscellaneous Reporting) Regulations 2018 and with the AIC Code. The Board takes into account any views in respect of directors’ remuneration expressed by shareholders in the formulation of the Remuneration Policy. 94 Directors’ remuneration (audited) 2025 Fees £ 2024 Fees £ David Hunter - 24,855 David MacLellan 73,000 56,623 Ian Mattioli 25,000 42,000 Nathan Imlach 17,607 - Hazel Adam 46,000 44,250 Elizabeth McMeikan 49,000 47,250 Chris Ireland 46,000 44,250 Malcolm Cooper 49,000 47,250 305,607 306,478 The Company incurred Employer’s national insurance contributions of £ 40,736 (2024: £39,575) during the year relating to Directors’ fees. * David Hunter retired as a Director on 8 August 2023. ** David MacLellan was appointed as a Director on 9 May 2023. *** Ian Mattioli retired as a Director, and Nathan Imlach was appointed as a Director, on 6 November 2024. In February 2025 the Board reviewed Directors’ remuneration against comparable entities, with information supplied by the Investment Manager, taking into account the performance of the Company, the nature of each Directors’ duties, their responsibilities and the time spent discharging their duties during the year. The Board has approved the following annual fees with effect from 1 April 2025: David MacLellan - £75,000; Malcolm Cooper - £50,500; Elizabeth McMeikan - £50,500; Chris Ireland - £50,500; Hazel Adam - £47,500, and Nathan Imlach - £45,000. At the 2021 AGM shareholders approved increasing the Directors’ aggregate remuneration cap contained in the Articles to £300k, subsequently rising with CPI to £375,000. The proposed FY26 fees are below this limit. The Board is mindful of the need to attract suitably experienced members and offer candidates competitive levels of remuneration when Board refreshment is required in line with the Company’s succession and diversity planning. 95 No pension benefits accrued to any of the directors during the year (2024: £nil). The Directors and the key Investment Manager personnel are considered to be the Company’s key management personnel defined by IAS 24 ‘Related Party Disclosures’. The terms and conditions of the IMA and the amounts due to the Investment Manager are set out in Note 19. Directors’ interests (audited) The Directors had the following interests in the ordinary shares of the Company at 31 March 2024: 2025 2024 No. shares % holding No. shares % holding Ian Mattioli N/a N/a 6,069,506 1.38% Nathan Imlach 235,993 0.05% N/a N/a David MacLellan 144,500 0.03% 144,500 0.03% Chris Ireland 122,500 0.03% 122,500 0.03% Malcolm Cooper 115,300 0.03% 115,300 0.03% Elizabeth McMeikan 20,400 0.00% 20,400 0.00% Hazel Adam 19,566 0.00% 19,566 0.00% 658,259 0.14% 6,491,772 1.47% No Director has or has had any interest in any transactions which are or were unusual in their nature or conditions, or significant to the business of the Company and which were affected by the Company or remain in any respect outstanding or unperformed. No loan or guarantee has been granted or provided by any member of the Company for the benefit of any director. There are no restrictions agreed by any Director on the disposal within a certain period of time of their holdings in the Company’s securities during their tenure as Director or post-retirement. Restrictions on other transfers of ordinary shares are set out in the Directors’ Report. There have been no changes to Directors’ interests since the year end. There are no requirements or guidelines for the Directors to own shares in the Company. Ian Mattioli, Richard Shepherd-Cross and Ed Moore, respectively Chairman, Managing Director and Finance Director of the Investment Manager, and their immediate families 29 , own 6,429,807, 371,381 and 102,596 shares in the Company respectively. 29 For Ian Mattioli this comprises shares held by Ian, his wife and a charitable trust under his control of 2,950,690 (2024: 3,923,445) and 3,479,117 (2024: 2,146,061) shares held by other persons closely associated. 96 Total shareholder return The graph below illustrates the total shareholder return over the 10 year period to 31 March 2025 in terms of the change in value of an initial investment of £100 invested on 31 March 2015 in a holding of the Company’s shares against the EPRA NAREIT UK Index 30 . Source: Deutsche Numis The Company has historically disclosed total shareholder return for a hypothetical basket of peer group companies. However, the majority of these peers have delisted due to mergers and take-privates or are subject to ongoing wind-down and the Board considers the remainder too narrow a peer group to offer an appropriate comparator. Benchmarking performance against a UK REIT index is considered to be the most appropriate method of measuring the Company’s relative performance, as required by the Regulations. The performance of the Company relative to its peers is also discussed in the Investment Manager’s report. 30 The EPRA NAREIT Index incorporates weightings of UK listed REITs and real estate holding and development companies. 20 40 60 80 100 120 140 160 180 Pence CREI NAREIT 97 The Act requires the Auditor to report to the shareholders on certain parts of the Remuneration report and to state whether, in their opinion, those parts of the report have been properly prepared in accordance with the Regulations. The parts of the Remuneration report that are subject to audit are shown in this Report as ‘audited’. Approval This report was approved by the Committee and signed on its behalf by: David MacLellan Chairman 11 June 2025 98 Directors’ report Report and financial statements The Directors have pleasure in presenting their report together with the audited financial statements for the year ended 31 March 2025. The Governance report forms part of this report. For the purposes of this report and the Directors’ responsibilities statement, the expression ‘Company’ means Custodian Property Income REIT plc and the expression ‘Group’ means the Company and its subsidiaries. The Company’s principal activity is commercial property investment. The Strategic report includes further information about the Company’s principal activity, financial performance during the year and indications of likely future developments. The trading status of the Company’s subsidiaries is shown in Note 12. Details of significant events since the year end are contained in Note 21 to the financial statements. The Directors believe they have discharged their responsibilities under section 414C of the Act to provide a balanced and comprehensive review of the development and performance of the business. Per section 414C(11) of the Act the Directors have elected to include the following matters, which are required by section 416(4) of the Act to be including in the Directors' Report, within the Strategic Report: • Financial Risk management objectives and policies; and • Future developments. Results and dividends The Group profit for the year after taxation is set out in the consolidated statement of comprehensive income. Total dividends paid during the year of 6.175p per share (2024: 5.5p), totalled £27.2m (2024: £24.2m). On Friday 30 May 2025 the Company paid a fourth interim dividend per share of 1.5p for the quarter ended 31 March 2025. The Company’s dividend policy is set out in the Financial review section of the Strategic report. 99 Going concern At 31 March 2025 the Company’s forecasts indicate that over the next 12 months: • The Company has surplus cash to continue in operation and meet its liabilities as they fall due; • Borrowing covenants are complied with; and • REIT tests are complied with. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements. The forecast is subject to sensitivity analysis, which involves flexing certain key assumptions and judgements included in the financial projections, impacting the following areas: Covenant compliance The Company operates loan facilities summarised in Note 16. At 31 March 2025 the Company had significant headroom on lender covenants at a portfolio level with: • Net gearing of 27.9% compared to a maximum LTV covenant of 35% on its Aviva facilities and 40% on its Lloyds and SWIP facilities, with £103.5m (17% of the property portfolio) unencumbered by the Company’s borrowings; and • 117% minimum headroom on interest cover covenants for the quarter ended 31 March 2025. Reverse stress testing has been undertaken to understand what circumstances would result in potential breaches of financial covenants. While the assumptions applied in these scenarios are possible, they do not represent the Board’s view of the likely outturn, but the results help inform the Directors’ assessment of the going concern status of the Company. The testing indicated that: • The rate of loss of contractual rent on the borrowing facility with least headroom would need to deteriorate by 17% to breach its interest cover covenant from the levels included in the Company’s prudent base case forecasts, assuming no unencumbered properties were charged; or • To risk breaching the applicable covenant for both assessment periods, property valuations would have to decrease from the 31 March 2025 position by: o 20% at a portfolio level; or o 13% at an individual charge pool level, assuming no further properties were charged 100 Note 10 details the expected movements in the valuation of investment properties if the equivalent yield at 31 March 2025 is increased or decreased by 0.25% and if the ERV is increased or decreased by 5.0%, which the Board believes are reasonable sensitivities to apply given historical changes. The Board notes that the February 2025 IPF Forecasts for UK Commercial Property Investment survey suggests an average 2.8% increase in rents during 2025 with capital value increases of 3.7%. The Board believes that the valuation of the Company’s property portfolio will prove resilient due to its higher weighting to industrial assets and overall diverse and high-quality asset and tenant base comprising over 150 assets and over 300 typically 'institutional grade' tenants across all commercial sectors. Liquidity At 31 March 2025 the Company had £7.9m of unrestricted cash and £15.0m undrawn RCF, with gross borrowings of £175.0m resulting in net gearing of 27.9%. As detailed in Note 16, the Company’s £20m loan with SWIP expires in August 2025 which resulted in the Company having £19.8m of net current assets at the year end. The Company intends to repay the £20m SWIP loan using its RCF facility. The Company has increased its RCF limit from £50m to £60m since the year end to maintain headroom, with the Company’s forecast model projecting it will have sufficient cash and undrawn facilities to repay the £20m SWIP loan, continue its programme of capital investment, pay its target dividends and its expense and interest liabilities over the one and three year assessment periods. Taxation The Group operates as a REIT and hence profits and gains from the property rental business are normally expected to be exempt from corporation tax. 101 Directors and Officers A list of the directors and their short biographies are shown in the Board of Directors and Investment Manager personnel section of the Governance report. The appointment and replacement of directors is governed by the Articles, the AIC Code, the Companies Act and related legislation. The Articles themselves may be amended by special resolution of the shareholders. Directors’ fees and beneficial interests in the shares of the Company are disclosed in the Remuneration report. During the year, no director had a material interest in a contract to which the Company or its subsidiary was a party (other than their own letter of appointment), requiring disclosure under the Companies Act 2006 other than in respect of Custodian Capital Limited and the IMA as disclosed in Note 19 to the financial statements. On 6 November 2024 Nathan Imlach was appointed as a Director and Ian Mattioli retired as a Director. Directors’ indemnity All directors and officers of the Company have the benefit of a qualifying third party indemnity provision contained in the Articles, which was in force throughout the year and is currently still in force. The Company also purchased and maintained directo rs’ and officers’ liability insurance in respect of itself, its directors and officers and the directors and officers of its subsidiaries as permitted by Section 234 of the Companies Act 2006, although no cover exists in the event directors or officers are found to have acted fraudulently or dishonestly. Conflicts of interest There are procedures in place to deal with any directors’ conflicts of interest arising under section 175 of the Companies Act 2006 and such procedures have operated effectively. Donations No political or charitable donations were made during the current or prior year. 102 Capital structure The Company’s authorised and issued share capital is shown in Note 1 7 to the financial statements. The ordinary shares rank pari passu in all respects. Save as may be agreed at each AGM, the ordinary shares have pre-emption rights in respect of any future issues of ordinary shares to the extent conferred by section 561 of the Companies Act 2006. There are no restrictions on the transfer of ordinary shares in the Company, other than certain restrictions that may be imposed from time to time by laws and regulations and pursuant to the Listing Rules of the FCA and the Company’s share dealing code, wh ereby certain directors and officers require approval to deal in ordinary shares of the Company. The Directors are not aware of any other agreements between holders of securities that may result in restrictions on the transfer of ordinary shares. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles and prevailing legislation. No person has any special rights of control over the Company’s share c apital and all issued shares are fully paid. Note 17 sets out the Directors’ authority to issue shares, pursuant to section 551 of the Companies Act 2006, to satisfy market demand and raise further monies for investment in accordance with the Company’s investment policy, and to make market purchases of ordinary shares under section 701 of the Companies Act 2006. CREST Custodian Property Income REIT plc share dealings are settled in CREST, the computerised system for the settlement of share dealings on the London Stock Exchange. CREST reduces the amount of documentation required and makes the trading of shares faster and more secure. CREST enables shares to be held in an electronic form instead of traditional share certificates. CREST is voluntary and shareholders can keep their share certificates if they wish. This may be preferable for shareholders who do not trade in shares on a frequent basis. 