Purchase of Property

RNS Number : 0474D

Custodian REIT PLC

26 January 2015

 

26 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 £89.6 million. 

Purchase of property

The Company has acquired a 44,192 sq ft industrial unit on the Tilbrook Industrial Estate, Milton Keynes, immediately opposite the 52,532 sq ft unit purchased in December 2014 on the same estate, which has excellent access to junction 13 of the M1.

The property is let to Domino's Pizza Group Limited ("Dominos") on a lease expiring on 10 November 2015 with current passing rent of £250,000 per annum, reflecting a net initial yield of 11.25%.  Dominos have confirmed they intend to vacate the property at lease expiry.

New term loan

On 21 January 2015, the Company and Lloyds Bank plc entered into an agreement to provide a second term loan of £10 million, which has been fully drawn down.  Under the terms of the agreement, the Company will pay annual interest of 1.9% above three-month LIBOR on the loan, which is repayable on 10 October 2019.

The agreed purchase price of £2.1 million was funded from the Company's debt facilities, with £8.7 million now deployed from the Company's revolving credit facility in addition to £20 million of term debt.  Total net borrowings have increased to 15.2% loan to value.

Commenting on the acquisition, Richard Shepherd-Cross, Managing Director of Custodian Capital Limited (the Company's external fund manager), said:

"Having recently acquired an adjacent property on the Tilbrook Industrial Estate we are aware of the high demand for property in this location and took the opportunity to enhance our ownership on the estate in a competitively priced deal.  Dominos intend to vacate the unit at lease expiry, following which we will undertake a comprehensive refurbishment and take advantage of what is expected to be a strong occupier market when re-letting in 2016."

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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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