Purchase of Property

RNS Number : 1150I

Custodian REIT PLC

23 March 2015

 

23 March 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 £100.9 million. 

The Company has acquired a prime 63,240 sq ft distribution unit on the Normanton Industrial Estate, West Yorkshire, located at junction 31 of the M62. 

The unit is let to Your Electrical Supplies, Service and Solutions (B) Limited (trading as YESSS Electrical), on a lease expiring on 18 June 2022 with a rent review on 19 June 2017.  Total passing rent is £282,300 per annum, reflecting a net initial yield of 6.28%.

The agreed purchase price of £4.25 million was funded from the Company's cash resources, with net borrowings following the acquisition of 9.3% loan to value.

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

"Despite an initial yield of 6.28% we believe the property will show a reversionary yield of circa 7% following the 2017 rent review, as prevailing market rents for prime distribution units in this location are comfortably in excess of the current passing rent.  The purchase price reflects a capital value of £67.20 per sq ft, which represents good value for this high quality unit.  The M62 corridor is a nationally recognised distribution hub and, as such, commands strong competition for modern, well positioned properties of this ilk.  YESSS Electrical operate the unit as their UK headquarters and principal distribution hub, demonstrating their belief in the strength of the unit and its location." 

-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 has raised a further £47.6 million via two subsequent placings.  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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