103 Substantial shareholdings At 31 March 2025 the Directors were aware that the following shareholders each owned 31 3% or more of the issued share capital: Shareholder Number of ordinary shares Percentage holding 32 BlackRock 15,441,201 3.50% No changes in substantial shareholding were disclosed between 31 March 2025 and 11 June 2025. Close company provisions The Company is not a close company within the provisions of the Income and Corporation Taxes Act 1988. Change of control The Company has borrowing facilities provided by its bankers which include provisions which may require any outstanding borrowings to be repaid, altered or terminated upon the occurrence of a change of control in the Company. Related party transactions Details of related party transactions are given in Note 19 to the financial statements. Environmental performance and strategy Custodian Property Income REIT is committed to minimising the environmental impact of its portfolio. This is underpinned by pro-active performance monitoring as a key part of the business strategy. Our sustainability consultants and advisors, JLL, support us through centralised environmental data management and reporting so that we can quantify and evaluate our impact. This has continued our efforts to improve data collection, quality, and coverage, to better understand the performance of our buildings. This is fundamental for transparency and 31 Ownership incorporates the control of voting rights through acting as discretionary investment manager on behalf of retail investors holding the beneficial interest. 32 Based on the issued share capital on 31 March 2025. 104 compliance reporting in alignment with the industry reporting frameworks we adhere to each year, which are EPRA and GRESB. The use of GRESB as an appropriate framework is currently under review by the Committee. The following information summarises our environmental performance in 2024. Our environmental impacts include the consumption of fuels, electricity, and water, and have been derived from both landlord and tenant obtained consumption data. GHG emissions This section has been prepared in accordance with our regulatory obligation to report greenhouse gas (“GHG”) emissions pursuant to The Companies (Directors’ report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 which implem ent the Government’s policy on SECR. Data collected relates to the calendar years 2024 and 2023 but has been disclosed as 2025 and 2024 respectively due to the Company’s March accounting reference date. Methodology We quantify and report our organisational energy consumption and GHG emissions according to the Greenhouse Gas Protocol Corporate Standard (revised edition). As all our properties are located within the UK, 100% of our energy consumption and GHG emissions are applicable to the UK. In categorising data and reporting our impact, landlord obtained refers to instances where we are responsible for the consumption/emissions of utilities in our buildings and maintain control, whereas tenant obtained refers to instances where tenants are responsible; either procuring their own utilities or via submetering from landlord-obtained supplies. To collect consumption data, our sustainability consultants have contacted the Company’s managing agents and tenants to request the provision of data for their properties. Creating and maintaining strong relationships with these stakeholders is key to generating good data flows, and we are continuously working on strengthening these to enhance our data coverage. Where possible, we also automate data collection to obtain information direct from suppliers and via smart meters or using a data aggregator. We then consolidate all data collected into a single source to run analysis, quality checks and further calculations as required. Consumption data has been collated and converted into carbon dioxide equivalent (“CO2e”) using the International Energy Agency Conversion Factors for Company Reporting for electricity, and Carbon Risk Real Estate Monitor ( “ CRREM ” ) for fuels, to calculate emissions from corresponding activity data. Due to the delay in the publication of annual emissions factors, a three-year lag is used in the application of emissions factors to ensure that GHG emissions data is continuously available for reporting. 105 Reporting boundaries and limitations The GHG sources that constitute our operational boundary for the year in this disclosure are: • Scope 1: Natural gas combustion within boilers, gas oil combustion within generators, road fuel combustion within owned and leased vehicles, and fugitive emissions from refrigerants in air-conditioning equipment; • Scope 2: Purchased electricity consumption for our own use; and • Scope 3: Natural gas and electricity consumption from tenants. Assumptions and estimations In instances where data is missing or unavailable, estimations have been applied to ensure a complete view of our impact is presented. We utilise different estimation methodologies depending on whether the data is missing (eg one month of the year) or unavailable (eg data we were not able to obtain). For missing data, we estimate based on historical data and figures from other months throughout the year. For data that was unavailable, we use benchmarking factors recommended by the CRREM tool and floor area. We have maintained detailed records of all instances of estimation. Performance The Company monitors and reports on environmental targets quarterly (internally) and annually within its Asset Management and Sustainability Report. Monitoring performance quarterly allows the business to assess and improve performance across ESG issues and implement a range of initiatives, including energy efficiency, green energy procurement, tenant engagement and ESG due diligence. The ESG Committee continues to oversee the Company’s robust environmental governance structure , monitoring overall progress towards these targets and ensuring the Investment Manager seeks to identify new opportunities to further embed sustainability across the portfolio. 106 The table below shows absolute energy consumption for the past two years, as well as year-on-year change. Absolute energy consumption (MWh) 2025 2024 Change Fuels Landlord obtained 2,990 3,523 -15% Tenant obtained 21,795 23,291 -6% 24,785 26,814 -8% Electricity Landlord obtained 3,337 2,103 59% Tenant obtained 37,910 40,133 -6% 41,247 42,236 -2% Energy 66,032 69,050 -4% We have observed a 2% and 8% decrease in absolute electricity and fuel consumption respectively from 2024 to 2025. Our total reported absolute energy consumption has decreased by 4% from 2024 to 2025. This includes both our landlord consumption, as well as that of our tenants from assets that are not managed by us directly. The table below presents absolute performance for both landlord and tenant obtained consumption for electricity and subsequently carbon. We report gas and water consumption on a whole building basis: Absolute GHG emissions 2025 2024 Change Scope 1 Landlord fuel consumption (MWh) 2,990 3,523 -15% GHG emissions (tCO ₂ e) 548 645 -15% Scope 2 Landlord electricity consumption (MWh) 3,337 2,103 59% (location- based) GHG emissions (tCO ₂ e) 717 422 70% Total Scope 1&2 emissions (location-based) (tCO ₂ e) 1,264 1,067 18% Scope 1&2 (location-based) emissions intensity (kgCO ₂ e/m²/yr) 2.74 2.26 21% Scope 3 Tenant fuel consumption (MWh) 21,795 23,291 -6% Tenant electricity consumption (MWh) 37,910 40,134 -6% Total Scope 3 emissions (tCO ₂ e) 12,135 12,313 -1% Scope 3 emissions intensity (kgCO ₂ e/m²/yr) 26.25 26.0 -1% Gross Scope 1,2 and 3 emissions (location-based) (tCO ₂ e) 13,400 13,380 -% Water consumption (dam³) 151.3 168.9 -10% 107 The emissions intensity calculation is based upon the floor area metrics available relative to the Scope 1, 2 and 3 emissions. As the Company is a REIT, primarily investing in real estate, floor area is an appropriate denominator to normalise energy consumption and GHG emissions as an intensity metric, and is consistent with the SECR guidelines recommendations for the property sector. Overall, our absolute emissions for Scope 1 and 2 (location-based) have increased by 18% from 2024 to 2025, due to an increase in electricity consumption, despite a decrease in fuel consumption being observed. We anticipate that the improved data coverage that has been achieved this year is a key driving factor in the Scope 3 emissions reductions observed, as less data relies on estimations which are generally more conservative. This is particularly prominent with our tenant consumption, where coverage is generally lower. In 2025, our environmental data covers 34% of the total floor area (combined landlord and tenant data) of our entire property portfolio, compared to total coverage of 26% in 2024. This strong improvement reflects our focused efforts to increase our data coverage. We understand that this enhances the accuracy and quality of our performance reporting, whilst providing our stakeholders with greater insights of our impact, and are continuing to target further improvements moving forwards. The return of data by our tenants has improved compared to previous years, with information received from tenants in 45 assets (2024: 33 assets) covering 206,537 sq m (2024: 160,017sq m) of floor area representing 37% (2024: 34%) of the total portfolio’s f loor area. We are continuing to address the challenge of obtaining tenant data, and working hard to further improve response rates to ensure these disclosures give the best available insight into overall consumption. We target quarterly tenant engagement, which is essential to review and address our collective ESG issues. We are committed to minimising our environmental impact, and aim to make data driven decisions to strategically enhance our portfolio. By using this engagement as an opportunity to also improve data coverage, we can increase our insights and accelerate progress, as well as working in collaboration with our tenants to improve the assets they occupy. Where feasible, we are also seeking opportunities to streamline data collection through automation to minimise collection efforts and maximise data coverage. This has been a strong contributor to the improvements in coverage that we have achieved this year. We have activated a number of sites over the past year using this solution, and will continue to review where and how we can roll this out further. Energy Efficiency Action During the year, the Company has continued to take action to increase energy efficiency across the property portfolio. A summary of actions taken are detailed below; further details can be found in our 2025 Asset Management and Sustainability Report. 108 • Smart meters - we have installed smart meters in 21 buildings during 2024, increasing our total to 48 buildings. We are also continuing to explore further implementation of smart metering, as well as expanding out data aggregation via an external third-party to improve coverage further. These measures led to 34% data coverage across the portfolio, which in turn improves insights of how and where we can target energy efficiency actions most effectively • EV charging - capacity increased to a total of 3,746 kWh (110 chargers) against previous year of 2,862 kWh (96 chargers). • Onsite renewables – at 31 March 2025 we had a total of 15 PV arrays across the portfolio equating to circa 18% of assets which are deemed suitable for PV and representing a capacity of 4,161 kWp. We have also established a strong pipeline of opportunities for continued rollout, with a further 12 projects targeted for the next 12 months. • Lighting upgrades - installed energy efficient LEDs at industrial properties in Livingston, Aberdeen and Atherstone, which will help to reduce our operational energy consumption 109 Financial risk management The Company ’s financial risk management is based upon sound economic objectives and good corporate practice. The Board has overall responsibility for risk management and internal control, with the assistance of the Audit and Risk Committee . The Board’s process for identifying and managing risks is set out in more detail in the Governance report. Since Admission, the Company has sought to manage financial risk to ensure sufficient liquidity is available to meet its identifiable needs and to invest cash assets safely and profitably. Short-term flexibility is achieved through the use of bank facilities. The Company does not undertake any trading activity in financial instruments. All activities are transacted in pounds sterling. The Company has not engaged in any hedging activities during the year. The Company reviews the credit quality of potential tenants and limits credit exposures accordingly. All trade receivables are subject to credit risk exposure. However, there is no specific concentration of credit risk as the amounts recognised represent income fro m a wide range of the Company’s tenants. The Company’s financial risk management policy is further detailed in Note 20 to the financial statements. Auditor Deloitte LLP , which has been the Company’s auditor since 20 May 2014, has confirmed its willingness to continue in office as auditor in accordance with Section 489 of the Companies Act 2006. The Group is satisfied that Deloitte LLP is independent and there are adequate safeguards in place to safeguard its objectivity. A resolution to reappoint Deloitte LLP as the Group’s auditor will be proposed at the forthcoming AGM. Directors’ statement as to disclosure of information to the auditor The Directors who were members of the Board at the time of approving the Directors’ report are listed in the Governance report . Having made enquiries of fellow directors and of the Company’s auditor, each of these directors confirms that: • To the best of each Director’s knowledge and belief, there is no relevant audit information of which the Company’s auditor is unaware; and • Each Director has taken all steps they might reasonably be expected to have taken as a director to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. 