Contracts Exchanged to buy Portfolio/RCF extended

RNS Number : 0668G

Custodian REIT PLC

19 November 2015

 

THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, ANY EEA STATE (OTHER THAN THE UK) OR ANY OTHER EXCLUDED TERRITORY.

19 November 2015

Custodian REIT plc

("Custodian REIT" or "the Company")

Exchange of Contracts to Acquire Property Portfolio and Extension of Revolving Credit Facility

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce it has exchanged contracts to acquire a property portfolio and entered into an agreement to extend its existing revolving credit facility ("RCF").

Property portfolio

The Company has exchanged contracts to acquire 11 UK commercial properties ("the Target Portfolio") for an aggregate consideration of £69.4 million. 

The acquisition of the Target Portfolio is expected to be completed in two tranches in early January 2016.  First, the Company has unconditionally exchanged contracts to acquire £28 million of assets, funded through a combination of the Company's existing cash resources and credit facilities.  Second, the Company intends to acquire the balance of the Target Portfolio (or part thereof), subject to the availability of proceeds from the recently announced proposal to issue new equity by way of a proposed (and ongoing) Placing, an Open Offer and an Offer for Subscription ("the Issue") that was announced on 5 November 2015. 

Extension of RCF

On 13 November 2015, the Company and Lloyds Bank plc entered into an agreement to increase the total funds available under the RCF from £25 million to £35 million and extend the termination date to 13 November 2020. 

Commenting on the proposed acquisition and extension of the RCF, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's discretionary investment manager), said:

"The Target Portfolio is consistent with the Company's Investment Policy, comprising smaller size, good quality, secondary offices, retail and industrial assets, diversified by tenant and region.  The Board expects the acquisitions to enhance returns to shareholders by deploying cash, undrawn debt facilities and proceeds from the recently announced Issue promptly, improving dividend cover.  The Target Portfolio also offers a number of potential asset management opportunities.

"Increasing the funds available under the RCF to £35 million and extending the term improves the Company's overall debt profile and extends our ability to utilise the RCF to reduce the impact of 'cash drag' following new equity issues, enhancing future shareholder returns."

-Ends-

For further information, 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

Notes to Editors

Custodian REIT plc is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014.  Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is characterised by small lot sizes, with individual property values of less than £7.5 million at acquisition. 

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By targeting smaller lot size properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth. 

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

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

Important Information

This announcement includes 'forward-looking statements'.  All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's business strategy and plans are forward-looking statements.  Forward-looking statements speak only as at the date of this announcement and are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements.  The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by applicable laws, regulations or rules.

 

END

 

 

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