Purchase of property in Milton Keynes

RNS Number : 9763Z

Custodian REIT PLC

17 December 2014

 

17 December 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 £71.9 million. 

The Company has acquired a 52,532 sq ft industrial unit on the Tilbrook Industrial Estate, Milton Keynes, with excellent access to Junction 13 of the M1.  The property is let to Massmould Holdings Limited, a manufacturer of plastic injection moulded products and part of the multinational Global Closure Systems Group, which is one of the world's largest providers of plastic closure solutions. 

The property is let on a 15 year reversionary lease expiring on 27 February 2031, subject to a tenant only break option on 28 February 2026.  The current passing rent is £280,000 per annum, reflecting a net initial yield of 6.96%. 

The agreed purchase price of £3.8 million was funded from the Company's existing facilities, with £2.5 million deployed from the Company's revolving credit facility.  Total net borrowings have increased to 7.4% loan to value, in line with the stated investment strategy of a target gearing ratio of 25% 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 a busy manufacturing facility on the Tilbrook Industrial Estate, Milton Keynes, which has a long record of full occupancy.  Massmould has recently committed to a 15 year reversionary lease, re-affirming a commitment to the building.  We believe these dynamics should put the property on course for future rental growth." 

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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 raised gross proceeds of £55 million through an initial public offering and raised a further £25 million via a subsequent placing.  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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