Purchase of Property

RNS Number : 4781D

Custodian REIT PLC

29 January 2015

 

29 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 £91.5 million. 

The Company has acquired an 8,894 sq ft, three storey office building in the centre of Solihull, with excellent access to Solihull train station, Birmingham airport and junctions four and five of the M42. 

The property is let to Lyons Davidson Limited ("Lyons Davidson") on a lease expiring on 29 October 2024 at an annual rental of £189,000 per annum, reflecting a net initial yield of 9.05%.

The agreed purchase price of £1.975 million was funded from the Company's debt facilities, with £11.1 million now deployed from the Company's revolving credit facility in addition to £20 million of term debt.  Total net borrowings have increased to 16.3% 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 pleased to have secured this well-let office building in Solihull's town centre.  The investment will provide a generous running yield and the comfort of a strong residual value, supported by the strength of the Solihull property market. Whilst the property is let entirely to Lyons Davidson, who have been in occupation since 2009, the property would also suit multiple tenants, providing flexible alternatives for the future.  The tenant has recently demonstrated a long-term commitment to the location by relocating a subsidiary company to share occupation of the premises." 

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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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