110 This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006. Annual General Meeting The AGM of the Company will be held on 9 September 2025 at 9:30am. The results of the meeting will be published on the Company’s website following the meeting. At the AGM the votes will be dealt with on a poll, using the proxy votes submitted prior to the meeting. Every member entitled to vote shall have one vote for every ordinary share held. None of the ordinary shares carry any special voting rights with regard to control of the Company. The Notice of AGM specifies deadlines for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions to be passed at the AGM. The relevant proxy votes are counted and the number for, against or withheld in relation to each resolution will be published on our website following the AGM. Engagement with suppliers, customers and others The Company’s approach to engagement with suppliers, customers and other stakeholders is set out in the s172 statement and stakeholder relationships section of the Strategic report. Events since 31 March 2025 Details of significant events occurring after the end of the reporting year are given in Note 21 to the financial statements. Approval This Directors’ report was approved by the Board of Directors and signed on its behalf by: David MacLellan Chairman 11 June 2025 111 Directors’ responsibilities statement The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the group financial statements in accordance with United Kingdom adopted international accounting standards. The directors have also chosen to prepare the parent company financial statements under United Kingdom adopted international accounting standards. The financial statements also comply with International Financial Reporting Standards (IFRSs). Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors: • Properly select and apply accounting policies; • Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; • Provide additional disclosures when compliance with the specific requirements of the financial reporting framework are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and • Make an assessment of the Company's ability to continue as a going concern. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Responsibility statement We confirm that to the best of our knowledge: 112 • The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; • The Strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and • The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. Approval This responsibility statement was approved by the board of directors and is signed on its behalf by: David MacLellan Chairman 11 June 2025 113 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CUSTODIAN PROPERTY INCOME REIT PLC Andy Siddorns (Senior statutory auditor) For and on behalf of Deloitte LLP Statutory Auditor London, United Kingdom 11 June 2025 114 Consolidated statement of comprehensive income For the year ended 31 March 2025 Year ended 31 March 2025 Year ended 31 March 2024 Note £000 £000 Revenue 4 47,997 46,243 Investment management fees (3,417) (3,451) Operating expenses of rental property - rechargeable to tenants (3,562) (3,280) - directly incurred (4,891) (3,899) Professional fees (823) (791) Directors’ fees (345) (349) Other expenses (814) (683) Depreciation (285) (133) Expenses (14,137) (12,586) Abortive acquisition costs - (1,557) Operating profit before gains/(losses) on investment property and financing 33,860 32,100 Unrealised profit/(loss) on revaluation of investment property: • relating to property revaluations 10 11,211 (26,972) • relating to costs of acquisition 10 (1) - Valuation increase/(decrease) 11,210 (26,972) Profit on disposal of investment property 444 1,418 Net gain/(loss) on investment property 11,654 (25,554) Operating profit 45,514 6,546 115 Finance income 6 127 78 Finance costs 7 (7,486) (8,126) Net finance costs (7,359) (8,048) Profit/(loss) before tax 38,155 (1,502) Income tax expense 8 - - Profit/(loss) for the year, net of tax 38,155 (1,502) Other comprehensive income 11 714 - Total comprehensive income/(loss) for the year, net of tax 38,869 (1,502) Earnings per ordinary share: Basic and diluted (p) 3 8.7 (0.3) Basic and diluted EPRA (p) 3 6.1 5.8 The profit/(loss) for the year and total comprehensive income/(loss) for the year arise from continuing operations and is all attributable to owners of the Company. Other comprehensive income represents items that will not be subsequently reclassified to profit or loss. 116 Consolidated and Company statement of financial position As at 31 March 2025 Registered number: 08863271 Group and Company Note 31 March 2025 £000 31 March 2024 £000 Non – current assets Investment property 10 594,364 578,122 Property, plant and equipment 11 4,711 2,957 Investments 12 - - Total non-current assets 599,075 581,079 Current assets Assets held for sale 10 - 11,000 Trade and other receivables 13 5,201 3,330 Cash and cash equivalents 15 10,118 9,714 Total current assets 15,319 24,044 Total assets 614,394 605,123 Equity Issued capital 17 4,409 4,409 Share premium 17 250,970 250,970 Merger reserve 17 18,931 18,931 Retained earnings 17 148,442 137,510 Revaluation reserve 17 714 - Total equity attributable to equity holders of the Company 423,466 411,820 Non-current liabilities Borrowings 16 153,641 177,290 Other payables 14 2,087 569 Total non-current liabilities 155,728 177,859 Current liabilities Borrowings 16 19,989 - 117 Trade and other payables 14 7,029 8,083 Deferred income 8,182 7,361 Total current liabilities 35,200 15,444 Total liabilities 190,928 193,303 Total equity and liabilities 614,394 605,123 The parent Company’s profit for the year was £38,155,000 (2024: loss of £1,502,000). These consolidated and Company financial statements of Custodian Property Income REIT plc, company number 08863271, were approved and authorised for issue by the Board of Directors on 11 June 2025 and are signed on its behalf by: David MacLellan Chairman 118 Consolidated and Company statements of cash flows For the year ended 31 March 2025 Group and Company Year ended 31 March 2025 Year ended 31 March 2024 Note £000 £000 Operating activities Profit/(loss) for the year 38,155 (1,502) Net finance costs 7,359 8,048 Valuation (increase)/decrease of investment property 10 (11,211) 26,972 Impact of lease incentives 10 (1,470) (2,105) Amortisation of right-of-use asset 7 7 Profit on disposal of investment property (444) (1,418) Depreciation 285 133 Cash flows from operating activities before changes in working capital and provisions 32,681 30,135 (Increase)/decrease in trade and other receivables (1,871) 418 Increase in trade and other payables and deferred income 1,286 357 Cash generated from operations 32,096 30,910 Interest and other finance charges 7 (7,068) (7,694) Net cash inflows from operating activities 25,028 23,216 Investing activities Capital expenditure on investment property 10 (6,843) (17,034) Purchase of property, plant and equipment 11 (1,326) (1,977) Disposal of investment property and assets held-for-sale 15,050 18,176 Costs of disposal of investment property (331) (134) Interest and finance income received 6 127 78 Net cash inflows/(outflows) from investing activities 6,677 (891) Financing activities New borrowings 16 - 5,500 Repayment of borrowings and origination costs 16 (4,078) (744) Dividends paid 9 (27,223) (24,247) 119 Net cash outflow from financing activities (31,301) (19,491) Net increase in cash and cash equivalents 404 2,834 Cash and cash equivalents at start of the year 9,714 6,880 Cash and cash equivalents at end of the year 10,118 9,714 120 Consolidated and Company statement of changes in equity For the year ended 31 March 2025 Note Issued capital £000 Merger reserve £000 Share premium £000 Revaluation reserve £000 Retained earnings £000 Total equity £000 Group and Company As at 31 March 2023 4,409 18,931 250,970 - 163,259 437,569 Loss for the year - - - - (1,502) (1,502) Total comprehensive loss for year - - - - (1,502) (1,502) Transactions with owners of the Company, recognised directly in equity Dividends 9 - - - - (24,247) (24,247) As at 31 March 2024 4,409 18,931 250,970 - 137,510 411,820 Profit for the year - - - - 38,155 38,155 Revaluation of property, plant and equipment 11 - - - 714 - 714 Total comprehensive profit for year - - - 714 38,155 38,869 Transactions with owners of the Company, recognised directly in equity Dividends 9 - - - - (27,223) (27,223) As at 31 March 2025 4,409 18,931 250,970 714 148,442 423,466 121 Notes to the financial statements for the year ended 31 March 2025 1. Corporate information The Company is a public limited company incorporated and domiciled in England and Wales, whose shares are publicly traded on the London Stock Exchange plc’s main market for listed securities. The consolidated and parent company financial statements have been prepared on a historical cost basis, except for the revaluation of investment property, and are presented in pounds sterling with all values rounded to the nearest thousand pounds (£000), except when otherwise indicated. The consolidated financial statements were authorised for issue in accordance with a resolution of the Directors on 11 June 2025. 2. Basis of preparation and accounting policies 2.1. Basis of preparation The consolidated financial statements and the separate financial statements of the parent company have been prepared in accordance with United Kingdom adopted international accounting standards and International Financial Reporting Standards (IFRSs). The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its own statement of comprehensive income. Certain statements in this report are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Accordingly, undue reliance should not be placed on forward looking statements. 2.2. Basis of consolidation The consolidated financial statements consolidate those of the parent company and its subsidiaries. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Custodian Real Estate Limited has a reporting date in line with the Company. All transactions and balances between group companies are eliminated on consolidation, including unrealised gains and losses on transactions between group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of the subsidiary are adjusted 33 Electricity is being both imported by the tenant and exported to the grid. 122 where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date the Company gains control up to the effective date when the Company ceases to control the subsidiary. Change in accounting policy The Company has changed its accounting policy for PV from cost less accumulated depreciation to fair value, as determined by the Company’s independent valuers, with effect from 31 March 2025. This change in policy has been made because at 31 March 2025 certain of the Company’s PV arrays have been fully operational 33 for at least 12 months, providing accurate annual revenue and cost data which incorporates: • Energy production per panel; • The import/export ratio (based on tenant usage and all metering being operational); and • Seasonal/local changes in both of the above (hours of daylight, tenant seasonality, panel maintenance). The fair value of PV arrays with less than 12 months of operational data is considered to be cost less accumulated depreciation. The Board believes that fair valuing PV, using reliable data that has become available this year, better reflects the Company’s investment in PV assets within its net asset value. The impact of this change in accounting policy on the current financial year is: 31 March 2025 £000 Consolidated statement of comprehensive income Increase in profit for the financial year - Consolidated and Company statements of financial position Increase in net assets 714 In subsequent years, this revaluation surplus will be depreciated thus ultimately recognised within profit or loss. Independent valuations of the Company’s PV portfolio were not available at 31 March 2024 so this change in accounting policy has been applied with effect from 31 March 2025, with no changes made to comparative numbers as allowed by IAS 16 – ‘ Property, plant and equipment ’ . 123 2.3. Business combinations Where property is acquired, via corporate acquisitions or otherwise, the substance of the assets and activities of the acquired entity are considered in determining whether the acquisition represents a business combination or an asset purchase under IFRS 3 - Business Combinations. A business combination is a transaction or event in which an acquirer obtains control of one or more businesses. A business is defined in IFRS 3 as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other income from ordinary activities. To assist in determining whether a purchase of investment property via corporate acquisition or otherwise meets the definition of a business or is the purchase of a group of assets, the group will apply the optional concentration test in IFRS 3 to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the concentration test is not met the group applies judgement to assess whether acquired set of activities and assets includes, at a minimum, an input and a substantive process by applying IFRS 3:B8 to B12D. Where such acquisitions are not judged to be a business combination, due to the asset or group of assets not meeting the definition of a business, they are accounted for as asset acquisitions and the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based on their relative fair values at the acquisition date. Accordingly no goodwill or additional deferred taxation arises. Under the acquisition accounting method, the identifiable assets, liabilities and contingent liabilities acquired are measured at fair value at the acquisition date. The consideration transferred is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control of the acquiree. 2.4. Application of new and revised International Financial Reporting Standards During the year the Company adopted the following new standards with no impact on reported financial performance or position: • Amendments to IAS 1 - ‘Presentation of Financial Statements’ clarifies that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period and not expectations of, or actual events after, the reporting date. • Amendments to IFRS 16 - ‘Lease Liability in a Sale and Leaseback’ specifies the requirements that a seller - lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller- lessee does not recognise any amount of the gain or loss that relates to the right of use it retains. 