Purchase of Land with Pre-let Development

RNS Number : 1560P

Custodian REIT PLC

04 June 2015

 

4 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 1.88 acres of land at the Tournament Fields development, two miles south west of Warwick at junction 15 of the M40.  The location allows easy access to the motorway network, mainline rail services (via Warwick Parkway station) and is close to Birmingham International Airport.  Other occupiers on the business park include Eagle Burgmann, Geberit, Pure Offices and West Midlands Ambulance Service.

The development comprises a 27,400 sq ft single storey industrial/warehouse unit, with construction being phased over an expected five month build period.  Development funding will be drawn down via monthly certified payments. 

The unit, to be developed by Clowes Developments, has been pre-let to Semcon Product Information UK Limited on a 10.5 year lease with no break option.  On completion of the development for a total consideration of £2.635 million, the total passing rent will be £180,000, reflecting a net initial yield of 6.64%.

The agreed land purchase price of £0.85 million was funded from the Company's existing facilities, with net borrowings following the acquisition of 11.1% loan to value.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:  "The current shortfall in supply of quality industrial units has led to increased demand for development funding of this kind throughout the UK.  This opportunity was of particular interest due to a well located unit and strong tenant on a long term lease.  We anticipate further investment in pre-let development projects while the requirement for good quality units in areas of high demand continues."

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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.  Its portfolio consists of properties let to institutional grade tenants on long leases throughout the UK. 

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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