Purchase of Property

RNS Number : 6377J

Custodian REIT PLC

21 December 2015

 

21 December 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. 

The Company has acquired the 55,713 sq ft Phoenix Leisure Park, Crewe, comprising four freehold units occupied by Pizza Hut, Mecca Bingo, Odeon Cinemas and MFA Bowl.  The park is near Grand Junction Retail Park and within walking distance of the town centre and railway station. 

The units' leases expire between June 2030 and March 2040 with a total passing rent of £523,625 per annum, reflecting a net initial yield of 7.50%.

The agreed purchase price of £6.6 million was funded from the Company's cash resources following an issue of new shares in December 2015, which raised £44.25 million (before costs and expenses).  The Company has £40 million of term debt and an undrawn £35 million revolving credit facility, with net gearing¹ of 5.8% following the purchase.  On completion of the purchase of a portfolio of 11 UK commercial properties for an aggregate consideration of approximately £69.4 million expected to complete in early January 2016, the Company's net borrowings are expected to increase towards the target ratio of 25% loan to value.

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

"We are delighted to have secured this recently refurbished restaurant and leisure park that adds further long-term income to the Company's portfolio at a price which demonstrates the value of small lot size regional property.  Crewe is dominated by two established out of town parks, Phoenix Leisure Park and Grand Junction.  A McDonald's restaurant and Hungry Horse public house have recently opened in the vicinity, which further establish the location."

¹ Gross borrowings less unrestricted cash divided by property portfolio valuation.

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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

Camarco
Ed Gascoigne-Pees	Tel: [phone]
	www.camarco.co.uk

Notes to Editors

Custodian REIT plc is a UK real estate investment trust, which listed on the main market of the London Stock Exchange on 26 March 2014.  Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK and is characterised by small lot sizes, with individual property values of less than £7.5 million at acquisition. 

The Company offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund.  By targeting smaller lot size properties, the Company intends to provide investors with an attractive level of income with the potential for capital growth. 

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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