18 July 2014

Custodian REIT acquire public house in High Wycombe

Custodian REIT is pleased to announce a further property purchase, bringing the total funds invested following its initial placing and admission to the Official List (IPO) on 26 March 2014 to £36.3 million.

The company has acquired the freehold interest of a public house on Frogmore Lane in High Wycombe. The property is let to the Stonegate Pub Company Limited trading as Yates’s Wine Lodge, on a 999 year lease subject to a tenant’s only break option in November 2026, giving an unexpired term of 12.3 years. The current passing rent is £115,000 per annum, reflecting a net initial yield of 6.69%. The purchase consideration of £1.625 million was funded from the company’s existing credit facilities, in line with the stated investment strategy of increasing gearing towards a target ratio of 25% loan to value.

The Stonegate Pub Company Limited is the UK’s largest privately held managed pub operator, trading from over 620 locations under brands including Yates’s, The Slug and Lettuce, The Living Room and Scream.

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

“In addition to the benefits of a long income stream from a very good covenant, we feel this purchase represents excellent value for money when considering the capital value of the building in this location”.

For further information on their investments, please visit Custodian REIT’s property portfolio.