Purchase of Land with Pre-let Development

RNS Number : 0030R

Custodian REIT PLC

24 June 2015

 

24 June 2015

Custodian REIT plc

("Custodian REIT" or "the Company")

Purchase of Land with Pre-let Development

Custodian REIT (LSE: CREI), the UK property investment company, is pleased to announce the completion of a forward funding agreement for a pre-let development, together with the purchase of the development land.

The Company has acquired 3.5 acres of land at the Kingswood Lakeside development, Cannock, adjacent to the A5 and Junction T7 of the M6 Toll, and three miles from the M6.  Current occupiers on the development include 3663, DHL, Finning Cat and Veolia.

The development comprises a 63,000 sq ft warehouse unit, with construction being phased over an expected 10 month build period.  Custodian REIT's funding for the development will be drawn-down via monthly certified payments.

The unit, to be developed by Coltham Developments, has been pre-let to Hellerman Tyton Limited on a 20 year lease without break.  On completion of the development for a total consideration of £4.22 million, the total passing rent will be £279,090, reflecting a net initial yield of 6.38% (assuming actual purchaser's costs) rising to 7.06% from year five.  The lease will provide for a fixed rental uplift at year five and two further rent reviews linked to the Retail Prices Index.

The land purchase price of £0.47 million was funded from the Company's existing facilities, with net borrowings following the acquisition of 16.7% loan to value.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:  "We are delighted to have secured another development funding opportunity in a prime location, with a long-term lease to an excellent tenant.  Pre-let industrial development volumes are increasing and we will continue to pursue opportunities where it is possible to secure brand new buildings in strong locations with tenants on long-leases, for no more than the price of standing investments."

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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, 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. 

 

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