Purchase of Property

RNS Number : 2015C

Custodian REIT PLC

15 January 2015

 

 

15 January 2015

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 £87.5 million. 

The Company has acquired a 60,187 sq ft industrial unit on the Language Science Park, Plymouth.  The unit is let to Geocel Limited ("Geocel"), a market leader in the development, formulation, manufacture and marketing of quality sealants and adhesives used in the building trade.  The acquired unit comprises a manufacturing facility and the UK head office of Geocel, a subsidiary of the multi-national US paint manufacturer The Sherwin-Williams Company, which also owns Ronseal, Purdy Professional Painting Tools and Altax in the UK.  

The unit is let on a reversionary lease, expiring on 30 May 2024 at a rent of £257,500 per annum, reflecting a net initial yield of 7.49%.

The agreed purchase price of £3.25 million was funded from the Company's existing facilities, with total funds of £17.0 million now deployed from the Company's £25.0 million revolving credit facility, bringing total borrowings to £27.0 million.  Borrowings have increased to 14.5% 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:

"This well-specified industrial unit has been the head office for Geocel for 25 years.  The tenant has demonstrated a long-term commitment to the building having agreed terms to take a reversionary lease until May 2024 and to undertake significant expenditure on the fabric of the building.  This will allow for their future operational developments at the site.  The lease provides a fixed rental uplift in May 2020 to £280,000 representing rental growth of 1.57% per annum until the next rent review." 

- 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

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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