124 The following new and revised accounting standards not yet effective: • IFRS 18 - ‘Presentation and Disclosures in Financial Statements’. This standard on presentation and disclosure replaces IAS 1, with a focus on updates to the statement of profit or loss. • IFRS 19 – ‘Subsidiaries without Public Accountability: Disclosures’. This reduces disclosure requirements that an eligible subsidiary entity is permitted to apply instead of the disclosure requirements in other IFRS Accounting Standards. • Amendments to IFRS 9 – ‘ Financial Instruments ’ and IFRS 7 – ‘ Financial Instruments: Disclosures ’ . The amendments provide clarity on the date of recognition and derecognition of certain financial instruments and amends/updates the disclosure required for some financial instruments. The Directors have yet to assess the full outcome of these new standards, amendments and interpretations; however, with the exception of IFRS 18, these other new standards, amendments and interpretations are not expected to have a significant impact on the Group’s financial statements. 2.5. Material accounting policies The material accounting policies adopted by the Group and Company and applied to these financial statements are set out below. Going concern The Directors believe the Company is well placed to manage its business risks successfully and the Company’s projections show that it should be able to operate within the level of its current financing arrangements for at least the 12 months from the date of approval of these financial statements , set out in more detail in the Directors’ report and Principal risks and uncertainties section of the Strategic report. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements. Income recognition Contractual revenues are allocated to each performance obligation of a contract and revenue is recognised on a basis consistent with the transfer of control of goods or services. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duties. 125 Rental income from operating leases on properties owned by the Company is accounted for on a straight-line basis over the term of the lease. Rental income excludes service charges and other costs directly recoverable from tenants which are recognised with in ‘income from recharges to tenants’. Amounts received from occupiers to terminate leases or to compensate for dilapidation work not carried out by the occupier is recognised in the statement of comprehensive income when the right to receive them arises, typically at the cessation of the lease. Lease incentives are recognised on a straight-line basis over the lease term. The initial direct costs incurred in negotiating and arranging an operating lease are recognised as an expense over the lease term on the same basis. Revenue and profits on the sale of properties are recognised on the completion of contracts. The amount of profit recognised is the difference between the sale proceeds and the carrying amount and costs of disposal. Finance income relates to bank interest receivable and amounts receivable on ongoing development funding contracts. Taxation The Group operates as a REIT and hence profits and gains from the property rental business are normally expected to be exempt from corporation tax. The tax expense represents the sum of the tax currently payable and deferred tax relating to the residual (non-property rental) business. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Investment property Investment property is held to earn rentals and/or for capital appreciation and is initially recognised at cost including direct transaction costs. Investment property is subsequently valued externally on a market basis at the reporting date and recorded at valuation. Any surplus or deficit arising on revaluing investment property is recognised in profit or loss in the year in which it arises. Any ultimate gains or shortfalls are measured by reference to previously published valuations and recognised in profit or loss, offset against any directly corresponding movement in fair value of the investment properties to which they relate. 126 Held-for-sale assets Non-current assets are classified as held-for-sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition, generally considered to be on unconditional exchange of contracts. N on-current assets classified as held for sale are valued externally on a market basis at the reporting date and recorded at valuation. Group undertakings Investments are included in the Company only statement of financial position at cost less any provision for impairment. Property, plant and equipment Electric vehicle chargers are stated at cost less accumulated depreciation and accumulated impairment loss. PV is valued under the revaluation model of IAS 16 – ‘ Property, plant and equipment . After initial recognition PV arrays whose fair value can be reliably established, assumed to be once an array has been operational for at least 12 months, are held at the fair value at the time of the revaluation less any subsequent accumulated depreciation and impairment losses. Fair value is determined by independent valuers and based on assumptions including future net income, capital expenditure and appropriate discount rates (yield). The fair value of assets which have not yet been operational for 12 months is considered equivalent to historical cost less accumulated depreciation (“ Net Book Value ” or “ NBV ”) . Valuation movements: • Above NBV will be recognised directly within equity (revaluation reserve); and • Below NBV will be recognised in profit or loss. Depreciation is recognised so as to write off the carrying value of assets (less their residual values) over their useful lives, using the straight-line method, on the following bases: EV chargers 10 years PV 30 years The depreciation charge for PV is: 127 • Included within profit or loss (classified as property operating expenditure) where depreciating historical cost; or • Offset against the revaluation reserve where depreciating the revalued amount. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The useful lives of PV cells have been reassessed at 1 April 2024 from 20 years to 30 years based on industry evidence. Cash and cash equivalents Cash and cash equivalents include cash in hand and on-demand deposits, and other short-term highly liquid investments that are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes and are readily convertible into a known amount of cash and are subject to an insignificant risk of changes in value. Other financial assets Financial assets and financial liabilities are recognised in the balance sheet when the Company becomes a party to the contractual terms of the instrument. The Company’s financial assets include cash and cash equivalents and trade and other receivables. Interest resulting from holding financial assets is recognised in profit or loss on an accruals basis. Trade receivables are initially recognised at their transaction price and subsequently measured at amortised cost as the business model is to collect the contractual cash flows due from tenants. An impairment provision is created based on expected credit l osses, which reflect the Company’s historical credit loss experience and an assessment of current and forecast economic conditions at the reporting date. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Share capital represents the nominal value of equity shares issued. Share premium represents the excess over nominal value of the fair value of the consideration received for equity shares, net of direct issue costs. 128 Retained earnings include all current and prior year results as disclosed in profit or loss. Retained earnings include realised and unrealised profits. Profits are considered unrealised where they arise from movements in the fair value of investment properties that are considered to be temporary rather than permanent. Revaluation reserve represents the unrealised fair value of PV assets in excess of their historical cost less accumulated depreciation. Borrowings Interest-bearing bank loans and overdrafts are recorded at the fair value of proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlements or redemption and direct issue costs, are accounted for on an accruals basis in profit or loss using the effective interest rate method and are included in accruals to the extent that they are not settled in the period in which they arise. Trade payables Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method. Leases Where an investment property is held under a leasehold interest, the headlease is initially recognised as an asset at cost plus the present value of minimum ground rent payments. The corresponding rental liability to the head leaseholder is included in the balance sheet as a liability. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the remaining lease liability. Segmental reporting An operating segment is a distinguishable component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company’s chief operating decision maker (the Board) to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available. As the chief operating decision maker reviews financial information for, and makes decisions about the Com pany’s investment properties as a portfolio, the Directors have identified a single operating segment, that of investment in commercial properties. 129 2.6. Key sources of judgements and estimation uncertainty The preparation of the financial statements requires the Company to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates and assumptions, which are based on the Directors’ best j udgement at the date of preparation of the financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. Judgements No significant judgements have been made in the process of applying the Group’s and parent company's accounting policies, other than those involving estimations, that have had a significant effect on the amounts recognised within the financial statements. Estimates The accounting estimate with a significant risk of a material change to the carrying values of assets and liabilities within the next year relates to the valuation of investment property. Investment property is valued at the reporting date at fair value. Where an investment property is being redeveloped the property continues to be treated as an investment property. Surpluses and deficits attributable to the Company arising from revaluation are recognised in profit or loss. Valuation surpluses reflected in retained earnings are not distributable until realised on sale. In making its judgement over the valuation of properties, the Company considers valuations performed by the independent valuers in determining the fair value of its investment properties. The valuers make reference to market evidence of transaction prices for similar properties. The valuations are based upon assumptions including future rental income, anticipated capital expenditure and maintenance costs (particularly in the context of mitigating the impact of climate change) and appropriate discount rates (ie property yields). The key sources of estimation uncertainty within these inputs above are future rental income and property yields. Reasonably possible changes to these inputs across the portfolio would have a material impact on its valuation. The valuers have considered the impact of climate change which has not had a material impact on the valuation. Further detail on the Company’s climate related risks are set out in the Asset Management and Sustainability report. The sensitivity analysis in Note 10 details the expected movements in the valuation of investment properties and PV if the equivalent yield at 31 March 2024 is increased or decreased by 0.25% and if the ERV is increased or decreased by 5.0%, which the Board believes are reasonable sensitivities to apply given historical changes. 130 3. Earnings per ordinary share Basic EPS amounts are calculated by dividing net profit for the year by the weighted average number of ordinary shares outstanding during the year. Diluted EPS amounts are calculated by dividing the net profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. There are no dilutive instruments in issue. Any shares issued after the year end are disclosed in Note 21. The Company is a FTSE EPRA/NAREIT index series constituent and EPRA performance measures have been disclosed to facilitate comparability with the Company’s peers through consistent reporting of key performance measures. EPRA has issued recommended bases for the calculation of EPS as alternative indicators of performance. Year Year ended ended 31 March 31 March Group 2025 2024 Net profit/(loss) for the year (£000) 38,155 (1,502) Net (gains)/losses on investment property and depreciation (£000) (11,369) 25,687 Abortive acquisition costs - 1,557 EPRA net profit attributable to equity holders of the Company (£000) 26,786 25,742 Weighted average number of ordinary shares: Issued ordinary shares at start of the year (thousands) 440,850 440,850 Effect of shares issued during the year (thousands) - - Basic and diluted weighted average number of shares (thousands) 440,850 440,850 Basic and diluted EPS (p) 8.7 (0.3) Basic and diluted EPRA EPS (p) 6.1 5.8 131 4. Revenue Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Gross rental income from investment property 42,828 42,194 Income from recharges to tenants 3,562 3,280 Income from dilapidations 1,131 574 Other income 476 195 47,997 46,243 5. Operating profit Operating profit is stated after (crediting)/charging: Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Profit on disposal of investment property (444) (1,418) Investment property valuation (increase)/decrease (11,211) 26,972 Fees payable to the Company’s auditor and its associates for the audit of the Company’s annual financial statements 171 163 Fees payable to the Company’s auditor and its associates for the interim review 39 37 Administrative fee payable to the Investment Manager 494 511 Directly incurred operating expenses of vacant rental property 1,886 1,968 Directly incurred operating expenses of let rental property 2,081 1,124 Amortisation of right-of-use asset 7 7 Fees payable to the Company’s auditor, Deloitte, are further detailed in the Audit and Risk Committee report. 