Acquisition

RNS Number : 9974X

Custodian REIT PLC

26 November 2014

 

26 November 2014

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Property

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce a further property purchase, bringing the total funds invested following its initial placing and admission to the Official List on 26 March 2014 to £60.5 million. 

The Company has acquired a 59,618 sq ft industrial unit on the North Moons Moat Industrial Estate, Ravensbank Drive, Redditch, four miles from Junction 3 of the M42.  The property is let to Sapa Profiles UK Limited, a world leader in aluminium profiling, on a 10 year lease expiring on 30 April 2020 (subject to a tenant-only break option on 1 May 2018).  The current passing rent is £250,000 per annum, reflecting a net initial yield of 7.87%. 

The purchase consideration of £3.0 million was funded from the Company's existing cash resources following a placing of shares in October 2014 which raised £25.0 million (before costs and expenses).  Following this acquisition the Company has no debt and has deployed all of the cash raised in the October placing.  Future acquisitions will be funded from the Company's existing credit facilities, in line with the stated investment strategy of increasing gearing up to 25% loan to value.  

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:  "This acquisition extends our ownership of established manufacturing units, with the property having been used in the manufacture and fabrication of extruded aluminium profiles for many years.  There has been scant development of manufacturing units in the recent past and the limited supply of suitable properties is leading to rental growth in the sector."  

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For further information:

Further information regarding the Company can be found at the Company's website www.custodianreit.com or please contact:

Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli	Tel: [phone]
	www.custodiancapital.com

Numis Securities Limited
Nathan Brown / Hugh Jonathan	Tel: [phone]
	www.numiscorp.com

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.co.uk

Notes to Editors

Custodian REIT plc is a UK real estate investment trust ("REIT") listed on the London Stock Exchange.  The Company launched on 26 March 2014, acquiring a portfolio of £95 million of UK commercial property.  This was sourced from an existing portfolio of 48 properties held by clients of Mattioli Woods plc in a syndicated structure.  The diverse portfolio consisted of properties let to institutional grade tenants on long leases throughout the UK. 

The Company also raised gross proceeds of £55 million through an initial public offering and raised a further £25 million via a subsequent placing in October 2014.  It invests in a diversified portfolio of UK commercial properties to achieve its investment objective of providing shareholders with an attractive level of income together with the potential for capital growth through a closed-ended fund. 

The target portfolio is characterised by small lot sizes, with individual property values of less than £7.5 million at acquisition. 

Custodian Capital Limited is the discretionary investment manager of the Company.  For more information visit www.custodianreit.com and www.custodiancapital.com. 

 

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