Purchase of Property

RNS Number : 1837Q

Custodian REIT PLC

28 August 2014

 



28 August 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 £48.4 million. 

The Company has acquired an 80,000 sq ft manufacturing facility situated on White Rose Way, Doncaster, one mile from the M18 and four miles from the A1(M).  The property is let to Portola Packaging Limited, a division of Silgan Holdings Inc., one of the largest global manufacturers of plastic lids, closures and containers for the dairy, juice and food industries.  The property comprises the European Headquarters and main UK manufacturing facility of the Group. 

The property is let on a 20 year lease expiring on 12 July 2021 with no breaks at a current rent of £355,000 per annum, reflecting a net initial yield of 7.25%. 

The purchase consideration of £4.625 million was funded from the Company's existing £25 million revolving credit facility, increasing total cash deployed from the facility to £12.5 million.  Borrowings have increased to 8.7% loan to value, in line with the stated investment strategy of increasing gearing towards a target loan to value ratio of 25%. 

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

"This acquisition further diversifies Custodian REIT's holdings within the industrial sector, increasing our exposure to manufacturing.  The tenant operates a high capacity production facility at the site, which is absolutely core to its operation.  The property also includes some undeveloped land, which provides the potential to accommodate any future expansion in the tenant's operations.  We believe there is strong occupier demand for this type of property."  

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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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