132 6. Finance income Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Bank interest 127 78 127 78 7. Finance costs Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Amortisation of arrangement fees on debt facilities 418 432 Other finance costs 443 113 Bank interest 6,625 7,581 7,486 8,126 133 8. Income tax The tax charge assessed for the year is lower than the standard rate of corporation tax in the UK during the year of 25.0% (2024: 25.0%). The differences are explained below: Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Profit/(loss) before income tax 38,155 (1,502) Tax charge on profit at a standard rate of 25.0% 9,539 (376) Effects of: REIT tax exempt rental profits and gains (9,539) 376 Income tax expense - - Effective income tax rate 0.0% 0.0% The Company operates as a REIT and hence profits and gains from the property rental business are normally exempt from corporation tax. 134 9. Dividends Year Year ended ended 31 March 31 March 2025 2024 Group and Company £000 £000 Interim dividends paid on ordinary shares relating to the quarter ended: Prior year - 31 March 2024: 1.375p 6,062 6,062 Special equity dividends paid on ordinary shares relating to the year ended: - 31 March 2024: 0.3p 1,322 - Current year - 30 June 2024: 1.5p (2023: 1.375p) 6,613 6,061 - 30 September 2024: 1.5p (2023: 1.375p) 6,613 6,062 - 31 December 2024: 1.5p (2023: 1.375p) 6,613 6,062 27,223 24,247 The Company paid a fourth interim dividend relating to the quarter ended 31 March 2025 of 1.5p per ordinary share (£6.6m) on Friday 30 May 2025 which has not been included as liabilities in these financial statements. 135 10. Investment property and assets held for sale Assets held-for-sale At 31 March At 31 March Group and Company 2025 2024 £000 £000 Balance at the start of the year 11,000 - Disposals (11,000) - Reclassification from investment property - 11,000 Balance at the end of the year - 11,000 Investment property Company £000 Group and Company At 31 March 2023 613,587 Impact of lease incentives and lease costs 2,105 Amortisation of right-of-use asset (7) Capital expenditure 17,034 Disposals (16,625) Valuation decrease (26,972) Reclassification as held-for-sale (11,000) At 31 March 2024 578,122 Impact of lease incentives and lease costs 1,470 Amortisation of right-of-use asset (7) Capital expenditure 6,843 Disposals (3,275) Valuation increase 11,211 At 31 March 2025 594,364 £490.9m (2024: £486.8m) of investm ent property was charged as security against the Company’s borrowings at the year end. £0.6m (2024: £0.6m) of investment property comprises right-of-use assets. 136 The carrying value of investment property at 31 March 2025 comprises £506.5m freehold (2024: £493.0m) and £87.9m leasehold property (2024: £85.1m). The aggregate historical cost of investment property and assets held- for-sale was £629.8m (2024: £637.6m). Investment property is stated at the Directors ’ estimate of its 31 March 2025 fair value. Savills (UK) Limited (“Savills”) and Knight Frank LLP (“KF”), professionally qualified independent valuers, each valued approximately half of the property portfolio as at 31 March 2025 in accordance with the Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors (“RICS”). Savills and KF have recent experience in the relevant locations and categories of the property being valued. Investment property has been valued using the investment method which involves applying a yield to rental income streams. Inputs include yield, current rent and ERV. For the year end valuation, the following inputs were used: Valuation Weighted Weighted 31 March average average ERV 2025 passing rent range Sector £000 (£ per sq ft) (£ per sq ft) Equivalent yield Topped-up NIY Industrial 298.3 6.1 4 .75 – 14.9 6.9% 5.5% Retail warehouse 127.3 11.6 6.1 – 22.4 7.6% 7.5% Other 78.2 11.3 2.7 – 80.0 8.4% 7.7% Office 57.7 16.8 8.5 – 38.0 11.1% 8.1% High street retail 32.9 19.3 3.7 – 67.0 8.4% 9.4% Drive- through restaurants’ ERV per sq ft are based on building floor area rather than area inclusive of drive - through lanes. Valuation reports are based on both information provided by the Company eg current rents and lease terms, which are derived from the Company’s financial and property management systems and are subject to the Company’s overall control environment, and assumptions applied by the valuers eg ERVs, expected capital expenditure and yields. These assumptions are based on market observation and the valuers’ professional judgement. In estimating the fair value of each property, the highest and best use of the properties is their current use. All other factors being equal, a higher equivalent yield would lead to a decrease in the valuation of investment property, and an increase in the current or estimated future rental stream would have the effect of increasing capital value, and vice versa. There are interrelationships between unobservable inputs which are partially determined by market conditions, which could impact on these changes, but the table below presents the sensitivity of the investment property valuations to changes in the most significant assumptions underlying their 137 valuation, being equivalent yield and ERV. The Board believes these are reasonable sensitivities given historical changes. Group and Company Year Year ended ended 31 March 31 March 2025 2024 £000 £000 Increase in equivalent yield of 0.25% 34,941 21,627 Decrease in equivalent yield of 0.25% (30,975) (20,134) Increase of 5% in ERV 1,864 1,807 Decrease of 5% in ERV (1,834) (1,754) 11. Property, plant and equipment PV cells EV chargers Total Group and Company £000 £000 £000 Cost/valuation At 31 March 2024 2,076 1,126 3,202 Additions 1,326 - 1,326 Valuation increase net of depreciation eliminated on revaluation 406 - 406 At 31 March 2025 3,808 1,126 4,934 Depreciation At 31 March 2024 (123) (122) (245) Depreciation (185) (100) (285) Eliminated on revaluation 308 (1) 307 Accumulated at 31 March 2025 - (223) (223) Net book value at 31 March 2025 3,808 903 4,711 138 PV cells EV chargers Total Group and Company £000 £000 £000 Cost At 31 March 2023 - - - Additions 2,076 1,126 3,202 At 31 March 2024 2,076 1,126 3,202 Depreciation At 31 March 2023 - - - Depreciation (123) (122) (245) Accumulated at 31 March 2024 (123) (122) (245) Net book value at 31 March 2024 1,953 1,004 2,957 12. Investments Shares in subsidiaries The Company’s non-trading UK subsidiary has claimed the audit exemption available under Section 480 of the Companies Act 2006. The Company’s registered office is also the registered office of each UK subsidiary. Company Country of 31 31 registration Ordinary March March Company and Principal shares 2025 2024 Name number incorporation activity held £000 £000 Custodian REIT Limited 08882372 England and Wales Non-trading 100% - - - - 139 13. Trade and other receivables 31 31 Group and Company March March 2025 2024 £000 £000 Falling due in less than one year: Trade receivables before expected credit loss provision 4,387 1,911 Expected credit loss provision (627) (855) 3,760 1,056 Other receivables 1,146 2,081 Prepayments and accrued income 295 193 5,201 3,330 The Company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk, for example a deterioration in a tenant’s or sector’s outlook or rent payment performance, and revises them as appropriate to ensure that the criteria are capable of identifying significant increases in credit risk before amounts become past due. Tenant rent deposits of £1.6m (2024: £1.7m) are held as collateral against certain trade receivable balances. The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable: • When there is a breach of financial covenants by the debtor; or • Available information indicates the debtor is unlikely to pay its creditors. Such balances are provided for in full. For remaining balances the Company has applied an expected credit loss (“ECL”) matrix based on its experience of collecting rent arrears. The majority of tenants are invoiced for rental income quarterly in advance and are issued with invoices before the relevant quarter starts. Invoices become due on the first day of the rent quarter and are considered past due if payment is not received by this date. Other receivables are considered past due when the given terms of credit expire. 140 Group and Company 31 March 31 March 2025 2024 Expected credit loss provision £000 £000 Opening balance 855 1,143 Increase/(decrease) in provision relating to trade 196 (241) receivables that are credit-impaired Utilisation of provisions (424) (47) Closing balance 627 855 The ageing of receivables considered credit impaired is as follows: Group and Company 31 March 31 March 2025 2024 £000 £000 0 to 3 months 106 288 3 – 6 months 40 - Over 6 months 551 567 Closing balance 697 855 141 14. Trade and other payables Group and Company 31 March 31 March 2025 2024 £000 £000 Falling due in less than one year: Trade and other payables 2,603 1,442 Social security and other taxes 760 830 Accruals 3,601 4,079 Rental deposits 65 1,732 7,029 8,083 Falling due in more than one year: Rental deposits 1,521 - Other creditors 566 569 2,151 569 The Directors consider that the carrying amount of trade and other payables approximates to their fair value. Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. For most suppliers interest is charged if payment is not made within the required terms. Thereafter, interest is chargeable on the outstanding balances at various rates. The Company has financial risk management policies in place to ensure that all payables are paid within the credit timescale. The ageing of rental deposits has been reassessed in the year to align with underlying lease agreements. 15. Cash and cash equivalents Group and Company 31 March 31 March 2025 2024 £000 £000 Cash and cash equivalents 10,118 9,714 Cash and cash equivalents at 31 March 2025 include £2.2m (2024: £2.5m) of restricted cash comprising: £1.6m (2024: £1.7m) rental deposits held on behalf of tenants, £0.6m (2024: £0.6m) retentions held in respect of development fundings and £nil (2024: £0.2m) disposal deposit. 142 16. Borrowings The table below sets out changes in liabilities arising from financing activities during the year. Costs Group and Company incurred in the arrangement Borrowings of borrowings Total Falling due within one year: £000 £000 £000 At 31 March 2023 - - - Repayment of borrowings - - - Amortisation of arrangement fees - - - At 31 March 2024 - - - Reclassification 20,000 (11) 19,989 Repayment of borrowings - - - Amortisation of - - - arrangement fees At 31 March 2025 20,000 (11) 19,989 Falling due in more than one year: At 31 March 2023 173,500 (1,398) 172,102 Additional 5,500 - 5,500 borrowings Arrangement fees - (744) (744) incurred Amortisation of - 432 432 arrangement fees At 31 March 2024 179,000 (1,710) 177,290 Reclassification (20,000) 11 (19,989) Repayment of (4,000) - (4,000) borrowings Arrangement fees - (78) (78) incurred Amortisation of - 418 418 arrangement fees At 31 March 2025 155,000 (1,359) 153,641 143 On 23 January 2025, the Company and Lloyds agreed to extend the term of the RCF by one year to expire on 10 November 2027. An option remains in place to extend the term by a further year to 202 8, subject to Lloyds’ consent. At the year end the Company had the following facilities available: • A £50m RCF with Lloyds with interest of between 1.62% and 1.92% above SONIA and is repayable on 10 November 2027. The RCF limit can be increased to £75 m with Lloyds’ consent, with £ 39m drawn at the year end. Since the year end, the RCF limit has been increased to £60m; • A £20m term loan with Scottish Widows plc with interest fixed at 3.935% and is repayable on 13 August 2025; • A £45m term loan with Scottish Widows plc with interest fixed at 2.987% and is repayable on 5 June 2028; and • A £75m term loan facility with Aviva comprising: - A £35m tranche repayable on 6 April 2032, with fixed annual interest of 3.02%; - A £15m tranche repayable on 3 November 2032 with fixed annual interest of 3.26%; and - A £25m tranche repayable on 3 November 2032 with fixed annual interest of 4.10%. Each facility has a discrete security pool, comprising a number of the Company’s individual properties, over which the relevant lender has security and covenants: • The maximum LTV of each discrete security pool is either 45% and 50%, with an overarching covenant on the Company’s property portfolio of a maximum of either 35% or 40% LTV; and • Historical interest cover, requiring net rental income from each discrete security pool, over the preceding three months, to exceed either 200% or 250% of the facility’s quarterly interest liability. The Company’s debt facilities contain market -standard cross-guarantees such that a default on an individual facility will result in all facilities falling into default. 144 17. Share capital Group and Company Ordinary shares Issued and fully paid share capital of 1p £000 At 1 April 2023, 31 March 2024 and 31 March 2025 440,850,398 4,409 Rights, preferences and restrictions on shares All ordinary shares carry equal rights and no privileges are attached to any shares in the Company. All the shares are freely transferable, except as otherwise provided by law. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. At the AGM of the Company held on 8 August 2024, the Board was given authority to issue up to 146,950,133 shares, pursuant to section 551 of the Companies Act 2006 (“the Authority”). The Authority is intended to satisfy market demand for the ordinary shares and raise further monies for investment in a ccordance with the Company’s investment policy. The Authority expires on the earlier of 15 months from 8 August 2024 and the subsequent AGM, due to take place on 9 September 2025. Since 8 August 2024, 22.9m ordinary shares have been issued in connection with the acquisition of Merlin. In addition, the Company was granted authority to make market purchases of up to 44,085,039 ordinary shares under section 701 of the Companies Act 2006. No market purchases of ordinary shares have been made. 145 Group and Company Share Retained Revaluation premium Merger earnings reserve account reserve Other reserves £000 £000 £000 £000 At 1 April 2023 163,259 - 250,970 18,931 Loss for the year (1,502) - - - Dividends paid (24,247) - - - At 31 March 2024 137,510 - 250,970 18,931 Revaluation of PPE - 714 - - Profit for the year 38,155 - - Dividends paid (27,223) - - At 31 March 2025 148,442 714 250,970 18,931 The nature and purpose of each reserve within equity are: • Share premium - amounts subscribed for share capital in excess of nominal value less any associated issue costs that have been capitalised. • Revaluation reserve - the unrealised fair value of PV assets in excess of their historical cost less accumulated depreciation. • Retained earnings - all other net gains and losses and transactions with owners (eg dividends) not recognised elsewhere. • Merger reserve - a non-statutory reserve that is credited instead of a company's share premium account in circumstances where merger relief under section 612 of the Companies Act 2006 is obtained. 