Purchase of Property

RNS Number : 4607M

Custodian REIT PLC

16 July 2014

 

16 July 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 the acquisition of a retail portfolio of nine properties, bringing the total funds invested following its initial placing and admission to the Official List ("IPO") on 26 March 2014 to £34.7 million. 

The Company has acquired a nationwide portfolio of eight high street retail units and one trade counter unit, including six freeholds and three long-leasehold titles.  The Company has completed the purchase of seven of the properties and exchanged on a further two, subject to securing landlords' consent to the assignment of the long-leasehold interests.  Tenants within the portfolio include JD Weatherspoon, Superdrug Stores, Whistles, Urban Outfitters, Poundland, Iceland, Cotswold Outdoors, Magnet and The Works. 

The portfolio currently generates a net income of £1.28 million.  The total purchase consideration of £17.4 million includes the commitment to purchase the two long leasehold interests and is being funded from the Company's existing resources.  Net initial yields on the portfolio range from 5.75% to 8.30% with an overall net initial yield (adjusted to reflect reduced agent's fees) of 6.97%.  Unexpired lease terms across the portfolio range from 3.0 years to 21.3 years, with an average weighted unexpired lease term of over 8.2 years.

This acquisition completes the investment of available cash following the IPO.  To fund future acquisitions, the Company has started to draw on its pre-agreed revolving credit facility of up to £25 million.  Drawing down on this facility enables the Company to work towards meeting its target gearing for the portfolio 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 this institutional grade retail portfolio of nine properties at a price which reflects a significant discount to historic pricing.  All the properties are located in towns with very low vacancy rates and the majority of shops are let at rental levels which reflect open market value.  These dynamics lay the foundations for future rental growth."

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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 ("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 will invest 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. 

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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