Purchase of Property

RNS Number : 9149E

Custodian REIT PLC

12 May 2017

 

12 May 2017

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 a 27,480 sq ft car dealership, located within York's 'motor alley' two miles from York city centre and adjacent to the A1237 ring road.  Nearby occupiers include Vauxhall, Audi, BMW, Mercedes-Benz, Toyota and Volkswagen.

The property is let to Pendragon Property Holdings Limited (trading as Evans Halshaw Peugeot and Citroen) on a lease expiring on 27 February 2030 with a current passing rent of £240,000 per annum, reflecting a net initial yield¹ of 5.75%.

The agreed purchase price of £3.92 million was funded from the Company's existing debt facilities, resulting in net gearing² increasing to 16.2% 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 property, well-established within York's premier motor retail pitch and let to the UK's largest motor retailer on a long-term lease.  Despite a keen net initial yield we believe the property will show a reversionary yield of circa 6.75% following the 2020 rent review, as prevailing market rents are comfortably in excess of the current passing rent.  The demand for this location is undoubted with Jaguar Land Rover having recently submitted planning for the development of a new dealership diagonally opposite the site."

¹ Portfolio passing rent divided by portfolio valuation plus estimated purchasers' costs of 6.5%.

² Gross borrowings less unrestricted cash divided by last published property portfolio valuation.

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For further information, please contact:

Custodian Capital Limited
Richard Shepherd-Cross / Nathan Imlach / Ian Mattioli MBE	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 properties with individual values of less than £10 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 sub £10 million lot size, regional 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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