146 18. Commitments and contingencies Company as lessor Operating leases, in which the Company is the lessor, relate to investment property owned by the Company with lease terms of between 0 and 21 years. The aggregated future minimum rentals receivable under all non- cancellable operating leases are: 31 March 31 March 2025 2024 Group and Company £000 £000 Not later than one year 38,406 39,751 Year 2 35,206 34,984 Year 3 29,810 31,620 Year 4 24,353 26,113 Year 5 19,380 19,946 Later than five years 77,434 74,059 224,589 226,473 The following table presents rent amounts reported in revenue: 31 March 31 March Group and Company 2025 2024 £000 £000 Lease income on operating leases 42,587 41,926 Therein lease income relating to variable lease 241 268 payments that do not depend on an index or rate 42,828 42,194 147 19. Related party transactions Save for transactions described below, the Company is not a party to, nor had any interest in, any other related party transaction during the year. Transactions with directors Each of the directors is engaged under a letter of appointment with the Company and does not have a service contract with the Company. During the year, the terms of the Directors’ appointments were amended such that each director is required to retire by rotation and seek re-election annually (2024: at least every three years). Each director’s appointment under their respective letter of appointment is terminable immediately by either party (the Company or the director) giving written notice and no compensation or benefits are payable upon termination of office as a director of the Company becoming effective. Nathan Imlach is Chief Strategic Adviser of Mattioli Woods, the parent company of the Investment Manager. As a result, Nathan Imlach is not independent. The Company Secretary, Ed Moore, is also a director of the Investment Manager. Compensation paid to the directors, who are also considered ‘ key management personnel ’ in addition to the key Investment Manager personnel, is disclosed in the Remuneration report. The directors' remuneration report also satisfies the disclosure requirements of paragraph 1 of Schedule 5 to the Accounting Regulations. Project Merlin Since the year end the Company has acquired Merlin and as part of this transaction the Company is due to pay Mattioli Woods an introducer’s fee of £ 0.2m and Custodian Capital a transaction fee of £0.06m. The vendors of Merlin are advised clients of Mattioli Woods. Investment Management Agreement The Investment Manager is engaged as AIFM under an IMA with responsibility for the management of the Company’s assets, subject to the overall supervision of the Directors. The Investment Manager manages the Company’s investments in accordance with the policies laid down by the Board and the investment restrictions referred to in the IMA. The Investment Manager also provides day-to-day administration of the Company and acts as secretary to the Company, including maintenance of accounting records and preparing the annual and interim financial statements of the Company. 148 Annual management fees payable to the Investment Manager under the IMA are: • 0.9% of the NAV of the Company as at the relevant quarter day which is less than or equal to £200m divided by 4; • 0.75% of the NAV of the Company as at the relevant quarter day which is in excess of £200m but below £500m divided by 4; • 0.65% of the NAV of the Company as at the relevant quarter day which is in excess of £500m but below £750m divided by 4; plus • 0.55% of the NAV of the Company as at the relevant quarter day which is in excess of £750m divided by 4. Administrative fees payable to the Investment Manager under the IMA are: • 0.125% of the NAV of the Company as at the relevant quarter day which is less than or equal to £200m divided by 4; • 0.115% of the NAV of the Company as at the relevant quarter day which is in excess of £200m but below £500m divided by 4; • 0.02% of the NAV of the Company as at the relevant quarter day which is in excess of £500m but below £750m divided by 4; plus • 0.015% of the NAV of the Company as at the relevant quarter day which is in excess of £750m divided by 4. The IMA is terminable by either party by giving not less than 12 months’ prior written notice to the other. The IMA may also be terminated on the occurrence of an insolvency event in relation to either party, if the Investment Manager is fraudulent, grossly negligent or commits a material breach which, if capable of remedy, is not remedied within three months, or on a force majeure event continuing for more than 90 days. The Investment Manager receives a marketing fee of 0.25% (2024: 0.25%) of the aggregate gross proceeds from any issue of new shares in consideration of the marketing services it provides to the Company. During the year the Investment Manager charged the Company £3.9m (2024: £4.0m) comprising £3.4m (2024: £3.5m) in respect of annual management fees and £0.5m (2024: £0.5m) in respect of administrative fees. During the year the Company appointed Maven, a subsidiary of Mattioli Woods, as Company Secretarial Adviser, which charges the Company an annual fee of £0.02m for Company Secretarial Services. 149 Mattioli Woods arranges insurance on behalf of the Company’s tenants through an insurance broker and the Investment Manager is paid a commission by the Company’s tenants for administering the policy. On 4 September 2024 100% of the share capital of Mattioli Woods was acquired Tiger Bidco Limited, a wholly- owned subsidiary of vehicles advised and managed by Pollen Street Capital Limited. 20. Financial risk management Capital risk management The Company manages its capital to ensure it can continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance within the parameters of its investment policy. The capital structure of the Company consists of debt, which includes the borrowings disclosed below, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued ordinary share capital, share premium and retained earnings. Net gearing The Board reviews the capital structure of the Company on a regular basis. As part of this review, the Board considers the cost of capital and the risks associated with it. The Company has a medium-term target net gearing ratio of 25% determined as the proportion of debt (net of unrestricted cash) to its property. The net gearing ratio at the year-end was 27.9% (2024: 29.2%). Externally imposed capital requirements The Company is not subject to externally imposed capital requirements, although there are restrictions on the level of interest that can be paid due to conditions imposed on REITs. Financial risk management The Company seeks to minimise the effects of interest rate risk, credit risk, liquidity risk and cash flow risk by using fixed and floating rate debt instruments with varying maturity profiles, at low levels of net gearing. Interest rate risk management 150 The Company’s activities expose it primarily to the financial risks of increases in interest rates, as it borrows funds at floating interest rates. The risk is managed by maintaining: • An appropriate balance between fixed and floating rate borrowings; • A low level of net gearing; and • An RCF whose flexibility allows the Company to manage the risk of changes in interest rates by paying down variable borrowings using the proceeds of equity issuance, property sales or arranging fixed-rate debt. The Board periodically considers the availability and cost of hedging instruments to assess whether their use is appropriate and also considers the maturity profile of the Company’s borrowings. Interest rate sensitivity analysis Interest rate risk arises on interest payable on the RCF only, as interest on all other debt facilities is payable on a fixed rate basis. At 31 March 2025, the RCF was drawn at £35m (2024: £39m). Assuming this amount was outstanding for the whole year and based on the exposure to interest rates at the reporting date, if SONIA had been 1.0% higher/lower and all other variables were constant, the Company’s profit for the year ended 31 March 2025 would decrease/increase by £0.4m (2024: £0.4m). Market risk management The Company manages its exposure to market risk by holding a portfolio of investment property diversified by sector, location and tenant. Market risk sensitivity Market risk arises on the valuation of the Company’s property portfolio in complying with its bank loan covenants (Note 16). The valuation of the Company’s property portfolio would have to fall by 20% (2024: 17%) for the Company to breach its overall borrowing covenant. Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The Company’s credit risk is primarily attributable to its trade receivables and cash balances. The amounts included in the statement of financial position are net of allowances for bad and doubtful debts. An 34 Source: Moody’s . 151 allowance for impairment is made where a debtor is in breach of its financial covenants, available information indicates a debtor can’t pay or where balances are significantly past due. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The maximum credit risk on financial assets at 31 March 2025, which comprise trade receivables plus unrestricted cash, was £11.7m (2024: £8.3m). The Company has no significant concentration of credit risk, with exposure spread over a large number of tenants covering a wide variety of business types. Further detail on the Company’s credit risk management process is included within the Strategic report. Cash of £10.1m (2024: £9.7m) is held with Lloyds Bank plc which has a credit rating of A1 34 . Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long -term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profile of financial assets and liabilities. The following tables detail the Company’s contractual maturity for its financial liabilities. The table has been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. 152 The table includes both interest and principal cash flows. 31 March 31 March 2025 31 March 31 March 2025 3 months – 2025 2025 Interest rate 0-3 months 1 year 1-5 years 5 years + Group and Company % £000 £000 £000 £000 Trade and other payables N/a 7,790 - 151 416 Borrowings: Variable rate 6.080 532 1,596 42,696 - Fixed rate 3.935 197 20,295 - - Fixed rate 2.987 336 1,008 47,939 - Fixed rate 3.020 264 793 4,228 37,134 Fixed rate 3.260 122 367 1,956 16,271 Fixed rate 4.100 154 461 2,460 26,599 9,395 24,520 99,430 80,420 31 March 31 March 2024 31 March 31 March 2024 3 months – 2024 2024 Interest rate 0-3 months 1 year 1-5 years 5 years + Group and Company % £000 £000 £000 £000 Trade and other payables N/a 5,922 - 151 420 Borrowings: Variable rate 6.9 673 2,018 46,041 - Fixed rate 3.935 197 590 20,295 - Fixed rate 2.987 336 1,008 49,283 - Fixed rate 3.020 264 793 4,228 38,191 Fixed rate 3.260 122 367 1,956 16,760 Fixed rate 4.100 154 461 2,460 27,214 7,668 5,237 124,414 82,585 153 Fair values The fair values of financial assets and liabilities are not materially different from their carrying values in the financial statements. The fair value hierarchy levels are as follows: • Level 1 – quoted prices (unadjusted) in active markets for identical assets and liabilities; • Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and • Level 3 – inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). There have been no transfers between Levels 1, 2 and 3 during the year. The main methods and assumptions used in estimating the fair values of financial instruments and investment property are detailed below. Investment property and assets held-for-sale – level 3 Fair value of PV is based on valuations provided by independent firms of valuers, which use the inputs set out in Note 10. These values were determined after having taken into consideration recent market transactions for similar properties in similar locations to the investment properties held by the Company. The fair value hierarchy of investment property is level 3. At 31 March 2024 , the fair value of the Company’s investment properties and assets held-for-sale was £594.4m (2024: £589.1m). PV – level 3 Fair value is based on valuations provided by independent firms of chartered surveyors and registered appraisers, which use the inputs set out in Note 11. These values were determined after having taken into consideration an appropriate yield and the net income from each array. The fair value hierarchy of PV is level 3. At 31 March 2025, the fair value of the Company’s PV was £3.8m (2024: £2.0m). Interest bearing loans and borrowings – level 3 At 31 March 2025 the gross value of the Company’s loans with Lloyds, SWIP and Aviva all held at amortised cost was £175.0m (2024: £179.0m). The difference between the carrying value of Company’s loans and their fair value is detailed in Note 22. 154 Trade and other receivables/payables – level 3 The carrying amount of all receivables and payables deemed to be due within one year are considered to reflect their fair value. 21. Events after the reporting date Dividends On Friday 30 May 2025 the Company paid a fourth quarterly interim dividend per share of 1.5p. Property disposals Since the year end the Company has sold: • Part-let offices in Cheadle for £4.0m; and • Fully-let offices in Cheadle for £2.9m. Acquisitions On 30 May 2025 the Company completed the corporate acquisition of Merlin Properties Limited for initial consideration of 22.9m new ordinary shares in the Company. Based on the nature of the acquisition it does not fall within the scope of IFRS 3 Business Combinations and the assets acquired were purchased at fair value. The transaction was financed by way of a share for share exchange. 155 22. Alternative performance measures NAV per share total return An alternative measure of performance taking into account both capital returns and dividends by assuming dividends declared are reinvested at NAV at the time the shares are quoted ex-dividend, shown as a percentage change from the start of the year. Group Calculation Year ended 31 March 2025 Year ended 31 March 2024 Net assets (£000) 423,466 411,820 Shares in issue at 31 March (thousands) 440,850 440,850 NAV per share at the start of the year (p) A 93.4 99.3 Dividends per share paid during the year (p) B 6.175 5.5 NAV per share at the end of the year (p) C 96.1 93.4 NAV per share total return (C-A+B)/A 9.5% (0.4%) Share price total return An alternative measure of performance taking into account both share price returns and dividends by assuming dividends declared are reinvested at the ex-dividend share price, shown as a percentage change from the start of the year. Group Calculation Year ended 31 March 2025 Year ended 31 March 2024 Share price at the start of the year (p) A 81.4 89.2 Dividends per share paid during the year (p) B 6.175 5.5 Share price at the end of the year (p) C 76.2 81.4 Share price total return (C-A+B)/A 1.2% (2.6%) 156 Dividend cover The extent to which dividends relating to the year are supported by recurring net income. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Dividends paid relating to the year 19,838 18,185 Dividends approved relating to the year 6,613 7,384 Dividends relating to the year 26,451 25,569 Profit/(loss) after tax 38,155 (1,502) One-off costs - 1,557 Net (gains)/losses on investment property and depreciation (11,369) 25,687 Recurring net income 26,786 25,742 Dividend cover 101.3% 100.7% 157 Weighted average cost of debt The interest rate payable on bank borrowings at the year end weighted by the amount of borrowings at that rate as a proportion of total borrowings. 31 March 2025 Amount drawn £m Interest rate Weighting RCF 35.0 6.080% 1.22% Total variable rate 35.0 SWIP £20m loan 20.0 3.935% 0.77% SWIP £45m loan 45.0 2.987% 0.45% Aviva • £35m tranche 35.0 3.020% 0.60% • £15m tranche 15.0 3.260% 0.28% • £25m tranche 25.0 4.100% 0.59% Total fixed rate 140.0 Weighted average drawn facilities 175.0 3.91% 31 March 2024 Amount drawn £m Interest rate Weighting RCF 39.0 6.900% 1.50% Total variable rate 39.0 SWIP £20m loan 20.0 3.935% 0.44% SWIP £45m loan 45.0 2.987% 0.75% Aviva £35m tranche 35.0 3.020% 0.59% • £15m tranche 15.0 3.260% 0.27% • £25m tranche 25.0 4.100% 0.57% Total fixed rate 140.0 Weighted average rate on drawn facilities 179.0 4.13% 158 Net gearing Gross borrowings less cash (excluding restricted cash), divided by portfolio 35 value. This ratio indicates whether the Company is meeting its investment objectives to target 25% loan-to-value in the medium-term with a maximum permitted level of 35%, to balance enhancing shareholder returns without facing excessive financial risk. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Gross borrowings 175,000 179,000 Cash (10,118) (9,714) Restricted cash 2,188 2,502 Net borrowings 167,070 171,788 Investment property 594,364 589,122 PV 3,808 - 598,172 589,122 Net gearing 27.9% 29.2% PV was not included in the net gearing calculation in the prior year. 35 Comprising investment property, assets held-for-sale and PV. 159 Ongoing charges A measure of the regular, recurring costs of running an investment company expressed as a percentage of average NAV, and indicates how effectively costs are controlled in comparison to other property investment companies. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Average quarterly NAV for the year 414,786 423,622 Expenses (excluding depreciation) 13,852 12,586 Operating expenses of rental property rechargeable to tenants (3,562) (3,280) Ongoing charges 10,290 9,306 Operating expenses of rental property directly incurred (4,891) (4,032) One-off costs - - Ongoing charges excluding direct property expenses 5,399 5,274 OCR 2.48% 2.20% OCR excluding direct property expenses 1.30% 1.24% depreciation was not deducted from total expenses in the prior year calculation. EPRA performance measures The Company uses EPRA alternative performance measures based on its Best Practice Recommendations to supplement IFRS measures, in line with best practice in the sector. The measures defined by EPRA are designed to enhance transparency and comparability across the European real estate sector. The Board supports EPRA’s drive to bring parity to the comparability and quality of information provided in this report to investors and other key stakeholders. EPRA alternative performance measures are adopted throughout this report and are considered by the directors to be key business metrics. 160 EPRA earnings per share A measure of the Company’s operating results excluding capital gains or losses, giving an alternative indication of performance compared to basic EPS which sets out the extent to which dividends relating to the year are supported by recurring net income. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Profit/(loss) for the year after taxation 38,155 (1,502) Net (gains)/losses on investment property and depreciation (11,369) 25,687 Abortive acquisition costs - 1,557 EPRA earnings 26,786 25,742 Weighted average number of shares in issue (thousands) 440,850 440,850 EPRA earnings per share (p) 6.1 5.8 161 EPRA NAV per share metrics EPRA NAV metrics make adjustments to the IFRS NAV to provide stakeholders with additional information on the fair value of the assets and liabilities of a real estate investment company, under different scenarios. EPRA Net Reinstatement Value (“NR V ”) NRV assumes the Company never sells its assets and aims to represent the value required to rebuild the entity. Group 31 March 2025 £000 31 March 2024 £000 IFRS NAV 423,546 411,820 Fair value of financial instruments - - Deferred tax - - EPRA NRV 423,546 411,820 Number of shares in issue (thousands) 440,850 440,850 EPRA NRV per share (p) 96.1 93.4 162 EPRA Net Tangible Assets (“NTA”) Assumes that the Company buys and sells assets for short-term capital gains, thereby crystallising certain deferred tax balances. Group 31 March 2025 £000 31 March 2024 £000 IFRS NAV 423,546 411,820 Fair value of financial instruments - - Deferred tax - - Intangibles - - EPRA NTA 423,546 411,820 Number of shares in issue (thousands) 440,850 440,850 EPRA NTA per share (p) 96.1 93.4 163 EPRA Net Disposal Value (“NDV”) R epresents the shareholders’ value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax. Group 31 March 2025 £000 31 March 2024 £000 IFRS NAV 423,546 411,820 Fair value of fixed rate debt below book value 16,754 16,926 Deferred tax - - EPRA NDV 440,221 428,746 Number of shares in issue (thousands) 440,850 440,850 EPRA NDV per share (p) 99.9 97.3 At 31 March 2025 the Company’s gross debt included in the balance sheet at amortised cost was £175.0m (2024: £179.0m) and its fair value is considered to be £158.2m (2024: £160.4m). This fair value has been calculated based on prevailing mark-to- market valuations provided by the Company’s lenders, and excludes ‘break’ costs chargeable should the Company settle loans ahead of their contractual expiry. 164 EPRA NIY and EPRA ‘topped - up’ NIY EPRA NIY represents annualised rental income based on cash rents passing at the balance sheet date, less non- recoverable property operating expenses, divided by the property valuation plus estimated purchaser’s costs . The EPRA ‘ topped-up ’ NIY is calculated by making an adjustment to the EPRA NIY in respect of the expiration of rent free periods (or other unexpired lease incentives such as discounted rent periods and stepped rents). These measures offer comparability between the rent generating capacity of portfolios. Group 31 March 2025 £000 31 March 2024 £000 Investment property 36 594,364 589,122 Allowance for estimated purchasers’ costs 37 38,634 38,293 Gross-up property portfolio valuation 632,998 627,415 Annualised cash passing rental income 38 41,135 41,732 Property outgoings 39 (2,122) (1,931) Annualised net rental income 39,013 39,801 Impact of expiry of current lease incentives 40 2,780 1,408 Annualised net rental income on expiry of lease incentives 41,793 41,209 EPRA NIY 6.2% 6.3% EPRA ‘topped - up’ NIY 6.6% 6.6% 36 Including assets held-for-sale. 37 Assumed at 6.5% of investment property valuation. 38 Annualised cash rents at the year date. 39 Non-recoverable directly incurred operating expenses of vacant rental property and ground rent costs. 40 Adjustment for the expiration of lease incentives. 165 EPRA vacancy rate EPRA vacancy rate is the ERV of vacant space as a percentage of the ERV of the whole property portfolio and offers insight into the additional rent generating capacity of the portfolio. Group 31 March 2025 £000 31 March 2024 £000 Annualised potential rental value of vacant premises 4,467 4,743 Annualised potential rental value for the property portfolio 50,194 48,976 EPRA vacancy rate 8.9% 9.7% EPRA cost ratios EPRA cost ratios reflect overheads and operating costs as a percentage of gross rental income and indicate how effectively costs are controlled in comparison to other property investment companies. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Directly incurred operating expenses and other expenses, excluding depreciation 10,290 9,306 Ground rent costs (38) (38) EPRA costs (including direct vacancy costs) 10,252 9,268 Property void costs (1,806) (1,807) EPRA costs (excluding direct vacancy costs) 8,446 7,461 Gross rental income 42,828 42,194 Ground rent costs (38) (38) Rental income net of ground rent costs 42,790 42,156 EPRA cost ratio (including direct vacancy costs) 24.0% 22.0% EPRA cost ratio (excluding direct vacancy costs) 19.7% 17.7% depreciation was not deducted from total expenses in the prior year calculation. 166 EPRA LTV An alternative measure of gearing including all payables and receivables. This ratio indicates whether the Company is complying with its investment objective to target 25% loan-to-value in the medium-term to balance enhancing shareholder returns without facing excessive financial risk. Group Year ended 31 March 2025 £000 Year ended 31 March 2024 £000 Gross borrowings 175,000 179,000 Trade and other receivables 5,201 3,330 Trade and other payables (8,550) (8,083) Deferred income (8,181) (7,361) Cash 10,118 9,714 Restricted cash (2,188) (2,502) Net borrowings 171,400 174,098 Investment property and PV 598,172 589,122 EPRA LTV 28.7% 29.6% EPRA capital expenditure Capital expenditure incurred on the Company’s property portfolio during the year. This ratio offers insight into the proportion of cash deployment relating to acquisitions compared to the like-for-like portfolio. Group 31 March 2025 £000 31 March 2024 £000 Acquisitions - - Development 4,843 3,567 Like-for-like portfolio 2,000 13,467 Total capital expenditure 6,843 17,034 167 EPRA like-for-like annual rent Like-for-like rental growth of the property portfolio by sector which offers an alternative view on the ‘run - rate’ of revenues at the year end. 31 March 2025 Group Industrial £000 Retail warehouse £000 Retail £000 Other £000 Office £000 Total £000 Like-for-like rent 17,688 9,711 3,270 6,310 5,351 42,330 Acquired properties - - - - - - Sold properties 390 - - - 108 498 18,078 9,711 3,270 6,310 5,459 42,828 31 March 2024 Group Industrial £000 Retail warehouse £000 Retail £000 Other £000 Office £000 Total £000 Like-for-like rent 16,357 3,679 9,785 5,807 5,415 41,043 Acquired properties - - - - - - Sold properties 918 14 - 28 191 1,151 17,275 3,693 9,785 5,835 5,606 42,194 168 Environmental disclosures (unaudited) EPRA Sustainability Best Practice Recommendations (“sBPR”) Guidelines Custodian Property Income REIT recognises the significance of disclosing ESG information and aligns reporting with the industry-leading, EPRA Sustainability Best Practices Recommendations ( “ sBPR ” ). This provides potential investors with transparent insights into ESG performance and facilitates benchmarking against our peers, setting clear objectives to achieve continued progress. We are pleased to have received an EPRA sBPR Gold Award in 2024 and we aim to retain this recognition. In alignment with our SECR statement, EPRA sBPR data relates to the calendar years 2024 and 2023 but has been disclosed as 2025 and 2024 respectively due to the Company’s March accounting reference date. Materiality The scope of our EPRA sBPR data disclosure was influenced by our application of materiality. Custodian Property Income REIT undertook a materiality assessment to review the applicability of the full set of EPRA indicators. Based on professional judgement, each indicator was assessed in terms of its impact on the Company and its importance to stakeholders. This calculation resulted in an overall score which determined if an issue was material. As part of the EPRA disclosures and associated materiality assessment, we have defined Custodian Property Income REIT ’s organisational boundary in line with the GHG Protocol. We have taken the operational control approach which has played a fundamental role in the materiality assessment. Custodian Property Income REIT is an externally managed REIT which has no direct employees. The Investment Manager has 33 employees and the Company has operational control over neither the Investment Manager nor its employees. The Social Performance indicators determined immaterial are in relation to employees, thus they are not relevant for reporting at the Company level. In addition, the Company does not have district heating and cooling which is therefore not a material reporting metric. Using this organisational boundary, our materiality assessment determined the following Sustainability Performance measures immaterial for Custodian Property Income REIT: • Total district heating and cooling consumption; • Life-for-like total district heating and cooling consumption; 169 • Employee gender and diversity; • Employee gender pay ratio; • Employee training and development; • Employee performance appraisals; • New hires and turnover; and • Employee health and safety. However, as Custodian Property Income REIT does have its own board, which comprises six Non-Executive Directors, we have chosen to report on gender, diversity and the gender pay ratio of board members, to be as transparent as possible with our stakeholders. The Company’s overarching recommendations and asset level sustainability performance measures are disclosed on its website at: custodianreit.com/epra-sbpr/ 170 Historical performance summary (unaudited) Income statement 2025 £000 2024 £000 2023 £000 2022 £000 2021 £000 Revenue 47,997 46,243 44,147 39,891 39,578 Expenses and finance costs (21,211) (20,501) (19,359) (14,639) (15,904) EPRA earnings 26,786 25,742 24,788 25,252 23,674 Property valuation movements and depreciation 10,926 (27,105) (91,551) 93,977 (19,611) Acquisition costs (1) (1,557) (3,426) (2,273) (707) Profit/(loss) on disposal 444 1,418 4,368 5,369 393 Property gains/(losses) 11,369 (27,244) (90,609) 97,073 (19,925) Profit/(loss) after tax 38,155 (1,502) (65,821) 122,325 3,749 Statement of financial position Property portfolio 594,364 589,122 613,587 665,186 551,922 PV and EV chargers 4,711 2,957 1,113 - - Net borrowings (163,512) (171,788) (168,123) (127,277) (137,259) Other assets and liabilities (12,097) (8,471) (9,008) (10,269) (4,797) NAV 423,466 411,820 437,569 527,640 409,866 Financial highlights NAV per share total return 9.5% (0.4%) (12.5%) 28.4% 0.9% NAV per share (p) 96.1 93.4 99.3 119.7 97.6 EPRA earnings per share (p) 6.1 5.8 5.6 5.9 5.6 Dividends per share (p) 6.0 5.8 5.5 5.25 5.0 Dividend cover 101.3% 100.7% 102.2% 110.3% 112.7% Share price total return 1.2% (2.6%) (7.0%) 17.0% (2.3%) Net gearing 27.9% 29.2% 27.4% 19.1% 24.9% OCR excl. direct property expenses 1.30% 1.24% 1.23% 1.20% 1.12% 171 Company information Directors: David MacLellan (Independent Non-Executive Chairman) Elizabeth McMeikan ( Senior Independent Non-Executive Director ) Nathan Imlach (Non-Executive Director) Malcolm Cooper (Independent Non-Executive Director) Hazel Adam (Independent Non-Executive Director) Chris Ireland (Independent Non-Executive Director) Company secretary: Ed Moore Registered office: 1 New Walk Place Leicester LE1 6RU Registered number: 08863271 Investment Manager: Custodian Capital Limited 1 New Walk Place Leicester LE1 6RU Depositary: Langham Hall UK Depositary LLP 1 Fleet Place London EC4M 7RA Broker: Numis Securities Limited 45 Gresham Street London EC2V 7BF Banker: Lloyds Bank plc 114-116 Colmore Row Birmingham B3 3BD Solicitors (property): Shoosmiths LLP 100 Avebury Boulevard Milton Keynes MK9 1FH Solicitors (corporate): Stephenson Harwood 1 Finsbury Circus London EC2M 7SH Property valuers: Savills 33 Margaret Street London W1G 0JD Knight Frank LLP 55 Baker Street London W1U 8AN Tax adviser: KPMG LLP One Snowhill Snow Hill Queensway Birmingham B4 6GH Registrar: Link Market Services Limited Unit 10 Central Square 29 Wellington Street Leeds LS1 4DL ESG adviser: JLL 30 Warwick Street London W1B 5NH 172 Company secretarial Maven Capital Partners UK LLP adviser: 205 West George Street Glasgow G2 2LW Distribution agents Frostrow Capital 25 Southampton Buildings London WC2A 1AL Property administrator Workman LLP 80 Cheapside London EC2V 6EE Auditor: Deloitte LLP 2 New Street Square London EC4A 3BZ Marketing FTI Consulting adviser: 200 Aldersgate Aldersgate Street London EC1A 4HD 173 Investment policy The Company's investment objective is to provide Shareholders with an attractive level of income together with the potential for capital growth from investing in a diversified portfolio of commercial real estate properties in the UK. The Company's investment policy is: (a) To invest in a diversified portfolio of UK commercial real estate principally characterised by smaller, regional, core/core-plus properties that provide enhanced income returns. Core real estate generally offers the lowest risk and target returns, requiring little asset management and fully let on long leases. Core-plus real estate generally offers low to moderate risk and target returns, typically high-quality and well-occupied properties but also providing asset management opportunities. (b) The property portfolio should not exceed a maximum weighting to any one property sector, or to any geographic region, of greater than 50%. (c) To focus on areas with high residual values, strong local economies and an imbalance between supply and demand. Within these locations the objective is to acquire modern buildings or those that are considered fit for purpose by occupiers. (d) No one tenant or property should account for more than 10% of the total rent roll of the Company's portfolio at the time of purchase, except: (i) in the case of a single tenant which is a governmental body or department for which no percentage limit to proportion of the total rent roll shall apply; or (ii) in the case of a single tenant rated by Dun & Bradstreet with a credit risk score higher than 2, in which case the exposure to such single tenant may not exceed 5% of the total rent roll (a risk score of 2 represents “lower than average risk”). (e) The Company will not undertake speculative development (that is, development of property which has not been leased or pre-leased), save for redevelopment and refurbishment of existing holdings, but may invest in forward funding agreements or forward commitments (these being, arrangements by which the Company may acquire pre-development land under a structure designed to provide the Company with investment rather than development risk) of pre-let developments where the Company intends to own the completed development. Substantial redevelopments and refurbishments of existing properties which expose the Company to development risk would not exceed 10% of the Company’s gross assets. (f) For the avoidance of doubt, the Company is committed to seeking further growth in the Company, which may involve strategic property portfolio acquisitions and corporate consolidation, such transactions potentially including public and private companies, holding companies and special purpose vehicles. 174 (g) The Company may use gearing, including to fund the acquisition of property and cash flow requirements, provided that the maximum gearing shall not exceed 35% of the aggregate market value of all the properties of the Company at the time of borrowing. Over the medium-term the Company is expected to target borrowings of 25% of the aggregate market value of all the properties of the Company at the time of borrowing. (h) The Company reserves the right to use efficient portfolio management techniques, such as interest rate hedging and credit default swaps, to mitigate market volatility. (i) Uninvested cash or surplus capital or assets may be invested on a temporary basis in: (i) cash or cash equivalents, money market instruments, bonds, commercial paper or other debt obligations with banks or other counterparties having a single-A (or equivalent) or higher credit rating as determined by an internationally recognised rating agency; or (ii) any "government and public securities" as defined for the purposes of the FCA rules. (j) Gearing, calculated as borrowings as a percentage of the aggregate market value of all the properties of the Company and its subsidiaries, may not exceed 35% at the time such borrowings are incurred. 175 Glossary of terms Term Explanation 2019 AIC Corporate Governance Code for Investment Companies (AIC Code) The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code, as well as setting out additional provisions on issues that are of specific relevance to the Company and provide more relevant information to shareholders. Alternative Investment Fund Manager (AIFM) External investment manager with appropriate FCA permissions to manage an ‘alternative investment fund’ Alternative performance measures (APMs) Assess Company performance alongside IFRS measures Building Research Establishment Environmental Assessment Method (BREEAM) A set of assessment methods and tools designed to help understand and mitigate the environmental impacts of developments Carbon Risk Real Estate Monitor (CRREM) A project focused on carbon risk assessment for the European real estate industry’s push to decarbonise, building a methodology to empirically quantify the different scenarios and their impact on the investor portfolios and identify which properties will be at risk of stranding due to the expected increase in the stringent building codes, regulation, and carbon prices. It also enables an analysis of the effects of refurbishing single properties on the total carbon performance of a company Core real estate Generally understood to offer the lowest risk and target returns, requiring little asset management and fully let on long leases. Core-plus real estate Generally understood to offer low-to-moderate risk and target returns, typically high-quality and well-occupied properties but also providing asset management opportunities. Dividend cover EPRA earnings divided by dividends paid and approved for the year Earnings per share (EPS) Net profit/(loss) divided by number of shares in issue Energy performance certificate (EPC) Required certificate whenever a property is built, sold or rented. An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient). An EPC contains information about a property’s energy use and typical energy costs, and recommendations about how to reduce energy use and save money EPRA earnings per share Profit after tax, excluding net loss on property portfolio, divided by weighted average number of shares in issue EPRA occupancy ERV of occupied space as a percentage of the ERV of the whole property portfolio EPRA (Sustainability) Best Practice Recommendations (BPR), (sBPR) EPRA BPR and sBPR facilitate comparison with the Company’s peers through consistent reporting of key real estate specific and environmental performance measures 176 EPRA topped-up net initial yield Annualised cash rents at the year-end date, adjusted for the expiration of lease incentives (rent free periods or other lease incentives such as discounted rent periods and stepped rents), less non-recoverable vacant property operating expenses and ground rent costs, divided by property valuation plus estimated purchaser’s costs Estimated rental value (ERV) The external valuers’ opinion of the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a property Equivalent yield Weighted average of annualised cash rents at the year-end date and ERV, less estimated non-recoverable property operating expenses, divided by property valuation plus estimated purchaser’s costs Expected credit loss (ECL) Unbiased, probability-weighted amount of doubtful debt provision, using reasonable and supportable information that is available without undue cost or effort at the reporting date Global Real Estate Sustainability Benchmark (GRESB) GRESB independently benchmarks ESG data to provide financial markets with actionable insights, ESG data and benchmarks Greenhouse gas (GHG) Gasses in the earth’s atmosphere which trap heat and lead directly to climate change Institutional grade tenants Tenants with strong credit ratings and financial stability, with a proven track record which are more highly sought after by institutional investors Investment management agreement (IMA) The Investment Manager is engaged under an IMA to manage the Company’s assets, subject to the overall supervision of the Directors Investment policy Published, FCA approved policy that contains information about the policies which the Company will follow relating to asset allocation, risk diversification, and gearing, and that includes maximum exposures. This is a requirement of Listing Rule 15 Key performance indicator (KPI) The Company’s environmental and performance targets are measured by KPIs which provide a strategic way to assess its success towards achieving its objectives Like-for-like Comparisons adjusted to exclude assets bought or sold during the current or prior year Market Abuse Regulation (MAR) Regulations to which the Company’s code for directors’ share dealings is aligned Minimum Energy Efficiency Standards (MEES) MEES regulations set a minimum energy efficiency level for rented properties. Net asset value (NAV) Equity attributable to owners of the Company NAV per share total return The movement in EPRA Net Tangible Assets per share plus the dividend paid during the period expressed as a percentage of the EPRA net tangible assets per share at the beginning of the period Net gearing / loan-to- value (LTV) Gross borrowings less cash (excluding restricted cash), divided by property portfolio and solar panel value Net initial yield (NIY) Annualised cash rents at the year-end date, adjusted for the expiration of lease incentives , divided by property valuation plus estimated purchaser’s costs 177 Net rental income Annualised cash rents at the year-end date, adjusted for the expiration of lease incentives, less estimated non-recoverable property operating expenses including void costs and net service charge expenses Net tangible assets (NTA) NAV adjusted to reflect the fair value of trading properties and derivatives and to exclude deferred taxation on revaluations Ongoing charges ratio (OCR) Expenses (excluding operating expenses of rental property recharged to tenants) divided by average quarterly NAV, representing the Annual running costs of the Company Passing rent Annualised cash rents at the year-end date, adjusted for the expiration of lease incentives Real Estate Investment Trust (REIT) A property company which qualifies for and has elected into a tax regime which is exempt from corporation tax on profits from property rental income and UK capital gains on the sale of investment properties Revolving credit facility (RCF) Variable rate loan which can be drawn down or repaid periodically during the term of the facility Reversionary potential Expected future increase in rents once reset to market rate Share price total return Share price movement including dividends paid during the year Sterling Overnight Index Average (SONIA) Base rate payable on variable rate bank borrowings before the bank’s margin Streamlined Energy and Carbon Report (SECR) SECR requirements aim to put green credentials into the public domain and help organisations achieve the benefits of environmental reporting Weighted average cost of drawn debt facilities The total loan interest cost per annum, based on prevailing rates on variable rate debt, divided by the total debt in issue Weighted average unexpired lease term to first break or expiry (WAULT) Average unexpired lease term across the investment portfolio weighted by contracted rent 178 Financial calendar 24 April 2025 Ex-dividend date for fourth interim dividend 25 April 2025 Record date for fourth interim dividend 30 May 2025 Payment of fourth interim dividend and special dividend 12 June 2025 Announcement of results for the year ended 31 March 2025 9 September 2025 AGM